EVERETT — Just two weeks after city officials said the budget surplus might be $1.4 million more than originally predicted, they revised that figure downward Tuesday, largely because of high health care claims from the city’s self-insurance pool.
Budget director Travis Earl proposed to the City Council’s budget and finance committee that $650,000 be spent from the operating budget to pay for increased health costs.
That combined with almost $200,000 in other unexpected expenses, including $30,000 to fight a lawsuit seeking the removal of the Ten Commandments monument from city property, and means the surplus will likely be about $23 million.
Over the past several weeks, Mayor Frank Anderson has convened meetings with representatives from employee unions to seek ways to decrease health care spending. Ray Stephanson, who will be sworn in as mayor today, said controlling medical costs will be one of his priorities.
The budget is prepared before the fiscal year begins, and is changed as expenses and revenues turn out to be different than predicted. Earl revised revenue projections upward Nov. 5, in large part because anticipated additional plane orders for the Boeing Co. in Everett will mean an unanticipated rise in business and occupation tax revenue.
Earl said Tuesday that the city may have to spend $1.5 million more on medical expenses than was thought only a few weeks ago. In addition to taking $650,000 from the operating budget, the city will dip into various funds that are set up to pay for personnel expenses such as health care costs.
The budget committee sent the spending proposals to the City Council, which will likely vote on the amendments in December.
The surplus was a major issue in the Nov. 4 mayoral election. Anderson proposed to use $4.8 million of the surplus to balance the 2004 budget. But Stephanson is vowing to not use any of the surplus. He said he will study the budget to determine what cuts to make to balance it.
Reporter David Olson:
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