EVERETT – Mayor Ray Stephanson presented a detailed 2005 city budget proposal to the Everett City Council Wednesday morning that included no cuts in jobs or city services.

The mayor said two of the major changes in the $96 million budget are increased funding for road projects and restoration of a codes compliance officer.

The proposed budget is mild in comparison to the 2004 budget, in which Stephanson made $3.5 million in budget cuts, including laying off 24 employees and trimming funding for parks, the library and other services.

Though codes compliance staff was reduced as part of budget cuts earlier this year, “it became apparent that we needed an additional person,” Stephanson said.

Code compliance officers enforce laws on junk cars, unsightly yards and other problems. The additional position raises the number of codes officers to three.

The budget also includes $1.6 million for city streets projects, including new asphalt, sidewalk replacements and parking improvements.

After Stephanson’s budget presentation on Wednesday, he and several council members exchanged praise about the budget process.

“Where (Everett has) come financially is really because of the strong partnership we’ve developed with the council,” Stephanson said after the budget hearing. “I can’t overemphasize that.”

Council President Arlan Hatloe thanked the mayor and his staff, including chief financial officer Debra Bryant, for finding a way to balance the budget without cuts.

Hatloe said he appreciates the openness of Stephanson’s administration.

“Thank you for the opportunity to ask questions – not only to ask questions, but to give input and ideas,” Hatloe told the mayor. “There were no sacred cows here.”

Next year, Everett will have a surplus of $26 million, but city policy bars dipping into those savings.

Stephanson said the painful cuts earlier this year positioned the city for a balanced budget in 2005. However, Bryant forecasts a possible $4.3 million gap between revenues and expenses for 2006 and a $6.3 million shortfall for 2007.

Councilwoman Marian Krell said the cuts earlier this year were necessary to get an immediate handle on the city’s finances, which could face any number of fiscal curveballs in the years to come.

“We’re still not out of the woods. There’s still going to be some challenging years ahead of us, we know that,” Krell said after the meeting. “But the longer we can stay at the lower levels, the better chance we have of meeting (budget) in the future.”

Two questions include rising employee health insurance rates and the possibility of another attempt by political activist Tim Eyman of Mukilteo to cut property taxes, she said.

Krell said city departments are definitely stretched, but are being innovative and working hard to handle the extra duties.

“We’re living within our means,” she said.

Councilman Ron Gipson, who will run against Stephanson in the 2005 mayoral election, said he thinks there still may be a cost-effective way to restore some of the jobs and services cut earlier this year.

“Is it worth the heartache that we put everybody through?” he said after the meeting.

Gipson, chairman of the council’s budget and finance committee, said he still has questions about the budget, adding that there will be several more opportunities to discuss the budget.

Reporter Jennifer Warnick: 425-339-3429 or jwarnick@heraldnet.com.