Budget crisis looms in Edmonds

The soundtrack of Edmonds Mayor Gary Haakenson’s dire budget warning Aug. 18 at City Hall was the drip, drip, dripping of a nearby ceiling leak falling steadily into a blue garbage can.

The leak helped illustrate the city’s sad tale: It faces a $5.4 million shortfall between 2009 and 2010, Haakenson said.

The city could lose $2.4 million in 2009 and $3 million in 2010, according to a budget summary.

New ambulance fees, higher utility taxes and higher permit fees are possible band-aids, the mayor said.

But eventually, higher property taxes will likely be needed “for the survival of our city,” Haakenson said. Immediate cutbacks might be unavoidable, he suggested.

“This is easily my most difficult budget in 13 years as an elected official,” said Haakenson, who was a councilmember before he became mayor in 2000. “Without significant revenue increases, we will be making millions of dollars of budget cuts.

“Our choices are very limited, very difficult and very painful,” he said.

Whatever the eventual solutions, Edmonds’ problems are real — rising costs and the prospect of a staggering shortfall.

It isn’t an entirely new phenomenon.

In fact, according to the draft budget summary compiled by finance director Kathleen Junglov, the city will lose $2.5 million in 2008 as well.

The future shortfalls will be fueled in part by growing labor costs.

The city expects its labor bill to grow $2.6 million by 2010, or 11.5 percent from 2008 to 2010.

It expects tax collections to grow by a more modest 8.7 percent.

Next steps

Despite Haakenson’s warnings, no actions have been taken.

The city’s budget process begins in earnest in October, and will cover both the 2009 and 2010 fiscal years.

Haakenson introduced the budget summary before October so that councilmembers could start thinking of solutions, or painful cuts, he said.

“The bottom line is that we do not have enough money to provide the services our city expects,” Haakenson said.