EDMONDS – Officials expect to spend about half of Edmonds’ year-end cash balance to get through this year after the state recently mandated higher payments to employee retirement funds.
A $187,000 increase in the city’s payment to retirement funds will force the city to dip deeper into its cash cushion than it had planned, acting finance manager Jim Larson said July 9.
The City Council was expected to vote July 15 on an ordinance that would formally make midyear budget changes. About half of the $1.5 million cushion will be spent by the end of the year, Larson said. The city’s annual general fund budget is about $24 million.
Most of this year’s unplanned expenses are attributed to the city’s continued funding of some police and fire services that otherwise would have been cut.
Last fall, Mayor Gary Haakenson proposed cutting $2 million from the city budget – about $950,000 of it from public safety – in response to the city’s decrease in annual revenues of $1.9 million in the previous three years.
The city ultimately wound up cutting $1.4 million, including 25 jobs, with $520,000 coming from the police and fire departments.
Voters will decide in November on a $1.7 million property tax increase that would permanently fund those services.
“But this year, to keep those going, we knew we were going to dip into” the general fund cash, Larson said.
In addition to the general fund balance, the city has an emergency financial reserve fund of nearly $2 million, Larson said.
Council member David Orvis, who sits on the city’s finance committee, said the city’s hands are tied when it comes to state-mandated expenses.
Leftover funds “are pretty precious right now, but we don’t have a choice,” he said. Fortunately, Orvis added, the city is taking in more money than expected.
Victor Balta is a reporter for The Herald in Everett.
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