2015 budget has more work to be done
EVERETT — An early preview of Everett’s 2015 budget shows the city is nearing a balanced budget but has more work to do.
The city also has more than $2.5 million in new expenses to account for in its budget calculations; the most talked-about last week is a plan to have the city refinance one of the construction bonds for Comcast Arena under its own credit.
It is looking clear the city may lay some employees off as it plans to eliminate 15 positions as part of its budget cuts to save $1.3 million. The city has 54 vacant positions in the budget already.
Entering this year, the city was facing a $13 million shortfall for 2015. The city now has the shortfall winnowed down to $2.6 million.
The city found $6.7 million in cutbacks and savings, and is picking up more than $6 million in new revenue, largely from utility tax increases passed earlier this year.
The biggest new expense adjustment is settling a contract dispute with the Everett firefighters union, which cost the city $2.4 million. Some of the payout backfills higher cost-of-living wage adjustments, reimbursing medical contributions and other items.
The Snohomish County Jail also will be hitting municipalities with higher jail booking and inmate fees, costing Everett $900,000 more than budgeted.
Even with the budget gap hacked down to $2.6 million now, the city hasn’t shaken the long-term structural deficit monkey off its back quite yet.
The city’s austerity measures helped cut its projected long-range deficit, but one still exists. The new long-range deficit is $15 million in 2018, down from a $21 million gap before budget work started.
Councilman Rich Anderson said he has no worries on the projected gap, he told the Tribune post-meeting. This look was from the first of many phases of the budget, Anderson said.
The fact there is still a structural deficit after months of budget work concerns Councilwoman Brenda Stonecipher, she told this paper post-meeting.
As part of the phasing approach, one of the most immediate plans is studying efficiency within the Fire Department. The city also plans to study the Police Department and other areas to shake more trees.
The City Council also may discuss creating a parks district to create a separate tax stream to help fund parks.
It’s in the process of passing a $20 car tab fee this week to raise $1.2 million for road maintenance. The public hearing is Wednesday, Aug. 6 at 6:30 p.m. in the City Council Chambers, 3002 Wetmore Ave.
Everett also floated an idea to have the regional Sno-Isle Libraries system take over Everett’s proprietary city library system, although that would require uniform voter approval among residents in both library systems.
Sales tax and property tax revenues are steadily climbing.
The big jump is coming from increased utility taxes, which are expected to pull in $4.2 million more dollars.
Some other cuts include removing lifeguards at Silver Lake and permanently parking the library bookmobile.
Unlike past years, the city will put money toward police and fire pensions this year, something Everett held off doing during the Great Recession.
There was no great worry of pensions running dry —the funds were pre-funded through 2020 during the pre-Recession boom years -- but holding off each year made for up to $4 million in budget savings at the end of the year.
Councilman Ron Gipson last week made a push for the city to put money into a construction project account that the city stopped contributing to during the Great Recession.The city used to put part of its end-of-year surplus money into it each year until 2007.
The account is called Capital Improvement Projects No. 4 (CIP 4) and it’s used to pay for projects with cash instead of taking out bond debts.
Using the account to pay with cash could be seen as one reason why the city’s debts are so low. Gipson, though, is worried the account will run dry how many projects tap into it.
The account will have about $4.6 million left at the end of the year if the city does all its planned projects, city spokeswoman Meghan Pembroke said.
Mayor Ray Stephanson, though, rebuked Gipson’s claim that the city uses CIP 4 as a “piggy bank.”
Every expenditure from CIP 4 is council-approved, Stephanson said.
Overall, the city plans to run on a $122 million general budget next year.