EVERETT — Better-than-predicted economic growth seen this year is helping allow Everett to prepare a balanced city budget for 2024, although it was no cakewalk to get here, city officials said.
The city has an unsustainable structural deficit, where the cost of running the city exceeds earnings.
Mayor Cassie Franklin is scheduled to deliver her budget Sept. 20 for City Council’s deliberation.
Franklin said last week she would still like to see a city property tax levy lid lift measure come to voters to help address the deficit. The mayor sees it as residents investing in their own city.
Workforce labor is the largest chunk of cost and labor costs increase each year. In fact, the city plans to increase some wages to remain competitive in the labor market. But addressing the deficit "is outside of our ability without a vote of the people," Franklin said at an Aug. 30 budget workshop.
The city overcame a $9.5 million deficit for 2024 on paper.
To get there, it’s holding off $4.8 million in expenditures by planning to again skip contributing to its police and fire pension fund, called LEOFF 1 and for employees hired before 1977.
It also plans to shift some $3 million in costs to issuing municipal bonds instead of using its saved capital funds.
Last week, Franklin introduced plans to enlarge the police department and add more human services in the 2024 budget.
The plan includes enlarging Everett Police by 11, including adding nine uniformed officer positions. All the officers are paid for with outside grant money: Seven would be officers pre-funded by a U.S. Department of Justice C.O.P.S. grant, which after the three years of grant payments end, the department is obligated to keep these officers at least an additional year. The other two uniformed officers also are funded from grant sources.
Franklin plans to add at least three city positions in her 2024 budget to meet the needs of the city.
During this year, Franklin has added at least nine city positions, such as hiring Government Affairs Director Jennifer Gregerson.
The city also will use its COVID-19 dollars to essentially hand the Bezos Academy $69,000 in rent assistance. The no-cost school academy is located inside Everett Station owned by Everett Transit. Transit operates independently. The assistance is by way of giving Everett Transit rent money.
Other COVID-19 dollars will support the Carl Gipson Center and the Clare's Place no-barrier homeless housing domicile. The city's support to the Carl Gipson Center will decrease yearly under its contract.
Everett focused its COVID-19 dollars outward to the community needs versus spending on itself, Franklin said.
2023 revenue growth
This year's financial picture is looking good.
As of figures from the end of July, tax revenues this year are better than expected and city spending is lower than anticipated by about $2.5 million. Sales tax revenues, any city's biggest chunk, are up by about $1.7 million or 8%, its finance division said last week.
The city will likely put this money toward expected costs such as increasing its jail fees budget, its self-insurance fund costs and other needs.
City budgetmakers are "taking an optimistic approach" in forming the 2024 budget, city finance director and treasurer Susy Haugen said.
They predict more growth thanks to economic activity. For the general fund, for day-to-day expenses, they are forecasting $161.5 million in revenue. It is currently preparing a balanced, $166.8 million expenditure budget.
In 2025, due to its structural deficit, the city faces an $11 million shortfall if it doesn't do more budget reworking. The deficit grows to $15 million for 2026 and $19 million for 2027.
— Includes reporting from Tribune archives
