Everett City Council

CITY OF EVERETT BUDGET COUNCIL COMMITTEE Date: September 17, 2025 Time: 5:30 p.m. – 6:15 p.m. Location: Everett City Council Chambers The public is welcome to attend in person or remotely. There will be no public comment during committee meeting. To watch remotely, visit our YouTube channel at https://www.youtube.com/everettcity/live. Agenda Items I. July Financial Report II. General Government Forecast and Budget Balancing Measures Preview Committee members: all members of the Council, chaired by Council President Schwab The City of Everett does not discriminate on the basis of disability in the admission or access to, or treatment in, its programs or activities. Requests for assistance or accommodations can be arranged by contacting the Everett City Council Office at 425.257.8703. For additional information, please visit our website at everettwa.gov/ADA  City of Everett Budget & Finance Committee September 17, 2025 July Financial Report General Government Revenues 2025 YTD% Budget Actual 180,000,000 Month of Budget 160,000,000 Jan 11,835,629 11,861,464 100.22% 140,000,000 Feb 21,084,047 21,744,090 103.13% 120,000,000 Mar 29,257,660 30,517,419 104.31% 100,000,000 Apr 42,201,586 45,065,002 106.79% 80,000,000 May 71,355,594 72,778,363 101.99% Jun 79,884,696 82,137,873 102.82% 60,000,000 Jul 94,375,420 96,523,101 102.28% 40,000,000 Aug 104,146,783 20,000,000 Sep 112,638,006 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Oct 126,386,942 Nov 153,814,557 2025 Actual 2024 Actual 2025 Budget Dec 167,992,557 July Financial Report B&O Tax YTD Budget YTD Actual 2025 Budget Estimate Receipts Variance $ Variance % $ 21,889,108 $ 15,583,958 $ 16,420,168 $ 836,210 5.4% 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2025 Actual 2024 Actual 2025 Budget July Financial Report Sales Tax YTD Budget YTD Actual 2025 Budget Estimate Receipts Variance $ Variance % $ 40,059,930 $ 22,516,325 $ 22,219,399 $ (296,926) -1.3% 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2025 Actual 2024 Actual 2025 Budget July Financial Report Sales Tax Top Sales Tax Sectors as of July 31, 2025 Cumulative $ Cumulative % % of Total Over/(Under) Over/(Under) Sales Tax Sector Sales Tax Budget Budget Retail 37.8% $ (126,840) -1.5% Construction 14.2% $ (538,290) -14.6% Accommodation & Food Services 8.7% $ (18,350) -0.9% Wholesale Trade 9.6% $ 213,638 11.1% Manufacturing 7.6% $ 154,480 10.1% Information 4.2% $ 77,581 9.0% July Financial Report General Government Expenditures 2025 YTD% Budget Actual 180,000,000 Month of Budget 160,000,000 Jan 16,528,420 14,205,942 85.95% 140,000,000 Feb 28,936,271 25,752,465 89.00% 120,000,000 Mar 42,896,836 38,778,984 90.40% 100,000,000 Apr 56,075,772 52,497,073 93.62% 80,000,000 May 69,539,420 65,977,163 94.88% 60,000,000 Jun 83,266,679 78,445,232 94.21% 40,000,000 Jul 97,513,191 95,774,754 98.22% 20,000,000 Aug 111,889,967 - Sep 127,583,222 Oct 139,674,887 2025 Actual 2024 Actual 2025 Budget Nov 153,107,846 Dec 173,624,352 Major revenue and expenditure categories Revenue Categories Expenditure Categories Property Tax Labor Costs (Salaries, Wages, Benefits) Sales Tax Operating Expenses (Utilities, Supplies) Business & Occupation Tax Cost Allocation External Charges (Contracts and Agreements, Other Taxes Grants) Reserves (CIP 1, Vehicle & Equipment Cost Allocation Replacement) Misc Revenues (Includes Operating Transfers) Unfunded Mandates  General Government Forecast as of August 2025 General Government Deficit Forecast (in millions) $0.0M -$5.0M -$7.9M -$10.0M -$15.2M -$15.0M -$20.0M -$24.6M -$25.0M -$27.5M -$29.1M -$30.0M -$32.5M -$33.6M -$35.0M -$40.0M 2026 2027 2028 2029 2030 2031 2032 FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST * Point-in-time results as of August 2025 Budget Balancing Measures Previously Implemented Balancing Measures Extended Through 2026 Amount LEOFF 1 Police Pension Fund 1 Suspend contributions to Pension Fund $ 1,801,000 LEOFF 1 Fire Pension Fund 1 Suspend contributions to Pension Fund 2,183,000 Reduce street overlay project, resulting in a remaining balance Street Overlay 2 $ 1,000,000 of $2.4M for street overlay [1] Prefunding of LEOFF 1 pension plans is not a common practice among other cities, which generally fund them on a pay-as-you-go basis [2] Some cities do not provide a general fund subsidy for street overlay Budget Balancing Measures Expenditure Reductions Balancing Measure Amount Department M&O Eliminate departments’ 2% annual M&O growth $ 213,346 Volunteers of America Transfers VOA Community Center contract to Senior Center 200,000 Management (VOA) Contract Reserve Fund 149 – a Non-General Government Reduce Human Needs grants and Clare's Place Supportive Housing Human Needs Related Programs contributions, resulting in a remaining budget of $350,000 for 308,800 grants and contributions in 2026 Budget Balancing Measures Revenue – Transfers In Fund Purpose for Transfer Amount Continue to use lodging tax revenues to support staffing resources for City-led Lodging Tax events and the Everett Performing Arts Center management contract paid out of $ 334,957 the General Government General Government Special Projects - Support Community Development’s Alternative Response Program Substance Abuse and Mental Health 1,068,150 Total grant is $4.5 million Services Administration Grant Use Criminal Justice sales tax revenue to support the Police department's Violent Criminal Justice 1,067,725 Crime Unit General Government Special Projects - Use unallocated, unspent Local COVID Relief Program funds to support General 2,296,117 Local COVID Relief Program Government operations Reallocate unspent Local COVID Relief Program funds committed to daytime General Government Special Projects - service access, Clean Everett, and tree planting activities to support General 2,556,139 Local COVID Relief Program Government operations  General Government Forecast as of September 2025 General Government Deficit Forecast (in millions) $0.0M $0.0M -$5.0M -$10.0M -$7.9M -$14.0M -$15.0M -$15.2M -$20.0M -$23.3M -$26.1M -$25.0M -$27.7M -$24.6M -$31.0M -$30.0M -$32.2M -$27.5M -$29.1M -$35.0M -$32.5M -$33.6M -$40.0M 2026 2027 2028 2029 2030 2031 2032 FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST FORECAST Revised Annual Deficit Annual Deficit as of August 2018-2025 Deficits City Actions on Deficits • Voluntary separation programs From 2018-2025, the City closed a cumulative • Public private partnerships budget deficit of: • Changes to staff benefit programs $99,567,370 • Aligned service fees to peer cities • Invested in software to streamline operations and automate processes • Utilized grant funding where feasible QUESTIONS/COMMENTS