Despite a rosy economic outlook that includes increasing sales tax revenue and stabilized property values, Edmonds Mayor Dave Earling told the Edmonds City Council Tuesday night that he is taking a “cautious approach” to the 2015 budget.

The main reason for that caution, the mayor said, is the $1.67 million bill the city received recently from Fire District 1 for two years’ worth of back pay for its union employees. It’s an obligation that the city must pay, under its current contract for fire services, although the city is meeting with Fire District officials to determine if all the costs are justified.

That obligation is also one that will continue next year after Fire District 1 completes its 2015 union contract negotiations, and Earling said that Budget Director Scott James has put a $978,000 placeholder into the budget until the 2015 amount is known.

The added financial obligation influenced the mayor’s decision to forgo adding additional staff positions in 2015, although he is recommending the continuation of new positions that were added in 2014, and changing one-half time position to three-quarter time. “I’m simply not comfortable adding new positions with the long-time financial implications that entails,” he said. “While acknowledging we have significant staffing needs in public safety, being cautious for a year is the prudent decision.”

Earling told the council there is much good news to share: “Our projected 2014 revenues are 3.6 percent higher than the 2013 actual revenues and the 2015 projected revenues are 2.1 percent higher than 2014 numbers.” In addition, the Snohomish County Assessor is projecting that home values will increase 10.8 percent in 2015, and the city is expecting a 2.1 percent increase in utilities revenue, he said.

The focus for 2015 will once again be on “one-time expenses or improvements,” the mayor said, including:

– Public works infrastructure

– Active work on capital and facilities projects

– Continued street repaving work. “This was the first time in five years we could begin repaving our streets,” he said. The city spent $1.2 million in 2014 and Earling is proposing a $1.56 million repaving budget for 2015. “We need to be as aggressive as possible with our street paving program,” Earling said. “We need to catch up. At some time in the future the community will need to grapple with how we maintain our long-term resurfacing needs.”

– $50,000 for engineering and design of a trackside warning system aimed at quieting train horn noise at the city’s Main Street and Dayton Street crossings.

– Work on traffic projects that include revisions at Highway 99 and 228^th Street Southwest, traffic flow adjustments at 212^th and 76^th and Safe Routes To School sidewalk projects.

– Upgrades of public information software to improve public access.

– Development services digitizing of planning maps, plans and documents for easier access to historical files.

– Ongoing work to update the city code.

– Continued funding of consultants hired for strategic action plan and communications projects.

– Completion of city parks projects that include the City Park spray pad, complete overhaul and repair of the waterfront fishing pier and opening of the new athletic complex at Old Woodway High School in coordination with the Edmonds School District.

Earling also noted that in the 2014 budget he set aside $400,000 for the council to use for projects they were interested in. He is including $250,000 in the 2015 budget for that purpose, a nod to his conservative budget approach, he said.

He closed his remarks by reminding the council that the ongoing Fire District 1 contract costs “will have long-term consequences which could begin to drain reserves which we so carefully built and desire to maintain. To counterbalance that drain, we must be very thoughtful in seeking new revenues and look for cost efficiencies,” he said.

The entire proposed budget, as well as the full text of the mayor’s budget message, will be posted on the City of Edmonds website Wednesday.