COVID recovery funds boost 2023 city budget — but they won’t last

How much money does it take to run the City of Edmonds?

The proposed budget for next year tops $114 million. Right now, that’s $3 million more than the city has in revenue coming in 2023. But by the time the final numbers are approved, by law, it will be a balanced budget.

Mayor Mike Nelson delivering his remote 2023 Budget Address.

Mayor Mike Nelson, in his budget message to residents Oct. 3, laid out his hopes:

“After three years of COVID, now more than ever it is time to invest in our city. With strong sales tax revenues, a significant city surplus, and federal rescue plan funding, we are in a great position to invest in people and our city, while maintaining a balanced budget.”

Those investments include:

“Significant increases in public safety”

“Improving our neighborhoods”

Providing more to “our most underserved community” on Highway 99

What are some of these critical projects? How much could they cost? And how long can Edmonds count on that federal COVID recovery funding to help pay some big bills?

Edmonds has receive a total of $12 million in federal American Rescue Plan Act (ARPA) funds. Some has been spent in 2021 and some this year. For next year, the city is budgeting $3.9 million of that ARPA money.

Federal ARPA money for the city:

– $1,385,000 for new maintenance, equipment and staff for Civic Park and Highway 99 improvements

– $1,315,000 for the police department — new cars, patrol support and expanding the criminal investigations division.

That $2.7 million for two city departments is 67% of the available $4 million in federal money included in the Edmonds budget in 2023.

Significant increases in public safety:

The police department budget proposal includes hiring six new patrol officers and beefing up the department’s criminal investigative unit with two additional detectives and a crime analyst. It will also hire a full time administrative assistant for the assistant chiefs and the command staff.

But the department is not using the ARPA money for that. The salaries and benefits will come out of the general fund. The federal dollars will buy and equip nine new patrol cars, and add equipment and systems for the criminal investigative unit and support patrol staff.

Edmonds Police Chief Michelle Bennett

Chief Michelle Bennett has already proposed a new chain of command – in addition to the two new assistant chiefs hired last year, she is creating the rank of commander as mid-level managers. Until now, the staff was set up as patrol officers, corporals, sergeants, then assistant chief. Commanders are expected to oversee the patrol division, detectives and crime analysis, and administrative staff.

Other changes are already in the works: The department has reinstated the full traffic unit; police will begin wearing body cameras early in 2023; the police reoutfitted the dive team, and six officers are now certified as bike patrol with the purchase of six bikes.

Bennett told the city council during a budget presentation Nov. 2 that the department has seen a lot more assaults and injuries to officers; the incidence of physical force against officers has risen from 31 in 2015 to 80 last year. What she called “impact” force against officers has doubled from 11 to 20 in the same time span.

She told councilmembers she does not want to link that violence to recent changes in police laws. “I don’t want to tie a direct correlation to new legislation or anti-police sentiment, but if I had to hazard a guess, you can see in some instances those numbers have doubled from the last couple of years,” she said.

For the first time since 1992, the department is about to hire its first police cadet; it is a paid internship, usually offered to college students. Bennett wants to reinstate the police explorer program in the high schools, and a Community Academy has also been launched.

Continuing police department goals include reducing crime and fear of crime, improving traffic safety, and responding safely to and resolving emergency calls and incidents and doing it effectively and efficiently. The chief also added new goals: collaborate with the community to address crime; recruit hire, train and promote the best applicants for open positions; and provide the equipment and technology to do the job.

Tuesday evening, Nov. 15, the city council holds its first public budget hearing. The city has already opened up the budget process to take questions from the public. You can find it here along with the complete budget proposals.

One of the first questions on the city’s Q&A webpage is: Similar to Chief Bennett’s request for new vehicles (which are proposed to be paid from ARPA) can ARPA funding be used to pay for the (Parks) maintenance vehicles?

City Answer: Yes, we have extremely wide discretion and can spend up to $10 million (total) of ARPA money on virtually anything.”

Edmonds has budgeted $630,000 in federal money to buy the new police cars and $220,000 for expanding the criminal investigations unit. Patrol support totals $420,000 in federal money and the new parks maintenance services uses another $285,000 from the federal pot.

Another question from the city’s Q&A page: “my concern that we are buying them (police cars) with one-time dollars (ARPA). With all vehicles in the fleet on a set replacement schedule, my sense is that we are setting ourselves up for a future expense in a single year that we aren’t going to be in a position to handle.”

City Answer: “Not true, we are not setting ourselves up for a future expense in a single year to replace these vehicles.” The answer explains that city departments already pay a fee into a ‘Fleet Fund’ for every vehicle they operate. That money is used to pay maintenance and also to “pre-fund” future replacement cost.

What happens when that federal money is gone – how does the city pay over the long term?

All the remaining federal ARPA dollars must be allocated by the city before the end of 2024 and spent by December 2026. But the new parks salaries and benefits are a long-term commitment. So is the parks maintenance for Civic Field and Highway 99 improvements. So is maintenance and replacement for police equipment, new cars, technology, and other items. Over the long term, how will the city pay for those salaries, benefits and maintenance?

Administrative Services Director Dave Turley oversees the city’s budget preparation. He told us that because of COVID “we’ve never before had these circumstances, this kind of experience.” Remember, in all, Edmonds will get $12 million from the federal ARPA funds.

Turley said that the city has budgeted federal money to pay for four of six new parks maintenance positions. At a salary of $63.000 a person, plus benefits, that’s a little over $300,000 a year. He also told us that all federal ARPA money must be spent by 2026. So, we’ve done our own math and once that federal cash runs out, in three years, the city council will have to figure out how to keep those employees on the job. And ongoing maintenance for the Civic Field and Highway 99 amenities will be costly. Where will that money come from?

The police department is not using the ARPA money for new hires, but again, once the federal money dries up, the city will have to cover over the long haul the police vehicle maintenance, new equipment, technology and things that ARPA is nonw paying for. The city will have to find that money in general funds since there will no longer be a $1.3 million gift from Uncle Sam. And Turley expects the demand for police services will only continue to grow.

On the city’s Q&A page, Councilmember Will Chen asked about a different topic, a proposed increase in utility rates for sewer and water: “Utility rate increase of 5% without a rate study. When is the rate study going to be performed?”

City Answer – “a rate study has not yet been scheduled. It should be scheduled early in 2023.” 

Turley told us the utility rate increase study should have been done this fall. But at that point, the public works department did not have a new director. Turley thinks with inflation running 8-9% this past year, the department had no choice but to put a rate increase into the budget; if it is not enough to cover the cost of water and sewer services, the council can increase the rate next year.

Council President Vivian Olson questioned budget problems related to the wastewater treatment plant upgrade:

“The story about our carbon recovery upgrade of our wastewater treatment plant goes from bad to worse. At last night’s Council meeting, Director Antillon said that the construction phase will “likely” be completed by the end of the year. It was supposed to be completed by now. In addition, he said that the commissioning and operational status of the plant won’t be until June of 2023. Another three-month delay from the previous (late) date of March. He also suggested he’s likely coming back to Council for additional funding for the project. How much more?”

City Answer:

“Currently, I don’t have an amount for possible cost increases. We are reviewing all pending change order requests, and some might result in valid cost increases. The quality control and construction management documentation are not very detailed or provide me with a good degree of confidence and considering the complexity of the project it might be good to hire a commissioning agent to ensure someone with that expertise can check every system before we accept it.”

There is still a lot of work before the city can pass next year’s budget. It may be, as the mayor pointed out, that “with strong sales tax revenues, a significant city surplus, and federal rescue plan funding we are in a great position to invest in people and our city.”

But when the federal government money is gone – not only for Edmonds but for thousands of other communities – bills still must be paid. The question yet to be answered: Can Edmonds take the “great position” it is in now and transform it into a long-term funding plan?

— By Bob Throndsen

  1. The city is like a kid in the candy store and it will cost us all. Record revenues should mean tax cuts but no we want to spend like drunken sailors on bigger government. Let me look into my crystal ball oh wait I can’t because I had to sell it to pay taxes, property taxes up 25% gas tax to double next yeas a increase in sales tax sewer rates going up higher heating costs this winter inflation at a 40 year high and you can be sure when the sugar high wears off the city will be coming back to the trough because pigs can’t get enough slop. But look on the bright side after they have taxed you out of your home they will give you a free room at the inn.

  2. Interestingly Toledo, Ohio dedicated $240M of the Covid relief funds to pay off/ down its citizens medical debt. My guess is that Toledo will have a brighter economic future than most Cities for doing so. Medical bill bankruptcy is a huge issue, and one largely ignored but going forward in Toledo that investment in not only reducing medical debt but in the actual well being of its citizens…..talk about true social justice.

  3. Additionally, we are taxed for a public hospital district (SNohomish public hospital district #2) which is the landlord for the buildings that house private hospital groups. An enormous amount of money is taken in as well as our continuing taxes for buildings that are paid off,,which was the reason for forming the district. It would be more valuable to have that group, now called Verdant, work to use those funds for the benefit of folks who struggle with medical debt rather than hand out grants for tangential project, swim lessons, bike helmets ect. A program to help pay off or pay down medical debt would free folks from debt they never contracted for, couldn’t choose to incur or not, and in many cases face poverty or bankruptcy because of. Parents with small kids are now facing increased hospitalizations from RSV, it would be nice for those kids to go home to parents who have somewhere to turn when they get the enormous bill.

  4. Diane, you are right. The public hospital district has over $50million in reserves and keeps getting our tax dollars. They just changed their grant giving so that the community can only apply for grants once a year which is hard for small agencies. They used to years ago have the director and the grants guy meet with the community but that doesn’t happen anymore. And they raised our levy rate! Why are they hoarding money when it could help so many people.

    1. Sam,
      I would be happier to pay those ghost taxes to the hospital district if that money was used for helping our folks directly with staggering medical debt, which would in turn give them the opportunity to live more fully without looming bankruptcy. One child with a chronic medical condition ( or an emergency) can financially ruin a family. Not fair at all. Let’s get some help to those folks and maybe, just maybe reduce our homeless and working poor numbers. The landlord agreement with Swedish Providence should actually be able to accommodate a large investment on our own struggling fellow citizens directly. No study needed. Toledo OH did right by their folks, so can our public hospital district.

      1. THey posted their financials on their website the other day. If you look at them, they have over $54million in investments and close to $3.5 million in cash on hand. They get almost $1million a month in lease from swedish and almost quarter million from the levy (our tax dollars) This is alot of money that could be used to help the community and individuals. https://verdanthealth.org/wp-content/uploads/Financial-Report-for-Monthly-Board-Meeting-11-16-22.pdf

  5. We currently have an out of control executive branch trying to push it’s will over the will of the people in terms of visualization and long term planning and a legislative branch that has no real codified oversight role in how funds are actually spent, the competency (or not) of Staff Directors, and the breakdown of how funding is accounted for. What could possibly go wrong?

    Our lone bright spots are our citizen planning board trying to have some influence and a top notch Police Chief – thanks mainly to Vivian Olson having some intestinal fortitude regarding that controversy. I know our City Council wants to do right by all of us and they have a pretty hard and generally thankless almost impossible job to do here.

    1. Clinton you might be on to something problem is the vote doesn’t reflect common sense in our region at least. So for now the status quo will continue down, in my opinion a precarious path.

      1. Posting this comment on behalf of Jim Ogonowski who is having technical issues:

        I’ll just add a little flavor to Mr. Throndsen’s well written article and try the answer the question “What happens when that federal money is gone?”.

        The answer has been clearly outlined in the proposed budget package itself. The Strategic Outlook, a forecast over the next five years, shows that we intend to spend down our unreserved fund balance from over $9M in 2021 to nearly zero by 2026. That’s the reality of this proposed budget – by their own admission. Spending more than revenues and covering the shortfall with year-over-year fund balances until they are depleted. Spending ARPA funds on budgetary line items with a recurring expense stream is part of the problem. The fact that we don’t have a priorities-based budgeting process is another culprit. Needs vs. wants. And watching the Council wade through this is better than watching reality TV. They’re trying their best, but the administration isn’t being very transparent.

        As I see it, we’re headed to either have to sell additional bonds (increase our debt), layoff staff and/or significantly increase taxes sometime over the next three-to-four years. If left unchallenged, this budget is setting up the next administration for failure.

        1. “Spending ARPA funds on budgetary line items with a recurring expense stream is part of the problem.” That is only our most recent windfall. The chicken will soon come home to roost and it will be what is left of the middle class to foot the bill for bloated governmental expansion. Please remind me again what party wants, has, has had, at least regional control for decades. The bill always comes due.

  6. Good reporting Bob,

    BTW Council draft amendments are on the website for folks to review..

    The most important pages of the budget (as Jim outlined) are pages 14 and 15 and I’m still trying to reconcile the other revenue and expense pages as it helps in transparent especially with no footnotes on ARPA funding or EMS revenue funds.

    But, in defense of administration, the budget was complied during the summer and with staffing issues.. So amendments are warranted.

    But, since summer, the economic environment has changed drastically with a spike in inflation and a recession looming. Fortunately, We were fairly resilient during the Pandemic because of our main revenue streams being property taxes and car sales.

    We should be forecasting a rocky economic road ahead as opposed to the status quo process from the budget approval demanded by CP Paine last year to have it approved via new adjournment meeting on 11/17/21 without elected officials Kristiana Johnson, Will Chen and me participating with our amendments.

    This year’s CP Olson seems to understand the importance of the budget process. And that she represents all Council members. More importantly, she has giving Council time to digest the budget-which means we are all listening,

    So please provide your comments about the budget to Council@edmondswa.gov

  7. In my comment above I was remiss in not saying that a third bright spot for us right now is that we have a fairly non-partisan City Council more in tune with what it’s role should be in terms of representing all the citizens in funding programs and making policy. What we don’t have is any sort of systemic way for our Council Members to monitor and assure that their funding and policies are being implemented properly by the executive on a day by day and week by week basis. For example our Planning and Development Director, who’s proper role is to administer building permits and building code enforcement, has assumed the role of manager over the vision for Edmonds of the future and there isn’t really anything our Council Rep.s can do about that. Citizens only have the ballot box every four years in regards to fair execution of codes and the proper use of public funds. That’s not good enough to assure constant proper government practices.

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