You can watch the video of Mayor Rosen’s address  and review the budget document here

Edmonds Mayor Mike Rosen presented his 2025 budget proposal at the Edmonds Waterfront Center Tuesday night in front of a combined live and virtual audience of 150. (Readers may wish to follow along with the mayor’s PowerPoint presentation as they read this story.)

“We’re creating a budget for a city with 42,000 folks,” Rosen began. “It’s hard to get it perfect for everyone. It’s a little like trying to create the perfect chocolate chip cookie – some want more chocolate, some want crisp, some want soft. That’s a challenge in itself, but what if you can’t even afford all the ingredients? That’s where we are today with the budget. There’s simply not enough revenue to do everything that our citizens would like us to do.”

He went on to stress that no one person caused this situation, no single group is responsible, it didn’t happen in a single year, it wasn’t due to one specific action, and – most importantly – no single action can fix it.

“Our long-range goal is to build a budget for the city we want, not shred what we have,” he added. “And we aren’t there yet.”

He went on to lay out guiding principles for the budget. Engaging the public every step of the way and budgeting by priorities top the list, which also includes being conservative with assumptions and projections, no hiding from the hard choices, and spreading/sharing the pain. Five strategies will guide the work: cut costs where we can, save money when we can, sell what we can live without, borrow money to carry us through the crisis, and look for ways to increase revenues, the mayor said.

“This is the result of lots of work by city staff, elected officials and citizens to get us where we are tonight,” said Rosen, who shared the following slide of the activities and processes that went into shaping the draft budget proposal:

A big part of this effort was setting budget priorities. Along with the Edmonds City Council’s budget priorities of safety, environment, investment, livability and economic resiliency, there was another major force shaping the process: The public survey where citizens identified the following as their top priorities: Housing affordability, Crime/Public Safety, Overdevelopment/Growth and Budget/Fiscal Responsibility.

The survey data were also used to generate a gap analysis comparing how survey respondents ranked the importance of various priorities compared with their satisfaction with how the city is meeting these. In this chart below, the grey bars indicate how well the city is doing in meeting the priorities, the blue the relative importance, and on the right the satisfaction gap, i.e., where respondents felt the city was overperforming or underperforming. At opposite ends of the scale were bike lanes, where respondents felt the city was placing too much emphasis, to reducing petty crime and burglary, where they felt the city was falling far short.

Rosen then got into the numbers.

For 2024, the city projected revenues of a little more than $51 million. But unexpected expenses combined with one-time use of ARPA funds and a council-approved deficit pushed the actual budget expenses up by an additional $10 million. Add to that the city’s depleted reserves, combined with inaccurate estimations/projections, and Edmonds was left with a $20 million budget hole:

Adding to this, the mayor pointed out a list of things that the city hasn’t been doing but should be, including deferred maintenance and hiring more police:

“This is all about choices,” he explained. “For example, we have 91 miles of roads without sidewalks – building these would cost a staggering $750 million. To meet the national average of police to number of residents, we’d need to add 33 new officers at a cost of more than $4 million. We need to make the hard choices. It comes down to what’s important to us, what we want, and what we’re willing to pay for.”

And then there’s the next problem: 2025

The current draft proposal projects a $13 million gap between costs and revenues for 2025:

“To help close this gap, I asked staff to come up with half of it – $7 million – in cuts,” he explained. “Some of the impacts of these cuts would be defunding 46 positions – people in them would lose their jobs – no beach rangers or summer day camp, reduced staff, and selling some of our vehicles. And there’s more.

Among the impacts of the proposed cuts:

• Furloughing all non-represented staff for 12 days
• Not funding 46 positions, meaning people will lose their jobs.
• Closing the Edmonds City Hall satellite office on Highway 99.
• One fewer animal control officer
• Switching from a Zoom streaming platform to Microsoft Teams.
• Reduced human resources and finance department staff.
• One less court probation officer.
• Reduced overtime.

“Remember that this is just a proposal,” he cautioned. “Council can and will make changes, and they’ll be engaging with this until late November.

The mayor next introduced Acting Finance Director Kim Dunscombe, who provided a more detailed breakdown of the city general fund versus expenses that form the basis of the 2025 budget assumptions.

 

“Our goal is to better align our spending with what we value most,” Dumscombe explained. “Note in the key assumptions slide that we are assuming annexation to the RFA (Regional Fire Authority), and an interfund loan of $7.5 million in 2025. That combined with the department cuts described by the mayor will cover the projected deficit. We’re also assuming salary increases up to 3.8%, increasing court staff, and hiring an emergency management coordinator and a grant analyst.

She went on to explain that with property taxes – the city’s largest single source of revenue – capped by law at a 1%- per-year increase – an opportunity to get more from that source is severely limited. The city has also mostly exhausted its ability to raise utility taxes, despite revenues from this source going down due to conservation and deceased usage. People are simply not using as much of these services as they once did, which is good for conservation, but bad for revenue.

“The bottom line for us is that we have few opportunities for revenue diversification, and this leaves us vulnerable to economic downturns,” she added.

Regarding Edmonds’ spending priorities, she pointed out that the proposal reflects the city’s commitment to public safety, with police and fire remaining top funding priorities.

Mayor Rosen then returned to the podium to address the final piece of the budget proposal: How to get more money through revenue enhancement.

“As you saw from Kim’s presentation, property tax is our major source of revenue,” he began. “But for every dollar you pay in property tax, only about 14 cents comes to the city. Another major revenue source – sales tax– is also limited. At the current rate, for every dollar you spend on goods and services in Edmonds you pay about 10.5 cents in sales tax, but less than a penny of this comes to the city. So, we’re looking at other sources, and have some initial ideas. I’ve grouped them into four areas: Ways we could increase what we collect from existing sources, new sources we could introduce, things we own that we could sell, and other sources. Some of these have promise, some don’t – they’re tough choices, but these are the kinds of things we’re talking about.”

He also pointed out things that are not on the table – things we must do by law or are core expectations of city government.

The mayor’s presentation concluded with a timeline of next steps. The first of these is Thursday evening, Oct. 3, when the public is invited to engage with councilmembers on the budget at an event hosted by the Edmonds Civic Roundtable at the Edmonds Waterfront Center, followed by city department budget presentations in October, public hearings in November and potential city council budget adoption Nov. 26.

More details are available on the City budget website.

— Story and photos by Larry Vogel