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An alternative 2026 plan shows the city can preserve services, stabilize finances and buy time for long‑term reforms using existing resources and a realistic revenue outlook, instead of cuts, closures, or panic tax hikes.
Start from what already works
In 2025 the city operated on less than $44 million, excluding the fire contract, without closing the FAC, Yost pool, or parks. For 2026, projected revenues can support about $50 million in spending — a 15% increase — making extreme austerity framing misleading when the baseline is already functioning service levels. The alternative budget simply applies that 15% increase to the known $44 million base, yielding a balanced $50 million 2026 plan with no cuts, no rush to a levy lid lift and no forced facility closures, while still incorporating loan repayment and maintaining a positive fund balance through the forecast period.
Budgeting on real revenue, not hope
Recent council discussions have leaned on an assumed new levy, treating its passage and size as foregone conclusions without transparent evidence that such a large increase is needed for 2026 (or out-year) operations. The alternative approach reverses that logic: First identify confirmed 2026 revenues, then fund essential services and reasonable enhancements, and only then determine whether a levy is necessary and how large it should be. That sequence respects taxpayers by demonstrating what can be done within current resources before asking for more and by clearly defining any remaining gap.
No closures, modest tools, real choices
Contrary to warnings, community facilities do not have to close to balance a $50 million 2026 budget within expected revenues. The plan does not depend on a utility tax hike, though it does recognize revenue from the Transportation Benefit District sales tax. The apparent $3 million difference between this plan and the city’s workshop figures mostly reflects the council’s willingness to assume a steep utility tax increase up front, which should instead be sized, if needed, after honest numbers are on the table. A central move in the proposed approach is reallocating $5 million from overfunded Internal Service Funds to the general fund, supported by analysis that about 80% of those ISF revenues originated as general fund transfers. This move creates a cash‑flow buffer by replenishing general fund reserves without undermining ISF operations.
Why a citizens’ budget commission
Short‑term fixes cannot deliver genuine recovery; the city needs independent analysis and sustained public oversight. A properly chartered citizens’ finance and budget commission could research revenues, spending and reserves, review capital and debt strategies, recommend sustainable levy levels and timing, and explain complex fiscal issues in plain language to voters. The council should act now to authorize drafting a charter so the commission can be in place by Jan.1, with roughly five months to study data, hold public discussions and, if needed, shape a well‑justified levy for a fall 2026 ballot.
Changing the narrative
This alternative budget is structured as a pragmatic compromise. It shows Proposition 1 supporters that 2026 services can be funded at higher levels than 2025 with no additional cuts, while giving opponents a commitment to live within confirmed revenues for now, delay any levy decision until the numbers are clear and reject scare tactics as a budgeting tool. It is not a permanent cure‑all, but it is a concrete demonstration that sanity and balance can return to city hall in time to pass a responsible 2026 budget.
Jim, as usual your input is always logical, makes sense , laid out in depth with common sense and could not make it any clearer, at least to us the residents. Why the City or Council do not grasp it is beyond my understanding. Is it too complicated for them? Is it that they only relate to their ideas even if wrong and costly, but maybe easier for them because takes no real thinking just add upcharges, simple. You and a few others have offered well thought out plans yet not one city person involved in budget has taken any of them in consideration. I am baffled and mad that it will be a while before they can get voted out and in the meantime continue their total mismanagement of OUR money and hit us at every point they can dream up. Now they throw in “temporary “ increase, that’s baloney and total incompetence on their part, but easy for them. We are sitting ducks or the golden goose i’m not sure which. I have no confidence whatsoever in our City and its total lack of consideration of the residents as anything other than how much they can squeeze out of us. Not all of us can just up and move, it’s just not that simple. Nor should we have to !
Thank you for the time and effort. Excellent presentation. “No panic tax hikes”!
Citizen of the Year ✔️
Jim’s exactly right. The numbers show Edmonds can fund 2026 services, maintain facilities, and stabilize the budget without panic taxes or closures.
The city operated on $44M in 2025; with nearly $50M projected for 2026, the “fiscal cliff” narrative just doesn’t match reality. Budget from confirmed revenue first, then justify any levy with real data. A citizens’ budget commission should have been created already.
This is the balanced, responsible path the city keeps refusing to take.
Jim’s plan makes sense – and that is what is lacking from the Mayor and majority of the Council. Why will the Mayor and Council not accept major good governance REFORM — fiscal discipline, accountability, performance-based/results-oriented work ethic, common sense, 360* transparency, and putting taxpayers first? Why do they refuse to listen to the super majority of 59% of taxpayers who voted ‘No’ on Prop 1? Why do they not accept input and guidance from passionate residents who are career professionals and volunteers to help them and the City? When are they going to stop complaining and fear mongering about 1% caps on property tax increases and the need to close down parks and rec facilities and defund police – when they have adequate staffing and bloated budgets built on unjustified 37-61% spending increases over the last 4 years? Jim has shown how they can move forward in 2026 with no significant cuts in services and with sufficient funding that doesn’t require another tax levy lift or utility tax increase. When are the Mayor and Council going to put taxpayers first ahead of their own egos and City staff? Please sign the ‘last straw’ Petition and join 153 disillusioned residents to demand good governance reform – including immediately establishing a volunteer Citizens’ Financial Advisory Committee and adopting Jim’s alternative budget: https://www.ipetitions.com/petition/enough-utility-tax-increase-is-last-straw
It’s surprising to me how ignorant Council has been to these suggestions and a change in Council leadership is needed.
Folks should push Council to reconcile the general fund since 2023 when Nelson’s Administration went wild with movements of funds without Council approval and a reduction of $4.7 million at FYE that was never footnoted. Since payment to many consultants were not approved by Council, who’s to say that some money might have been paid to a few shell consultants or friends of staff? One Director’s professional services was $1.6 million in one year or $600,000 over her budget and no explanation given.
A forensic audit might answer some of these questions since Rosen ignores without explanation.
Citizens deserve answers as that 2023 to 2024 General Fund changes that were not reconciled by the Blue Ribbon group despite a former Finance Director asking for reconciliation.
King County’s recent forensic audit found mismanagement of millions of funds – so why not follow their lead? Are certain Council members afraid they may be consider knowledgeable of Nelson’s staff mismanagement of funds and weak internal controls?
And CM Eck is inaccurate to say Council is being transparent? Council is not even following its own financial code.
It’s time to demand answers and financial transparency as $4 to $6 million is not immaterial – it’s worthy of explanation.
Hear, hear.
As always, an excellent assessment Jim!
Unfortunately, it appears that you are casting pearls before the swine. That lot in the council and mayor office are hellbent in increasing taxes by any means and have been ignoring any rational consideration presented to them.
It is as if they have been following an agenda and instructions from their puppeteers in Olympia and God-knows where else. And, like any puppets, they will blindly follow their masters at the expense of everyone else.
After even resorting to illegal means to pass the RFA annexation and get their gangster allies fleecing Edmonds’ taxpayers wallets, they are not satisfied yet and greedy for unlimited funds.
I completely agree. Logic should rule the day, or year, depending on the circumstances. What can we do to make the city understand how much we need and want this kind of responsibility in managing our finances?
Jim, the essential differences between your plan and the city’s plan are: The city plan requires $2.4M more revenue than your plan to start to rebuild the reserves in the general fund but you propose a one-time transfer from the internal service funds, obviating the need for that additional revenue, and you propose an additional transportation benefit district (TBD) sales tax to raise an additional $1.2M, over and above the public safety sales tax increase that the city has already approved and included in its plan. The combined impact is essentially equal to the $3.5M in incremental revenue that the city proposes to raise through a utility tax increase. So, there is a level of agreement between these two plans, and the question becomes which route to take to achieve essentially the same result. There are legitimate questions about your proposal such as whether it is feasible to transfer $5M from the internal service funds (the city appears to have indicated no but has not explained the rationale), and whether the TBD sales tax can offset general fund expenses given the restrictions on the use of such revenue, but it seems there is agreement that the city needs some combination of the TBD tax, the ISF transfer and the utility tax to make it through 2026.
Niall,
Thanks for highlighting this. You’re right—there should be some common ground with this plan, but so far I’ve received no response from city hall.
What’s important to note is the clear difference between this proposal and the direction the city appears to be heading. This alternative plan remains balanced without relying on any levy lid lift, and it demonstrates solvency throughout the forecast period. By contrast, the city’s current plan has already baked in an $8 million levy lid lift for 2027, treating it as a foregone conclusion rather than a future decision.
Thank you, Jim, for the plan. Thank you, Diane, for suggesting where to investigate to uncover former financial mishaps.
Jim, curious to know, in your opinion, how many budget scenario models is needed to show “honest numbers”? Also curious to know how many budget workshops, panels, citizens committee meetings, consultant studies, audits would be needed to be honest with ourselves about how deep into financial trouble we are in to know that, regardless of how inconvenient it is, there’s probably no getting out of this mess without raising something, significantly cutting something, or both?
Understanding that the gap isn’t one-time or accounting-related and that it’s truly a structural and recurring gap, it seems like unless we can find a “money growing on trees” recurring revenue strategy in FY ‘26, every credible scenario under the sun, that is feasible and legal, still seems to point to a (larger than we want) levy lid lift + cuts to get back to level wings.
-Cuts only plan not practical.
-One time fund transfers, not sustainable.
-$5M-$7M / year levy lid lift + large cuts, cuts deficit, not enough for long term solvency.
-$10M / year levy lid lift + moderate cuts, balances next few years, deficit returns in 4-ish years
-$12M / year levy lid lift + reasonable cuts, solvent through 2030-ish, almost sustainable long-term
-$14M / year levy lid lift? It’s not difficult to see how the city got to this number. Inconvenient I know.
Strange they want to raise the utility tax but make no mention of why utilities need it, haven’t our utilities gone up by at least 30% in just the last few years so I assume tax revenues have as well this smells like robbing Peter to pay Paul. Question does the sewer system work yet? Are we still hauling our waste to Oregon? I mean if the city said we need to raise utilities taxes to pay for this fiasco I might understand but that doesn’t seem to be the case, sounds like a money grab to me. Nice work Jim.
yes, we’re still hauling the sludge to Oregon. The Mayor gives a very brief financial update at each regular City Council meeting. I wish he would also give a WWTP update. There’s a legal dispute with the engineering firm, there’s employees telling The Beacon reporter that there’s safety issues with the high voltage electrical service they work around, there’s budget overruns, there’s confusion over whether the manager was fired or put on leave (and that employee filed a legal claim against the city), and the whole plant is being run by the former Public Works Director in their consultant role that recommended the new technology in the first place. All this feeds into the high utility rate, the high city liability insurance premium, and probably other serious issues that I am not aware of.
Hi Jim, we all pay a primary utility bill and that is a user-based charge. The more you use the more you pay. The current rate will be going up. I think the increase will be 9-10%. Today we pay a tax on our utility bill and that tax goes into the general fund. What council is discussing is adding an additional utility tax. If passed that tax along with the current tax will go to the GF. The current utility tax and the added utility tax if passed will not go to the utility fund.
Thanks Darrol I understand, I guess its legal but seems a bit underhanded or unethical to me.
Jeremy,
I’m not entirely sure how to respond to your comment. It seems you may have overlooked the final paragraph of my article, where I clearly acknowledge: “It is not a permanent cure‑all, but it is a concrete demonstration that sanity and balance can return …”
The plan I’ve outlined specifically calls for the creation of a citizen finance board or commission to assist the City Council with fiscal and budgeting matters—similar in spirit to the Board you once chaired, but structured to report directly to the Council rather than the administration.
What’s also being missed in these discussions, including your comment, is the impact of RFA annexation. The city now realizes a net savings of roughly $6.5 million annually by not having a fire contract to pay. Add to that the $5 million in new non‑property tax revenue the city has identified, and together those figures essentially equal the property tax revenue the city currently collects. Run the numbers yourself then we can continue the conversation from the same set of facts.
Clearly, there is a need for a credentialed, professional City Administrator in Edmonds. This City can no longer rely on leadership that cannot recognize a higher level of expertise is essential. If the City’s long-term planning efforts were laudable, Prop 1 would not have been needed. If there is such a need for a public safety tax, why does leadership continue to resist asking for proposals from the Snohomish County Sheriff, to compare public safety costs in preparation for public safety union contracts expiring the end of June 2026? Change is needed, and new taxation schemes without a sound reasonable basis clearly meets the definition of insanity. Well run cities like the City of Marysville, have credentialed, professional City Administrators.
Good luck with that Mary Jane, I preached that for about 15 years, constantly being invited out for coffee by some town mover and shaker or “wannabe” mover and shaker and being told I was wrong because all systems of government can be subject to abuse. Yet you look at these towns that use professional management systems with weak mayors and strong councils or hybrid strong mayor/professional management systems and they almost always seem to be run more efficiently. Examples are many – Marysville as you suggest, Mountlake Terrace, Shoreline, Paulsbo etc. One former Council Person I admire and respect greatly used to argue with me against Strong Council/Weak mayor/ city manager but now has come to agree with me. Theresa Hollis’s comment above tells you all you need to know about how mismanaged current Edmonds is.
I applaud your efforts Clinton, because doing so takes courage. The Prop 1 campaign raised the public’s awareness but there is more work to do. Those who discouraged your efforts, is a sign that your idea threatened their advantageous ties to the ingrained culture of “how things are done” in Edmonds. The decision to increase more revenue through taxation on water consumption via the wastewater utility by Councilmembers Eck, Paine, Tibbott and Nand is a clear indication they believe their role is to rubberstamp Mayor Rosen’s administration’s desires, without a signifcant reasonable basis other than cash flow.
Now that I’m outside looking in; I’m kicking myself for not getting out at least 10 years sooner as I definitely saw all this coming way back, even before the Connector. Hindsight is perfect, of course, but a good professional city manager would have seen that a road running over and into a marine sanctuary was a bad idea and maybe even illegal. A good certified city manager would have seen that buying a new and untested technology waste water treatment plant was not a good idea (like buying the first model year of a rushed to market car – a real gamble). Your current mayor has actually rehired the very person that recommended that bad idea in the first place to run it. How does that make any sense whatsoever? And, just think, were it not for the late and very good CM Johnson and her astute debating skills along with the last minute defeat of the ill advised Connector, Neal Tibbott would probably have been our/your mayor. Of course after he saw the “Mob” at city hall he voted against the Connector in the vein hope, as it turns out, he would become the next mayor.
LOL, Clint – you can use my name; the whole story is Council tried to get the form of government change after Haakenson with strong support from League of Woman Voters (in 2010) and citizen interest did not support the ballot measure.
With Earling – there was strong Council members enforcing financial transparency and good governance with strong financial minded Police Chief, P&R Director, Economic Director and Finance.
It wasn’t until Nelson that things went south with “Wild West” spending and a simple majority that blew up the 2022 budget because the attorney “pulled out of his hat” an adjournment meeting process that CP Paine and appointed CM Distelhorst and CMs Laura Johnson and Fraley Monillas approved – jamming through so budget passed on a Wednesday night WITHOUT three elected Council Members. I was not even notified (at niece’s wedding).
As many know excess spending, affluent trips, ignoring certain CMs took over and money was freely spent.
Then Rosen takes over and ignores the $4+ million general fund discrepancy and keeps same staff that continued with the excess spending. Slowly some left “mutually” with excess severance given – REALLY!?! And, he adds a new City Manager – so yes, let’s change the form of Government (get on ballot).
Ridiculous the amount of $$ on non-union salaries/lawsuits, professional services, unnecessary attorney fees and bad legislative control.
What is the specific level of grant revenue the city realizes? Is there someone on staff who applies for federal or other sources of grant dollars? I had thought that was a deficiency that could be a source of future net positive funding