Edmonds Finance Committee Meeting - March 18, 2026: Financial Reports, Policy Changes, and Budget Amendment
Edmonds City Council Finance Committee Meeting – March 18, 2026
Note: The agenda and transcript list the meeting date as March 17, 2026, at 1:00 PM, but the provided instruction specifies March 18, 2026, at 15:45 UTC. This summary uses the given date per instruction, while noting the discrepancy.
The Finance Committee reviewed the January 2026 monthly financial report, discussed a proposed revision to the city's financial reporting policy, and considered a budget amendment for April 2026. Key topics included cash flow projections, new revenue tracking, and the need for forward-looking financial analysis.
Discussion Items
1. January 2026 Monthly Financial Report Finance Director Go presented the report, noting that January typically shows a fund balance decline due to large annual payments such as the $2.7 million WCIA liability insurance premium. The general fund decreased by $2.4 million in January, which Director Go characterized as normal. He explained that the city is now in month 13 of the biennium, and staff are working to improve the biennial report to mirror simpler formats used by Lynnwood, with four columns showing beginning balance, revenues, expenditures, and ending balance. The improved report will be available starting with the February report.
Councilmember Barnett asked about cash flow, and Director Go showed that property tax revenues arrive in large chunks in April and October, causing cash lows in early months. The city is also repaying an interfund loan, which affects cash flow. Councilmember Barnett also requested clarity on “carry forward” in the biennial budget; Director Go explained that in a biennium, funds remain available unless removed by amendment, and future amendments should be used proactively rather than carrying forward at year-end.
Councilmember Payne asked about sales tax increases, including the new public safety sales tax (PSST). Director Go noted that PSST revenues have not yet been received (due to a two-month lag) and that the observed increase in January sales tax reflects November-December activity. He committed to breaking out PSST in future reports. Councilmember Payne also asked about real estate excise tax (REET) trends and contingency planning if revenues fall short; Director Go said the city would consider budget amendments or project delays.
Councilmember Barnett asked about the investment portfolio; Director Go reported that the city recently purchased three investment items to fill a gap in 2029, keeping the portfolio within best-practice five-year maturity and under the 75% compliance threshold.
Councilmember Peng asked about the status of the Tyler ERP implementation and its impact on the technology rental fund. IT Director Brian confirmed that higher January expenditures in the technology rental fund are due to concurrent work on the accounting and HR modules, with consultant costs higher than last year.
Councilmember Chen asked about graphs in the water utility fund (421) showing a sharp jump from July to August, which did not match prior year trends. Director Go said it might be due to rate increases and seasonal patterns, and he will research further.
Councilmember Chen also questioned a debt payment line showing interest on the interfund loan, though the ordinance states no payments until 2027. Director Go said he will follow up to clarify the numbers.
Councilmember Barnett expressed concern about the need for forward-looking projections, not just historical reports. Director Go agreed to include cash flow projections in the next month's report, incorporating new revenue estimates.
2. Financial Policy – Financial Reporting Director Go presented a comparison of financial reporting policies from neighboring cities (Lynnwood, Mukilteo, Mountlake Terrace, Shoreline). He argued that the current policy (a page and a half) is overly prescriptive, leading to 40-page monthly reports that obscure the big picture. He proposed revising the policy to allow a shorter monthly report focusing on fund balance, high-level revenues/expenditures, and key metrics, with quarterly reports providing more detail. He also noted that the new ERP system will eventually enable dashboards and drill-down capabilities.
Councilmembers generally supported the idea of a more concise monthly report, with the ability to dig deeper when needed. Councilmember Will suggested using the new ERP to allow self-service for council and the public. Councilmember Chen asked about the status of dashboard development; IT Director Brian said a dashboard project kickoff is planned for summer 2026, and he will provide a work session to define parameters. Councilmember Michelle requested visual aids (e.g., red flags for out-of-trend items) and a breakdown of revenue sources (e.g., sales tax by sector, port revenue).
The committee directed Director Go to bring back a modified policy and an example of a streamlined monthly report at the next finance committee meeting in April.
3. Budget Amendment – April 2026 Director Go introduced the first budget amendment of 2026, primarily driven by three items:
- Marsh Fund Project (Phase 2): A grant-funded design project to restore the marsh to its original saltwater condition. Total cost $1,066,140, with $677,400 from a grant (NFWF), $98,240 from the Marsh Fund, $50,000 citizen donation, and $240,000 in-kind volunteer labor. The city must amend the budget to have authority to spend the grant funds. Engineer Mike Delila explained that the 30% design will improve eligibility for future grants. The project also involves land ownership issues (Unocal owns part of the marsh, but the city has first right of refusal). The committee expressed support for the project.
- Park Impact Fee Study: Parks Director Angie Feser requested $50,000 (up to $60,000) to update the city's park impact fee formula, which has not been revised since 2015. A state law change in 2024 requires recalculation by July 2026. The study cannot be paid from impact fees or REET, so general fund allocation is needed. Feser noted that if authorized now, she can expedite a consultant selection via informal bidding; otherwise, a formal process would take months. The committee supported moving forward.
- IT Software and License Increases: IT Director Brian requested $21,025 for increased costs in fleet management software, text message capture for public records, and engineering software licenses. These are ongoing operational needs.
Additionally, the committee discussed a carry-forward of $200,000 for the Ballinger Lake Park Phase 3 project (ILA with Mountlake Terrace). The money was already allocated but unspent due to contractor delays. No new funding is needed; only a budget amendment to reflect the extended timeline.
Councilmember Barnett asked about the timing of the grant for the Marsh project; the grant award is pending further paperwork from NFWF, but the city wants to be ready to issue an RFQ. The committee agreed to advance the budget amendment to the full council, with a target first reading in April (likely April 7 or later) to allow for additional items. Director Go noted that the Marsh project is the most time-sensitive.
Key Outcomes
- The committee will advance the April 2026 budget amendment to the full council for first reading, with a tentative schedule of April 7, 2026, or later, depending on any additional items.
- Director Go will bring a revised financial reporting policy and an example of a streamlined monthly report to the April finance committee meeting.
- The committee will consider a separate presentation from the Marsh group on the scope and success of the partnership.
- IT Director Brian will provide a work session on dashboard capabilities before the summer 2026 kickoff.
- The committee noted the discrepancy between the agenda date (March 17) and the instruction date (March 18) and will rely on the official record for future references.
Meeting Transcript
Can you hear me? Yes, we can. There we go. Okay, so it's one club, let's call the months 17 Finance Committee to order at one PN. We have Mayor is with us. Councilmember Ben and Councilmember Dodge and we have Director Go here. Um June. We have Councilmember Peng, Councilmember Act. Let me see. Okay. All right. Thank you for attending today's meeting. We have three items on the agenda. The first one is review. January, 2026 monthly financial report. We have Director Go here to walk us through. Thank you. You're welcome. Good afternoon. So first thing I want to say is usually January is um it's kind of a not much to the month, right? It's the first month of the year. Um we have our big payments that go out for annual dues and fees for certain things like insurance. For example, the largest um expense for the year of the city, especially the general fund will have is non for nine um project driven. It's the WCIA bill, which is our liability insurance, which is totals 2.7 million. So that's gonna skew the numbers for January and the couple of funds, especially the general fund. And that's exactly what it's done. So could if you compare this January to last year, very similar, um, but it takes the fund balance down right off the bat. And so uh that's probably the biggest thing here. I know there's some questions that were asked. Uh one of the things I do, and so it did this the fund decreased 2.4 million in January, but it's nothing for cost for concern, it's just a normal operating business the way it happens. We get less revenues in January than we do in December and then also through the rest of the year. It's normal for every city I've been at. One of the things I would say is that the difference this year is that this is month 13 of the biennium. So we have a biennium report in there, it's but it needs to be changed. It's just too there's too much information and it doesn't highlight what I want you to see. And that is that I want you to see what what it looks like where we are on the 13th month, what are what we expect it to be at? We don't have anything to compare to because we don't have another biennium to compare it to except way back in 2007, right? So that'll take another year for us to get to that point when we have and we hit 2027-28. But we still can compare it to our budget and how it's tracking. So um there is uh a report in here. We have two reports, one's for just annual and the other one's for biennial, right? And the biennial one needs to be worked on a little bit to shrink it down because it's got too many moving parts, and what we're gonna do is we're gonna mirror something like what Linwood has, where they have four columns. And I and I've sent I've included that in this packet, right? Where they have beginning balance, um, then they have revenues for two years, and then they have expenditures for the two years, and then the ending balance, and then you also see the actuals in there too. So that'll give you the true fund balance as of the 13th month or the 14th month, not just one month, right? So I hope everybody understands that. Um we haven't had time to get to it yet. So there will be the cumulative amount. Yes, and we will have that starting with the February reports, so you can have that um so you can look at it. What I want to do is when we meet next time is talk about what's the best thing to look at for the in the biennual report that you want to see.
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