Edmonds City Council Special Meeting: Fiscal Forecast, Budget Development, and Boards & Commissions Review - September 11, 2026

The Edmonds City Council held a special meeting (retreat) on September 11, 2026, from 10:02 AM to approximately 1:07 PM. The meeting focused on the Baker Tilly fiscal sustainability project, the 2027-2028 budget shortfall, revenue decisions with restrictions, and proposed changes to the city's advisory bodies. No formal votes were taken; the session was informational and deliberative.

Discussion Items

• Baker Tilly Fiscal Forecast & Project Status – Michael Perkins, Matt Stark, and Matt Bubner presented the first phase of the fiscal sustainability plan. Key findings:

  • Revenue and Expenditure Trends: From 2022-2026, expenditures exceeded revenues, with 2023 being particularly challenging. The 2026 budget is roughly balanced due to recent cost-control efforts. Projections show growing deficits starting in 2029, primarily because the utility tax surcharge (~$3.2 million) and red light camera revenue (~$440,000) are set to expire at the end of 2028. Inflationary pressures will widen the gap, reaching an estimated $9.5-10 million by 2033.
  • Fund Balance: The general fund balance has been drawn down to about $2 million. A small surplus is projected in 2028 due to an interfund loan repayment, but deficits thereafter will quickly exhaust reserves.
  • Advantages: The city has "breathing room" through 2028, allowing time to develop strategies, but immediate action is needed.
  • Phase 2 & 3: Phase 2 will evaluate budget strategies in four buckets: expenditure controls, service delivery changes, revenue enhancement, and service level reduction. Phase 3 will involve a fiscal sustainability task force, with meetings starting in October 2026 and recommendations expected by spring 2027.
  • Councilmembers asked about retroactive cost allocation from enterprise funds, facility deferred maintenance, and the assumptions used in the model. Baker Tilly confirmed that assumptions will be documented and the model will be shared with the city.

• Budget Development Status & Process – Mayor Rosen reviewed the budget development timeline, noting it began in February 2026 with council priorities and a community survey. Staff have been refining departmental budgets, with first drafts submitted in August. The process is ongoing and the budget remains a "rough draft."

• Updated 2027-2028 Budgetary Shortfall – Kisha Post presented a preliminary estimate showing 2027 revenues of just over $55 million and expenses of $55 million, leaving a razor-thin deficit of approximately $58,000 (down from $4.5 million in July). The improvement resulted from:

  • Extension of the utility tax
  • Corrections to general fund subsidies to enterprise funds
  • Directors submitting flat or reduced expense projections
  • Updated labor assumptions based on current contract negotiations and anticipated turnover (senior staff departures filled at lower steps) The numbers are dynamic and may change as position budgeting and other refinements are completed. Councilmembers noted that the city is not in a position to begin reserve replenishment and requested that reserve planning be explicitly included in the budget process.

• Council Revenue Decisions & Restriction Impacts – Kisha Post summarized three restricted revenue sources:

  • Transportation Benefit District Sales Tax (0.1%): Adopted January 2026, collection began April 2026. Revenues go to the street fund for transportation improvements. Budgeted $660,000 for 2026.
  • Public Safety Sales Tax (0.1%): Authorized August 2025, collection began early 2026. Must be used for criminal justice purposes. Budgeted $1 million for 2026, but actual collections are expected higher. The state may hold disbursements until compliance with training requirements is met.
  • Automated Traffic Safety Program: Includes school zone, red light, and upcoming walk zone cameras. School zone revenues (~$400,000/year) go to the general fund. Red light cameras (two intersections) generate an estimated $2.2 million/year, with 25% to be redirected to the state's Cooper Jones Active Transportation Safety Account starting in 2029 (net of program costs). Walk zone enforcement will begin in 2027, with 20% to general fund and 80% to street construction. Councilmember Nan expressed concern that red light revenues are being deposited into the general fund without the restrictions required by state law (ESSB 2384) and called for compliance. The mayor assured that the city will ensure compliance.

• Boards and Commissions (ECC Title 10 Amendments) – Mayor Rosen presented proposed revisions to the city's advisory bodies, informed by a task force that met earlier. Key proposals:

  • Rename "boards and commissions" to "advisory bodies" for consistency.
  • Repeal two obsolete bodies: Municipal Defense Commission (established 1941) and Medical Staff Insurance Advisory Board.
  • Modify the Youth Commission to serve as a broader youth advisory board with a larger age range, meeting twice a year.
  • Reduce Historic Preservation Commission meetings to quarterly (with ability to meet more often as needed).
  • Transition the Sister City Commission into a nonprofit over time.
  • Convert the Climate Protection Committee into a mayor's climate task force with specific deliverables (e.g., climate action plan).
  • Standardize naming conventions: "Board" for policy/quasi-judicial, "Task Force" for specific problems, "Work Group" for hands-on support, "Advisory Board" for expertise/community perspective.
  • Future considerations include creating a separate parks board, merging the Architectural Design Board with the Planning Board, and revisiting the city's role in the cemetery.
  • Staff costs: Estimated 30.75 staff hours per meeting, totaling 3,751 hours for all meetings. Out-of-pocket costs (e.g., email accounts) are about $16,000-$17,000.
  • Council discussion: Several members supported the proposed consolidations. Councilmember Olson suggested making climate protection an umbrella with trees and parks as subcommittees. Councilmember Chen emphasized elevating climate and economic development. Councilmember Ekstrom noted the value of community engagement and requested that lodging tax advisory budget decisions include council discussion. The mayor indicated he will revise the proposal based on feedback.

Key Outcomes

• Fiscal Forecast & Task Force: The Baker Tilly team will continue to refine the forecast and develop budget strategy options. The fiscal sustainability task force will convene in October 2026, with recommendations expected by spring 2027.
• Budget Adoption Timeline: The proposed budget will be presented to council on October 5, 2026, followed by study sessions on October 6 and 14, public hearings on October 27 and November 2, and adoption target on November 24, 2026.
• Boards and Commissions: The mayor will incorporate council feedback into a revised ordinance for ECC Title 10 amendments. A public hearing will be scheduled. The ordinance must be adopted before January 1, 2027, when the current suspension of boards and commissions expires; otherwise, the previous structure will automatically resume.
• Revenue Restrictions: Staff will work to ensure compliance with state restrictions on automated traffic safety revenues and improve tracking by enforcement type.