Everett Budget & Finance Committee Meeting – April 16, 2025: Budget Performance and Community Outreach Review
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Everett City Council Budget & Finance Committee Meeting – April 16, 2025
The Budget & Finance Committee met on April 16, 2025, at 5:30 PM in City Council Chambers. The committee reviewed year-to-date budget performance through February 28, 2025, received a summary of community budget outreach conducted in August 2024 following the failure of Proposition 1, and discussed improvements to the council budget book. No votes were taken; the meeting was informational and deliberative.
Year-to-Date Budget Performance (through February 2025)
- Finance Director Heidi Berlantez and Assistant Finance Director Jamie Lee Graves presented the revenue and expenditure overview.
- General government revenues exceeded projections by approximately $1.2 million, with total revenues for February reaching just over $983,000. This was attributed to timing of operating transfers, miscellaneous revenues, and Business & Occupation (B&O) and sales tax collections.
- B&O tax receipts increased by $360,546 (8.3%) compared to budget. The largest quarterly payments occur in January, April, July, and October.
- Sales tax collections were $17,389 (0.3%) above budget. February collections reflect economic activity from December 2024.
- Expenditures remain below budget due to strong departmental fiscal discipline, but future increases are anticipated from the collective bargaining agreement approved March 18, 2025, which will require retroactive pay adjustments.
- Councilmember Martu asked whether rental income from apartment buildings is subject to B&O tax. Jamie Lee Graves replied that the tax typically applies to retail, construction, manufacturing, and wholesale industries, but specific analysis would be needed for apartment leasing.
- Councilmember questioned the drop in construction sales tax; Graves noted that the numbers reflect December activity, and while permit processing has increased 340%, actual construction spending depends on market conditions.
Community Budget Outreach Survey Results
- Heidi Berlantez presented results from the 2024 outreach, which included three public meetings, a citywide survey, and email/mail feedback. The survey received 482 responses.
- The top community priority identified was Safe Community, followed by Housing/Transportation/Infrastructure, Responsive & Responsible Government, Economic/Workforce/Cultural Vitality, and Engaged & Informed Community.
- When asked about potential budget cuts, the top five areas residents identified were: neighborhood group support, parking enforcement, business support, police community outreach, and events/arts/culture.
- A side-by-side comparison showed that the city’s general government budget allocation aligns with these priorities: 59% of the general government budget is dedicated to Safe Community.
- The city will not repeat a large-scale survey this year, as standard municipal practice is to conduct such surveys every two years. Public engagement remains open via phone, email, public hearings, and written feedback.
- Councilmember Bader noted that the general government budget does not fully reflect the city’s total investment in housing/transportation/infrastructure (e.g., Everett Transit, public works), which constitutes the largest share of the total city budget. He also asked if the survey process prompted any changes in budget presentation. Heidi Berlantez said the team would consider how to better walk through the budget book for council and the public.
- Councilmember Rizerlingo observed that residents in face-to-face sessions found it difficult to specify specific cuts when presented with concrete options, and that there is strong public interest in the city’s long-term fiscal sustainability and efficiency.
Council Budget Book Discussion
- Council President Schwab (implicitly chairing) noted that she and Councilmember Ryan met with Finance Director Heidi Berlantez and staff to brainstorm improvements to the council budget book.
- A key idea was to provide councilmembers with a high-level summary packet (alongside the mayor’s budget message) a week or two before the full budget book is released, allowing time to review the big picture before diving into details.
- Specific charts and formatting improvements were discussed. The committee expressed support for this approach moving forward.
Key Outcomes
- No formal votes were taken; the meeting was for discussion and information.
- The city will not conduct a major budget survey in 2025, relying on 2024 results and ongoing public input channels.
- Staff will explore ways to improve the budget book presentation for council and the public, including providing a high-level summary packet ahead of the full budget book.
- The committee will continue to monitor year-to-date budget performance and adjust forecasts as needed.
Meeting Transcript
About year to date budget performance. Second is a budget community outreach review. And then we'll have a discussion on a small discussion on the council budget book. So we'll begin with a presentation. Welcome, Heidi. Good evening, Mayor and City Council. All right. Heidi Berlantez Finance Director joining me is Jamie Lee Graves, our assistant finance director. This evening we'll begin with a review of our year-to-date budget performance through February 28th. And this is followed by a recap of the budget community community outreach that was conducted in August of 2024. So at this time, I will turn it over to Jamie Lee and she'll go over the year-to-date budget performance. Good evening, Mayor and Council. First, we will start with the general government revenues. Oh, our revenue forecasts or how much of the revenue budget is collected each month is based on historical actuals. As of February, general government revenues exceeded projections by approximately 1.2 million dollars, with total revenues for the month reaching just over $983,000. This increase is largely attributed to the timing of operating transfers in, along with miscellaneous revenues, business and occupation tax, and sales tax are also contributing to the positive year-to-date performance. As noted in the monthly financial report, this yearly increase should not yet be interpreted as a reoccurring trend as revenue collections can vary significantly throughout the year due to timing as well as seasonal factors. Starting with one of our primary revenue sources, the business and occupation tax receipts through February reflect an increase of 360,546 or 8.3%. As shown in the accompanying graph, the city typically receives its largest BNO payments on a quarterly basis in January, April, July, and October. Turning to sales tax revenues, collections are currently $17,389 or 0.3% above budget. It's important to note that sales tax receipts are received on a two-month leg. So February collections represent economic activity from December. Next, we'll take a look at general government expenditures. Similar to revenues, our expenditure forecast representing how much of the budget we expect to spend each month is based on historical actuals. This approach helps us develop a more accurate projection by capturing long-term trends and seasonal patterns. However, monthly expenditures can vary due to the timing of specific activities, such as construction projects, which are more common during the summer months. Certain expenses may also be delayed, resulting in variances when compared to the budget. One example is the collective bargaining agreement recently approved by council on March 18th. As a result, we anticipate an increase in expenditures as retroactive pay adjustments are processed for affected employees in 2025. These fluctuations are expected and factored into our broader financial planning framework. It's also worth noting that departments have demonstrated strong fiscal discipline with spending remaining below budget. We've emphasized the importance of responsible financial stewardship, and we're pleased with the proactive efforts our teams have made to manage resources effectively. Before passing it off to Heidi, are there any questions on the February report? Questions? Councilor Martu. I have one. Can you explain BO tax? I had a somebody ask me this question, and I didn't really know. Say uh an apartment building that's somebody who has a lot of apartment buildings and they rent that out. Do they pay BO tax? Is that because that's their business? Or is that uh no? Uh lease revenues. Yeah. Um, I would have to look specifically for releasing. Um, mainly we see it more in kind of the industry related. Um, so it would be um analysis would need to be done with apartments as an example and what industry that would fall under. But yeah, generally it's kind of within our retail construction manufacturing and wholesale. So that's kind of what I thought, but I was it was a question that I I had never really thought about. I had no idea.
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