Well, welcome.

This is the City of Everett budget City Council Committee meeting for September 17th, 2025.

Um, for those of you watching live and maybe recorded, we appreciate your interest in city business.

And so we'll begin with our administrator Jennifer Gregerson to talk about our agenda.

Well, I will just um turn it over to our budget finance team here that has a presentation for you.

Um starting with monthly report and then building into general government forecast.

Thank you.

Good evening, mayor and city council, Jamely Graves, Assistant Finance Director, and with me is Heidi Berlantes, Finance Director.

Um, we are going to begin with a review of our year-to-date budget performance uh through July 31st, followed by an update to the development of the 2026 general government budget.

Starting off with general government revenues, as of July 31st, revenues exceeded year-to-date projections by 2,147,681 dollars or 2.3%.

This increase is driven primarily by BNO tax revenues along with strong performance in grants and other tax categories.

Taking a closer look at our major revenue streams, business and occupation tax receipts are up $836,210 or 5.4% year to date.

Our largest BO payments are received quarterly in January, April, July, and October.

Sales tax receipts continue to be aligned with the budget, coming in just 296,926 or 1.3% below projections year to date.

As you know, sales tax receipts have a two-month leg, so July receipts reflect May activity.

This table lists our six largest sales tax categories.

The percent each category makes up of total sales tax receipts based on July 31st results, as well as how each one is performing relative to budget.

Wholesale trade, manufacturing, and information came in above budget, while retail construction and accommodation and food services have fallen short.

Sales tax revenues are currently tracking close to budget, which puts us in a relatively strong position.

While we are seeing some categories affected by broader economic conditions, other sectors are outperforming expectations.

These stronger than anticipated gains are helping to offset weaker performance in other areas, allowing us to stay largely on target with overall sales tax collections.

I'll just stick with uh our revenue.

Do you have um our B and O tax divided up in a categories?

Um yes, I I don't have that with me, but we do have um it divided out by sectors.

You don't, I know you want to be perfect in the numbers, but what's the biggest uh it'd be manufacturing is our largest manufacturing B and O tax.

Okay, thank you.

Any other questions on revenue?

Okay, thank you.

Oh, council member.

I just want to apologize if I'm jumping the gun here.

But where if the impact of the Boeing strike is still working its way through, where where is that at?

Where do we see that?

Um, if we've seen if we see it, if we saw a drop in revenue that would cause by that.

Uh, you would see it in uh our business taxes and sales tax under the manufacturing category.

So thanks, Mayor.

So we're not really seeing that at this point then uh because it looked like manufacturing was uh actually up over We saw it a couple of months ago, is that correct?

I think um we'll probably see it earlier this year uh because of the two month lags.

Gotcha.

So that that lag is now worked its way through and okay.

Thanks.

Thank you.

Okay.

Great.

Uh moving on to general government expenditures, just like with revenues, we base our monthly expenditure forecast on historical trends, which helps us plan for the natural ebb and flow of expenses throughout the year.

Year-to-day expenditure came in 1,738,437 or 1.8% under budget.

Departments continue to remain below budget, showing good financial management.

We'll now transition to the second portion of the presentation, focusing on the 2026 general government budget update.

Developing a budget is an essential process that requires careful planning, forecasting, and balancing of revenues and expenditures.

The budget serves as a roadmap for how funds will be allocated to support essential services, maintain infrastructure, and invest in the future.

This process has two key components revenues, the sources of funding and expenditures, how the funds are used.

The balance between these factors directly impacts the city's ability to deliver services to its residents while ensuring long-term financial stability.

We have a revenue workshop next month where we will go more in depth, but we wanted to provide an overview of the major categories that drive budget development.

On the revenue side, we have property tax, sales tax, BO, other taxes, cost allocation, and miscellaneous revenues.

On the expenditure side, we have labor costs, operating expenses, cost allocation, external charges, reserve funds, and unfunded mandates.

By understanding the dynamics of both revenue and expenditures, the city can develop a budget that supports the delivery of essential services while maintaining fiscal responsibility.

Moving on to the general government forecasts.

This graph shows the city's general government long-range financial outlook.

As of August 2025, we're projecting a budget deficit of $7.9 million in 2026.

This figure reflects our updated revenue and expenditure forecast after completing a robust, robust reforecasting process in July.

Please be reassured that the measure that will be presented in the next few slides balances the 2026 budget.