City of Everett finance staff told the city's Budget and Finance Committee on July 16, 2025, that 2024 general government revenues fell short of the forecast by $928,000 while expenditures came in about $8.3 million below the adopted budget, and that the city's reserves remain well above the city's 20% fund balance policy.

Jamie Lee Graves, assistant finance director, said the city budgeted $161,621,239 in general government revenues for 2024 and recognized $160,638,928, a shortfall of about $928,000 (0.61%). Graves attributed part of that gap to timing: the 2024 COPS grant check for about $928,000 arrived in April 2025 and therefore was not recognized in the 2024 cash-based accounting year. She said actual 2024 expenditures were $163,784,203 compared with a budgeted $172,151,255, approximately $8.3 million (4.16%) under budget.

Why it matters: the presentation framed the shortfall and underspending together as factors shaping the city's available resources for capital projects, pension contributions and equipment replacement. "We remain committed to good financial stewardship and appreciate the proactive efforts administration and our teams have made," Graves said.

Staff walked the committee through several reserve and capital funds. Highlights included:
- CIP 1 (major repairs and renovations): typically funded by a $3,000,000 annual general-fund contribution; the city deferred 2024 contributions and staff forecast a 2025 ending balance of about $15,300,000.
- CIP 2 and CIP 3 (real estate excise tax–funded capital): these funds are supported by the city's real estate excise tax (REET). CIP 3, which is restricted primarily to parks, streets and utilities, had a projected 2025 ending balance of about $7,700,000. CIP 2 is currently covering debt service on the Angel of the Winds Arena and LTGO bonds.
- CIP 4 (major renovations, expansions, and new facilities): staff noted projects approved for 2025 include later phases of the Eclipse Mill Park project, riverfront trail improvements and an outdoor event center; specific forecasted balance figures in the transcript were unclear.

Other funds and items discussed:
- Motor Vehicle & Equipment Replacement Fund: projected 2025 ending balance roughly $2,500,000; by 2027 the fund is expected to dip sharply (to about $450,399 in the forecast) due to roughly $8,000,000 in planned vehicle and equipment purchases, led by large purchases for fire apparatus and police vehicles. Staff identified the largest planned costs as approximately $7,700,000 for fire vehicles/engines and $6,700,000 for police cars.
- Real Property Acquisitions Fund (Fund 145): the real property subfund's 2024 ending balance decreased to $716,000, largely due to professional services for the outdoor event center. The 2025 forecasted ending balance shown was $175,342. The street-and-alley vacation subfund had a 2025 forecasted ending balance of about $654,397.
- Fund for Animals: forecasted 2025 ending balance $1,200,000; staff said the department will launch a new grant-funded behavior program and add agility equipment for a new play yard.
- Library cumulative reserve (Fund 152): forecasted 2025 ending balance $460,652; staff noted 58 free community programs in 2024 and new shelving installed in the Northwest Room.
- Parks cumulative reserve (Fund 148): forecasted 2025 ending balance about $3,200,000; staff said recent rent revenue began after homes were made available for rent last year.

Pensions and actuarial work
Graves told the committee the city suspended contributions to the police and fire pension plans in 2023, 2024 and 2025 but that the funds' ending balances remain positive under current forecasts. The city completes an actuarial valuation every two years; staff said a full actuarial valuation is underway and results are pending, and that the forecast is therefore subject to change. The finance presentation also noted the fire pension fund receives an annual state contribution derived from taxes on fire insurance premiums.

Fund balance policy and recent uses
Finance staff reiterated the city's fund balance policy, which requires an ending fund balance equal to 20% of annual revenues. Staff said the actual ending fund balance has averaged 31% of operating revenues and remains consistently above the 20% minimum. The presentation described one-time uses of the fund balance in 2022: approximately $4,700,000 was appropriated to CIP 1 and about $3,700,000 to the police and fire pension funds; staff said remaining reserves helped mitigate a reduction in business-and-occupation tax revenue after Boeing moved 787 production out of state.

Council questions and staff follow-up
Committee members asked multiple operational questions during the meeting. Councilmember Will asked whether proceeds from a future sale of the Waits Motel property would replenish CIP 4; staff replied that sale proceeds would return to that account and said negotiations with a potential purchaser are ongoing and that the city will report back when there is more to share.

Councilmember Fossey asked how the rainy day fund differs from the general ending fund balance; staff replied that the rainy day fund is a separate reserve held for emergencies and is not included in the general government fund-balance calculation presented.

Councilmembers raised questions about ADA curb ramp funding, police and volunteer vehicle replacement practices, and measuring park usage. Staff said ADA ramps are funded largely through federal and state grants and the city's streets fund, and that street/sidewalk work is prioritized based on grant availability and proximity to pedestrian zones such as schools. On vehicle replacement, staff said departments identify needs and the city prioritizes purchases based on available funds; staff agreed to provide more detailed information about police vehicle life cycles and the process for reassigning higher-mileage vehicles to lower-intensity uses (including volunteer use).

On grants, staff clarified that the federal COPS grant commonly requires a local match; the COPS revenue noted in the presentation reflected only the cash timing of the federal check, not a no-match award. Staff said the city budgeted about $2,000,000 for COPS in 2024 but recognized roughly $1,100,000 in 2024 cash receipts because of the later arrival of federal funds.

Next steps
Staff said committee leadership will discuss the August agenda and that the 2026 budget process will begin in earnest in late October and November with earlier preparatory work in September.

This account is based on the finance presentation and the committee's Q&A at the City of Everett Budget and Finance Committee meeting on July 16, 2025. No formal motions or votes were recorded during the presentation portion of the meeting.