Edmonds Mayor Mike Rosen delivered the city’s proposed financial plan for the 2027-28 fiscal years to the public on Monday, outlining a return to positive cash flow. For the first time since 2022, the city’s projected income is expected to exceed its spending. The proposal anticipates a general fund surplus of $714,720 in 2027, rising to $1.9 million in the following year. If these projections hold true, the municipality will hold $2.2 million in reserves by the end of 2028. Rosen noted that the city has been without significant reserves for an extended period, marking a notable shift in its financial standing.
This turnaround follows a period of severe fiscal strain. In 2023, local leaders declared a fiscal emergency after depleting $8 million in reserves and tapping $12.5 million in one-time funds to cover ongoing costs. Rosen attributed the previous deficits to inflation and a statutory limit that caps property tax increases at 1%.
Residents had the opportunity to address this shortfall in November 2025 but voted against a $14.7 million property tax lid lift. In the interim, the city implemented several other revenue measures, including a 0.1% sales tax for public safety, a 0.1% sales tax for a transportation benefit district, and a ballot measure to join the South County Fire district. Additionally, utility rates were temporarily raised by 20%, a provision scheduled to expire at the close of 2028. To balance the books, the administration also cut staff positions and programs, imposed furloughs, and divested certain city assets.
Despite the projected surpluses, the long-term outlook remains challenging. The proposed budget indicates that without further intervention, the city faces a $9.5 million deficit by 2032. Rosen described the current surplus as a window of time to begin addressing this future shortfall.
The financial plan allocates resources for several priority initiatives, including infrastructure upgrades on Highway 99, the development of a citywide strategic plan, revisions to the parks and recreation strategy, and simplifications to the development code. Funding is also directed toward nutrient treatment enhancements at the wastewater facility and the reactivation of various municipal boards and commissions.
Department heads warned, however, that significant gaps remain. A parks and recreation director stated that the department is currently operating with minimal staffing. A local police chief indicated that the force requires 11 more officers to reach the state average of 1.4 officers per 1,000 residents. Furthermore, the court system needs additional personnel to manage the continuous operation of school zone speed cameras, a requirement established by a recent council vote.
In the public works sector, the city is postponing water main replacements to build a financial cushion. This reserve is intended to offset a substantial upcoming increase in wholesale water rates from the city of Everett.
Police spending represents the largest share of the general fund, accounting for 37% of expenditures, up from 35% in the previous two-year period. Parks and recreation remains the second-largest category at 10%, unchanged from the prior biennium. Labor costs constitute 48% of the proposed general fund, an increase from 44% previously. The city’s three primary revenue streams, sales, property, and utility taxes, each contribute approximately 22% to the total.
City officials are actively investigating regional partnerships to mitigate escalating expenses, as neighboring communities in south Snohomish County, such as Lynnwood and Mountlake Terrace, navigate similar fiscal pressures. Discussions are underway about a potential shared aquatic facility, while preliminary talks have also begun on consolidating wastewater operations across multiple municipalities.
“We’re facing a series of challenging choices moving ahead,” said City Manager Rosen. “This marks the beginning of a longer journey, not the culmination. The adopted plan provides stability for the next two fiscal years, and that’s our immediate horizon. We’re acting as temporary stewards, borrowing this community for our time, but committed to leaving it in solid shape.”
The proposed budget remains subject to formal adoption by the City Council, with a series of public forums planned over the coming months. Council deliberations are scheduled to kick off this coming Tuesday. A dedicated public hearing on projected property tax collections is set for Oct. 13, followed by broader budget reviews on Oct. 27 and Nov. 2. Council members anticipate voting on final budget approval during their Nov. 24 meeting.