Resolution 1532RESOLUTION NO. 1532
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
EDMONDS, WASHINGTON, AUTHORIZING THE USE OF
GENERAL FUND OPERATING RESERVES FOR 2023
GENERAL FUND EXPENSES AND ADDRESSING THE
STRUCTURAL BUDGET IMBALANCE AND
DECLARATION OF A FISCAL EMERGENCY
WHEREAS, the City of Edmonds adheres to the Fund Balance Reserve Policy as adopted on
July 2, 2019 by Resolution 1433; and
WHEREAS, the City Council adopted a balanced budget in December of 2022 for fiscal year
2023;and
WHEREAS, the recent high inflation and tight labor markets necessitated increased wages and
led to other higher costs; and
WHEREAS, during the course of 2023, budget amendments increased expenses to levels not
sustainable for revenues creating a structural budget deficit as defined by Article VIII in the Fund
Balance Reserve Policy; and
WHEREAS, the Strategic Outlook in the Mayor's Proposed 2024 Budget shows estimated
spending of $2,204,692 of the minimum required amount of the General Fund Operating
Reserves in 2023; and
WHEREAS, the Fund Balance Reserve Policy states that the General Fund Operating Reserve
shall be used in cases of fiscal emergency; and
WHEREAS, Article III, section 1 states "(a)ny use of the committed General Fund Operating
Reserves shall be used only in cases of a fiscal emergency", which are broadly defined to include
"economic uncertainties, unforeseen emergencies and unanticipated operating expenses and
revenue shortfalls"; and
WHEREAS, Article VII, Deviations from the Fund Balance Policy, allows for deviation from
the fund balance reserve policy with a simple majority vote of Council; and
WHEREAS, this spending of the 2023 General Fund Operating Reserves represents such a
deviation; and
WHEREAS, this significant structure imbalance was caused by two specific ordinances adopted
in March and April 2023. These negative fiscal trends coupled with the shortfall in General Fund
Operating Reserves is now considered a fiscal emergency as defined in Section III section 1 by
the City Council.
NOW THEREFORE, THE CITY COUNCIL OF EDMONDS WASHINGTON HEREBY
RESOLVES AS FOLLOWS:
SECTION 1. On November 6th, the City Council recognizes the de facto fiscal
emergency represented in the 2024 Mayor's Proposed Budget and approves the
deviation per Article VII of the Fund Balance Reserve Policy.
SECTION 2. After City Council approves the 2024 budget, a fiscal emergency may
continue to exist in 2024 because of the structural imbalance of future expenses
exceeding projected revenues unless the Administration and City Council take strong
corrective measure during the course of 2024.
SECTION 3. The City Council approves the use of General Fund Operating Reserves to
support the 2023 General Fund Operations and requests the Administration provide in
accordance with Article III Section 1 a General Fund Reserve Replenishment schedule
for Council approval in November 2023 (and all subsequent Novembers until the reserves
are replenished).
RESOLVED this 6th day of November, 2023.
ATTEST:
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
RESOLUTION NO.
CITY OF EDMONDS
MAYOR, MIKE NELSON
November 6, 2023
November 6, 2023
1532