Edmonds finance director flags sales-tax shortfall; council schedules budget retreat

The Edmonds finance director and mayor briefed council on near-term revenue trends and a July finance report indicating the city will likely fall short of previously budgeted sales-tax growth and is adjusting 2026 assumptions.

Key points: Mayor Mike Rosen and Finance Director Michelle Gold told council sales-tax receipts have not met the 3.5% increase assumed in the current budget. Council heard staff estimate a revenue shortfall in the range of $800,000 to $900,000 for the year and an estimated 2026 impact of about $1.3 million if budgets use prior assumptions. The mayor and director said the city will adopt a conservative approach for 2026 budgeting and use updated year-end projections.

July report and fund balance: The finance director said July reports were delayed but included August sales-tax numbers for real-time context. She reported the overall fund balance was $8.3 million higher than budgeted largely because capital projects have been delayed and real-estate-excise-tax receipts were strong (one noted figure: $574,000). The city is continuing a software conversion to Tyler and is responding to frequent state-auditor requests that require staff time.

Fines, red-light camera revenue and staffing: Director Gold said fines and penalties are under budget for the year because enforcement programs started later; red-light camera program revenues showed substantial monthly amounts and staff plan to add labor in October to process volumes. Staff will present a breakout of red-light camera revenues and related labor costs and intends to show a program-specific report when feasible.

Budget retreat and next steps: Council will hold a budget retreat to review projections and assumptions for the rest of 2025 and for 2026; staff and council members requested reforecasting of 2026 revenue assumptions before final budget actions. The mayor and director plan to update council as more monthly data arrive and to present capital and revenue analyses at the retreat.

Ending: Council directed staff to continue monitoring receipts and return with revised projections and program-level revenue/expenditure breakdowns as requested.