Everett officials begin FY2026 budget review; council sets rules for upcoming hearings

Council President Stephanie Martins called a joint meeting of the Everett City Council and the school committee to begin review of the city’s proposed fiscal year 2026 operating budgets and to review the city’s budget policy.

Chief Financial Officer Mr. Dimas provided an overview of a five-year financial forecast covering fiscal years 2025 through 2029, summarizing the city’s fiscal position, reserves and preliminary revenue and expenditure estimates. He told the council the city expects to issue new debt within about six months, and that Standard & Poor’s has assigned Everett an AA+ rating with a stable outlook on prior obligations.

The presentation said available reserves include a stabilization fund balance of $12,938,100 and an OPEB (other postemployment benefits) trust balance of $15,772,899. The administration proposed a conservative assumption of using $5,000,000 in free cash for FY26 (the city used $10,000,000 of free cash in the prior year). The capital improvement stabilization fund was reported at $9,644,166.

Mr. Dimas summarized the city’s preliminary revenue and expenditure estimates: an estimated total tax levy of $190,487,202 and an excess levy capacity of $57,602,353. Local receipts were estimated at $18,694,112; the water and sewer enterprise fund was estimated at $23,049,312 and the ECTV (PEG cable access) fund at $583,731. The administration also noted projected state aid reflected in the Senate’s recent proposal (reported in the meeting as $139,303,170) and said the numbers will be updated after the city closes its books and receives Department of Revenue certification.

On expenditures, Mr. Dimas said fixed costs are driving much of the budget pressure. He reported the retirement assessment at $21,435,962 and employee insurance at $35,549,421, saying health insurance costs are a major factor and are projected to rise about 21% year over year. Debt service was reported at $10,523,085. The presentation showed a total school department budget of $142,154,420, including an estimated $5,214,215 for special-education transportation; the school budget figure represents an increase of about $6,643,000 (roughly 5%) over FY25.

The administration said it plans to submit the FY26 budget for the Government Finance Officers Association (GFOA) distinguished budget award this year and expects the city’s comprehensive annual financial report (CAFR) to be considered for a GFOA award in late summer or early fall.

After the presentation, Councilman Camping moved a package of procedural motions to guide FY26 budget deliberations. The motions—moved and seconded as one package—require that the mayor, the mayor’s chief of staff, the city’s chief financial officer and the city’s budget director appear at all budget hearings to answer questions; request that department heads bring line-item expenditure-to-date figures, projected unexpended balances for FY25 line items, and names of funded but unfilled positions; request that all budget hearings be televised live on Everett Community Television (ECTV) or recorded and made available for later viewing; require the budget document be posted on the city’s official website by 5 p.m. on Tuesday, May 13, 2025; and request printed copies be made available at the Parlin Memorial Library and the city clerk’s office beginning Wednesday, May 14, 2025. The package also referred the budget to the city council’s committee on the budget, with hearings to begin Wednesday, May 14, 2025, at 6 p.m.

The council voted to approve the seven-item package by a recorded tally of 18 yeas and 1 nay; Councilor Smith cast the lone no vote. The meeting record shows an earlier, separate motion to excuse a named member (Ms. Ademas) was approved. Later, Councilor Smith requested that the budget materials also be shared with the council in Excel format; that request was moved, seconded and approved by voice vote.

Members and staff were reminded that the numbers presented are preliminary. Mr. Dimas said the administration will update revenue and expenditure estimates as the city closes its books and works with the Department of Revenue on certification prior to setting the tax rate.

The council and school committee closed the joint session after approving the motions and scheduling the budget hearings. Detailed line-item reviews and department-level discussions are to take place at the upcoming committee hearings beginning May 14, 2025.