Everett council hears $7.5 million first amendment to 2026 budget; third reading set for April 8

Interim finance director Mike Bailey briefed the Everett City Council on March 25 on a proposed first amendment to the city’s 2026 budget that would increase appropriations by nearly $7.5 million, mostly composed of carried-forward project funds, grant pass-throughs and targeted planning allocations.

"For this afternoon, we're recommending expenditure increases totaling almost $7.5 million," Bailey told the council, tying roughly $1 million to general government needs and about $6.5 million to non-general funds. He said much of the increase reflects money already identified for specific purposes that was not spent in 2025 and is being reappropriated for 2026.

Why it matters: the amendment adjusts the city’s available spending authority for projects already under way, clarifies whether increases come from new grant revenue or fund balance, and sets financing for several near-term initiatives. Bailey said the city now estimates unrestricted general fund balance would be closer to $50 million, up from the $35 million target cited in the adopted 2026 budget, and clarified that those figures refer to unrestricted funds.

The package includes specific items Bailey and staff highlighted: $696,058 in street-improvement funds carried forward because state law restricts those revenues to transportation purposes; about $4.8 million in dedicated COVID-related funds being carried forward in a separate fund; $205,000 to complete vehicle purchases delayed from 2025; $40,834 in library reserve carryovers; and pass-through grants for street medicine and chemical-dependency/mental-health initiatives. Bailey also identified a $60,620 grant to help offset indigent-defense costs.

Staff recommended several targeted additions funded from existing fund balance, including $200,000 for annexation planning and $50,000 for work in the Casino Road and Downtown Everett Association areas. Bailey described the city’s approach to reusing fund balance prudently and said many departments will continue to pursue projects within existing 2026 spending authority before seeking additional amendments.

Council members asked for clarifications. Council member Bader asked whether the $35 million and $50 million figures included restricted funds; Bailey replied, "The numbers I cited are the unrestricted funds. Yes." Bader also pressed staff on whether other restricted amounts were included in the broader total.

The briefing included procedural context on how amendments can be financed (new revenues such as grants versus use of fund balance) and a reminder that some reappropriations reflect purchases ordered in 2025 that were not delivered or invoiced until 2026.

What's next: Council Bill 2603-17 was read as a first reading; the third and final reading is scheduled for April 8, 2026, when the council may vote to adopt the amendment or request additional changes.