The Everett City Council voted to authorize the City Auditor to bond $8,925,000 to pay for previously approved Capital Improvement Plan projects in fiscal year 2015, and followed that up with four votes that established new stabilization accounts for specific purposes and fund them with $700,000 from the city’s discretionary fund balance (free cash), this establishing a new mechanism for proactively managing the city’s cash reserves going forward.
Coupled with it’s earlier vote to authorize a $500,000 loan for a citywide drainage study, the Council effectively approved $10,125,000 in new spending outside of the FY 2015 budget, which is scheduled to begin debate next week.
The $8.925 million bond issue is directly related to the Mayor’s 2015 Capital Improvement Plan (CIP) which had previously been adopted by a vote of the council in May. At the time it was adopted, Mayor Carlo DeMaria’s office had outlined where the funding for each project was expected to come from and the $8,925,000 from bonding had already been heavily debated.
As for the $700,000 in free cash that was set aside, City Auditor Richard Viscay explained to the Council that recent state legislation allows cities and towns to establish specific stabilization accounts to address outstanding issues and doing so allows the city to accrue interest from previous free cash balances.
With its votes on Monday night, the council has agree to establish a stabilization fund for employee sick/vacation time buyback, in accordance with city union contracts and a new fund for capital improvement stabilization.
They further agreed to fund the Employee Buyback Stabilization with $200,000 from free cash and the Capital Improvement Stabilization Fund with $500,000 from free cash.
Auditor Viscay noted that no additional taxing would be needed to fund the two new accounts, and that the city would essentially be taking money it has already collected and not spent in FY 2013 and placing it into “rainy day” accounts for specific purposes.
The new stabilization funds will require a 2/3 vote of the City Council to fund, expend from or repurpose funds in the future, just as with the city’s existing general purpose stabilization fund.