Committee endorses $7.55M transfers to stabilization/OPEB accounts and presses CFO on FY24 Q2 financials

The Everett City council committee recommended transferring $7,552,930 from available fund balances to reserve accounts — including the general stabilization account, the post‑employment benefits (OPEB) trust, and the capital improvement stabilization fund — and held an extended question‑and‑answer session with Chief Financial Officer Eric Demas on FY24 quarter‑two financial results.

The order (presented under President Robert VanCampen’s name) was described by the CFO as a transfer to set aside funds; Demas emphasized the action does not itself authorize spending. He explained OPEB (other post‑employment benefits) is an actuarially measured liability that the city now reports annually and that these transfers are consistent with the city’s financial policy of reserving free cash after the tax rate is set. “This is no authority to spend any funds,” Demas told the committee when describing the order’s effect.

Councilors used the session to probe multiple departmental accounts and financial processes. Demas provided current reserve balances: general stabilization $8,262,033; CIP stabilization $5,027,184; and OPEB fund $11,379,025. He described CIP stabilization as a funding source the city draws down as part of capital planning to reduce bonding and interest costs when appropriate.

On revenues, the CFO said the ‘actual’ revenue column reflects the quarter through Dec. 31 and noted a posting issue that moved some entries into January; those corrections will show up in Q3. Councilors highlighted an apparent disparity in the sewer use line (an $2 million estimate vs roughly $7 million posted) and Demas agreed to include a monthly water/sewer breakout in future quarterly materials. He also flagged an upcoming approximately $170,000 purchase order for the CityWorks asset‑management integration and related GIS/ESRI upgrades to be charged to water/sewer professional services.

Committee members pressed on payroll and allocation issues stemming from a new payroll system: several stipends and pay codes (police, fire and hearing officer items) were misallocated and the administration is working to correct them citywide, with the expectation most fixes will appear by Q3 and be completed by fiscal‑year end. The CFO also said a city clerk buyback payment was mischarged to the wrong account ($71,000), explaining it was paid in 2023 at a higher rate than expected after carryover rules changed in 2022.

Councilors asked about ARPA (American Rescue Plan Act) funding for staff salaries in recurring programs. Demas said federal guidance is still being clarified and he is seeking written direction from the state administration and finance office (A&F) before making long‑term commitments; some positions remain temporarily charged to ARPA pending that guidance.

On contracted services and outside vendors, the CFO noted solid waste/recycling costs (Casella) and the city’s $2.3 million trash collection contract with Capital are under negotiation or nearing renegotiation, and he described the CityWorks integration and PlayFit wellness center contract (about $390k–$395k annually) and their budget implications. The committee requested more transparency on event‑level spending across departments and asked the administration to provide additional detail in the quarterly packet.

After the discussion the committee moved to place the financial reports on file and voted to recommend the appropriation. The session ended with a motion to adjourn.