Mayor Jim Ferrell presented the proposed 2027-28 Biennial Budget to the Federal Way City Council on September 15, outlining a plan described as balanced, without new taxes, and aiming to fully fund city reserves. The proposal also includes cost-of-living adjustments for city staff.
Ferrell emphasized the importance of balancing increasing operational costs with managing economic fluctuations, stating that discernment is critically important in budget decisions. This approach involves prudent prioritizing to address the city's most significant needs.
A key component of the budget is a $460,000 adjustment designated for cost-of-living increases for the more than 400 individuals employed by the city. Ferrell noted that competitive compensation is crucial for retaining qualified staff, preventing them from seeking employment in other cities.
Significant expenditures outlined in the budget include approximately $2.5 million annually from the general fund for the debt associated with Federal Way's new operations and maintenance facility.
Finance Director Steve Groom highlighted increased insurance premiums as the single largest cost increase for the upcoming biennium. These premiums are projected to rise by an additional $2 million in 2027 and $2.2 million in 2028. Groom explained that these rates are based on the city's loss history, with the city's losses appearing dramatically higher due primarily to Police Department vehicle incidents, which often involve responses where officers have no choice in their actions. Jail costs have also risen, driven by the police department's increased ability to pursue criminals and higher jail rates.
On the revenue side, Mayor Ferrell noted several challenges. Sales tax revenue is not keeping pace with inflation, and real estate excise taxes have been down for the past four years. The city also anticipates a $500,000 reduction in revenue due to the closing of Wild Waves. The property tax cap further strains the city's income stream, with sales tax funds now generating double the amount of property tax funds, a shift from when they were once equal.
To address these financial pressures and achieve a balanced budget, the mayor stated that "belt-tightening measures" were implemented across all city departments. This process involved extensive collaboration and prioritization of overall city needs, including a line-by-line review of every budget item and vacant position. Specific measures include reevaluating which police and public works vehicles require replacement, deferring certain projects funded by real estate excise taxes, and more carefully managing department hiring.
Ferrell also commented on public safety, reporting an 80% drop in car thefts and a 71% reduction in robberies over the past three years. He added that gun violence numbers have fallen to historic levels. He attributed the decline in car thefts partly to removing "professional car thieves" from the population for short periods, and concluded by stating, "I have to tell you that the city has never been safer."
The budget development process is described as starting at the beginning of the year, involving multiple stages where each department presents its needs and wants to accomplish its mission.
Community members interested in reviewing the proposed budget can attend upcoming meetings at city hall on October 6 and October 20, both scheduled for 5 p.m. Mayor Ferrell aims for the adoption of the 2027-2028 budget on November 17.