Budget projections are discussed at annual planning conference
The City of Washougal is expected to face economic challenges, based on recent projections.
During the City Council’s annual planning conference Jan. 25 and 26, Finance Director Jennifer Forsberg and City Administrator David Scott talked about the long term financial status of the city’s general fund.
With the city’s requirement that the annual budget include a minimum reserve equal to 16 percent of one year’s operating expenses, options to make sure the general fund is balanced include slowing the rate of the growth of expenditures and/or increasing the rate of growth of revenues.
With a 16 percent minimum reserve of $1.8 million this year, additional reserves are listed at $887,371. In 2014, the 16 percent is expected to equal $1.78 million, with additional reserves at $603,176.
The minimum reserve is in danger of going below 16 percent in 2015 and being depleted in 2017.
“The impact of the structural deficit is going in the red, using the assumptions in the model,” City Administrator David Scott said. “Of course we cannot go into the red, we have to resolve it. The purpose of the forecast is to illustrate the effect of the structural deficit.”
The hypothetical estimated need for a three-day emergency is $100,000.
Slowing the rate of expenditure growth could involve a review of city programs and levels of service. The planning conference included a review of services that are mandatory, essential or discretionary.
A small piece of the projected deficits is the 2012 expiration of a levy lid lift for emergency medical services.
“The lid lift, as it was at 10 cents per $1,000 assessed value, is estimated to produce a total of $120,000 annually,” Scott said. “The expiration of the lift doesn’t make its full impact until half way though 2014. Some savings were generated from the prior lift that we are using this year and part of 2014 until it is gone.”
The city did not seek renewal of the levy lid lift through an election in 2012.
Scott said the city will continue to wait, because there is currently no capacity to ask for a levy lid lift.
“We are currently capped at the maximum property tax rate of $3.10 per $1,000 of assessed valuation,” he said. “This happened because of the decline in assessed valuation we have experienced over the last several years.
“When assessed values increase over the next year or so, our rate will decrease and there may be room to ask the community if a renewal of the lid lift is supported to maintain EMS services,” Scott added.