A new revenue stream that didn’t pan out as expected is playing a significant role in the need for a series of adjustments to Camas’ 2016 budget.
City staff members are currently working on modifying the document, which was originally approved as part of the city’s first biennial budget process in December 2014.
At that time, it was predicted that annexations of the Grand Ridge and Winchester Hills subdivisions — together made up of approximately 325 homes in Southeast Camas, but within Clark County’s jurisdiction — would be complete in 2015. That, as it turns out, wasn’t the case.
“Both areas are within our urban growth boundary and we provide city services to residents within those areas, but we receive no tax revenue for it,” said Camas Planning Manager Robert Maul. “Our goal is to keep our tax dollars local.”
A portion of the Grand Ridge subdivision — 35 properties — was annexed in the city through the 60 percent petition method in September 2015.
According to Maul, the city will pursue annexing the rest of Grand Ridge and all of Winchester Hills, most likely using other methods due to the area’s inherent challenges. A large number of the property owners are investors who do not live in the local area.
While city leaders expect these annexations to happen within the coming year, the 2016 budget is still left with approximately $300,000 less than they planned for in 2014.
Other factors impacting the 2016 budget include additional expenses that came as a result of the settlement of several labor contracts, as well as the adjustments that come with making the transition to a completely new budgeting process.
“We came into what was an early draft 2016 budget that was much higher than what our revenues were,” said City Administrator Pete Capell. “Now we are looking at some of the things we’ve done to try to bring it closer to align.”
During a recent City Council workshop, Capell and Finance Director Cathy Huber Nickerson unveiled those changes to the general fund, as well as what they explained as a need to tap into general fund reserves.
Proposed reduction measures include delaying filling the vacant library director position for three months or more, saving at least $27,000. Former Director David Zavortink retired Oct. 2.
Additional cuts could include deferring library system upgrades and book purchases ($71,000), putting off the City Hall roof project ($40,000), reducing cemetery irrigation and seasonal help expenses ($21,500); reducing the Camas Municipal Pool season to better align with attendance levels ($51,743); and delaying the purchase of automated external defibrillators that would have been placed in every Camas Police Department vehicle ($20,000).
A reduction is also proposed for the Camas-Washougal Fire Department’s overtime budget. Although the fire department used $350,000 for that purpose in 2015 and originally budgeted that same amount for 2016, officials do not believe it will be needed.
“In 2015 we had an extensive amount of overtime.” Capell said, explaining that eight people were on leave due to injury and several others were out responding to regional wildfires.
With seven of the injured workers now back on shift, Capell described 2015 as an “anomaly,” adding that a budget of $250,000 should be sufficient to cover overtime expenses in 2016.
“We are pretty confident that we can be able to control overtime a little better,” he said. “We still have a very high overtime budget in fire.”
Several general fund expenses were also added to the 2016 budget including two new positions in information services and one seasonal position in the engineering department.
With these adjustments to the 2016 budget, revenues are predicted to exceed expenditures by $21,416.
“We have narrowly addressed the structural deficit for a year,” Huber Nickerson said. “We got to that dollar amount with this budget.”
However, even with the reductions the city will be left with a 15 percent general fund reserve. This is approximately $394,188 short of the 17 percent reserve fund that is preferred through city council policy.
Huber Nickerson said it would be difficult to reach that 17 percent, equal to $3.32 million, without drastic measures.
“That would be a very challenging number to get to,” she said. “We would probably have to think outside the box, not just on the expense side but the revenue side as well, to get to that number. There is just not an easy way to get to that $400,000, just from expenses, given that a majority of [the budget] is salaries and expenses.”
The city receives property tax payments, on which it relies heavily, twice a year. The reserves help with cash flow issues.
Councilman Greg Anderson expressed expressed some reservations about straying from those funding level goals.
“I am concerned. $400,000 is not that much, but at the same time it’s 2 percent,” he said. “I don’t have a question in here, I’m just concerned. I’m not stuck on 17 as a magic number, but it’s been there for a while and we’ve been happy.”
Looking ahead to the 2017-18 budget, Capell explained that with experience planning a biennial budget under staffs’ belts, and the additional revenues that will be generated from the annexations as well as upcoming construction projects, the process will look much different.
One year down the road, he said, the reserve fund should hit that 17 percent level.
“What we are asking for [in 2016] is a one-time allowance to deviate from policy,” he said.