Camas officials are grappling with how to maintain the city’s established service levels, as growth and the expenses that go along with it begin to outpace money coming in from existing revenue sources.
This topic has been discussed more than once in recent years, and was the focus of a portion of the City Council’s annual planning conference on Saturday.
While a firm decision was not made regarding how to solve this problem, the general consensus seemed to be that inaction is not an option.
City revenues, particularly in new construction, are growing. However, expenses in areas including pensions, health care, and salaries and wages for the city’s nearly 200 employees, are increasing at an even faster rate.
“The bottom line is new construction pays for the existing employee and labor costs,” said City Administrator Pete Capell. “It doesn’t enable us to grow the work force to better serve that new population and growth that is occurring. That is where I keep saying we’re addicted to growth, just to [be able to] continue operating at the level that we’re currently operating.”
Labor costs represent 85 percent of the city’s annual operating budget.
“Our biggest cost is labor, and our labor costs continue to grow at a faster rate than our revenue grows,” Capell said, adding that expenses for wages and benefits are growing about 6 percent per year, while property taxes can only grow by 1 percent.
Major residential, commercial and industrial development during the next two decades will be focused north of Lacamas Lake, and in the Green Mountain area. The Camas population is predicted to reach an estimated 35,000 by 2035.
City services that are expected to be hit hardest by future growth include community development, police and fire services, parks, engineering and streets.
According to Police Chief Mitch Lackey, 75 percent of the time during a given year the department hits the minimum staffing requirement of seven officers on duty during a 24-hour period. There are times, however, when coverage of the entire city is reduced to just two officers.
Looking into a future that includes a 37 percent growth in population, Lackey has concerns.
“I have worries about letting this community down, compared to where their expectations are,” he said.
Community Development Director Phil Bourquin explained that for his department, significant increases in work load will occur sooner rather than later.
“The stresses this year are going to come if housing starts to accelerate, faster than what it is now,” he said. “The other outlier, which we know is coming, is the schools. We’ve got two new schools that are going to begin construction this summer. That is a huge resource issue for us in terms of inspections and plan review. We are working with the schools to make sure we are collecting what we need to provide that service.”
Currently, property tax revenues make up 64 percent of the general fund taxes collected by the city. By law, the rate can only increase 1 percent per year. Sales tax revenues make up the other 36 percent.
According to Finance Director Cathy Huber Nickerson, most cities do capture a large portion of their incomes through property taxes. But their revenues are balanced by the addition of sales, business and operations and utility taxes.
“They realize [revenue diversity] is what they need to get through those times when property taxes are really strapped,” she said.
With this in mind, potential new more sustainable sources of revenue that are being considered by Camas officials include utility taxes, a transportation benefit district and additional property taxes. An assessment of the current minimum balance standards in the city’s general fund reserves may also be evaluated.
“I just think we are going to have to turn over every stone,” said Councilman Tim Hazen “Despite my effort to slow residential growth as much as possible, we are still going to grow.”
Councilwoman Bonnie Carter said she supports considering a variety of options to address revenue problems. In addition, she stressed that the public needs to be informed about the city’s financial situation.
“[We need to be] educating people on what we do,” she said. “There are a lot of misconceptions. Finding more revenue streams for us is going to sound off to them, if we don’t’ give them the ‘why.'”