As Camas leaders jump into the 2019-20 biennial budget cycle, one question looms large: how will the city avoid service cuts as expenses start to overtake revenues?
The city’s finance director, Cathy Huber-Nickerson, told city councilors in mid-July Camas could experience a “soft recession” in its now-booming housing market in 2020 and 2021, and will likely not have enough money to fund its desired levels of service by 2022.
Huber-Nickerson said the city must supplement Camas’ revenue base if city leaders want to avoid service cuts in the future.
This week, the finance director came back to the council with more information about two such revenue supplements — a transportation benefit district and utility taxes.
“This is background information (to inform) council discussions,” Huber-Nickerson said at the council’s Aug. 20 workshop.
The finance director plans to present detailed “decision packages” to the council members at both September workshops, scheduled for 4:30 p.m., Monday, Sept. 3, and 4:30 p.m., Monday, Sept. 17, at Camas City Hall, 616 N.E. Fourth Ave., Camas.
If council members decide to implement utility taxes or a transportation benefit district, they would be following the lead of many other Washington cities: nearly 70 cities, including Vancouver and Battle Ground in Clark County, charge $20 to $40 on vehicle tab renewals; and several Clark County cities, including Vancouver, Battle Ground, Ridgefield and Washougal have taxed utilities to supplement general fund revenues.
Vehicle tab fees could raise $1 million annually by 2023
According to Huber-Nickerson’s Aug. 20 presentation, establishing a transportation benefit district that implemented a city-specific fee on residents’ vehicle tab renewals could bring the city an additional $369,178 in 2019 and more than $1 million by 2023. Those figures assume the city approves the allowable $20 tab fee in 2019-20, raises it to $40 in 2021 and to $50 in 2023. The city would have limits on the tab fee — increasing it to $100, for instance, requires voter approval.
Money collected by transportation benefit districts can only be used for transportation improvements included in the local, regional or state transportation plan, Huber-Nickerson told council members on Aug. 20. The money could go toward construction, maintenance or operation costs, and would theoretically free up money the city now spends on its streets for other general fund expenses such as parks, the library or the city’s police and fire departments.
Utility taxes could bring city $500,000 to $3 million annually
Huber-Nickerson estimates new utility taxes, in which the city taxes utilities like cable television, electricity, gas, sewer and water between 1 and 6 percent, could bring the city between $512,000 and $3,072,000 annually.
Camas is one of very few regional cities without a wide array of utility taxes. In Washougal, for example, there is a 6-percent tax on cable television, electricity, ga and telephone utilities and a 10-percent tax on sewer, solid waste and water utilities.
Huber-Nickerson said Monday the utility taxes are able to bring in revenues without overburdening residents. Residents would likely see an increase of between $3.98 and $23.86 per month on their utility bills, depending on the utility taxation rate. The city could offer tax rebates or tax exemptions for low-income and disabled residents, and would use the utility taxes to supplement Camas’ general fund needs.
To implement the utility taxes, the city would need to go through a public hearing process, and there would be a 60-day waiting period on electric, telephone and gas, according to Huber-Nickerson.
At the council’s Aug. 20 workshop, City Councilman Don Chaney said he would like to have more discussions about the possible new revenue streams, and hear other council members’ thoughts and concerns.
“Any decision to implement fees and taxes needs to be a deliberate process … with separate discussions,” Chaney said.
Huber-Nickerson plans to bring “decision package priorities” regarding possible utility taxes to the council’s Sept. 4 workshop.