Washougal city officials dive into 2025-26 budget

The city of Washougal “will maintain service levels” heading into the creation of its biennial 2025-26 budget, according to city leaders.

“I don’t want to say necessarily it’s a ‘status quo’ budget because …we’re healthy. We’re not making cuts,” Washougal City Manager David Scott told Washougal City Council members during their Aug. 26 workshop. “But there’s no additional staffing investments that weren’t already planned, (and we don’t) have an ability to do significant new initiatives unless there was a new revenue stream.”

The City’s 2025-26 capital projects budget, however, is “a different story,” according to Scott.

“It’s a very impressive capital budget,” Scott said of the City’s expected 2025-26 capital facilities budget. “We have many, many projects with lots of funding coming in from outside sources, and we still need some more. It will be very exciting when we talk about the next two-year capital budget with everything that’s going to be starting and ramping up. It’s pretty intense on that side of it.”

Daniel Layer, Washougal’s finance director, presented the Council with its first look at the City’s 2025-26 budget strategy during the Aug. 26 workshop. The budget, which Council members must approve before the end of the year, will be the city of Washougal’s first two-year budget cycle instead of the typical yearly budget the city of Washougal has adopted in the past, and is similar to the biennial budget adopted in the nearby city of Camas.

Washougal city department leaders will present individual budget needs to the Council later this month. Scott is expected to present his draft budget to the Council on Monday, Oct. 28, and the Council could vote to approve the budget as early as Monday, Nov. 4.

“The next work sessions where we come in as departments and present (the budgets), I don’t want to say they’re going to be a lot there,” Scott said. “Obviously, there’s a lot that we do, but there won’t be any big changes that we would be proposing for consideration, so that makes it a little easier, I guess, for us, as we’re moving into a biennial budget, because the two-year budget is hard to estimate. As we do it the first time, we may have to make some adjustments late next year or something like that.”

The budgets will include “key investments” based on the City’s 2023-28 strategic plan, which includes five strategic priorities — financial health and core services, a vibrant town center, smart growth, redefined community identity and economic development and community prosperity.

“The budget is developed around all of these strategic priorities,” Layer said.

Layer reminded the Council that it created and funded a Strategic Plan Implementation Fund (SPIF) as a placeholder for investments to facilitate the plan’s success.

According to Layer, the City plans to use SPIF funds to develop a “Doing Business in Washougal” guide packet; to implement a Citizen’s Academy that will help Washougal residents better understand local government operations; and to complete a new brand identity for Washougal over the next two years.

The City also hopes to pursue a series of non-SPIF-funded projects — identifying and implementing community development procedures to streamline permit review timelines; identifying a preferred option for fire and emergency medical services (EMS); identifying a preferred option for enhanced parks and recreation services; implementing the second phase of its police department strategic plan; developing a parking management plan for its town center; improving streetscapes and vacant downtown building facades; adopting an updated comprehensive plan; and adopting a new ordinance for urban forestry.

“This is just what we teed up in 2023, so we’re on it,” Scott said. “Some of it is being done in-house, and some of the other things are a little more grassroots. We’re just now beginning to shape the budget to present to the Council, but it’ll be centered around these things as initiatives.”

For revenues, the City is assuming a 1% increase to the amount of property taxes it is able to collect, an EMS levy increase; a 2.75% increase on new construction in 2025; and a 1.75% increase on new construction in 2026.

“On the expense side, the assumptions are, of course, to maintain service levels,” Layer said. “We’re looking to invest in the key areas of the strategic plan; continued use of economic development and SPIF funding; government affairs support toward pursuing funding opportunities for programs; and capital projects to enhance economic development. We’re always looking for more grants or types of money.”

The City expects it will have flat or decreased retail sales taxes in 2025 and 2026, with an expected $4.17 million collected in 2025 and 2026 — a 1% decrease over 2024’s expected retail sales tax collections.

“For 2024, Washougal’s portion of the sales tax is trending flat, or collected at a similar rate compared to last year,” Layer said. “I plan to monitor this revenue over the next couple months and possibly refine the estimates.”

The City also is planning to collect a total of $14.93 million in 2025-26 through property taxes and the EMS levy; and a total of $5.96 million from utility taxes, including $2.95 million in 2025 — a 2.18% increase over 2024 — and $3.01 million in 2026.

“Positive trends in these revenues are based on the product of previously adopted utility rate increases and growth in the community,” Layer said. “Cable and telephone utility tax revenues are on the decline based on consumer preferences. All stormwater utility tax revenues are transferred back to the stormwater fund.”

Layer added that the City has always taken a conservative approach to budgeting.

“For example, we do see bumps in the sales tax revenues from time to time based on new development, but we do not budget them as recurring revenues,” he said. “Once these revenues are realized and received, the City will amend the budget to permit a one-time expenditure of these funds.”

City leaders will present their proposed 2025-26 capital projects budget to the Council on Monday, Oct. 14.

The City has already received funding for several major capital projects, including the Camas-Washougal Fire Department Station 43 replacement, the City ‘s downtown revitalization plan, and for the design and planning of the 32nd Street underpass. The City hopes to complete, or mostly complete, these projects in 2025 and 2026.