Inflation and population growth have been driving Vancouver’s costs up by about 4 percent a year, outpacing 2.4 percent revenue growth, City Manager Eric Holmes said Monday during a two-hour workshop with the city council about setting the framework for the 2015-16 budget.
The meeting, one of the first of several that will end with a Nov. 3 public hearing on a proposed budget, included some grim numbers.
The bottom line: Even if the council enacts an annual 1 percent property tax levy increase every year and annual total utility (sewer, water and stormwater) rate increases of 2.5 percent, the city still has a forecasted deficit of $10.2 million by 2020.
Holmes told the council he’s assuming the council will approve the tax levy and utility rate increases.
“If this is off-base, it would be great to know sooner than later,” Holmes said.
The city has gone from a high of 1,214 employees in 2008 to its current number of 952.
The city’s annual general, street and fire funds equal about $175 million a year. Raising the property tax levy by 1 percent as allowed by law would bring in an additional $400,000, Holmes said.
A comparison of what residents in 18 places in Washington and Oregon paid in monthly utilities (combined water, sewer and stormwater) showed Vancouver has the second-lowest rate, pennies higher than people in unincorporated Clark County. For example, a combined monthly bill for a Battle Ground family is $80.11; the same family would pay $62.66 within the city of Vancouver, $62.55 in unincorporated Clark County and $153.22 in Portland.
How the city plans to fix its structural deficit remains to be seen, and none of the council members outright objected Monday to the idea of raising the property tax levy and utility rates.
Even Councilor Bill Turlay, the most conservative member of the council, said the city needs to let its residents know it’s operating at maximum efficiency.
Natasha Ramras, the city’s deputy finance director, said 52 percent of the general, street and fire funds go toward salaries and benefits.
Holmes said public safety will continue as the city’s No. 1 priority. While he doesn’t plan to hire additional employees without a new type of revenue, he’s not planning layoffs.
Holmes did have some good news Monday. The city has a healthy capital reserve, funded at 75 days of city operation costs, and a healthy designated liability funding reserve. The latter allows the city to meet obligations of current law enforcement staffing grants.
A detailed budget wasn’t presented Monday. Holmes said it includes council priorities such as reopening the police department’s east precinct to the public, upgrading or replacing aging fire stations and starting construction of a waterfront park the city planned as part of a $1.3 billion private redevelopment project. Holmes also included money for developing a plan for the Old Evergreen Highway corridor, continuing investment in street preservation, and focusing on community and neighborhood traffic safety. Another funded council priority Holmes listed was supporting completion of C-Tran’s Bus Rapid Transit project to connect the Vancouver mall area to downtown.
Department budget submissions are due to Holmes in mid-July. Holmes plans to have a proposed budget ready Oct. 6.