Washougal successful in managing budget

The City of Washougal continues to be faced with the difficult financial and budgetary pressures facing all governments in the nation as a result of the great recession. However, I am happy to report that in 2010 and 2011 we have been successful in balancing our budgets without increasing property and sales taxes and without the use of reserves. Much of the success in achieving this significant accomplishment belongs to the staff, department heads and city council for understanding the situation we were facing early last year and their support of the administration's efforts to manage our expenses and find efficiencies. The originally adopted 2010 budget relied upon the use of approximately $1.5 million of reserves to be balanced. In early 2010 we began to aggressively address this situation. First we implemented a 10 percent across-the-board cut, saving approximately $1 million. Next, with the city council's support, we hired a municipal finance expert to assist us with a comprehensive financial analysis of our past and current revenues and expenses, and an accurate forecast of our future financial status. This process involved all of our department heads, representatives from our employee union groups and the city council's finance committee. The information gained from this process enabled us to make well informed decisions regarding opportunities for additional savings and strategies for the future. When completed with this process we identified an additional $300,000 in savings, bringing our projected use of reserves down from $1.5 million to only about $200,000 for 2010. Our continued aggressive fiscal management throughout the remainder of the year resulted in even further savings. By the end of the year we ended with approximately $350,000 left over, an astounding turnaround of over $1.8 million in one year. These additional savings were the result of a number of factors. On the expense side, departments were able to finish the year at 93 percent of their adjusted budgets (their budgets after they reduced them 10 percent earlier in the year). On the revenue side, because of a number of foreclosed properties being sold to new owners in 2010, our property tax collections came in higher than anticipated due to past-due taxes being paid at closings. We also had significantly more revenue come in from new home and commercial construction than had been forecast. Finally, we made some staffing changes that redeployed some staff to other positions and we also held off filling a vacant position in the police department. In 2011 we are projected to use no reserves. However this approach has some consequences. We eliminated the vacant position in the police department and we also eliminated another police officer position that became vacant in early 2011. We have also cut our budget for seasonal help in maintaining our parks and right-of-way. I also want to take a moment to thank our Police Officers Association for their assistance in addressing our situation. Their new labor contract, which they proposed, calls for no cost of living increases for 2011 and minimal (1 percent) increases in 2012 and 2013. The officers also agreed to cost saving changes in their health care benefits and paying more of their own coverage in 2012/2013. While our current financial situation is balanced for 2011 we have not completed our work. Current projections show that we will need to dip into reserves in 2012 and then use significant reserves to balance the budgets for 2013 and beyond. We will continue to concentrate our efforts on finding efficiencies in the ways we provide services and we will do everything we can to bolster real estate valuations and help businesses in the area to succeed. I appreciate the efforts of all of our staff who worked hard to move Washougal to a better financial position and I look forward to working with them to further all of our efforts for the years to come. Sean Guard is the mayor of Washougal. He can be reached at sguard@ci.washougal.wa.us or 834-2533.

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