City's 2022 budget increases $1.4 million

DAYTON-The City Council approved the $7.9 million 2022 budget at its December 1 meeting, holding some discussion before its approval, but absent discussion of the $1.4 million increase from 2021 to 2022.

Councilmember Misty Yost expressed some concerns that she shared with fellow Councilman Dain Nysoe, who voted against the budget over the lack of meetings that are usually held by committees when preparing for it. Yost stated she felt comfortable to approve it because it is similar to the budget the previous year.

“In preparing this budget, there were significant issues that impacted our ability to develop the 2022 budget in a timely manner such as the changes in staff positions, COVID-19, and Union negotiations,” Mayor Zac Weatherford said in his budget message. “I acknowledge this uncertainty and reinforce our commitment to creating a budget that reflects our commitment to moving our community forward by maintaining and building essential infrastructure and providing efficient, quality services while being conscientious of our financial position and in compliance.”

Reviewing the budgets over the last three years from 2020-2022, the 2020 budget was just over $7 million. The 2021 budget was $6.5 million. The current $7.9 million budget more closely resembles the budget for 2020 than 2021.

The budget reflects the beginning cash balances and revenues expected. For most of the funds, the beginning cash balances carried over from 2021 funds are up significantly, together with some additional expected revenues, which has allowed for an increased budget. The following are the variances from 2021 to 2022, unless otherwise noted.

The current expense budget increased from $1,257,134 in 2021 to $1,539,315 in 2022. The beginning cash balance decreased by just over $50,000 but revenues are expected to be higher at $280,000 overall from taxes mainly resulting from the sheriff, court and dispatch tax and $12,000 from donations and contributions, over $20,000 in government payments, and $17,000 in state entitlements.

Budgeted expenditure increases for current expense are most notably $11,000 for the judicial department as a result of the contract with the county for court services and $25,000 for city parks mostly for contracted repairs and maintenance.

A sizable increase from the 2021 to 2022 budget was for dike maintenance and repairs. It went from a mere $18,500 to $99,100 which is closer to the 2020 budget for the same expense at $125,000. The Cemetery Services budget is down $35,000 from the previous year and $13,000 from the year before mainly associated with salary and wages paid for work there.

Security is the largest budget expenditure at 28.8% of the budget and at $400,000 for the law enforcement contract which is $30,000 higher for each year’s budgets from 2020-2022.

Weatherford recounted in his budget message, “Our ILA agreement with Columbia County for law enforcement, dispatch, and Municipal court services costs the city $612,500 a year, with a price increase at 100% of All Urban Consumers CPI, West size Class B/C, effective January of each year.

The City Council passed a 12% Utility Tax in May 2020 to help offset the cost of these services.”

For the 2022 budget, 20.7% or $318,638 of the $1,539,315 current expense budget is being held for an ending fund balance. This is compared to 7.38% or $92,766 of $1,257,134 from the year before. A sizable decrease of $15,000 overall was for City Clerk/Treasurer operating expenses.

As for the salary schedule, the annual maximum salary budgeted for the Public Works Director is $7300 less for 2022 than 2021, for the Administrator/Clerk-Treasurer it remained the same, and for the Director of Planning and Development it is just under $5000 less. For the Assistant Public Works Director, the salary is $3000 more, the Deputy City Clerk is $10,000 more, the Utility Accounting Clerk is about $10,000 more if full-time, and the Wastewater Treatment Plant Operator salary was not listed specifically in 2021 and is budgeted for $55,000 in 2022 under the salary schedule but is listed as $0 under the Sewer Operation and Maintenance Fund though it was previously listed there at $79,000 in 2021.

For the city and street road fund, the budget went up from $426,884 to $524,234 mainly resulting from a $40,000 higher beginning cash balance and an additional $47,500 in state entitlements. Various professional or contracted services increased by about $25,000, but the salary associated costs are down $160,000. Additional expenses are spread out among the line items. (Expenditures don’t total what the budget says it does at $524,234 but totals $274,234, so $250,000 less.)

The budget lists the 2022 City Street and Road ordinary maintenance department primary objectives as research equipment options for performing an effective crack sealing program, performing maintenance on city alleyways by grading and shaping by re-graveling, implementing a Main Street Trees Maintenance Program, implementing Main Street Trees Maintenance Plan, remedying city-owned property code compliance violations, replacing the bridge in the alley between South Third and South Fourth Street over the Mustard Ditch.

The motel/hotel excise tax fund is $65,000 this year compared to $43,984 the previous year due to the beginning fund balance being $21,000 versus $3600 from the year before, and a slight increase in motel/hotel sales and use tax. Affordable and supportive housing is just a little higher than last year at $4700 versus $4456.

Weatherford also stated in his budget message, “The 2022 budget focuses on many capital improvements and maintenance of infrastructure. Including moving forward with our South Third Street Project, several side street improvements, continuing the crack seal program, increasing our GIS program, ongoing enhancement and maintenance of our parks and cemetery.”

The 2022 capital improvement fund is less by over $50,000 despite $20,000 in more tax revenue at $173,100 versus $204,250 in 2021. Expenditures are down $30,000 due to expenses associated with salaries being cut and completed street projects. The budget note for this fund states, “Certain aspects of this Fund are limited by RCW and can only be utilized for capital improvements established within the City’s Growth Management Comprehensive Plan, 6-Year Capital Improvement Plan, and 6-Year Transportation Improvement Plans.”

A list of objectives for this fund include an annual loan payment towards the purchase of a new street sweeper, an annual interfund loan payment towards the South First Street and West Main Street improvements, South Third Street Sidewalk Replacement Project Interfund Loan Repayment, an installation of Phase 4 of the automated sprinkler system in Pietryzcki Park– fish pond/ball field, park and cemetery equipment replacement reserves, and City Hall deferred maintenance improvements.

Water and sewer debt service is up from $589.451 to $637,800 because of an increase in the beginning cash balance though revenues reflect less transfers-in to the fund. Expenditures increase for interest paid in the amount of $75,000, but decrease by $13,000 for no principal payment. The water and sewer debt reserve fund increased from $211,500 to $245,000 to meet bond reserve requirements.

The water reserve capital improvement fund went from $325,000 to $478,000. $40,000 more is reflected in the beginning cash balance, and $5000 is indicated as additional charges for revenues. Expenditures are reduced by $114,000 because of less budgeted for equipment replacement and general capital expenses and no costs associated with engineering for levee improvement and computer software and hardware expenses in 2022.

The water operations and maintenance fund is up $670,000. Revenues increased because the beginning cash balance is $278,000 more and water sales and service was up $394,000. Expenses remain about the same. In the budget message the mayor wrote, “As noted in the 2020 Budget, the city deferred capital improvement projects in exchange for foregoing water utility rate increases in fiscal years 2019 and 2020.

“The 2020 Budget also made it clear that water utility rates increases would be necessary beyond 2020 to provide current operation and maintenance service levels; meet capital improvement and/or replacement needs to not only keep up with the system’s demands, but to mitigate system failures and interruption of services; and, meet outstanding debt service requirements…The proposed water utility rate increased for fiscal year 2021 was 10%, OR, $4.40 per month per residential unit located within city limits with a standard 1” or less water meter.”

The sewer reserve capital improvement fund has a beginning balance of $250,000 more than the previous year, but the fund has decreased revenue because the Department of Ecology $790,000 grant was received only in 2021. The fund is $1,077,961 compared to $1,475,286 the previous year. Revenues reflect double the transfers in at $292,000. The American Rescue Plan Act (ARPA) grant is allocated here at $340,000 and will cover the Third Street sewer project. Expenditures are reduced by $500,000 overall mainly due to the reduction of professional services for the waste water treatment plant, but sewer improvement costs went up by just under $250,000.

The sewer operations and maintenance fund is $1,331,300 compared to $782,473 in 2021 – a difference of $548,827. The beginning cash balance was higher by $111,000. Revenue from sewer sales and services increased to $1.1 million from $666,473. Increased expenses include $565,300 for transfers out reflected in the previous sewer budgets for transfers in. Salary related expenses were reduced by $185,000. Additional increased expenses are spread out over the line items.

A note for this fund from the budget said, “The 2021 Budget included a sewer utility rate increase of 10% or $6.26 per residential unit located inside city limits for 2021. The city has not experienced an increase sewer utility rate since 2019.

In 2020, the City Council delayed an increase in sewer utility rates in exchange for deferring capital improvement programs for one-year. Throughout the Budget process, it was relayed that sewer utility rates increases would be necessary beyond 2020 to provide current operation and maintenance service levels; meet capital improvement and/or replacement priorities to keep up with the system’s demands, and to mitigate system failures and interruption of services; and, meet outstanding debt service requirement.”

The endowment fund for the cemetery increased from $268,557 to $319,000. This is resulting from $86,000 more in the beginning cash balance but less $37,100 in revenue from a loan repayment. The expenditures are $33,00 less in salary related expenses. The pathway endowment fund remained the same.

In summary, the 2022 revenues increased mainly due to higher beginning cash balances, the projected revenue increases for water and sewer sales and services, and the ARPA grant.

The highest expenditures for 2022 are for dike maintenance, contracted and professional services, and increased interest payment for water and sewer debt service cost.