Council okays utility tax hike

The Cathlamet Town Council voted unanimously Monday to double its tax on utilities in 2012.

Officials said they were taking the step in order to boost revenues and avoid further cuts to services.

The town has been collecting a 3 percent tax on utilities. By law, the town can tax utilities 6 percent without voter approval, and councilmembers voted to increase the collection to 6 percent.

The council also is considering a 1 percent hike in property taxes, but council members delayed action on that measure to a special meeting planned later this month in order to have exact valuation and collection figures from the Wahkiakum County Assessor's Office.

The council projected a collection of $53,790 in its preliminary budget, based on the 3 percent collection of utility tax. The increased collection will double that figure.

Mayor George Wehrfritz said the decision to boost the utility tax came after the council's budget committee went over the proposed budget, which was introduced at the council's October meeting.

That budget showed the Current Expense Fund finishing the 2012 year in a deficit estimated to be as high as $60,000.

Wehrfritz said Tuesday that he and Clerk-Treasurer Tina Schubert had reviewed the budget to see what could be trimmed. The finance committee came to a meeting with them with their own proposals, many of which were the same.

They were also able to update their revenue projections for the year, Schubert said.

The town Current Expense Fund has been running on deficits for several years. Schubert said the shortfall has been around $27,000 per year for the past few years.

Wehrfritz said the Current Expense Fund started 2008 with a $98,738 surplus. In January, 2009, that was down to $86,573, and in January, 2010, $50,415.

The recession that started in 2008 has started a decline in revenue, Wehrfritz said. In 2010, the town had to draw from reserves to cover Current Expense Fund expenses, which totalled $458,338.31, excluding the emergency services grant which has been transferred to Wahkiakum County.

"We had to transfer in $40,000, or we would have finished the year with about an $8,000 deficit," Wehrfritz said.

Actual Current Expense Fund expenses totalled $325,984.59 though October, 2011, and should end close to $386,474, Wehrfritz said. Officials anticipate an ending balance of $11,982 for the Current Expense Fund.

"Town government has shrunk," Wehrfritz said. "In a way, we're to the point where there doesn't seem to be any other option (than to raise a tax).

"The tax question is something that we don't take likely."

If the council had to trim the budget further to deal with the decreased revenue, Wehrfritz said, it would have to cut services such as the Blanche Bradley Municipal Library or the Julia Butler Hansen Municipal Swimming Pool, which has financial support from Wahkiakum County government.

Officials did trim the pool budget, said Councilmember David Goodroe. The pool manager had requested $42,000 for personnel, but the finance committee trimmed that to $35,000.

The proposed budget does include 3 percent cost of living adjustment raises for town employees, whose wages haven't been raised in the past four years.

The council will take final action on the proposed budget at its December 19 meeting.

The town has scheduled several capital improvement projects in 2012. These include improvements to the town hall building, installing new street lights on Main and other streets, improvements to 3rd Street, and the start of a new waste water treatment plant. These will largely be funded with grants and loans, with town matches coming out of dedicated reserves.