Revenue loss at the state level will impact county finances

DAYTON—County officials are dealing with projected shortfalls, state required cuts, and are trying to maintain adequate funds to cover expenses.

In her second quarter financial report to the Board of County Commissioners on Monday, County Treasurer Carla Rowe offered a dire forecast for state revenue collections over the next few years due to the COVID-19 situation.

She said the Washington State Economic and Revenue Forecast Council announced an estimated decrease in revenue collection for the 2019-21 budget of around $4.5 billion.

“It is reported that would leave the state with a $1.4 billion shortfall, including reserves, at the end of the biennium. The council also reduced the forecast for the 2021-23 budget cycle by $4.3 billion,” Rowe said. “This will be a revenue loss at the state level of approximately $9 billion over three years.”

Rowe said county property taxes for the first half of the year remain at the same rate as that of 2019, but stressed that while the collection percentage is the same the first half delinquencies are at 11 percent.

She said because 11 percent of the second half was paid during the first half collection cycle, it balanced out the collection rate.

She estimates about $247,000 of the property taxes in the current expense budget for 2019 will not be collected this year, because of the current delinquency rate.

“It will be collected eventually, just not in this year,” Rowe said.

Rowe said her office offered two payment plans, both with 1 percent interest. Interest earned on that amount will be $11,423.00.

$827,516.76 in sales tax has been refunded to the Department of Revenue out of the current expense budget, to meet the 75 percent renewable energy sales tax exemption for the Marengo I and Marengo II wind projects.

Also, sales tax refunds have been made on the 1 percent sales tax collections specified for E911 and mental health in the amount of $82,751.66 ea.

The fourth quarter of 2019 is in audit, and Rowe said she expects a refund request for the first quarter of 2020, as well. Funds have been set aside in anticipation of these requests.

The county collected $9751 in interest from taxes on past due collections during the Second quarter compared to $5,672 during the same in 2019.

Interest earned was $2,349 for the Second Quarter for the Current Expense Reserve Account compared to $5,797 for the Second Quarter of 2019.

County revenue without property and sales taxes in the Second Quarter of 2020 was $3,185,347 compared to $2,416.774 in the Second Quarter of 2019.

At the end of June, the Current Expense Account had $2,044,584 in cash and reserve compared to $2,090,546 at the end of June, 2019.

The Interest rate for the reserve at Washington Federal Bank dropped in March, and has remained the same through the rest of the quarter. Because of the dip, Rowe opened a reserve account at HomeStreet Bank, in May, at a rate of .70 percent. For June the rate was .45 percent. For July it will be .36 percent, Rowe said.

The Local Government Investment Pool (LGIP) rate has varied over the quarter from .3929 to .3270 daily yield; ending the quarter at .3359.

Residual investments include $125,153 in a US Bank Bond. The yield rate is 1.62 percent with a maturity date of Jan. 15, 2021.

County Auditor Anne Higgins said the budget overall has increased due to multiple federal emergency grants received by the County. Those grants, however, are very specific to use, so there was a major restructuring in expenditures for several funds.

The main funds that were restructured were Current Expense and the County Road budgets.

“Revenue shortfalls are minimal at this point in time, but are anticipated to be between 11-15 percent by the end of the year,” she said.

Several departments have reduced expenses helping compensate for the revenue shortfall. Due to change from in-person meetings to web meetings the costs for travel and meeting registration fees have also been reduced.

Following a public hearing regarding budget amendments, and the presentation from Higgins, the BOCC adopted the following:

Resolution 2020-29: Amendments for the 2020 Budgets for current expense and various funds due to emergencies which could not have been foreseen at the time of budgeting.

Resolution 2020-30: Revising the Fee Schedule in 2020, to account for actual costs and liabilities incurred by the county regarding the Parks and Recreation Fee Schedule.

Resolution 2020-31: Authorizing agreements between the Army Corps of Engineers, Columbia County and the County Flood Control Zone District to receive assistance for repair of various levees associated resulting from the 2020 flood event.

Resolution 2020-32: Authorizing various repairs to the county roads damaged as a result of the 2020 flood event.