Hoquiam City Financial Director Corri Schmid presented a balanced 2017-18 budget to the city council Monday that adopts a “more with less” strategy to maintain critical services while dealing with an overall lack of revenue to fund those services.

The passage of the EMS levy helped with the city’s ambulance fund, but the funds come in over a five-year period and the levy accounts for only 10 percent the fund’s total revenue, about $430,000; most of the money comes from monthly utility fees and fees for service. Most of the fund’s expenditures go to salaries and benefits. The fund has no reserves and the budget had to be increased a little more than eight percent, so the city is proposing an increase in the ambulance utility fee of $8.40 a month, and reviewing fire and EMS service contracts to increase revenue. The increase in the utility fee would bring in an additional $800,000 for the biennium. The total ambulance fund proposed for the upcoming biennium is $4,186,990.

Challenges facing the overall city budget include being allowed only the one percent increase in property taxes, no projected growth in revenue, no revenue from investments, and having to deal with funds that are not self-sustaining. That creates the “more with less” scenario Schmid talked to the council about, and repeated calls for the need to “do what we can with what we have.”

The city’s general fund provides for public safety and government operations. Schmid reported there is a $4.7 million decrease in the fund from the last biennium, meaning the city has that much less to spend than it did in the last budget. This is in part because the general fund also absorbs the necessary reserve funds.

“There are recommendations from agencies that perform audits over local municipalities that look at reserves to ensure an entity can meet their financial obligations,” Schmid said. “The City of Hoquiam has a fiscal policy stating they will ‘strive for a 45 day reserve,’ which is what we have budgeted for.”

Reserves for the upcoming biennium come to nearly $1 million, in place to make sure the city can maintain operations in the face of an economic crisis or emergency.

The budget calls for expenditures from the general fund totaling $13,750,875, including nearly $5 million for the police department and just under $2 million for the fire department, just slightly more than the 2015-16 budget. The general fund is fed primarily by taxes and to a much lesser extent charges for services and licensing fees. The biennial budget estimates, with the maximum allowable one percent increase, property taxes of just over $3 million and total tax revenue just under $10,290,000. Licenses and permits will contribute another $824,730; all told, the city is looking at revenues for the general fund just topping $15 million in the upcoming biennium.

The cemetery fund will need a boost from the endowment fund in the amount of $224,270 over the next two years to maintain the property at the current level. Cemetery fees and a cell tower land lease bring in most of the money for this fund, but aren’t nearly enough to cover maintenance of the facility. A long-term financial plan for the cemetery is needed as the endowment funds are only going to last about four years, according to City Administrator Brian Shay. The water, sewer and storm fund is down $1.3 million from the last biennium. A chunk of the expenditures comes from cost of living increases for employees, 2.5 percent for employees and an additional 2.5 percent on top of that for plant operators and building officials. The proposed budget has this fund at $15.5 million, down from $16.8 million during the last budget cycle.

The overall budget is balanced at $50,792,985, matching revenue with expenditures, including reserves. This is down from $55,346,365 in 2015-16. In drafting this budget, the city is “doing everything we can” to ensure residents won’t have a significant drop in services from the levels of 2015-16 despite having to work with significantly less money, said Schmid. Residents will see the one percent property tax and $8.40 ambulance utility increase starting next year. Community members can comment on the budget at the next council meeting Monday, Nov. 28 at 7 p.m.