Staff seeks balanced budget before union talks

During their meeting on Monday, May 5, Cathlamet Town Council passed a motion to "approve the Town of Cathlamet and Public Utility District No. 1 of Wahkiakum County Water and Wastewater System Asset Transfer and Improvement Agreement" effective that day. According to meeting's minutes, per the agreement, "PUD will assume operations of the water and wastewater treatment systems on August 1, 2025, to allow the Town the opportunity to inform the union of this transition with regards to the PUD consolidation." Prior to giving her staff report during the Monday, May 19 meeting, Town Clerk/Treasurer Sarah Clark, referencing the May 5 motion, noted the union "needs to know which union positions will be eliminated and/or any benefits or wages will be adjusted" before they can be given a 60-day notice. "Until we can balance our budget, we can't provide the notice that they required," said Clark. "Currently, unless we somehow figure out how to balance our budget by the next meeting, that will push out the original date from August 1 until how long it takes us to balance."

Elaborating on the union dynamic, Mayor David Olson said, “Once Council identifies the positions eliminated - the layoffs - then it has to be bargained where the union comes back to bargain. It's not just give the notice and go. They have the right to come in to bargain.”

Describing her report as a "pre-intro," Clark said her intention was to show Council "the high levels" by doing a "mock-up budget" for next year based on what money the town would have without utilities. "We need to be able to basically establish what our budget will look like next year so we know how many staff we can keep and then we can move forward from there," she said. "If we can figure out next year, I can figure out this year. It's just easier to do it based on an annual budget rather than half a year budget." Clark notified Council she plans to present a final with projections during the next meeting on June 2.

At the onset of her report, Clark noted the Town is "still between $150,000 and $350,000 over budget" without utilities. "The Town cannot proceed as it currently is without utilities," she said. "Something has to be cut. That's not my opinion. That's factual information based on budget data." Regarding revenue considerations with the consolidation, Clark reported not only that utility tax will increase by $32,500 a year but hinted at a potential franchise-fee of between $124,000 and $156,000 assessed to PUD, which they "would have to determine how to bear that cost," meaning possible higher rates as a result.

Assuming two positions would initially go away with the consolidation, Clark shared six positions would still be left, four of which are union employees who spend 59 percent of their time on utilities. Clark then noted that one public-works employee spends 75 percent of their time on utilities. "If we want to keep that person, we have to roll that 75 percent back into the general funds," said Clark. "If we were to keep all positions except the two, the total cost would be $830,000, and 37 percent of that is currently charged to the general fund and 55 percent of that is to the utility fund. If consolidation occurred, the general fund version would increase to $870,000." Clark shared having considered "40 to 50 different scenarios," and the six positions "would not be needed to remain at full capacity." According to Clark, "any retained staff would have to be fully funded by the general fund."

Following her discussion on staff retention, Clark, broaching a different theme in the budget, said, "The town is required to maintain essential non revenue generating services such as police department, fire and other services we are legally obligated to provide. The library is included as one of those. These are primarily supported by tax revenues. General services are very rarely ever self sufficient. They're tax funded programs."

Referencing Erickson Park, Strong Park, the trails at Waterfront Park, and the Cathlamet Public Swimming Pool, Clark noted, due to the fact the grant obligations were signed in perpetuity, those facilities "have to be maintained as recreational purposes forever." Explaining further, Clark said, "They could potentially be transferred to someone else. However, that someone else has to be a sponsor of the original grant that we were awarded."

Following possible suggestions by councilmembers, including the pool being drained to allow for a "skateboard park" feature, Clark turned to perhaps the Town's favorite "non-revenue-generating" service: the Cathlamet Public Library. "Currently, our general fund is over [the] library, which we cannot support the additional burden of the utility portion of costs without cuts to services and/or personnel," said Clark. "Whether that cuts the services where we're taking all the money or if it's actual services, that's what we have to determine."

As part of her "pre-intro," Clark estimated a budget gap of $150,000 and returned to the theme of cutting services. Noting the utility funds "don't subsidize general funds programs" but, at the same time, "play a crucial role in supporting the overall staffing cost," Clark went on to point out the library is the only of these general services that "isn't locked in" with regards to a grant operation and that the Town is "legally required to provide fire and police" in general.

"Without new sustainable revenue sources beyond what's already identified or corresponding reductions in expenses, the Town may be forced to reduce some of its services," said Clark. "That's up to you... What we're looking at now is our sustainable revenues. There's no one-time revenues included.... It is possible to balance the budget using that money but that's not sustainable. This is trying to get us into a sustainable position rather than saying, 'Let's use timber harvest money for the next two years and then we'll be broke.'"

The time being turned over to them for comment, Councilmembers Laurel Waller, Jeanne Hendrickson, Joe Baker, and Robert Stowe voiced their own concerns. Regarding the library itself, Baker said, "I don't think anybody at this table wants to take the library away." Hendrickson, who raised the most questions throughout Clark's presentation, said, "I don't want to get rid of utilities because we just don't like having them. I just feel very insecure because we've kicked the ball down the road so many years, right now we've got ourselves a problem."

Voicing his aggravation, Stowe said, "Everybody appears to be worried that the PUD is going to increase the rates, but who's going to pay for the loans that we have to get to fix what we didn't take care of? Whose rates are going to go up? Our rates, because we didn't take care of it. We have to get loans, fix things. We have to get loans and somebody has got to pay for the loans and the Town doesn't have the money, assuming we can even get a loan."

Waller, who has spent the most time with Clark regarding the budget, said, "What we're trying to do is make it work."