County juggles budget issues

By RAELYNN RICARTE
News staff writer

Hood River County Administrator David Meriwether said reserve funds built up during good economic years have backfilled the budget for fiscal year 2009-10.

However, he said these funds will be drained away within several years without preventative action.

“We’re really not holding our own at this point,” Meriwether said.

The county is receiving a 10-percent reduction in federal compensation for logging cutbacks, for the second year. The same rate of decline will take place for two more years and then the payments stop altogether.

Since that money — $1.7 million in 2007-08 — was once half of the road maintenance budget, Meriwether said its loss will be difficult to make up.

He said the county budget committee has proposed to supplement $1.2 million in forest funds with $795,000 from its $10 million in reserves. That money can only be used for transportation-related projects.

The Oregon Department of Transportation contributed $2 million to the reserves. The state agency compensated the county several years ago for the lost value of gravel in an unusable rock pit.

The remainder of the reserve account is receipts from harvests in the national forest per an agreement with the federal government.

The goal, said Meriwether, is to now stretch that money as far as possible until the economic recession is over.

He said timber revenue from the county’s 30,000 acres of managed forests, a consistent source of income, has also fallen. The annual average intake of $4 million dropped to $2 million two years ago because of poor market conditions.

To make up for lost revenue, the county has supplemented its budget with reserve funds from past high-year harvest receipts. Meriwether said the reserve account, which once held $7 million, will be down to $3.8 million by July 1 of 2010.

“We are alright for the immediate future but these are finite sources of money,” he said.

The county will consider at its June 15 meeting whether to share its federal funding with Hood River and Cascade Locks. For the past several years, the cities have received $213,000 and $36,368, respectively, for road maintenance.

“The commission will decide if it’s willing to carry less forward for future years,” said Meriwether.

He said the county could make up about $570,000 per year in missing revenue if the state adopts a 6 cent per gallon gas tax. However, he said that tax will not go into effect until Jan. 1, 2011, or after two healthy economic quarters in 2010.

The majority of the county board also favors the enactment of a local gas tax, although it is being called a Business License Fee on Motor Vehicle Fuel Dealers. The idea was broached on Monday and will be further discussed at the June 15 meeting.

Meriwether said the county could realize another $420,000 per year in local tax receipts. He said about half of that money would be turned over to the two cities.

Commission Chair Ron Rivers said some major reductions are being made in the 2009-10 budget based on commission interviews with all department heads.

“We just got hit with the perfect storm of economics,” he said. “There is just (fiscal) negativity on all fronts.”

Although the county has reduced, through attrition, 10 percent of its workforce in the past five years, there are still three layoffs planned for July 1.

Meriwether said a park technician position will be eliminated from the Parks and Buildings Department. In addition, a planner position is being cut from the Planning Department. The front desk receptionist, an administrative employee, will also be let go.

Meriwether said unions representing Parks and Planning were asked in March to accept a wage freeze during 09-10. When an agreement had not been reached by the May 15 deadline, Meriwether said the cuts had to be made to balance the budget. Other members of these two unions will keep their contracted 3 percent cost of living adjustment.

The sheriff’s office avoided a layoff of one deputy by agreeing to forgo a 2.5 percent wage increase for 09-10. All non-union employees, including managers, have also accepted a pay freeze.

Meriwether said personnel costs for 135 county workers comprise about $11.3 million of the total $33 million budget. Incorporated in that budget is potential state and federal grant and loan funding.

For example, the county has applied for $3.2 million in federal stimulus dollars to complete the Windmaster sewer project. Homes in that area have failing septic systems that are creating a health hazard.

Meriwether said the stimulus package is made up 95 percent of grants with a 5 percent loan that has no interest charges.

The library’s annual budget of about $750,000 has been reduced by one third in 2009-10. Rivers said the State Street facility provides services that are non-essential to public health and safety, which are the first priorities in a time of budget constraints.

The county plans to ask county voters in May of 2010 to make the library a separate taxing district. Meanwhile, the facility’s hours will be reduced as of July 1 and there could be a cutback in personnel.

“What you are seeing is the freight train slowing down but now we have to stop it from hitting something,” said Rivers.

He and Meriwether believe the county can recoup $1.2 million to $1.5 million per year by getting into the renewable energy business. The local government is interested in placing windmills on its Middle Mountain property to generate about 10 megawatts of power for the grid.

The two officials said another source of income is the siting of a tribal gambling casino in Cascade Locks. They said the Confederated Tribes of Warm Springs have agreed to pay the county about $500,000 per year to cover the cost of the services it provides.

“Our problem is getting through these times to there,” Rivers said.