Camas mayor: maintaining City’s AAA rating critical

Camas city officials this week continued to debate new revenue sources proposed in Camas Mayor Steve Hogan’s 2025-26 budget as a way to maintain the City’s current service levels, add new supervisory positions to the Camas Police Department, help cover costs associated with Camas’ network of streets and preserve the City’s celebrated AAA credit rating.

“We battled for years to put together a AAA rating,” Hogan told Camas City Council members Monday evening, during the Council’s Nov. 4 workshop. “We’re there now, but our tax base has dropped so substantially that Moody’s and Standard and Poor’s (credit rating agencies) will be able to see quite quickly if we as a Council don’t take steps to maintain what we have in our general fund reserves.”

Hogan reminded the Council that the City’s AAA credit rating saved the City $1.5 million when it issued its 2023 general obligation bond that helped finance parks redevelopment, facilities construction, street construction and other capital improvements.

“That rating saved us a hell of a lot of money,” Hogan said. “And will have saved us a hell of a lot of money down the road.”

Hogan also warned Council members that the City will need to decide which areas of the budget they plan to cut if they cannot increase revenues enough to meet the City’s current expenses.

“We’re focusing on what we’ll have to cut and not what we have to maintain to keep levels of service to the community,” Hogan said. “If we knock off 2 percent here and whatever there, we are going to start cutting services quickly because I am, as the chief administrative officer, going to maintain that AAA rating, and I’m going to come back to you guys and have involved in who we cut, where we cut … and it will get fairly nasty.”

The mayor, who has proposed going to voters in February 2025 to pass a new 4% tax on the City’s water, sewer, stormwater and garbage utilities to fund new supervisory positions at the Camas Police Department, said he does not believe the City should cut funding for its police or fire departments.

“The uniformed services we have should not be cut,” Hogan said Monday, adding that “the rest of the options,” including the City’s parks department and public library, “are wide open” if City leaders must cut expenses instead of increasing revenues to hold steady in 2025-26.

“I just think you ought to focus on, ‘What’s it going to take to keep a credit rating I’m not sure any other cities in this county are able to keep?’” Hogan told the Council on Monday.

Council members on Monday debated two of the revenue sources Hogan has earmarked for his proposed 2025-26 budget: the creation of a new Transportation Benefit District that could potentially charge a .01% sales tax in Camas and/or a $20 vehicle tab fee to help fund streets-related maintenance, pavement preservation, operations and new projects, and a utility tax that would continue the City’s two-year, 2% utility tax meant to sunset at the end of this year and ask voters to approve an additional 4% utility tax to fund the new police positions.

Camas Finance Director Cathy Huber Nickerson explained this week that the mayor’s baseline budget for 2025-26 was developed with $2.9 million in reductions in mind.

The City is saving around $2.7 million by not filling more than two dozen new staff positions approved by Council in 2022 for the 2023-24 budget.

“Then, critical police needs were identified with increased funding and existing and new revenues were recommended for a balanced budget,” Huber Nickerson told Council members Monday, adding that the City currently has a “three-legged stool” for its revenue base, including $15.2 million in annual property tax revenues, $6.24 million from sales taxes and around $927,000 from the 2% utility tax.

Some Council members have expressed opposition to revising the City’s 2022 ordinance that created a 2% utility tax on the City’s water, sewer, garbage and stormwater utilities and to overhauling the ordinance’s sunset provision.

“So you want a continuation of a tax we told citizens would sunset?” Councilwoman Leslie Lewallen asked Monday.

Huber Nickerson explained that the Council had passed the temporary utility tax in the hopes that Camas and Washougal voters would approve a regional fire authority (RFA), possibly reducing the City’s fire department-related expenses by the end of 2024.

“It was an aggressive schedule and … has not happened,” Huber Nickerson said of the RFA, which is still being hammered out in joint Camas-Washougal committee meetings. “The (utility tax) was not to apply to the RFA. This was a bridge until we had the RFA … The assumption was, in 2022, that the RFA would free up revenues that currently go toward the fire department.”

Councilwoman Bonnie Carter said she remembers the utility tax being “a bridge” that would also help fund new staffing positions the Council put into the 2023-24 budget.

“This was limited money and was not a good decision to put limited money into positions where people were involved,” Carter said. “So we didn’t hire those positions and (utility tax revenues) went into the general fund, and we ran business as usual with this funding.”

Carter, who is a member of the Council’s finance committee, added that the mayor’s recommendation of extending the 2% utility tax would simply maintain current City services as they are today, but would not be enough money to cover the additional, nearly $1 million in annual costs associated with the new police supervisory positions the mayor and police chief have said are critically needed in Camas.

“The 2% (utility tax) is to run business as usual,” Carter said. “The 4% (voter-approved utility tax) would be to fund (new) police positions.”

Carter added that the City has already experienced lower service levels because it could not afford to hire the new staffers the Council approved in 2022.

“I’ve seen a decline in our services with citizens already because we have not hired all those people we thought we were going to hire in 2023,” Carter said.

The 4% utility tax would help fund the $1.25 million “decision package” that would add two sergeants and one lieutenant to the police department to “focus on urgent, long-delayed public safety needs.”

The Council will consider ordinances for the new revenue sources on Nov. 18.

The City will host a public budget open house beginning at 5:30 p.m., Wednesday, Nov. 13, at Lacamas Lake Lodge, 227 N.E. Lake Road, Camas.