Under pressure, city of La Center passes 2017 budget, preps for severe revenue shortfalls in years ahead

LA CENTER — The mood was somber inside the La Center City Hall Tuesday night, after city councilors voted to approve three new taxes without a word of disagreement from the public, then moved on to the approval of the 2017 city budget.

La Center city leaders have been warning the public for some time now that the city’s budget situation, which has long been dependent on gambling tax revenues from the city’s private card rooms, could face a brand new chapter next year, after the Cowlitz Indian Tribe’s mega-casino opens just a couple miles west of the card rooms.

Although the councilors approved a 2017 budget that uses reserves and additional gambling tax revenue — thanks to a prosperous year at the city’s private card rooms — to keep the city’s services and employees intact, the city’s mayor warned that the 2018 budget process may not be so rosy.

“Over the past decade or more, the residents of the city of La Center have enjoyed a high level of service, thanks to a strong tax base from a single industry,” stated La Center Mayor Greg Thornton in his introduction to the city’s 2017 budget. “The industry that has helped us achieve these results may be threatened when the ilani casino opens (in April 2017). Our 2017 budget begins to transition to a new financial reality, which will impact our services, taxes and ultimately our reserves.”

Instead of taking a “wait and see” approach, Thornton has been proactive in trying to diversify the city’s revenue streams and open about city leaders’ fears that, if the card rooms lose customers to the new tribal mega-casino, the city’s revenue stream could take a huge hit in 2017.

“Despite the threats to our finances, I am confident we will successfully navigate the transition to a new fiscal reality, while preserving our quality of life and the attributes that make this a wonderful community,” Thornton stated. “The good news is the regional economy is as strong as it has been in the past 10 years and La Center is in the direct path of new development.”

La Center City Council
The La Center City Council unanimously approved the 2017 city budget on Tue., Nov. 22. Pictured here at the Nov. 22 meeting, from left to right: Councilor Randy Williams, Councilor Joe Valenzuela, Councilor Liz Cerveny, Mayor Greg Thornton, Councilor Heather Birdwell-Currey and Councilor Al Luiz. Photo by Kelly Moyer

The mayor’s 2017 budget, which city councilors unanimously approved on Tue., Nov. 22, includes a new Community Development Coordinator position, to help the city grow its commercial/light industrial area closest to the new tribal casino, at La Center’s Interstate 5 junction, and to help expand development in the city’s commercial downtown core.

At the city council’s Tue., Nov. 22 meeting, some councilors expressed support for the mayor’s proactive approach, while others questioned the wisdom of including a new staff position — the community development director  — when the city doesn’t know how it will maintain its current staffing situation in 2018, if the card rooms, which currently provide three-fourths of La Center’s general fund revenues, take an economic hit after the ilani casino opens.

“With what’s coming in 2017, I still have a little heartburn with the community development coordinator position,” Councilor Al Luiz told Mayor Thornton at the Nov. 22 meeting. “I understand why you want to do it, and I don’t want to strap you from building our new city out at the junction, but knowing that we’re adding another employee at $89,000 or $90,000 a year … it’s the only issue I have with the budget this year.”

Councilor Joe Valenzuela agreed with Luiz and said, considering the city’s uncertain economic future in 2017 and 2018, he was “very hesitant to put any other employees” into the city’s budget, but that he understood the city’s need to have a person in charge of future development.

The mayor said he understood the councilors’ concerns, but pointed out that the new position would essentially be “budget neutral” since the city currently contracts with planning consultants and the new position would eliminate the need for the outside contractors.

“The city is expending the money anyway,” Thornton told the councilors on Nov. 22. “I actually think it (the community development director position) is going to be a cost-savings for the city since we’ll have someone here to address these issues full time and to work on development throughout the city. I think this is a critical position. I appreciate your concerns, but I would rather see someone come on now, before we get overwhelmed by a lot of (development) activity, instead of putting that person in a position of having to catch up.”

Councilor Liz Cerveny, a former La Center mayor, agreed with Thornton’s proactive  approach to development and to diversifying the city’s revenue streams.

“What we’ve  proven for many years is that we need to broaden our revenue streams in  La Center,” Cerveny said Nov. 22, before the council voted to approve Thornton’s 2017 city budget. “We’ve been dependent on a single revenue stream since the early 1980s and there’s been a constant question of “How did we get here?” and a constant issue has been looking the other way.”

Cerveny added that, in her opinion, the new community development director position, which the city hopes to fill by April of 2017, can benefit the city not only at the I-5 junction area, but also in La Center’s downtown core, which is currently dominated by the three private card rooms.

“This position could help bring in more businesses, more small businesses, in the downtown core,” Cerveny said. “And this individual will have the relationships in  Clark County and beyond … we need this to bring in the diverse revenue streams that La Center needs.”

The 2017 La Center budget also includes three new taxes — a 1-percent increase to property taxes, a lodging tax that the city can collect on overnight stays at hotels/motels, campgrounds, RV parks and things like Airbnb rooms, but must use for tourism-promotion purposes, and an excise tax on certain utilities.

Thornton said the new utility excise tax, expected to bring in about $330,000 next year, will be effective Oct. 1, 2017, and will help “diversify the city’s tax base and partially offset the expected decline in gambling revenue.”

The councilors voted unanimously on Tue., Nov. 22 to approve the 2017 budget. The $3.7 million budget funds the city’s police department, finance department, parks, legislative branch, the planning department and public works. The biggest expenditures are for the city’s 27 employees, with salary and benefits comprising 73 percent of the entire budget, at a cost of $2,715,676 in 2017. Following is a breakdown, by department of the 2017 expenditures in the city of La Center:

Public Safety: Police services are the city of La Center’s biggest expense, at $1,647,689, or about 45 percent of the overall budget expenditures.

Public Works: The city’s public works department accounts for about 20 percent of the budget expenditures, with funding levels at $729,286 for 2017.

Finance: The city’s Finance Department is the third greatest expense for La Center, with funding levels at $574,739 for 2017, or 15 percent of the budget expenditures.

Parks: The city’s fourth-biggest expenditure, the Park Department is funded at $405,774 for 2017, or roughly 11 percent of the budget.

Planning: The Planning Department accounts for about 7 percent of the budget expenditures, with funding at $276,977 for 2017.

Legislative: The legislative costs for the city of La Center are budgeted at $74,732 for 2017, include $24,700 in salary costs, and comprise about 2 percent of the overall budget expenditures.

To see the final 2017 budget for the city of La Center, approved by the city council on Tue., Nov. 22, click here.

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