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City declares financial emergency
The Oak Harbor City Council declared a state of financial emergency for the year 2002.
Mayor Patty Cohen asked the council members to pass the resolution at the Tuesday meeting in order to allow her the freedom to reduce city spending and increase efficiency without having to go through the process of bringing everything before the council.
The declaration of a financial emergency continues a very similar resolution the council passed a year ago, when the city was reeling from the effects of Initiatives 695 and 722.
Interim City Supervisor and Finance Director Doug Merriman explained that the citys financial problems are due to the double-whammy effects of property-tax-limiting Initiative 747 and the weak economy.
Although the budget is now balanced with the city tax increases passed at the same meeting, Merriman said the administration will still need to do some major cost cutting because of the financial trouble on the horizon. The city will likely lose the $270,000 a year in backfill for Motor Vehicle Excise Tax from the state after 2002. Moreover, the passage of I-747 means the city probably wont be able to raise property taxes to keep up with inflation beyond percent unless the voters approve a larger property tax increase.
The resolution will allow Cohen to take a variety of unimpeded cost-chopping actions, such as laying off personnel, reducing or eliminating employees cost of living increases, consolidating departmental operations, re-engineering work processes, and outsourcing and developing cooperative arrangements with other governmental agencies.
The citys ongoing budget woes go back about six years to when former Mayor Steve Dernbach came into office and found the city had a $1 million deficit nobody seemed to have been aware of. Then car tab Initiative 695, which meant a $800,000 loss for Oak Harbor, passed just before Cohen took office.
Tuesday, the financial emergency resolution passed unanimously after Councilman Paul Brewer added an amendment that any change involving a contract over a year in length must come before council.