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Chamber hears gloomy predictions
The city of Oak Harbor may stop funding the senior center. The city parks department might be shut down, leaving nobody to care for the citys many parks.
The city could go bankrupt in five or six years.
Both Oak Harbor Mayor Patty Cohen and Finance Director Doug Merriman, who also serves as interim city supervisor, offered these doom and gloom predictions about the citys economic future in separate speeches delivered this week.
Cohen told the Greater Oak Harbor Chamber of Commerce during a luncheon Thursday that voter-approved initiatives 695 and 747 have put the city in a grave financial situation that will likely necessitate drastic service cuts in coming years.
Its unfortunate, she said, that the initiative sponsors failed to research the full impact of the initiatives before launching into new ones.
Cohen pointed out that she has already cut jobs, reorganized departments and cross-trained employees. Currently the city has 129 employees, which is down from 145 employees at this time last year.
Still, she predicted that the city will be looking at a $650,000 deficit next year. But with the compounding effect of I-747, which limits property tax increases, she said the city will be $1.3 million in the red by 2006.
Merriman gave the city council a similar talking-to in his year in review report during the Tuesday meeting. He discussed the uncertain futures all local governments are faced with nowadays.
Merriman said fellow city officials must reinvent ourselves or face bankruptcy in the near future. He also pointed to the tax-cutting initiatives, together with unfunded mandates from the state, as the cause of the citys serious financial distress.
I-747 limits governments from raising property taxes by more than 1 percent a year. The state Legislature enacted I-695, which cut car tabs to $30, after the measure passed but was declared unconstitutional. Since the car tab tax funded sales tax equalization, Oak Harbor stood to lose $800,000 a year. The state helped mitigate the impact by giving the city about $240,000, but that funding will end after this year because of the states own billion shortfall of some $1.5 billion.
Beyond Oak Harbor, Cohen said many cities and counties in the state are hurting because of the initiatives. She said the Washington Association of Cities is predicting that several cities in the state, including Lake Forest Park, Bridgeport and even Yakima, may have to disenfranchise because of budget problems.
The solution for Oak Harbor, Cohen said, is for the community and council to give up their resistance to change and cant-do attitude and be open to new ideas, such as creative funding mechanisms. Cohen did not offer any specific ideas, but asked the city council to hold a town hall meeting to gather public input.
Both Cohen and Merriman said city officials will have to prioritize city services and develop a list of essential services. Non-essential services, like the senior center, the marina and the parks program, may have to go. Moreover, Cohen said, with the budget problems, it may be up to citizens instead of the government to bring real change and economic revitalization to the city.
Cohens dark predictions cast a cloud of silence over the normally boisterous crowd of business people. Yet it was unclear what local leaders of business and industry thought about her speech.
Local realtor George Churchill suggested that the city ask the voters to pay for a bond to finance the proposed municipal pier.
Cohen called for a straw poll on who would support a bond to fund emergency services in the city. About half the people raised their hands in support, though nobody voted against it.
Then Cohen asked for a show of hands to see who would be willing to vote for the Churchills pier bond idea. Again, about half the people raised their hands in approval, but a few people raised their hands against it.
The city does not have the dollars to throw at these projects, she said. It may be up to the community to make things happen.