The city of Ocean Shores has an $850,000 dilemma as it closes the books on the 2017 budget — and that’s money that can be used for a multitude of options.
The real news, however, is that the money comes on the heels of a 2018 budget process that already projects a $1.5 million surplus to end the year.
In wrapping up the December 2017 financial statements, Finance Director Angela Folkers said, the city realized that revenues came in over budget, and expenses came in under budget.
“We actually have some extra money that we weren’t expecting to have in the general fund at the end of 2017,” Folkers told the City Council on Feb. 26. “That’s exciting news. It’s a good problem to have.”
Revenues were over by about $409,000, with more collections from Business & Occupation taxes, the public utility and water utility taxes, and building permits, which accounted for about $313,000 of the excess revenue.
Expenses also were about $440,000 less than what was budgeted last year. Primary causes, Folkers said, were understaffing (Police and Fire Department vacancies), savings in litter control, the Parks Department budget and other departments.
“Along with having extra money comes the question: What do we do with it?” Folkers asked.
She presented some possible uses based on the council’s stated financial goals and policies and what she said where some of the concerns she has heard voiced by the council members and mayor.
“The big one was paying off city debt,” Folkers suggested. That could save the city interest rate payments. The city’s 2007 LID balance carries an interest rate of 7.5 percent. “We could actually save about $66,000 if we pay that off now,” she said.
The city also could pay off interfund loans that still exist. Folkers noted if the Convention Center interfund loan was paid off, more funds could be freed up by the Lodging Tax Advisory Committee to fund tourism and marketing projects or event support.
“Those loans have been hanging around a long time and the auditors have some concern about the length of those,” said Folkers, who previously worked for the State Auditor’s Office.
Another option, she suggested, would be to build up reserves for projects such as the proposed Point Brown Avenue sidewalks project. The city is estimated to need $1.1 million over five years to pay its portion of matching funds for that project. Money also could be set aside to help with street maintenance projects to go along with whatever money is raised through a pending Transportation Benefit District.
“Or we can choose to do nothing, wait for the 2019 budget and decide what to do with it there,” Folkers added.
So far in 2018, sales tax revenue is down 4 percent compared to 2017, and Folkers said it was too early to predict a trend.
“We have some money that we have some options to do good things with,” she said.
The council will revisit the surplus at a later meeting.
“It’s good news,” Mayor Crystal Dingler said. “It means we were short-handed all of last year, which is not so good. But it’s good news that we saved a little money.”
