Whatcom County's road budget woes will require some creative accounting
Whatcom County's Public Works Department is having a bit of a cash flow problem, and the County Council is being asked to change its accounting rules so that bills can be paid on time.
At issue is the Road Fund, which is a budget category where part of the county's property collections and its share of the state gas tax is allocated. State and federal grant money for road projects goes there too, and that's where money comes from to pay for road construction, repairs, snow removal and related projects.
That fund is sometimes in the red when money is needed to pay the bills during the busy summer construction season, Public Works director Elizabeth Kosa told the County Council in a committee meeting Tuesday.
It's partly because of higher labor and material costs, a drop in gas tax receipts, and also linked to the timing of property tax collections in spring and fall.
'We have a much higher budget authority than the funds we have available to spend. And I can commit to you, 100%, we will not spend beyond what we have,' Kosa told the council's Finance and Administrative Services Committee.
Cash flow is threatening important summer road projects such as paving on Everson-Goshen Road and a slide removal on Lummi Island, she said.
Because of this, Kosa is asking the County Council to authorize interfund loans to finance cash flow for Road Fund, in amounts up to $4 million for a term not to exceed two years.
County Council members voted unanimously Tuesday to consider the matter at their next meeting on May 27.
Kosa said that the Public Works budget is reeling from increased labor and construction material costs, some unexpected expenses, and a 'pattern of deficit spending has continued for over two decades.'
To save money and balance its 2025 budget, Kosa said that Public Works is delaying some projects, continuing to reduce spending, and freezing 14 vacant positions for several years.
The Road Fund 'is not nimble enough to absorb unexpected costs,' she said.
'We're recommending that our lowest month of the year contain $10 million balance in available cash flow. Without this we will not be able to float disasters such as a road washout or other emergencies. Any emergency would result in a request to use other county funds or a loss of service. The plan that we have proposed will get us through this year, provided no additional emergencies arise,' Kosa said.
Public Works isn't exactly robbing Peter to pay Paul, because such interfund loans must be repaid.
Deputy Excutive Kayla Schott-Breseler said the loan could come from any fund, but most likely it would be the General Fund or or real-estate excise taxes.
'The way that the ordinance is set up is that it gives the treasurer flexibility to chose the fund that is most healthy for cash flow purposes,' Schott-Breseler told the council.
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