Cowlitz County reports REIT-driven spikes in capital improvements fund; ARPA and courthouse work projected to affect 2025 spending

Cowlitz County finance staff told the Board of County Commissioners on Monday that the capital improvements fund has experienced intermittent one‑time increases in real estate excise tax revenues tied to ownership transfers, and that planned transfers and ARPA funding will be used for courthouse and other capital projects this year.

Finance Director Kathy Funk Baxter and Public Works staff said the fund is budgeted for $1,025,000 in REIT (real estate excise tax) receipts; through the month reported they had received $620,002.71. Baxter said a $226,000 increase in April was attributable to a WestRock ownership transfer and characterized that as a one‑time “bump.” She also noted a February spike of about $287,000 tied to a Capstone transaction and an earlier November 2018 controlling interest change of about $98,000.

“These are generated as a point 25% on all real estate transactions within Cowlitz County outside of the city jurisdiction,” Public Works staff said, and the fund has varied over recent years — peaking around $1,500,000 in 2021 and falling to roughly $979,000 last year.

Baxter told the board the capital improvements fund also shows $2,000,000 in other financing sources for 2024–25: $1,000,000 of American Rescue Plan Act (ARPA) funds expected to be spent this year for the courthouse project, and a $1,000,000 annual transfer from the general fund to keep projects moving. Miscellaneous revenue (primarily investment income) is budgeted at $298,000 for the year; $84,004.83 has been received so far.

On the expense side, staff reported two half‑time positions charged to the fund (budgeted at $109,003.07; $35,006.47 expended to date) and service budgets of $910,009.74 with $65,004.38 expended; many public works projects involve prevailing wage affidavits and state processing that delay payments. The capital expenditures line totals nearly $5.9 million in the current budget, though only $38,111 had been spent as of the report; staff said most large invoices are expected later in the year.

Baxter also noted a $300,000 budgeted transfer to cover annual debt service tied to morgue building and equipment financing; staff said the equipment portion was structured as a 10‑year piece and the building portion as about 20 years and that the building was occupied in 2022. The financing rate on that debt was described as “3 point something percent.”

No formal action was taken; staff said they will continue to monitor REIT revenue anomalies when preparing five‑year forecasts and will present an updated CIP plan to the board. Commissioners asked for continued updates on timing of project spending and on the ARPA amount set aside for courthouse work.