Cowlitz County commissioners direct staff to use one‑time reductions, certify levies using new‑construction only

Kathy, a county budget staff member, told the Cowlitz County Board of Commissioners at an afternoon workshop that the county’s revised 2025 general‑fund budget projects roughly $63 million in revenues and about $77 million in expenses when ordinary commitments and currently budgeted positions are included, leaving the county to draw on fund balance to meet obligations.

The shortfall Kathy laid out reflects a combination of steady revenue (property, sales and timber taxes) and rising personnel and services costs. “Because our revenues are less than our expenses…we’re budgeting to bring that fund balance down,” she said, noting staff projects drawing down reserves by several million dollars without corrective action.

Why it matters: County staff and commissioners said the gap is large enough that short‑term, one‑time measures are needed to protect the county’s reserve policy while they develop longer‑term structural solutions for 2027. Commissioners repeatedly emphasized they prefer to exhaust internal efficiencies and reductions before pursuing new recurring taxes.

What staff proposed

Kathy presented a set of near‑term, largely one‑time measures to close the 2026 gap and rebuild a one‑month operating reserve required by county policy. Suggestions included: drawing down portions of internal reserves (for example, IT reserves), moving two sheriff mental‑health positions and their associated internal service charges from the general fund to the opioid fund, returning previously over‑collected internal service billings to departments where appropriate, delaying some equipment refreshes to reduce annual transfers, and estimating $100,000–$200,000 in healthcare premium savings from a new medical plan. Kathy also listed a placeholder of approximately $500,000 for additional one‑time reductions under review.

Commissioners and staff discussed specific departmental and contract reductions as near‑term options. Staff noted that the IT internal reserve had built to multiple millions and could absorb a one‑time draw; departments such as industrial accident and emergency management showed surpluses in 2024 that could be partially used in 2026; and the Expo Center transfer (currently an annual $125,000 supplement from the general fund) could be reduced temporarily, although commissioners asked staff to confirm the enterprise fund’s solvency before cutting support.

Commissioner response and efficiency emphasis

Commissioner Tracy Jackson said the board should pursue departmental efficiencies before raising taxes and pointed to prior leadership workshops that produced operational savings ideas. “We should push for efficiency and try to find other ways,” Jackson said, urging staff to prioritize proposals that avoid layoffs.

Commissioner Farrell expressed similar hesitancy about shifting costs to taxpayers and warned the board faces a structural gap that likely requires hard decisions: “You’re not gonna do that without touching positions,” he said, stressing payroll is the largest single expenditure.

Levy options and board direction

Kathy outlined three levy certification options: 1) certify the highest lawful levy including banked capacity, the 1% banked growth and new‑construction allowance; 2) certify banked capacity plus new construction but not the 1%; or 3) certify new construction only (no banked capacity, no 1%). She explained the assessor provides a preliminary assessed‑value figure used to calculate those amounts and noted state levy rules (RCW) and local deadlines govern certification timing.

After discussion, commissioners signaled a consensus to follow option 3—certify levies based on new construction only—and to include the routine “refund levy” adjustment (to recover prior‑year administrative exemptions). Staff noted option 3 is the same approach the county used the previous year and is not a new tax on existing taxable value; it adds assessed value from new construction for the levy calculation.

Near‑term cuts identified for 2026

Commissioners and staff agreed to direct Kathy to pursue a short list of operational changes that together should produce approximately $500,000–$700,000 in one‑time savings to bring the 2026 budget into balance while a longer plan for 2027 is developed. Those near‑term items (to be analyzed and implemented by staff) included:

- Benefits administration transfer reduction (one‑time, ~$300,000) that was identified by finance staff as available to smooth 2026 cash flow. - Reducing or reconfiguring janitorial services (administrative building and other county facilities). - Scaling back contracted landscaping services (estimated about $60,000 annually). - Reviewing and temporarily reducing administrative security contract costs for the administrative building (staff cited roughly $90,000 per year for building administration security coverage), with attention to maintaining court security at the Hall of Justice.

Staff cautioned that several of the proposed measures are one‑time draws on reserves or temporary reductions and that sustaining balance into 2027 will require deeper structural changes (hiring freezes, permanent position reductions, levy changes, or other recurring revenue). Kathy said she will prepare levy paperwork, model the identified adjustments, and return the refined budget and levy certificates for final approval.

What the board directed

The board directed staff to: prepare levy certification paperwork consistent with option 3 (new‑construction only) for the general fund and road fund and include the refund levy; quantify and implement the near‑term operational adjustments discussed above to reach an estimated $500k–$700k in one‑time savings for 2026; and continue developing longer‑term, recurring options for 2027. Commissioners asked staff to prioritize preserving essential positions and to document consequences of any proposed permanent personnel reductions.

Next steps and timing

Kathy noted levy certification and budget deadlines in November require the county to finalize levy direction within weeks. She told commissioners she needs decisions promptly because she is scheduled for time away in November and must complete levy filings and budget documents before departing. The board scheduled follow‑up work in early 2026 to evaluate structural, recurring solutions for 2027.

Ending note

The workshop ended after staff confirmed the board’s direction and the chair adjourned the meeting.