Cowlitz County flags $2 million five-year shortfall as Hall of Justice HVAC, juvenile roofs move forward

Cowlitz County staff told commissioners on Wednesday that the county’s five-year facilities capital plan assumes steady real estate excise tax (REET) receipts and a $1 million annual general-fund transfer but would produce roughly a $2 million shortfall by the end of the five-year forecast if all listed projects are completed as currently scoped.

The county’s capital reserve is funded primarily by REET, an annual $1 million general-fund transfer and about $73,000 a year in cell-tower lease revenue at the Hall of Justice. Staff said recent state law changes (House Bill 1791) increased REET spending flexibility — raising the maintenance cap from 25% to 35% and removing a prior $1 million-per-year maintenance cap — allowing the county to use more REET dollars for maintenance activities.

Mike Moss, public services director, and finance staff explained the maintenance budget and the list of capital projects grouped by category: recurring maintenance (filters, small projects), roofs, parking lots, seismic/facade work and HVAC. The Hall of Justice HVAC replacement remains the largest single item in the plan; staff currently estimate the project will exceed $6.5 million with remaining debt scheduled in 2026 and a planned 3–6 year repayment depending on interest-rate conditions.

Staff also warned that the juvenile facility will likely require a full roof replacement and engineering work; early estimates discussed in the meeting were roughly $3 million for the juvenile roof and an additional roughly $2.3 million for related infrastructure, yielding a multi-million-dollar need at that facility. Separately, staff noted a probable future security/door-lock capital request from juvenile and IT that could exceed $500,000.

"Even with the general-fund transfer and conservative revenue assumptions," finance staff said, "this forecast shows a potential negative balance in about five years if we continue with the projects listed." Commissioners asked staff to identify where costs could be reduced; staff pointed to line items 1–9 (annual maintenance) as the primary area they can control and described pausing or reducing landscape and certain preventative-maintenance line items to reduce near-term outlays.

Staff also described a $750,000 placeholder for facade repairs; investigative interior work is still under way and staff expect a ballpark figure by mid-to-late December, after which the board could be asked to amend the budget. Commissioners discussed options for phasing or debt financing to smooth cash flows.

Why it matters: the plan lists essential maintenance and multi-million-dollar infrastructure replacements. If commissioners direct staff to pursue every item on the list without additional revenue or changes in scope, the county’s capital reserve would decline and require trade-offs or added debt.

What’s next: staff will present the capital plan within the December budget package for formal approval and return with more detailed estimates for the facade, juvenile roof and the Hall of Justice HVAC if new information becomes available.