Cosmopolis budget workshop flags revenue drop after mill closure and warns sewer contract leaves city a year behind

Tara Dunford, the city’s contract accountant, told the Cosmopolis City Council on July 24 that the city’s cash-basis financial statements show projected revenues nearly $300,000 below the 2024 budget. "Projected revenues are nearly $300,000 less than budgeted, due to two primary factors," Dunford said, naming an approximately $185,000 reduction in business-and-occupation and electric utility taxes tied to a mill closing and the removal of a $100,000 Recreation and Conservation Office grant from the projections.

Dunford explained the city reports on a cash basis as required by the Washington State Auditor’s Office and emphasized differences from GAAP financials. She said anticipated expenditure changes include savings from unfilled administrative positions and adjustments in police staffing. "The police expenditures have been adjusted downwards approximately $59,000 to reflect reducing the number of police officers from 4 to 1 and then adding the police position back at 10 hours a week and adding in the Aberdeen service contract," Dunford said, adding that the full-year savings are larger when annualized.

Council members and residents pressed staff about whether the Aberdeen contract could be canceled and officers rehired. Resident Kelly Daniels said the numbers suggested the council might afford bringing officers back and "canceling the contract with Aberdeen because it seems as if we will have the funds to do that," and Dunford replied the rough arithmetic supports at most two full-time officers under current projections without other cuts.

Dunford also warned of structural problems in the sewer fund. She said the city pays Aberdeen on a pro rata share of Aberdeen’s budget for sewer service and bills are for the prior year’s usage, leaving Cosmopolis "a year behind" on cash flow. "Of our projected $495,000 in expenditures for 2024, $325,000 of that is for 2023 usage," Dunford said, noting unpredictability when Aberdeen’s capital spending varies.

Dunford recommended continued monitoring of general fund cash flow, a review of sewer rates and the Aberdeen service contract, and that council prepare for the 2025 budget cycle. The council did not take any formal budget votes at the workshop but authorized staff to pursue follow-up work on sewer contract terms and fund-level amendments tied to grant awards.