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Are City of Ferndale finances as bad as the Mayor says?

Still of City of Ferndale Mayor Greg Hansen speaking during a video press conference with WA US Senator Patty Murray (August 10, 2020).
Still of City of Ferndale Mayor Greg Hansen speaking during a video press conference with WA US Senator Patty Murray (August 10, 2020).

FERNDALE, Wash. — Ferndale Mayor Greg Hansen spoke Monday, August 10th, about the need for local city funding during the COVID-19 pandemic during a video press conference with Washington state US Senator Patty Murray. According to a news release from Murray’s office, the purpose the press conference was “to discuss the urgent need for Congress to allocate critical state, local and Tribal funding in the next COVID-19 relief package.” The entirety of the video recording of the Mayor’s statements was published by The Bellingham Herald and can be viewed online.

Hansen told those on the call how small cities in Washington were facing challenging financial situations resulting from reduced tax and fee revenues due to restrictions in place by the state in response to the COVID-19 pandemic and the closing of the US-Canada border to only essential travel.

Hansen’s statements included,

  • “… and we’ve seen 50% decreases in our gas tax revenues or hotel motel tax revenues. These represent substantial portions of our city budgets.”
  • “Many of us are also facing staff furloughs and layoffs due to the severe budget shortfalls.”
  • “We are going into 2021 with very little cash reserves left in the bank and and so with very little fat left to cut from our budget for small cities like ours.”

While Hansen’s statements painted a bleak financial picture, the latest monthly financial reports available on the City of Ferndale website provide a different financial perspective.

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The 2020 City of Ferndale budget is approximately $75,000,000. The cash position of the city as of July 31, 2019 was $10,573,348 and $19,695,097 on the same date in 2020.

The following table shows total revenue collected from sales tax and other citizen sources year-to-date as of July 31st in 2019 and 2020.

Revenue Source20192020Change% of Change
Property Tax $654,425 $919,192 $264,76729%
Sales Tax1,351,9781,426,87374,8955%
Transportation Benefit District Sales Tax317,219335,91418,6956%
Utility Tax1,092,6531,218,804126,15110%
Water Sales1,405,6731,699,817294,14417%
Sewer Sales2,279,3862,533,067253,68110%
Storm Drainage Utility853,883903,29649,4135%
Solid Waste Tax1,689,0521,462,172(226,880)-16%

The account balance for City of Ferndale Hotel/Motel Tax revenues was $80,572 on July 31, 2019 and $103,918 on the same date in 2020, an increase of $23,346.

Hansen also warned those on the call, “We’re going to hit a brick wall on October 31st when CARES [Act funding] ends but the impacts of this pandemic continue. I think I can speak for almost every small city in saying that we need more help. We need more flexibility on how we can spend our CARES dollars and we need the CARES timeline to be extended. But even more, we need assistance in backfilling our revenue deficits.”

In response to questions from My Ferndale News, City of Ferndale Administrator Jori Burnett said in an email the city was not anticipating any furloughs or layoffs and the city’s Finance Director was still working on year-end projections. He added, “Things are changing rapidly that we are trying to figure out trend lines.”

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