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State audit ranks Columbia County highest in debt burden

Treasurer says county is poised to pay off debt early

Columbia County may be headed toward financial prosperity, but a statewide audit ranked it highest in the state for debt to revenue ratio.

SOURCE: OREGON SECRETARY OF STATE - A chart shows Columbia County with the highest debt to income ratio, but county officials say the chart doesn't account for recent reductions in debt, nor does it reflect that many outstanding loans are self-sufficient.A 2016 Financial Condition Review of Oregon’s counties released Tuesday by the Secretary of State’s Office indicates Columbia County had the highest debt burden among 36 counties, using a five-year average from 2011 to 2015.

“A key indicator used to evaluate a county’s debt burden is the percentage of debt service to revenues,” the report states. “States recognized as having sound debt management practices typically use a range between 5 percent and 8 percent of revenues. The State of Oregon uses a target of 5 percent.”

Using a five-year average of data, the county came in at 8.2 percent, followed by Polk, Coos, Tillamook, and Multnomah counties.

The report evaluated the financial condition of counties using indicators like liquidity, personal income, fund balance, dependence on timber revenue, retirement benefit obligations, unemployment and debt burden, among other factors.

While Columbia County came in highest for its debt burden, it ranked near the middle in tax revenue per capita, at $343 per capita, and low on overall timber revenue dependence. Columbia gets about 2.7 percent of its revenue from Bureau of Land Management timber payments, the report shows.

The county comes in low on its average permanent tax rate. Oregon’s average is $2.82 per $1,000 of assessed property value. Columbia County’s is $1.40.

Despite ranking highest in debt burden, the county’s most recent budget data indicates an upward tick in financial health.

Last week, the Columbia County Board of Commissioners authorized six new positions be added to the upcoming budget, including a legal assistant, paralegal, two accountants, a finance analyst and an accounting manager. Some of the positions were jobs cut years ago during heavy budget constraints, county commissioners said.

Furlough days, which have kept the county courthouse closed every Friday, will also end this summer.

Columbia County is also poised to pay off some of its debt early.

“All of our big dollar debt, none of it has a negative impact on general fund dollars,” Jennifer Cuellar-Smith, the county’s treasurer and finance director, explained Wednesday. “They’re all either self-funded or funded by users.”

The county’s debt burden comes primarily from loans for major facilities like a road loan for access to Port Westward, the county’s solid waste transfer station, jail refinancing and bonds taken out nearly 15 years ago to cover the cost of pension payments through the Public Employment Retirement System.

At $150 per resident, Columbia ranks one of the lowest counties in the state for retirement benefit obligation per capita, but one of the highest

in public safety spending, at $189.

Cuellar-Smith said the state’s report may give the impression that the county is debt-heavy, when in reality, its debt burden is rapidly declining.

“A better indicator would utilize total outstanding debt in some way,” Cuellar-Smith stated via email. “We’re certainly not issuing new debt to fund expenditures!”

Last year, the county was using roughly 4 percent of its borrowing capacity, while making excess payments to the road loan and transfer station loan, reducing outstanding liability by a significant margin. The county’s outstanding debt declined by 39 percent last year, going from $9.69 million to $5.96 million, Cuellar noted.