LANGLEY: City of Langley’s general fund in peril (SWR)

Kira Erickson reports from the Langley City Council meeting of Mar. 18, 2024 for the South Whidbey Record.

The city of Langley’s finances are currently in a precarious state.

During a city council meeting this week, Mayor Kennedy Horstman said the city’s financial position is “not fine” and that there is a likelihood an interfund loan will be needed prior to the end of the first quarter, which is approaching soon.

“We are not in a panic mode, but our finances are necessarily being closely monitored,” Horstman said.

Her comments pertained exclusively to the city’s general fund, which is used for government services such as the mayor’s salary and the council’s stipends and business operations like finance, community planning, police and to some degree, public works.

They Said It

Horstman explained that the general fund balance was 66% of what was needed for the first quarter of 2023. Expenditures in 2023 exceeded budgeted revenue by $194,000 and actual expenditures were $264,000 greater than revenue.

“Speaking to our current situation, we started 2024 with the general fund underfunded by $460,000 and with a starting balance of $91,000,” she said.

The mayor said the city is limiting general fund expenditures to “mission critical” items only, and work is being delayed until there are enough funds to cover it. She anticipates that April revenues will bring Langley to a significantly better position.

“However, we have some serious work ahead of us to establish a healthy realistic budget and to make up for significant overspending,” Horstman said, adding that she and Finance Director Wanda Grone are working with the city’s Finance and Personnel Legislative Commission to establish a budgeting process that does not rely on historical and miscalculated budgets.

Officials will attempt to get a healthy financial statement this year where the city spends less than or equal to what it takes in, but Horstman acknowledged it may take more than a single year’s budget to build back up the reserves required, and she anticipates it’s going to require some tough decisions.

In an email to The Record, Horstman said she intends to hire a new clerk-administrator.

“My first several months as mayor have only strengthened my conviction that the city needs an administrator,” she said. “I have delayed hiring to ensure the city is on firm financial footing complete with a healthy and transparent budget.”

When asked by The Record about how the city’s finances got into the current position, Horstman said she saw evidence of multiple factors compounded over time: “a flawed, legacy finance system, staff turnover resulting in institutional knowledge loss and past lack of executive fiscal oversight, discipline and transparency.”