The worldwide financial crunch is finally hitting Oak Harbor, but it’s doubtful than other cities, counties or countries are crying about Oak Harbor’s plight.
Next year, Oak Harbor is looking at a budget deficit, but it’s only $272,952, a small fraction of the overall budget. The Finance Standing Committee will start making plans to deal with the deficit when it meets Wednesday, July 14, at 3:30 p.m. at City Hall. Cuts are never easy, but Oak Harbor hasn’t yet cut to the bone as have many other jurisdictions. There is bound to be some fat or redundant or unnecessary programs that can be eliminated. And when the cutting is done, any pain can be assuaged by the city’s extremely healthy financial reserve of $2.88 million, which accounts for more than 20 percent of the city’s budget. School districts often strive for a 5 percent reserve, so Oak Harbor looks like it’s rolling in cash by comparison.
Overall, Oak Harbor’s finances are looking extremely healthy three years into the great recession. The consensus among city leaders is that Finance Director Doug Merriman should get the credit for skillfully guiding the city through the good times and bad. When the economy was booming, he invested the city’s money prudently and cautioned against overspending just because times were good. He’s been around long enough to know that good times never last forever. As a result, Oak Harbor sailed smoothly through the financial tempest.
Merriman’s economic forecasts are also cautious, and he conservatively sees Oak Harbor’s budget deficit growing to $1.6 million by 2016. If city leaders heed his advice and budget accordingly, there’s plenty of time to whittle that deficit down. And if Merriman’s estimates are too conservative, a growing economy could well erase the projected deficit.
We trust the city will follow Merriman’s prudent financial leadership and budget cautiously, rather than hoping that a healthy growth rate will bail the city out sometime in the future. And if money should pour in faster than projected, nobody will be happier about it than Doug Merriman.
