City of Cascade Locks completes 2022-23 audit; council to put 5% Prepared Food and Beverage tax on November ballot to fund Emergency Services

The coming increase in electrical rates was up for discussion. With the recent Preliminary Injunction against the Columbia River Operating Power System, BPA has assured users that costs will be going up. The injunction requires more water to be directed through the spillways, with less available for energy production. Cascade Locks buys power from the BPA and distributes it locally. The cost is based on the city’s “High Water Mark,” referring to “that point in the supply of electricity where the cost of the power increases.” Zimmerman also pointed out that the city’s current fee structure reveals that industrial users have an unfair advantage; he encouraged a rate/cost analysis before making decisions about the forthcoming rate increase, and the council agreed.

The council then focused on the city’s need for Emergency Services funding, namely on-site Fire and EMS services. These are currently funded with a variety of sources, but are still under-funded. The department’s need for supplementary money from the city’s General Fund has become problematic. The city cannot raise property taxes, so a Prepared Food and Beverage tax is being discussed. This tax puts the burden on non-residents, appropriately, since 65% of emergency calls come from out of the city, and around 90% of restaurant business is estimated to be non-residents.

“Prepared food” is food sold for immediate consumption, which includes salads from salad bars, sandwiches, hot prepared foods, and scooped frozen desserts. It does not include groceries, whole pies, cakes, or loaves of bread, with many other exclusions.

Following public outreach, the council leaned toward lowering the ask from 7% to 5%, though Mayor Brenda Wood opposed the decreased tax, citing the need not only to fund emergency services from outside the General Fund, but also to maintain and replace aging equipment and gear. She particularly noted the department’s second-hand hose, lack of rain gear, outdated Emergency Plan and aging fleet of emergency vehicles. Councilor Tiffany Pruit sees the option as binary, stating, “Do we want an EMS or don’t we?” The council eventually agreed to reduce the tax request to 5% and put it on the November ballot.

Finally, the council heard from Zimmerman that the 2022-23 audit is complete. There were zero instances of Government Auditing Standards non-compliance, but several material weaknesses: there was no year-end reconciliation for 2023, empty staff positions led to decreased internal controls and oversight, and the city lacks internal controls over its IT systems.

Zimmerman explained that these weaknesses are being rectified and noted for future financial management. The audit revealed a single issue of non-compliance of Uniform Guidance for its financial policies, which was quickly corrected when the council passed an "Allowable Costs Policy” earlier in this meeting. Zimmerman also gave a timeline for the future audits. Though Interim Finance Officer Bump is currently working on the city’s coming budget, the 2023-024 audit is already 50% complete and is on track to be done by this summer, with the 2024-25 audit completed by fall. 

Zimmerman’s report summarized the progress made on Mary Avenue, the wastewater replacement pumps, and the substation refurbished transformer installation. He updated the council on the search for a city engineer. In council comments, several councilors noted and praised the increased presence of law enforcement.

The Cascade City Council next meets on Monday, April 13, at 7 p.m.