Financial Summary

Financial Summary Introduction A budget is a plan that develops and allocates the City’s financial resources to meet community needs, both immediate and for the longer term. The development and allocation of these resources is accomplished on the basis of policies, goals and objectives that address the requirements and needs of the City of Longview. While the other sections of this document present the budget in detail, this section provides an economic overview of the City and the challenges it faces. As such, this section focuses on the City’s strategies to maintain its financial strength and the basis for the expectations for future revenues. Additional information about the City’s financial outlook is detailed in the Budget Message. The first half of the Financial Summary examines Longview’s economy and includes the following topics: Longview’s Economic Outlook Mint Farm Industrial Park Other Economic Contributors Meeting Needs and Improving the Quality of Life in Longview The second half of the Financial Summary is the Budget Summary portion. It begins with detailed information about the City’s budgetary accounting methods and systems as well as fund definitions. The remainder of this section includes details about and comparisons of various portions of the budget. It documents Revenues and Expenditures for 2021 and 2022, provides historical information about City departments over the past five years, and breaks down the budget by funds. This section also contains information about the City’s debt management. This portion of the Financial Summary includes: General Governmental Functions Financial and Budgetary Controls Compliance with State Budgeting, Accounting and Reporting System (BARS) Fund Accounting • Governmental Fund Types • Proprietary Fund Types • Fiduciary Fund Types 2021 and 2022 Revenues City Revenue Sources 2021 and 2022 Expenditures Budget Fund Comparisons Five-Year Comparisons by Department Debt Limitations and Management Detailed information about revenues and expenditures for each of the City’s individual funds is captured in the Fund Summary on page 61, followed by the various accounting funds and the Capital Improvement Program. 23 2021/2022 Budget Financial Summary Longview’s Economic Outlook The Economy The City of Longview was initially developed as a planned community to support timber workers in the 1920s. The chief industrial sectors, wood products and aluminum production, drove the local economy from World War II until its peak in the 1970’s when a third of the County’s workforce was in manufacturing. Our per capita income surpassed the national average and was on par with the state. Since that time, leading companies have scaled back or disappeared altogether. The local economy has lost ground against both the state and nation. While the Northwest economy has been strong in recent years, with record growth in the Seattle and Portland urban areas, growth has been slower to arrive in Longview. The good news is Longview has been attracting investor attention, led by the potential of a 2 million square foot project currently doing due diligence at the Mint Farm Industrial Park. Projects large and small continue to be presented to City staff exploring some phase of the site selection process around the City. Despite a worldwide pandemic, investors carry on looking for and creating potentially fruitful business opportunities in locations such as Longview. With its close proximity to the I-5 corridor between Seattle and Portland, it provides business and industry an extensive network of transportation infrastructure. Longview is at the center of a comprehensive network of import/export shipping, warehouse/distribution facilities, and overland connections. Efforts to support and improve these assets will pave the way to a brighter future. It helps attract business investment in our community which, in turn, creates jobs and a better quality of life for our citizens. Regional Economic Development The City of Longview prides itself on being a proactive, business-friendly partner and is actively supporting economic development, recruitment, and assisting existing businesses in Longview. The City partners with the Cowlitz Economic Development Council, local property owners, and developers of residential, commercial, and industrial property throughout Longview to attract economic opportunity for the city. Together with Cowlitz County, Longview’s industrial site development has even attracted the attention of our governor, various state agencies, and economic development professionals throughout the region. Participation in county and statewide economic development organizations and an ongoing partnership with Weyerhaeuser Real Estate Development Company at the City’s Mint Farm Industrial Park has resulted in Longview’s continued position as a prime location for industrial/ manufacturing, and transportation/trade companies. Marketing efforts for the Mint Farm Industrial Park have been rewarded with the development of several industrial plant locations and site purchases. Currently, a major international developer is in the pre-permitting phase and is working closely with the CEDC and the Army Corps of Engineers to develop 2 million square feet of distribution/light industrial space at the Mint Farm. 24 Other noteworthy industrial projects in Longview and Cowlitz County include: The Port of Longview developed its West and East Park industrial sites consisting of nearly 300 acres of rail served property. It also has an additional 280 acres west of the Millennium (formerly Longview Aluminum) site for industrial development. The Kalama River Industrial Park in the Port of Kalama is comprised of 75 fully serviced industrial acres in addition to its already developed 148 acres. A $2 billion methanol manufacturing facility is going through the permitting process. A partnership with the federal government, the states of Oregon and Washington, and the ports along the Columbia River resulted in completion of a river channel deepening project that has expanded the capacity of shipping to accommodate large panamax ships that have made the region a significant competitor in Pacific Rim trade, for both the import and export markets. The Port of Woodland Industrial Park and surrounding sites offer nearly 180 acres of industrial land in close proximity to the Portland/Vancouver metro area. In addition, they are in the pre-permitting phase to develop a berth on the Columbia River. Despite permitting setbacks, Millennium Bulk Logistic Company continues to push a plan for a coal export facility requiring an investment in excess of $660 million expected to produce 300 direct and indirect family- wage jobs. The Port of Kalama has a $6.3 million project to build a public market facility to accompany a cruise ship dock currently in the works. NW Innovation Works, also facing permitting issues, plans for a $2.2 billion methanol project at the Port of Kalama. This project calls for 2,000 construction jobs and will employ 240 full-time workers upon completion. International Raw Materials (IRM) has elected to lease the Port of Longview’s Bridgeview Terminal. IRM proposes maximizing throughput of existing terminal infrastructure – intending to make Longview their flagship location for dry-bulk cargo. IRM has immediate intentions to improve existing components of the bulk load-out facility, while working to expand the on-site rail footprint All of these sites have attracted attention in recent years, as is demonstrated by ongoing economic development recruitment efforts and the location of business and industry. Employment Regionally, the employment outlook appears uncertain due to the Covid-19 crisis. As of October 2020, the unemployment rate was 6.9%. However, this shows much improvement over the ballooning rate we saw in April 2020 when it jumped to 16.4% when the Governor’s Stay Home, Stay Safe restrictions were put in place. It is difficult to predict what the unemployment picture will look like as the pandemic continues. There is optimism with the rolling out of several vaccines in the coming months that could help stem the tide of infections and death. With that outlook, we are able to look forward to people getting back to work and our economy open and recovering. Other Economic Successes Downtown and central business core development has shown significant activity in recent years. The CEDC now oversees the Longview Downtowners group and they have taken several leaps forward with the largest car show on the west coast, small business Saturday and new restaurants and retail stores that were seeing great success before Covid-19 hit. 25 2021/2022 Budget Financial Summary Investments in pedestrian and bicycle safety and mobility projects have provided improved access along the Washington Way and 15th Avenue corridors that are major transportation corridors into the business district. These improvements provide better connectivity from Lower Columbia Community College and other nearby commercial/office districts to the Downtown Commerce district. Traffic signal upgrades were made in 2020 to further enhance pedestrian, bicycle, and motorist safety to access the Downtown Commerce district and nearby businesses. Longview also stands to benefit from several commercial construction projects either recently completed or on the horizon. Larger projects of note include: PeaceHealth St. John’s Hospital (1615 Delaware) – Multiple facility upgrades currently completed or in progress, including a new outpatient Physical

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