City of Washington Government Will Know Change | Eastern NC Now

    The recent Washington election results are telling. The citizens voted overwhelmingly for change. This isn't really shocking. The giant property tax hike imposed upon our citizens was tremendously unpopular. I am one of the newly elected. I ran on a campaign to eliminate this onerous property tax hike.

    During the campaign I found it quite difficult to get straight answers from those in charge. I was curious as to why we raised property taxes. I was told several different answers. At first I was told that we didn't raise taxes, we actually lowered them. This was technically true but a patently absurd answer. We all could read our property tax bills and the amount charged had soared regardless of what the rate did. The entrenched crowd stuck to this argument for a while until they realized that the populace wouldn't be hoodwinked with this line.


Candidate Nick Fritz, now the anticipated Mayor Pro Tem within the city government of Washington, NC: Above. Image supplied by the Fritz Campaign. Click image to enlarge.
    After some initial investigating, I began digging into the government's published budgets. These have always been available to the public, but they are so long and purposefully complicated that no one actually looks at them, including those inside the government. But that was the only source that was readily available. I poured over the 300 page documents for each of the last several years.

    The first thing that jumped out was that the city's debt has been ballooning. In 2022 it was at $4 million. In 2023 it jumped to $7 million. In 2024 it jumped to $10 million. In 2025 it jumped to $22 million. This was rather alarming. The city's tax revenue during that period was relatively flat. We bring in around $17 million in taxes and that figure barely budged during the same period. So the amount we are bringing in is flat but our debt is soaring. Our debt payment is soaring as well. It went from under $1 million per year in 2022 to over $4 million per year by 2025. I asked the powers-that-be about this.


    The mayor was initially as shocked as anyone else and denied that the city had debt. The city manager said that our debt was good. The debt was for infrastructure projects and our interest rates are really favorable. Besides, he said, we have plenty of cash in the bank. We could pay off the debt if we wanted to, but the interest that we earn on our money in the bank is more than the interest that we have to pay on the loans.

    While that may be true (I haven't been able to verify this), the new debt servicing requires an additional $3.5 million in revenues. That means the city needs to collect at least $3.5 million more from the citizens to be able to pay for these loans. The citizens largely don't pay much attention to what those in city hall are doing until they ask for higher taxes to cover their agendas. We perk up then. We were all given a loud wake-up call when our taxes shot up.

    As I continued to look over the budget a nasty picture began to emerge. Our tax revenue (the government's income) has stayed the same for five years, but the expenses have increased. In 2022 our expenses nearly matched our revenues. By 2025 we are spending significantly more than we are taking in. How are they bridging the gap, I wondered?

    Our city also owns several small businesses. They call these businesses 'enterprise funds'. The water department charges us for services, pays its bills and makes a profit. Washington Utilities charges us for electricity, pays its bills and makes a profit. There are several of these enterprise funds and they all generate a profit. The city is legally allowed to take some of this profit and use it to pay its bills. At first I was relieved. They might call it profit, but to me it looks like just another tax. If the enterprise funds are generating "profits" that help pay the city's bills, then things still seem okay to me.

    But then I began speaking with some of those departments. The 'profits' that these enterprise funds generate are supposed to be stored and used for long-term projects. Washington Utilities, for example, piles up extra money each year so that when it is time to do infrastructure projects there's money in the bank. When those projects come up we look in the bank but the money is not there. We've taken that money to pay our day-to-day bills. To complete those projects we take on a loan and tack on a payment.


    So the picture becomes clearer. The city is running an operating deficit. To cover the deficit, we take the savings from the enterprise funds. When it's time to do capital improvement projects, we borrow money and take on a monthly debt payment.

    This has been the modus operandi for the last five years: run a deficit, take money from enterprise funds, use debt to do capital improvement projects. Over time, the actual money in the bank diminishes. This year we've crossed the threshold. There's very little excess money in all of the enterprise funds. There's very little money in the General Fund. There's a lot of debt. We've taken on many projects and we've expanded nearly every service. They had to raise taxes to cover the costs.

    But what about the city manager saying there was so much cash in the bank? I spoke with the Director of Finance. She said that our balance in the bank is quite large, but it's not our money. I was confused, how can the balance be large, but it not be ours? She informed me that the city gets massive grants from the state to do projects. The state gives us the money in advance, but we're ONLY allowed to use it for a specific project. We have a great deal of money in our bank account for an airport project that we haven't begun. The money is earmarked and cannot be spent on anything else. Well, how much money do we have available to us, I inquired? She could not give me a straight answer and said she was simply unsure. The number, however, was very low. There was not nearly enough to pay off any of our several debts. All of the accounts were kept pretty close to their legally allowed low-balance limits. I asked her pointedly, can I pay off our debts. She said, "If our debts are under $1 million, maybe."

    Hmph. So, high deficit, high debt and debt payments. No cash for infrastructure improvement projects. Minimal cash to pay off any debts. Less cash than usual to transfer and cover next year's deficits. Things look worse than I initially feared.


    Let's take a momentary detour and look at our expanding services. Washington's population has not changed much since 1950. It peaked in 1960 at about 9950 residents. Since then it has ebbed up and down, never breaking the high we reached in 1960. The size of our government, on the other hand, has continued to grow continuously. We have added more and more staff over the years. We currently employ over 250 employees in the City of Washington government. We added an additional fire department, we've swelled our police force, we've grown our utility department, we've added and grown a storm-water department, we've expanded our EMS services, we've grown our parks and rec division. The city is providing a great many services and they cost a great deal of money.