While the Tenino City Council approved its 2026 annual budget at the end of last year, Tenino Mayor Dave Watterson announced amendments are already being considered during a council meeting work session on Tuesday, March 11, as the South Thurston County community still struggles to recover from budget misreporting issues.
As a suggestion to help the city deal with financial strains coming from the budget misreporting, city finance committee members are considering dissolving the Tenino Police Department to cut costs.
Going back to 2021, misreporting issues resulted in the city’s budget expenditures outpacing revenues by an estimated total of $1.4 million. These issues occurred prior to Watterson being elected during the tenure of former Mayor Wayne Fournier, who served as the city’s mayor from 2015 to 2023, when he was elected to his current office as a Thurston County commissioner.
The budget issues were discovered by city staff and Watterson shortly after he took office. They led to the city spending an estimated $1.6 million from restricted sewer and water funds for other city expenses, Watterson explained.
Because it’s a violation of state law to use the restricted funds on non-fund related items, the city council had to retroactively approve use of the funds as an interfund loan.
The city must now pay back the loan to the sewer and water funds within the next three years at a 4% interest rate for a total of approximately $1.8 million.
Previously, Watterson had estimated it would take the city about three years to pay back the interfund loan, however he said it now looked like it would take around a decade to pay off.
“The state recommends three years, but there’s just no way we can pay back that amount of money in three years,” Watterson said Tuesday. “So I think the council’s kind of general direction is to try to pay that back in 10 years. This year, we budgeted $160,000 just to pay in interest and back-interest, because we didn’t pay interest last year on the debt, so we’re trying to catch up.”
He added next year’s payment would be between $190,000 and $200,000 to at least pay both interest and principal on the interfund loan.
While he stressed no motion was being made on the issue on Tuesday and that the work session discussion was simply informational to explore options, the main solution Watterson proposed was dissolving the Tenino Police Department in favor of contracting for police services with the Thurston County Sheriff’s Office (TCSO), or a neighboring police department like Tumwater’s.
At the end of his first year in office in 2024, dozens of residents expressed opposition to the idea of cutting the police department’s budget after Watterson asked Thurston County Sheriff Derek Sanders to come to a meeting and explain how contracting with the TCSO would work, as previously reported by The Chronicle. Ultimately the council voted to keep the Tenino Police Department’s budget at $780,803.45.
Watterson added Tenino also currently pays $347,000 more than other cities of comparable size for a police department. The city also currently has no reserve funds.
“What we’re doing tonight is the responsible thing. We know the numbers, we have the analysis, we have the peer-city comparisons, we have a plan,” Watterson said. “Responsible leadership means making the hard calls when the numbers are clear, not finding reasons to delay.”
The mayor spoke for nearly the entire hour of the work session prior to the city council meeting, adding cuts to city staff in other departments have already been made, and salary cuts, starting with a 30% decrease in his own as mayor, were also being considered.
Even with those other budget cuts, Watterson stressed it would still most likely be necessary to either make cuts to the city’s police force, or do away with it entirely.
To make matters worse, this past year the city saw a decline in sales tax revenue. City expenses for utilities were also outpacing budget revenue generators.
“Just the day-to-day cost of operating a city is very difficult, it’s something to realize,” Watterson said. “If we didn’t have any of this debt, we would still be struggling to keep up with increased costs with what we get in revenues.”
Currently, the Tenino Police Department takes up $683,869.
Many Tenino residents were in attendance for the meeting, with some already expressing opposition to the proposal of police cuts in the budget.
Watterson provided attendees with a breakdown of the budget during his time talking, along with a city budget breakdown which is also available on the council’s agenda report starting on page 5 at https://tinyurl.com/2a66wbuz.
“The longer we put this off, the more it's costing us. Every month that we keep not doing this issue, we’re spending about $30,000 more than we should be to make our budget,” Watterson added.
Watterson told councilors he was preparing to once again meet with Sanders to discuss TCSO contracting options, along with meeting Tumwater Police Department officials to discuss the same thing.
Additionally, he invited any residents to reach out with concerns or other possible solutions they might want to discuss. Watterson can be reached via email at dwatterson@cityoftenino.org.
