City of Langley’s Growing Reserves Mask Deep Financial Dysfunction
While the City of Langley’s bank accounts appear flush with cash, a closer look at the municipality’s recently released financial data reveals a local government struggling to keep its books straight amidst staggering staff turnover and broken accounting systems.
From a purely fiscal standpoint, Langley’s total reserves expanded significantly over the last two years. At the close of 2023, the City held a total ending cash and investments balance of $13,035,914. By the end of 2024, that total had grown to $14,979,154.
However, diving into how that money is tracked, spent, and reported exposes severe vulnerabilities in the city’s financial operations.
The Million-Dollar Illusion
Despite the strong cash position, Langley’s internal accounting controls harbor what state reviewers classify as a “material weakness.”
The core issue stems from how the city tracks its utility money.
Langley uses separate operations and capital funds for each of its utilities. When money was moved internally between these different utility accounts, the city’s software automatically rolled the transactions up without staff manually backing them out.
As a result, basic internal transfers were falsely published as brand-new revenues and brand-new expenditures.
This bookkeeping failure created a massive illusion on paper. The City overstated its revenues and expenditures by $678,750 in 2023, and by another $452,500 in 2024.
While this million-dollar misstatement did not actually change the amount of real cash in the bank—the money was just counted twice—it crippled the City’s ability to produce reliable, transparent financial data for the public and the City Council.
To fix this moving forward, city management announced they will completely discontinue the use of these complex “managerial funds,” acknowledging they require too much staff time and introduce a level of complexity far beyond the city’s actual needs.
Busted Budgets and a Revolving Door at City Hall
City records paint a stark picture of a municipal government paralyzed by constant staff turnover and what officials bluntly described as “organizational turbulence.”
This instability had direct, tangible consequences on the city’s ability to adhere to its own spending limits. In 2024, two specific city funds blew past their legally adopted budgets.
The Capital Reserve Fund was authorized to spend $75,000, but ultimately burned through $161,110—an overrun of more than $86,000.
Similarly, the Public Works Vehicle Replacement Fund exceeded its $30,000 budget by over $7,000.
The city has attributed these overruns to a lack of structured oversight and spending controls, driven by a staggering wave of departures in key administrative roles.
Throughout 2024, Langley’s front office became a revolving door:
January 2024: A newly hired City Administrator left their position, and the role remained unfilled.
June 2024: The Accounting Assistant departed and was replaced by an individual with no prior municipal experience.
October 2024: The Finance Director left employment.
While the city eventually replaced the outgoing Finance Director in late 2024 with a candidate who possessed actual municipal finance experience, the damage was deeply embedded.
The incoming director was immediately tasked with navigating “years of coding and entry errors in the software,” making accurate reporting nearly impossible.
This chaos is the culmination of a multi-year crisis; previous years saw a similar pattern of unexpected resignations and the hiring of administrators who completely lacked municipal finance experience.
A Decade of Red Flags and Corrective Actions
Langley’s current financial dysfunction is part of a nearly decade-long struggle.
City management has admitted to a troubling historical track record, noting they have received warnings or findings for inadequate controls over financial reporting during every major review cycle dating back to 2015.
To stop the bleeding, the city is rolling out a multi-pronged corrective action plan. All finance staff are now required to complete mandatory state accounting training, and the city is actively rewriting its standard operating procedures.
Furthermore, the Finance and Personnel Committee is receiving specific orientation on how to interpret financial reports so they can provide tighter monthly oversight.
Looming Debts and an Untouched $3.5 Million Loan
As Langley works to clean up its daily bookkeeping, it must also manage significant long-term financial obligations. At the close of 2024, the city carried a total of $4,325,683 in debt and liabilities.
The vast majority of this burden stems from voter-approved General Obligation bonds, including $3,470,000 still owed on a 2020 bond and $137,349 on a 2014 bond. The city is scheduled to pay roughly $190,000 to $200,000 annually to service these debts through the end of the decade.
Other significant liabilities include $386,381 for post-employment benefits and $239,120 in accrued vacation and sick leave payouts owed to employees.
Perhaps the most glaring indicator of the city’s administrative bottleneck is a massive, unused line of credit. Langley was previously awarded a $3,500,000 Public Works Board Loan to help fund the Langley Infrastructure Project. However, at the time of the audit, the city had not utilized a single dollar of this funding.
As Langley moves forward, stabilizing its finance department will be critical not just for correcting paper errors, but for actively managing the multi-million dollar capital projects and long-term debts the community relies on.
Additional findings that were made by the Washington State Auditor can be reviewed here.