Benny Westcott
What to do with $2.03 million?
That was a focus of the Sweet Home City Council’s April 13 meeting, in which members discussed potential allocation strategies for the funding that Sweet Home will receive from the American Rescue Plan Act.
Councilors Angelita Sanchez, Susan Coleman, Lisa Gourley, Greg Mahler, Diane Gerson, Dave Trask, and Dylan Richards attended the meeting.
President Joe Biden signed the American Rescue Plan Act on March 12. Among other things, the legislation allocated $65.1 billion in federal aid to municipalities across the country. Oregon cities and counties are slated to receive $1.5 billion and Sweet Home’s portion of those funds is estimated at $2,033,561. The funding is scheduled to arrive in two distributions, one 60 days from the date of enactment during the current fiscal year and the second 12 months later, toward the end of fiscal year 2022.
While more information is due from the U.S. Treasury, it is estimated that roughly half of the total funding will arrive with each distribution.
The ARPA mandates that the federal funding must be spent by Dec. 31, 2024 and specifies what the money can be used for. According to the League of Oregon Cities, that list includes:
– Responding to the public health emergency or its negative economic impacts, including assistance to households, small businesses and nonprofits, or aid to impacted industries such as tourism, travel and hospitality.
– Responding to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of the city that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.
– The provision of government services to the extent of the reduction in revenue of the city due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency.
– Making necessary investments in water, sewer or broadband infrastructure.
Funds cannot be used for reducing taxes by legislation, regulation or administration, or for deposits into pension funds.
Additional guidance is being developed by the U.S. Treasury and city staff said they expect some additional refinement in the allowances before funds are deposited.
In a memorandum submitted to the City Council, Finance Director Brandon Neish listed some examples for potential uses of the funds for the council to consider:
– $25,626 for the streets maintenance fund to replace lost revenue due to reduced gas taxes state-wide.
– Capital needs in the water treatment and distribution systems in accordance with the city’s capital improvement plan.
– Construction for the wastewater treatment plant, reducing the amount of debt required to complete the project and thereby lowering future debt payments.
– Tackling broadband access issues within Sweet Home.
– Establishing a grant program for local businesses impacted by shutdowns during the pandemic.
Each counselor weighed in on what their initial thoughts were for using the money.
Sanchez said: “Being as we don’t have to spend it until 2024, I’d like to set it aside and maybe earn some money on it, if possible, until we could figure out which projects we need to get done first and foremost, and then use some of that money for the infrastructure projects.”
Coleman suggested: “We could reimburse the streets maintenance fund. And then from there, I think earning some interest would be a great idea as well.”
She added she was also interested in tackling some of the broadband issues in Sweet Home.
“Sweet Home is growing from people who are coming and working remotely,” she said. “It would benefit those residents and the current residents in town. It will also benefit small businesses in town, and the larger businesses who lose their internet on a regular basis.”
She said investing in broadband would also benefit the schools.
Gourley also said that broadband would be a good thing to put the money towards, and added “I think we need to deal with our water issues.”
Mahler also recommended investing the money first, and then putting the funds toward water and wastewater treatment.
Gerson suggested reimbursing the streets maintenance fund, and said “I do believe that broadband would help everyone in the community.”
Trask said “I am not opposed to saving some of that money and getting some interest off of it.”
Richards said he would like to see the money “replace the money out of the street maintenance fund, and then go straight to water distribution.”
Retroactive COLA
for City Employees
The council passed a resolution in 2019 stating that non-represented employees would receive a cost-of-living adjustment (COLA) of 3% beginning July 1, 2020.
Due to the ongoing COVID-19 pandemic and its previously unknown long-term effects on city finances, members of the non-represented staff agreed to voluntarily forgo their COLAs in a bid to prevent future layoffs of city staff.
Additionally, members of the American Federation of State, County and Municipal Employees (AFSCME) Local 3337, which represents non-supervisory employees, agreed during their contract negotiations to forgo a COLA as well.
The agreement with AFSCME was finalized in August of 2020 and specifically stated that “subsequent cost of living adjustments (COLA) shall be equal to that given to non-represented management staff in both salary adjustment and timing.”
“When we ran into COVID, there was a lot of uncertainty, and a lot of people were unsure what would happen in our world, particularly related to our finances,” said City Manager Ray Towry.
After COVID, Towry said that the first 4½ months of city revenues were below expectations.
“At one point, I personally was slightly panicked on a couple of areas,” Towry said.
However, Towry said that revenues have turned around since that time, and staff is now projecting that revenues will be above expectations in all funds except for gas tax revenues.
He said the exception of gas tax revenues “is to be expected, because with COVID people did not travel, so they did not buy gas.”
Due to what was termed “the health of our existing funds” in a request for council action, city staff recommended to the council that the COLAs originally forgone in 2020 be reinstated effective Jan. 1, 2021. This would mean that the COLAs would be applied retroactively.
In response to staff’s recommendation, the council unanimously voted to reinstate the COLAs from the beginning of the January pay period on.
Said Trask of employees’ decisions to forgo their COLAS during the pandemic: “I’m not surprised; but I’m happy that you guys took that step. It was a pretty cool thing you did. I’m happy you all made that call because of the community. I think you should kind of be rewarded for that.”
Towry said city staff is deserving of having their COLAs reinstated retroactively.
“Our team didn’t get time off for COVID,” he said. “Our team worked through COVID and continued to provide service in all areas of city functions.”
“Further, through the fires, when we needed staff, they answered,” he said.
“We have a tremendous team here, from the top down. We’ve worked really hard at building a culture that encourages our staff to do great things. We’ve seen some of those things in the past couple of years.”
Mahler echoed Towry’s sentiments: “I think employees are doing a phenomenal job.”
“Last year was very trying. I think all employees need to be commended for what they’ve done.”
In addition to the COLA reinstatements, the resolution added a captain’s salary range to the city budget for the Police Department, which the department plans to fill in the coming months.
The captain will take some responsibilities of the chief, allowing the chief to focus on the holistic and high-level view of the department, including long-range planning, policy development and more.
Additionally, the captain position will serve as the successor to the existing police chief, Jeff Lynn, should the position become vacant. Lynn mentioned in an earlier City Council meeting that he is planning to retire from the position of police chief in three years.
Related to the police captain’s position, a salary review conducted by city staff revealed that Sweet Home’s chief’s salary range was lower than market comparators. Sweet Home uses Independence, Molalla, Monmouth, Sheridan, Silverton and Stayton as comparable cities. A review of the chief salary in these cities prompted city staff to propose increasing the chief’s salary by approximately 5%.
Additionally, the resolution adds an information technology services manager position to the city staff. With more and more city operations dependent on information technology, city staff determined that the workload has grown to be too much for the city’s current third party contractor to manage.
“We do not anticipate any negative impacts in the budget with this decision,” Towry said.
He said that “We’re spending a significant amount of money with our contract IT provider, and we’re not getting as good a service as we could get if we had somebody in-house.”
Towry said that he believes the city could actually “save a little money by bringing this position in house.”
Finally, the resolution added an equity adjustment for the Public Works operations manager. An internal review of the operations manager and utility manager revealed similar job functions, supervisor requirements and technical skills for the positions. While the positions are similar in scope, the utilities manager position had a higher rate of pay. The revision increases the salary of the operations manager to match the utilities manager pay.
Library Board Appointment
Mayor Mahler appointed Coleman as a city council liaison to the Sweet Home Library Advisory Board.
Transient Lodging Tax
The council unanimously approved an intergovernmental agreement that would allow the city to bill for Linn County’s transient lodging tax simultaneously with the city’s transient lodging tax.
The City of Sweet Home has been collecting a 6% TLT since 1990. The tax is paid by people who rent a room in a hotel, campsite or other temporary lodging facility within the city. A portion of the revenue collected from the tax is appropriated by the city council to help support tourism projects in Sweet Home.
The 2017 legislature authorized the Oregon Department of Revenue to collect local lodging taxes on behalf of a local government if the local government enters into an intergovernmental agreement similar to the IGAs used for local marijuana tax collection.
The council adopted language that would allow the state to collect Sweet Home’s TLT in 2017. The state is not prepared to collect the tax yet, so the city is still collecting the tax.
In 2018, Linn County staff asked if the city of Sweet Home would bill for the county’s TLT when billing for the city’s, and then pass the county’s funds through to them. In return, the city of Sweet Home would be able to keep 5% of what it collects.
The approved IGA was a renewal of these previous terms and conditions.
Potential utility rate increase
Councilors also discussed whether the city should raise water and stormwater utility rates to meet immediate and long-term budgetary needs, or whether the priority should be limiting capital projects to leave rates where they are. Another option discussed by council was to take out a loan to fund projects, an idea that not all councilors were in favor of.
“I’m not necessarily against a low-interest rate loan, but I’m hesitant on debt, as I know that it has been a determining factor on what the rates are,” said Coleman.
She added: “The concern that I have is that we have not increased the storm water rate for 15 years. That’s a long time to keep the rate the same. I think the hope was to benefit the people and yet it’s harming us in the long run because we don’t have the funds to fix things that are broken.”
Speaking of loans, Mahler said, “Low-interest rates do serve a purpose, but I want to remind the council that you do not want to overextend yourself as a community.”
Trask said, “I’m not for another loan. We’ve had enough of them. We’ve spent thousands and thousands of dollars paying those bills. The taxpayer is going to pay for it one way or another.”
He said, “I hate increases. However, they’re necessary to keep our plants running. We can’t deny that.”
Gourley spoke to the need to make improvements in water infrastructure.
“There are people in town who pay the same rates as anybody else, and their water pressure sucks. And that’s not fair,” she said.
Richards said he favored pursuing a loan: “I have a hard time swallowing any increases in fees or taxes. So I would rather see us go with a loan option.”