City to maintain its budget levels

Sean C. Morgan

The City of Sweet Home is proposing to maintain budget levels into the next fiscal year as it prepares for its annual budget approval process.

City Manager Ray Towry presented the budget proposal for fiscal 2018-19 to the city’s Budget Committee on May 1.

The city’s fiscal year begins on July 1 and ends on June 30.

The proposal budgets $21,718,369 for 2018-19, a decrease of $36,446 or .17 percent.

Towry explained that budget totals are inflated by several factors. For example, transfers to long-term projects also count as expenditures, while they are really saved in a reserve fund.

Those are not an expense until the project incurs the costs, Towry said. “Staff contends to determine the total expenses, you must eliminate transfers that are not expenses, contingency and ending fund balances,” which is revenue that unappropriated and carried over into the next budget year.

Taking this into consideration, Finance Director Brandon Neish said the actual proposed budget for 2018-19 is $13.1 million, $5.3 million less than $18.4 million in 2017-18, the current fiscal year.

The difference reflects another approach to budgeting, Neish said. In this budget, the city is planning figures closer to actual expenses and revenues. Previously, the city has tended to budget higher for expenditures and lower for revenues, which adds to the ending fund balance, which have grown large enough to cover six months of city operations.

Actual revenues and expenditures for 2017-18 will be even lower, Towry noted. After the Wastewater Fund ran in the red for a portion of the year, the General Fund was placed under a spending freeze to ensure the city could cover the deficit.

Since the fund returned to the black this year, the spending freeze has been lifted, Towry said.

City officials are projecting a 5-percent increase in property tax revenue over the current-year projection of $641,000 to the General Fund this year, Towry said. With a 9- to 11-percent increase in property taxes over the past five years, it leaves the city with a safe margin in its budget plan.

Overall, the budget proposes $10.3 million in beginning fund balances, money carried over from ending fund balances. That’s an increase of $1 million from the adopted 2017-18 budget.

The city is projecting an increase of $550,000 in property taxes over the 2017-18 adopted budget, and it proposes budgeting $3.6 million in property tax revenue for 2018-19. Franchise fees are expected to decline by $53,000 to $597,000, while utility fees are projected to raise $5.5 million in the 2018-19 budget, an increase of $577,000 over the current budget.

Personnel expenses are expected to decrease by $125,000 to $5.2 million, representing a reduction of roughly 1.25 full-time equivalent positions after significant reorganization of personnel; materials and services by $1.3 million to $3.8 million; and capital outlays by $3.8 million to $2.7 million. Total expenditures, not counting transfers, will decrease by $4.6 million to $13.1 million.

In his budget message, Towry said the budget document has been arranged differently, using an “outcome-based budgeting” model.

“Staff will present to you what the return on the taxpayer’s investment is,” Towry said. “It’s that simple. What you will see is what it will cost to maintain what we have, add any new programs and what it will cost to do any capital improvements.”

The format presents combined costs for items with costs that may be spread across multiple funds and departments, for example; and it is presented by department.

Towry listed numerous plans in his budget message, each of them aligning with the City Council’s goals.

Among them, this budget begins work on upcoming Wastewater Treatment Plant upgrades, and it will allocate about $1 million to remodel the new City Hall, located in the former Sweet Home Ranger District Office.

The city has already begun improvements at Sankey Park, and more will follow in the 2018-19 budget, along with improvements at Northside and Ashbrook parks.

The city is upgrading and changing accounting and Public Works software. The budget creates a new communication-public information officer to increase communications, community engagement and transparency.

The staff is being reorganized to be more lean, efficient and effective in City Hall, Public Works and the Police Department, Towry said. “We’ve eliminated some positions already through attrition and reassigned some current staff into areas that will provide better service and achieve outcomes.”

The budget moves 75 percent of the police chief’s salary to the General Fund to allow the Police Department to reorganize and add two new sergeant positions meant to provide more accountability and consistent three-person coverage on each shift.

The reorganization should reduce overtime expense, increase public safety, increase officer safety and department morale, Towry said. It also will allow additional promotion opportunities, and it will not require additional staff.

The city is working with seven other communities and gained funding from Business Oregon through a Rural Opportunities Initiate Grant to pay for a staff person with the Oregon Regional Innovation and Accelerator Network, Towry said. The staff person will help connect local entrepreneurs with resources through the RAIN program.

Additional funding will pay for a new facade improvement program.

Towry said the city is not focused on Public Employees Retirement System rate increases in the coming years because most staff members are not members of PERS. It will be a major concern in the police budget because its staff are required to be in PERS.

Both of the city’s unions will bargain new contracts in 2018-19, Towry said.

Attending the Budget Committee meeting were Derek Dix, Dave Holley, Dave Jurney, Gerritt Schaffer; Mayor Greg Mahler; and city councilors Bob Briana, Susan Coleman, Diane Gerson, Lisa Gourley and Dave Trask. Councilor James Goble was absent.

The committee elected Holley, a former city councilman and mayor, chairman. It elected Jurney, a Chamber of Commerce board member, vice chairman.

Kenneth Hamlin also attended. He had applied for a position on the Budget Committee but had not been appointed yet. His application was on the council’s agenda for Tuesday evening, May 8.

The committee includes the seven city councilors and seven Sweet Home residents. Two positions are vacant, and the city is accepting applications. For more information, to view the proposed budget or to apply, stop by the city manager’s office in City Hall, 1140 12th Ave. or call (541) 367-8969.