Benny Westcott
How do you construct a budget amid the worst pandemic since the early 1900s?
“The recipe for these estimates requires part science, part art, and part use of a crystal ball,” said City Manager Ray Towry as Sweet Home’s Budget Committee met for the first time on Thursday, April 22.
The meeting was the first of a process that will lead to the adoption of the budget by the City Council for the 2021-22 fiscal year. The fiscal year runs from July 1, 2021 to June 30, 2022.
The Budget Committee consists of the entire City Council as well as Robert Briana, Derek Dix, Kenneth Hamlin, David Lowman, Gerritt Schaffer, and Lisa Willson.
Hamlin was e;ected chair of the committee and Briana, a former city councilor himself, was elected vice chair.
The total budget being proposed for this year is $36,286,140.
For the fiscal year 2020-21, which ends June 30, the City Council adopted a budget of $29,363,383.
“When constructing a municipal budget, often the immediately prior year is the best bellwether for future predictions,” Towry said. “With COVID-19, this standard theory went out the window, forever branding the 2021 fiscal year with an asterisk.”
He said that the 2021 fiscal year, which is in its latter stages now, is “an outlier in many ways” and “while it should not be ignored, it is not as strong as an indicator as the fiscal years preceding it.”
But even the years preceding the 2021 fiscal year may prove to be little help in predicting fiscal year 2022 amidst the current uncertainties.
“With constantly changing state projections and economic forecasts, a crystal ball may prove to be the best tool we have to forecast this budget,” Towry said.
The city’s budget has, however, successfully forecasted revenues in the general fund within 1% three of the last four years.
This year’s projected new revenues are expected to be $20 million, according to a budget summary prepared by staff.
Last year, in fiscal year 2020, general fund revenues were 1.4% higher than budgeted.
The proposed General Fund budget for 2021-22 is $192,278, 2.6% decrease from the current year’s.
The General Fund is used to account for all financial resources except for those to be accounted for in another fund. It includes Municipal Court, Community and Economic Development and Parks. Revenues come from property tax, interest, transfers from other funds, licenses, permits, state sources, contracts for services, municipal court fines, grants, leases, rents, refunds and donations.
Towry said that utility revenues have remained surprisingly stable during the pandemic.
He said that property taxes have been much more volatile.
During the 2021 fiscal year, property tax evaluations were significantly higher than anticipated, but also came in later than anticipated, causing some concern for actual receipts for the year.
City staff is pitching what Towry called an “ambitious” capital plan to the Budget Committee, with funding for 14 projects totaling $7.8 million.
The largest of these is the start of construction of the wastewater treatment plant, which is expected to begin in the second half of this fiscal year.
Currently, that project is projected to cost $30 million including design and build. City staff have been working toward securing outside funding to help finance the project.
Towry also anticipates several street improvement projects using funds available from Oregon’s Department of Transportation, and said “we will continue to make improvements at Sankey Park.”
The budget proposal also includes a significant transfer from the library fund to a capital reserve fund to set aside funds for either an upgrade to the existing facilities, or to leverage for grants to build a new building, he said.
“The Police and Library Levies are projected to be very healthy at the end of the 2022 fiscal year with four- and six-months beginning fund balance in our five-year projections,” he said in his budget message.
“This proposal also includes a significant transfer from the Library fund to a capital reserve fund to set aside funds for either an upgrade to the existing facilities or to leverage for grants to build a new building.
“At the end of 2022, the proposal leaves the library capital reserve with nearly $400,000, which can be used to garner additional assistance from the state, grantors, or private donors.”
Also, the budget proposal includes an employee in the Executive Department for Information Technology services to better support the organization and serve our needs, especially in the Police Department which operates a 24-hour dispatch and law enforcement program along with the Library which needs support on weekends,” Towry said.
Other personnel changes outlined in the budget include an increase of five full time employees in the water and sewer treatment divisions as the city resumes full control of its treatment facilities after control was previously held by a contractor.
In addition, the position of .20 full time employees for the Communications Specialist makes the position full-time, and changes within the Police Department reduce their FTE by .5.
The city is utilizing new software to do the budget process electronically this year. The software is called ClearGov. There are significantly more graphs and pictures included with this new software compared to Sweet Home’s prior budget documents.
“We, as staff, really feel like this is a better mechanism for the budget committee and the community to truly follow what we are trying to do,” said Finance Director Brandon Neish.
Towry added, “One of the things that we’re trying to do is be more transparent with the public, and this software really allows us to do that. People can find information, even if they’re not on the budget committee, at a whim.”
Community members can view the 2022 proposed budget by going to sweethomeor.gov, going to the finance department’s webpage, and clicking on the “City Budget” dropdown.