Scott Swanson
The Sweet Home City Council on Tuesday, May 28, voted 4-3 to approve a $19,761,737 city budget for the 2019-20 fiscal year beginning July 1.
Voting in support of the budget were Mayor Greg Mahler and Councilors Susan Coleman, James Goble and Dave Trask. Voting in opposition were Councilors Diane Gerson, Lisa Gourley and Cortney Nash.
There was little comment from council members or staff, other than Gerson, who, in a statement to her fellow councilors after the vote, likened the budget process to a journey, and said it was easy to focus on “problems, potholes in the road” instead of “seeing the whole situation” and urged them to focus on goals rather than hurdles.
“While I approve of this budget as a destination for the city for the next year, I do have concerns about potholes,” she said. “So I see it as my responsibility to work to fix them, realizing I may not be able to resurface the whole road but can address how potholes may be eliminated.
“So I have three choices on this road to a budget: I can stop all the traffic on the road and try to fill the potholes myself, which I did contemplate. I can drive over them, trying to ignore the injury to my tires and suspension. Or I can drive around them, note their location, and work to get them changed for the next trip down the road.
“This is the route I have chosen,” Gerson said.
The budget process has been punctuated by concerns raised over the budgeted transfer of $180,000 from the police levy and $47,000 from the library levy to a new Internal Services Fund. The city’s departments and funds, including the General Fund, will pay into the Internal Services Fund to cover primarily the costs of the city’s executive and finance departments and various other shared expenses.
It is a practice used by other cities and is considered a best practice by the Government Finance Officers Association, said City Manager Ray Towry, and administration and finance are expenses the departments incur as part of their operations.
The library and Police Department are currently funded by local option levies. They must be renewed periodically. The current levies are for five years and expire June 30, 2021.
Some citizens, including during budget meetings and a City Council public hearing held May 14, have questioned the use of police and library levy money, approved for those purposes by voters, for administrative and other purposes in the budget. Some have suggested that the city may have trouble getting voters to approve the levies in 2021.
Gerson said she was “saddened by the public discourse on possibly voting down the levies in two years.”
“This is not who we are as a community,” she said. “We have always stepped up in time of need and I am confident that will happen again. Viable police and library services are an integral part of every community. We know it and you know it.”
She acknowledged that there might have been “misdirection” or “miscommunication” in the budget process, and said the city should “agree on the need to move forward down the road, learning from each pothole.”
Later, in discussion of proposals to increase water rates and storm water utility fees, councilors questioned whether those proposed increases were reflected in the budget they had just passed.
Finance Director Brandon Neish and City Manager Ray Towry said that the proposed increases were reflected in the budget. When councilors asked what would happen if they didn’t approve the increases, Neish said that the budget could be adjusted.
“If the rate does not pass, simply, internally, we’d have to reduce expenditures so as not to overspend the fund,” he said.
That prompted discussion of a requirement that the council address such rate increases in May.
“It would have been better if we know what these rates were going to be before the budget came out,” Trask said.
Towry responded that the city’s Capital Improvement Plan, which is factored into the budget and included in the 2019-20 budget document, was used to settle on the amounts reflected in the document, including the proposed rate increases.
“We produced the budget with assumptions based on the Capital Improvement Plan,” he said. “If my memory serves me correctly, I believe it says by ordinance or resolution that we are to do it in May. I don’t know how we get through the budget process if have to wait for a decision in May. Budgeting is a lot of crystal ball work – we identify trends, what comes out of Salem.”
He said city staff begin working on the following fiscal year’s budget in late November, a process that produces the proposal that is worked over and approved by the Budget Committee and City Council meetings starting in April.
“It took the whole month of April to do it and now we’re at the end of May.
If something slips, we have to do it by the end of June,” he added, noting that the state requires city budgeting to run July 1 to June 30.
“This is a sensitive thing,” Trask said. “For me, it would be helpful for you to tell us ahead of time that you’re going to raise rates by a dollar, two dollars.”
Gourley suggested that rate increases could be projected farther ahead of time than during the budget process.
“We could decide for next year rather than next month,” she suggested.
Towry said some cities use biennial budgets – extending over two fiscal years.
“We could look around and see what other communities do,” he said. “The council could revisit the resolution that it has to be done in May.”
He said the biggest factors that can produce variations in a budget are union contracts, capital improvement projects and healthcare costs, the latter which can “vary greatly.”
Matt and Brandy Jordan of No Drought Potable Water Service said they didn’t necessarily oppose a change in rates, but that an increase would prohibit them from doing business in Sweet Home.
“Our mission is to offer customers water at affordable prices,” Brandy Jordan said, noting that rates increased last year for “mega users.”
She proposed a return to the rates in effect before the most recent change, or a “flat rate for bulk water users.”
“Our concern is we cannot afford to pay $10 per (hundred) cubic foot,” Brandy Jordan said. “We cannot provide customers in Sweet Home at that rate.
“You’re saying water increases, we’re pricing you out of business to do business in Sweet Home,” Goble asked.
Jordan emphasized that she and her husband grew up in Sweet Home and want to do business here.
Matt Jordan said he sells water by the truckload – 3,000 gallons – to residents on the north end of 19th and 20th avenues.
“I have to truck it,” he said, noting that, without a meter, he can’t really measure out quantities less than that. Most of his customers, he said, have holding tanks that size, often with indicators that notify them when to call for a refill.”
He said they pay $2.62 per (hundred) cubic foot in Monmouth, where they also deliver. Other communities fall between that figure and what Sweet Home charges, he said. “Every city structures water usage a little bit differently,” he said.
“It’s not our place to tell you how to run your business, what you should, should not do,” Goble responded, adding “I’d like to see that documentation,” which a couple of other counselors echoed.
In a letter to the city, Schools Supt. Tom Yahraes that the district is looking at rates of $7.87 to $11.51 per 100 cubic feet under the proposals.
Residential customers using the average amount, about 600 cubic feet, will pay $3.93 per 100 cubic feet, Yahraes said, when taking into account the first 300 cubic feet of water, which is provided at no additional cost above the base charge.
He said that the district’s water rate increased by 45 percent last year and questioned the rate structure, which considers depreciation and personnel to be variable costs and part of the commodity charge, the charge per 100 cubic feet.
“It takes a similar amount of time for a meter reader to read a meter that uses 100,000 cubic feet of water in a month as a meter that uses 100 cubic feet,” Yahraes said.
At the same time, Yahraes noted numerous facilities for community sports and activities that are open to the public and plans to build an irrigated regulation soccer-football field open for community use.
“The way Oregon schools are funded, every additional dollar we spend for bulk water results in one less dollar available to spend on student programs,” Yahraes said.
Council members made it clear that they didn’t want to take any action on the three proposals to change the rates and ways water is billed, nor to address the question of raising the storm water utility fees.
“I just feel like we’re moving too fast on increasing rates,” Coleman said.
Trask said he recommended moving ahead. “I don’t think we should put it off for six months.”
His motion to hold off on moving futher until the June 11 council meeting was unanimously approved.
Towry asked if councilors wanted to have a study session “to better understand what’s driving these costs?”
Councilors said they just wanted to see documentation for the rates before they decide, and Towry said the Capital Improvement Plan, in their budget documents, spelled out many details.