Sean C. Morgan
Sweet Home’s municipal budget process kicked off last week with a tough problem: How to finance law enforcement.
Property tax revenue will be too low to completely fund the Sweet Home Police Department in fiscal 2014-15, so city officials have proposed transferring $546,500 from the General Fund to cover the shortage.
City Manager Craig Martin presented a budget proposal for fiscal 2014-15, which begins on July 1, and his budget message to the city’s Budget Committee Thursday evening, April 24.
“As projected and planned for in prior budgets, we have saved the necessary funds to offset the expected property tax revenue shortfalls in our police operating levy this year,” Martin said. “The fund transfers identified in this budget should be adequate to stabilize public safety services until our police and library levies can be placed before voters for renewal in 2015-16.
“Our persistent efforts during the past several years to save when and where we could and only utilize fund balances as needed have helped the city stabilize expected services to our citizens without the drastic reductions as have occurred with other entities over the same time span.”
The Police Department had a budget of $3.1 million in 2011-12 and $2.9 million in 2012-13. It was budgeted about $500,000 less this year, 2013-14 and will increase to $2.56 million in the proposed budget.
The city collected $1.5 million in 2011-12 and in 2012-13. It is anticipating collecting $1.38 million this year and budgeting $1.35 million for 2014-15.
Property tax revenues have remained roughly static or declined in recent years based on property tax limitations, an effect called compression.
“I would like to have one year during my tenure as city manager when I’m not coming to you with property taxes as our No. 1 major fiscal challenge, but I don’t see this happening in the near future,” Martin said. Despite efforts last year at the legislature, cities and other taxing districts are left “watching as our compression reductions continue to increase upward.
“We expect compression reductions to continue increasing as other tax entities seek increases in their voter-approved local option levies, property values are removed or values lowered that are used in the market value calculation of the Measure 5 compression rate.”
In other areas, the proposed budget adds an on-call library assistant position to help the library meet scheduling needs.
Some positions have remained unfilled as employees left this year, 2013-14, Martin said. “These positions continue to be funded in the budget should the need arise to refill the position during the year based upon the service demands.”
In the meantime, funds not expended on the vacant position carry forward to the next fiscal year.
New wage scaled approved in 2013 are offset by changes in insurance benefits, Martin said. Employees agreed to move into high-deductible plans with the creation of health savings accounts.
Personnel services across the entire city budget increased by about $10,000, Martin said.
Overall, the budget increased from about $18.5 million to about $19.4 million, an increase of 4 percent.
Not counting transfers among funds or contingency funds and ending fund balances, which roll over to the following year, the budget increases from $13.1 million to $14.3 million, a 9-percent increase.
The bulk of the increase is in materials and services, increasing by about $605,000 and capital outlays, which increases by about $671,000.
Most of the increase in materials and services is for a $400,000 housing rehabilitation grant. Capital outlays are primarily Public Works improvement projects.
Debt service is decreasing by about $160,000, and ending fund balances are decreasing about $682,000. Debt service is decreasing due to the retirement of an old special Public Works loan.
The city still has about $16.5 million in outstanding loans for its ongoing sewer rehabilitation projects. It also has about $8.4 million in debt for the Water Treatment Plant, built in 2009.
The budget assumes an increase in water and wastewater rates. The increase is estimated at about $12 for the average customer. The water rate is being increased for the first time since 2009, and the wastewater rate for the first time since 2012.
Increases had been deferred in response to the economic downturn, Martin said, but unfortunately, the increases are eventually needed to keep the funds from operating in a deficit and to meet incurred debt liabilities.
The Budget Committee will review the budget on May 5, May 7, May 12 and May 14. Following the review, the Budget Committee votes to approve the budget. The City Council adopts the budget prior to the end of the fiscal year, June 30.
The meetings are open to the public and begin at 6:30 p.m. On May 5, the committee reviews the police and library budgets. On May 7, it will review Public Works funds. On May 12, it will review the General Fund. Typically, the committee will approve a budget with changes at the May 12 meeting, while May 14 remains open for further review if necessary.
The committee elected Stefanie Gatchell as chairwoman. Vice chairwoman is Leanna West.
Present at the meeting on April 22 were councilors Dave Trask, Scott McKee Jr., Greg Mahler, Bruce Hobbs, Marybeth Angulo and Mayor Jim Gourley and Budget Committee members Susie Ford, Gatchell, Zach Lincoln, Gerritt Schaffer and West. Absent were Councilor Craig Fentiman and members Andrew Allen and Anay Hausner.