City budget contains proposed 11.6% increase
May 9, 2017
City of Sweet Home staff last week presented a $23.5 million budget for 2017-18, an increase of $2.5 million, to the Budget Committee for consideration.
The council must pass a balanced budget prior to the beginning of the new fiscal year on July 1. The Budget Committee will review, adjust and approve the budget. Following a public hearing, the City Council will decide whether to adopt the approved budget.
“As you can see, the budget document for the City of Sweet Home has undergone some changes from the previous year,” said City Manager Ray Towry in his budget message, delivered Thursday evening, May 4.
“A new mayor, two new city councilors and a new city manager all bring a new vision for Sweet Home. This will bring exciting changes to the community.”
The 11.6-percent increase includes increases in most spending categories. Topping the list are capital outlays, increasing by $1.1 million, a 23-percent increase over the current fiscal year, 2016-17.
The budget also includes a 22-percent increase, $787,000, in ending fund balances and contingencies. Funds remaining in ending fund balances become beginning fund balances in the following fiscal year. They are used to pay operational expenses during the first four months of a fiscal year – until the city receives property tax payments.
With completion of contract negotiations with city employees, the cost of personnel services increases by 7 percent, $349,000, in the proposed budget.
Materials and services increase by 2 percent, $100,000. Increases in transfers among various city funds accounts for $74,000, a 6-percent increase, of the overall increase in spending.
Debt service payments will decrease by $5,243, less than 1 percent.
Proposed budgeted revenue for the 2017-18 fiscal year includes an increase of $454,000, 5 percent, in beginning fund balances.
The budget projects a 5-percent increase, $143,000, in property tax revenue, and it projects a 23-percent, $1.8 million, increase in collection of fees, franchise fees, interest and other revenue sources.
Under the proposed budget, the General Fund will grow by 22 percent, $700,000. The Police Levy Fund increases by $6,437, less than 1 percent, and the Library Levy Fund increases by $12,000, 2 percent.
Street funds increase by $140,000, 6 percent, in the proposal, and the Wastewater Operating Fund increases by $52,000, 2 percent. The Water Operating Fund will decrease by $93,000, 4 percent.
Impacting changes in the General Fund is the reduction of a half-time code enforcement officer in the Police Levy Fund and addition of a full-time code enforcement officer in the General Fund. The Finance Department is being reorganized, with two positions moving out of Public Works, including an accounting supervisor position, and the addition of a shared Public Works field supervisor position. Those changes are also reflected among fund transfers.
The budget adds a maintenance lead worker funded by water, gas tax, wastewater, storm drainage and parks funds.
The budget assumes a 4-percent increase in property values. Finance Director Pat Gray said that property values have exceeded 4 percent growth over the past three years.
The budget assumes that property tax compression remains at 35 percent. Compression is the reduction from assessed property taxes by property tax limitations.
Property tax rates are applied to assessed values to calculate property taxes. When the property taxes are compared to real market values, they are limited to a maximum of $10 per $1,000 of valuation and reduced accordingly. Public officials refer to difference as property tax compression.
The budget also assumes that beginning fund balances will grow by 4 percent and state shared revenue, with the exception of tobacco taxes, will increase.
The city anticipates receiving up to $2 million from the state to assist with required Wastewater Treatment Plant upgrades.
The budget does not reflect increases in water and wastewater user rates. New rate proposals have not been finalized yet.
The budget reflects the City Council’s goals adopted on April 11, Towry said.
“We look forward to new challenges, new projects, a new vision for the City of Sweet Home.”
Coming up, city officials expect to move forward with the development of its new City Hall, Towry said. Processes for all departments are under review for efficiency and effectiveness, which may require personnel, software and equipment changes to “help us provide star quality services for our customers.”
“We will work on bringing a community and economic development director on board to help create an environment, which will assist our local businesses and new business to prosper,” Towry said. “We will work on making Sweet Home a community people want to move to for its quality of life by ensuring quality services.”
Incorporating a quote attributed to Albert Einstein, Towry said, “There are some changes in this budget. However if we continue to do the same thing, we will be the same thing. We cannot solve problems by using the same kind of thinking we used when we created them.”
Budget Committee members attending the meeting Thursday were Mayor Greg Mahler; councilors Susan Coleman, Diane Gerson, James Goble, Lisa Gourley, Dave Trask and Ryan Underwood; and citizens Bob Briana, Dave Holley, Dave Jurney and Gerritt Schaffer.
Absent were citizens Andrew Allen, Brent Gaskey and Mark Woody.
The committee elected Holley, a former Sweet Home mayor, as chairman.
The committee will meet at 6:30 p.m. May 18, May 22 and May 25 to consider and discuss details in specific funds. Meetings are held in the City Council chamber in the City Hall Annex, located behind City Hall, 1140 12th Ave.
For more information about the budget or meetings, call the city manager’s office at (541) 367-8969.