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Reduction of budget from $97.4 million to $93 million due to decrease in assessment for fire service

Newberg officials would like their constituents to weigh in on how best to spend their tax dollars as the city's annual financial process has begun with the April 11 release of a preliminary budget.

The city's budget committee held a public hearing on Monday and the city says additional opportunities to give public input will be slated as needed.

The proposed budget was first drafted by Finance Director Matt Zook in concert with City Manager Joe Hannan before being forwarded to the budget committee, who will tinker with it before sending it along to the City Council for final approval. The state requires the document be approved by the end of June.

The proposed 2018-2019 budget is $93 million, which includes $77 million in expenditures and $15.3 million in contingencies and reserves. The $93 million is a 6.6 percent decrease from last year's $97.4 million budget.

Appropriations are the maximum amount that the city is allowed to spend and excludes the reserves amount. Contingency acts like a reserve that can be legally spent after a certain legal action is taken, such as a supplemental budget adopted by the council.

The proposed budget recognizes a 4 percent increase in water rates, a 3.5 percent increase in wastewater rates and a 9 percent increase in storm water fees that, if adopted, would take effect in January.

In order for the city to balance the budget, money was taken from reserve funds, leaving the general fund with a reserve of $2.3 million.

"The reality is that the city of Newberg has a $1.37 million budget shortfall this year," City Councilor Patrick Johnson said. "We are dipping into reserve funds to cover the deficit, but we don't have the money to continue doing that in the future."

The reserve is basically set aside to meet costs that may arise unexpectedly, but are not meant to be spent in the fiscal year.

"Between the increases in health care and PERS, property taxes we collect simply don't keep up with the cost of providing services," Johnson said.

City administrators projected a 4.3 percent increase in proceeds from property taxes this year. The figure includes the maximum 3-percent increase in valuation allowed by state law, amounting to a projected $1.93 million increase over 2017 assessed values, and reflects a $1.93 million increase in assessed values from 2017.

In August 2017, city voters approved a decrease in city property taxes from $4.38 to $2.50 per $1,000 assessed value to reflect the elimination of the Newberg Fire Department and the city being annexed into the Tualatin Valley Fire & Rescue district. In July, TVF&R will begin assessing landowners $2.08 per $1,000 to fund fire and emergency medical services. Other districts assessing taxes on city landowners include Portland Community College, Yamhill County, Newberg School District and the Chehalem Park and Recreation District, among others.

The proposed budget includes a 3 percent increase in funding for the library, the third increase in as many years, to pay for remodeling projects that include a new office and workroom space, among other additions.

The council has set budget priorities through 2019 that include maintaining the police dispatch center, maintaining sidewalks and streets, completing a five-year financial plan, expanding the urban growth boundary, encouraging construction of affordable housing and developing a riverfront master plan.

The budget also provides funding for updating and completing master plans to preserve the streets, water, wastewater and stormwater systems. Some of the projects slated for the 2018-2019 year include upgrading water flow to George Fox University with eight-inch water mains, extending water lines to Chehalem Drive, replacing the Dayton Avenue pump station and a whole host of street repairs.

The effort to upgrade its communication system, including the construction of a radio tower in the public works yard, is joined by the rising cost of personnel and decreasing tax proceeds as being the city's toughest financial challenges going forward.

Johnson encoraged residents to attend budget committee meetings and make their wishes known

"Budget committee meetings are the perfect time for taxpayers to come and voice their concern about taxes, fees and water and sewer bills. ...," he said. "I would urge anyone with ideas on how to solve this budget problem, and have concerns about raising taxes or fees, to attend the meetings and make your voice heard."

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