Tax rate maintained despite retirement of water-sewer bond debt

The city of Beaverton’s 2014-15 budget the City Council passed on Tuesday night maintains the property tax rate from the current budget but raises the water consumption fee for homeowners.

The $183 million city budget, which includes a $64 million general fund, maintains a tax rate of $4.38 per $1,000 of assessed property value while increasing water consumption fees from $2.77 per 100 cubic feet to $2.87. That works out to an approximately $1.80 monthly increase for the average homeowner.

There was no public comment Tuesday on the document, which the city’s Budget Committee approved on May 29. Councilor Betty Bode, however, spoke almost apologetically about the need to raise water rates to maintain infrastructure of the city’s complex water system.

“The offset of having to raise the water rate is that the property tax was not increased,” she said. “Maybe that takes some of the sting out of it ... Nobody likes to raise (fees), but this is one area where we have to do it to keep Beaverton a city that offers an excellent level of community service.”

Councilor Marc San Soucie, who championed continuing the city’s $50,000 contribution to support the Portland Community College’s Future Connect scholarship program, called this a “pretty boring budget overall.

“Nobody likes increases in water rates, and that’s completely understandable,” he said after the committee passed it last month. “Unfortunately, the rate of inflation, and infrastructure costs for pumps, pipes and everything involved with the delivery systems tend to be higher. It’s absolutely a cause for us to be vigilant, but I think Beaverton has been extremely conservative.”

Although he didn’t mention this during the three Budget Committee meetings in late May and early June, Councilor Ian King pointed out in a phone interview that retirement of debt service on the water and sewer fund could have accommodated a property tax reduction had the committee chosen that direction.

The general fund rose from $3.64 million in the current budget to $3.7 million in the upcoming 2014-15 budget, while retirement of water and sewer bond debt reduced the city’s general obligation debt service from $229,00 to $195,000.

“The general fund number goes up while the water fund number goes down,” King observed. “By retiring the water bonds early, that pot goes down. Had nothing else increased elsewhere, we would’ve seen the (property tax levy) totals go down.

“By adding up all the funds, the (final amount) is staying the same,” he added. “But we’re actually increasing the general fund by the amount we’re not paying on the water debt.”

While it would be nice to pass that savings along to city taxpayers, King said he understands and supports the need to shore up the city’s reserve funds and dedicated programs by maintaining the general fund.

“Could we have reduced taxes and kept everything equal? You could argue, ‘Yes,’” he said. “Would that have been sound fiscal policy to just give a tax reduction at this point in time? I’m not sure that’s the best thing for the city right now.”

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