Just as we do for our household budgets, every year the city puts together its budget about six months before the fiscal year begins in July. The end result of our budget process is a plan that guides how we spend every penny of a roughly $137 million budget.
Tigard always gets questions about money and how taxes and fees are spent, including whether the city can be more flexible with its revenue streams and better control its costs. Can't we use the gas tax or water rates to pay for increased services? The answer is simple: In Oregon, local government budgets are regulated by state budget law. Big or small, all cities balance their budget the same way. Most of our budget and revenues are legally restricted in their uses.
Basically, the city has two kinds of money: unrestricted revenue and restricted revenue.
Unrestricted revenue, accounted for in the city's General Fund, is money the City Council, together with citizen members of the Budget Committee, chooses where and how to spend.
Our General Fund accounts for a little under $37 million of the $137 million budgeted for expenditures.
Your property taxes are one primary revenue source for the General Fund. We use property taxes to fund our police department, parks and recreation, library services, and our finance and planning and city administration services. Some people are surprised to learn that Tigard collects roughly $15.4 million annually in property taxes for operations. For perspective, it costs approximately $17.3 million each year to run our police department.
The second kind of money, restricted revenue or designated funds, is dedicated to certain projects or activities as mandated by state law or other rules. Those funds are allocated by the City Council, but with certain restrictions. For example, state law prevents the city from using the Wastewater (sewer) Fund's dedicated money to hire more General Fund (or discretionary) police officers.
I believe we have done a good job of using your tax dollars wisely, and Tigard residents and businesses believe they get a good value for the relatively low property tax rate they pay. Relative to our cost growth, our general fund resources erode every year, meaning slowly eroding city service levels.
Staffing levels at the city are the same as they were a decade ago. We've deferred needed repairs, postponed investments in some of our basic infrastructure, and drawn on the city's reserves to keep our taxes and fees low. Last year, the Budget Committee heard about needed replacement of the police department roof, needed upgrades to the locker rooms, and we consistently put off updating our fleet and computer systems. These measures allowed us to steady General Fund operations costs to a slight 2.3 percent annual increase. The public hasn't really seen any dramatic impacts to city programs since 2012.
We face significant financial challenges ahead. As we continue on our current financial path, our troubles will become more evident. Even though Tigard is growing, the city's average revenues only increase by 3.5 percent annually and, for a city our size, expenses for general services grow at an average of about 4 percent annually. Wages, health care costs and retirement costs are some of the contributors for expenses to outpace revenue growth.
Your City Council and the citizen members of the Budget Committee review and recommend the budget each year and have all of this in mind to do what they feel is best for our city. The imbalance between resources and expenditures is the city's reality and it is the reason that your City Council is exploring a voter-approved local option levy to maintain funding for day-to-day city services.
I encourage you to learn more about these issues and see how our budget is developed. A good place to start is by attending the City of Tigard's Budget Committee meeting scheduled for Wednesday, April 19, beginning at 6:30 p.m. in the Public Works Auditorium, 8777 S.W. Burnham St., Tigard.
John Cook has been mayor of Tigard since 2013.