City releases clarification on annual budget
A week after announcing a proposed $17 million budget increase, the city of Newberg has made its budget overview available.
According to the budget message, which was not available when the proposal came out for either the public or members of the budget committee, the city states the 2019-2020 budget "reflects Newberg as a modestly, but steadily growing community that implements the City Council priorities in public safety, staff as our most important resource our investment in streets, safe water and wastewater, and long range plans for growth, stability and sustainability."
The nearly $114 million budget represents an increase of more than 18 percent over the current operating budget.
The city used an estimate of 4.3 percent growth in assessed value to prepare the upcoming budget, which represents a maximum 3 percent increase in taxable assessed value plus an estimated growth rate of 1.3 percent.
The exact budget proposed is $113,849,504, compared to the 2018-2019 budget of $96,170,736. The exact percentage increase being proposed is 18.4 percent.
According to the recently released memo, nearly $102,600,000 f the budget is for appropriations.
The city's operating budget, proposed at $37,266,888, is an increase of 7 percent over the current operating budget of $34,829,772.
Some of the larger increases in appropriations came from capital projects, which rose more than 31 percent from roughly $14.9 million to more than $19 million. Transfers between funds are included in appropriations, which rose more than 36 percent from roughly $13.3 million to more than $18 million.
Contingency, which is also listed under appropriations, rose by 96 percent under this proposal, from the current $11.8 million to nearly $23.3 million.
The budget proposal was revealed April 17. The next steps include the budget committee meeting this week, where department heads will discuss things that didn't get into the budget, including items or positions they asked for but didn't get, or things they didn't ask for or were deferred or needed to be addressed in the future.
This budget does not include the addition of full-time employees. The growth in full-time employee hours increased by less than one-half of a percent.
The city has a permanent rate tax limit of $4.38 per $1,000 of assessed value. The budget included a reduction of $1.88 per $1,000 of assessed value in property taxes after the city joined the Tualatin Valley Fire & Rescue district; a 4 percent increase in water rates, a 3.5 percent increase in wastewater rates and a 9 percent increase in storm water fees.
Zook said the new budget has a property tax rate increase of 7.5 cents per $1,000 of value. That's a 3 percent rate increase, which the city charter allows for each year and is part of the charter amendment when the city shifted its fire and emergency medical services to TVF&R.
The budget includes a 4 percent increase in water rates, 3.5 percent increase in wastewater rates and 9 percent increase in stormwater fees. There is no anticipated change in the transportation utility fee as recommended by the Citizens Rate Review Committee and approved by the council effective January 1, 2020, according to the memo.
To accomplish a balanced budget in the general fund, $1.27 million is committed from reserves, leaving a balance of $2.7 million. Two additional fees are proposed - an increase in the public safety fee of $3 per month per household and an increase in the franchise fee for Waste Management from 5 percent to 7 percent.
The 2018-2019 fiscal year budget had forecasted a deficit of nearly $1.4 million, although that figure came in at less than $232,000. According to the city memo, the budget performed better because of unexpected revenue.
"The 2019-20 budget proposes more expenditures than projected revenues, creating a $1.27 million structural deficit, with a projected ending fund balance of $2.7 million (21.3 percent of the general fund)," the memo reads. "The substantial reserves provide the means for implementing a measured process of achieving a financial plan and budget in 2020-21 where revenues meet expenditures while funding all of the council's priorities. However, there is no guarantee of unexpected new or increased revenues."
The memo also states "Police Department expenditures in the general fund ($7.37 million) exceed estimated total property taxes ($5.12 million) to be received by the city. The public safety fee of $3 was established in 2009 as a fund of restricted revenues. The $3 per month fee is assessed per equivalent dwelling unit and dedicated to fund three patrol officers. Neither property taxes nor public safety fees are keeping up with paying for police officers."
The proposal reflects a 3 percent increase for general and police employees and a 2.5 percent cost of living plus a 0.5 percent bonus for public works employees to allow the city to keep seasoned employees. No additional positions are in the general fund and several long standing employees are retiring. Overall, personnel costs decreased by almost 6 percent.
The Public Employee Retirement System (PERS) caused an increase of $124,000 citywide, $85,000 from the general fund.
"Funding PERS and rate increases will continue to impact city operations for several years," the memo read. "City staff continue to monitor potential programs at the state level to help mitigate rate increases and will provide options to the City Council when they are available."