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A handful of changes are coming to the budget for this fiscal year; PERS deposit requires increase

Entering a new fiscal year under unique circumstances due to the COVID-19 pandemic, the city of Dundee approved its 2020-21 budget in late June, with the budget taking effect July 1.COURTESY PHOTO - Entering a new fiscal year under unique circumstances due to the COVID-19 pandemic, the city of Dundee approved its 2020-2021 budget in late June, with the budget taking effect July 1.

This year's city budget is $8.71 million, up 4.4% from last year's budget of $8.34 million. The largest categorical increase is to personnel services, which is up 34.5% from the previous year to a total of $1.63 million. Debt services are up 7.6% to $1.17 million, while materials and services increased by 5.2% to $2.07 million. Capital outlay and transfers are down 5.9 and 6.2%, respectively.

The spike in personnel costs is due to a one-time deposit of $400,000 into a PERS side account scheduled for August, according to city manager Rob Daykin.

"The deposit takes advantage of special legislation that established an incentive of a 25% match by state funds for qualifying agencies," Daykin wrote in the budget proposal. "In Dundee's case, $100,000 will be added to the deposit of which the $500,000 will then be used to buy down the city's actuarial liability in PERS and a credit will be applied against the city's biennial PERS contribution rates over a 20-year period."

The deposit contribution, Daykin said, only affects the major appropriations in operating funds with personnel costs. Major operating funds equal approximately $4.74 million, up 9.7% from the last fiscal year. Were it not for the PERS deposit, Daykin said that number would have increased by just $19,000, or 0.4%.

Daykin also noted that limited analysis was available at the time of the budget's approval regarding the long-term effects of the COVID-19 pandemic on the local economy.

"Revenues that are most susceptible to reduction include transient room tax, motor vehicle fuel taxes, traffic fines and utility consumption charges for commercial users," Daykin wrote. "Most of the funds, such as Street, Tourism, Water and Sewer have capacity in their respective budgets to accommodate a reduction in revenue either by deferring transfers out to other funds or expenditures on larger projects."

Daykin said the general fund has a limited capacity with that strategy. He also expects that general fund reserves will drop an additional $70,000 or more due to unexpected costs in response to a tort claim filed against the city. This claim stems from a female firefighter's allegations that the city failed to protect her from workplace injury while she worked under Fire Chief John Stock, who is on paid administrative leave due to multiple allegations of sexual misconduct.

The city plans to participate in a study involving all the various fire services in Yamhill County, with a goal of determining what services would best fit the city's needs. Consolidation or shared, cooperative services are on the table.

"Dundee will have an opportunity to explore various options with other agencies to create greater efficiencies in the delivery of fire and rescue services to the community, which may have an effect on next year's budget yet to be determined," Daykin wrote.

The final phase of local improvements to Highway 99W will start this fiscal year and include reconstruction of the highway surface; construction of sidewalks and crosswalks; and installation of new decorative lighting, storm and water facilities and landscaping. These projects are accounted for in the budget under the Street CIP Fund.

The highway improvements will require moving a water main in the area, which previously was paid for by the Water CIP Fund but will now have to be funded by a loan. Daykin said this larger project will require a $225,000 loan from the city's Equipment Reserve Fund.

The city also plans to remove and dispose of biosolids at its wastewater treatment plant. Sludge builds up in storage lagoons on the property and is removed every three years, with the preferred method of exporting the biosolids to farmland for beneficial use. Under the current bid process, Daykin said the city is asking the hauler to secure and manage the land where the biosolids would be applied.

Ditches in Dundee, particularly in the hillside area, are susceptible to erosion and that is addressed in the budget as well, along with plans for an urban renewal in partnership with the Dundee Urban Renewal Agency.

"The proposed budget includes an improvement to correct one of the fastest eroding ditches that is starting to undermine the adjacent asphalt street," Daykin wrote. "Work involves the installation of storm pipe and inlets, and regrading and filling the ditches on the uphill side of Red Hills Drive near Upland Drive, and on the north side of Upland Drive between Red Hills Drive and Walnut Avenue."

Property taxes are the largest source of revenue for the city's general fund, equaling approximately 43% of its revenue. The tax levy in this budget is just under $712,000, which reflects a permanent tax rate of $2.31 per $1,000 of assessed value on a home. Applied to the average assessed home value of approximately $308,000 means the average property tax bill for a Dundee homeowner is roughly $712.

For more information on the city's budget, with full financial breakdowns of each category and extensive information on where taxpayers' money goes and how it will be spent this fiscal year, go to dundeecity.org. A PDF with a full accounting of the approved budget is available to read under the "Administrative Department, Budget and Finance tab."


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