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Ashland spends down reserves By Myles Murphy Ashland Daily Tidings Skyrocketing personnel and energy costs are ripping great chunks out of Ashland City budget, but officials are confident the city will have no trouble maintaining service levels. "We're spending down reserves more than were taking money in," Ashland City Administrator Gino Grimaldi said, commenting on the proposed 2003-04 city budget released this week. The projected $87.3 million budget calls for a $478,000 drop in the city's general fund reserve money. "That, in one year by itself, is not that bad," Ashland Finance Director Lee Tuneberg said. The reserves are intended to be used as a cushion when needed, and cities are required to maintain certain reserve levels for just that purpose. However, at this rate, the city would be facing a significant deficit down the line. "That's if we take our hands off the wheel and do absolutely nothing," Grimaldi said. "But there's no way we're going to sit back and do absolutely nothing." The budget assumes a 40 percent increase in PERS costs, a 20 percent hike in health care premiums, along with significant but unknown jumps in wholesale electricity rates. These costs - and a higher-than-normal level of uncertainty about the future increases - have city officials waiting for the other shoe to fall. Overall, the budget is relatively conservative, according to Grimaldi. "It's a take-a-deep-breath-type budget," Grimaldi said. "It allows us to wait and see how things unfold in the future." The city is also facing the potential loss of $190,000 a year if an appeal from telecommunications company Qwest does not fall in the city's favor. "If they win that, that will contribute to stress," Tuneberg said. "On the other hand, we get good news, that's another story." The budget is $4.5 million smaller than the 2002-203 $91.8 million budget, the last in a long line of ever-increasing budgets. The 4.9 percent drop in the total budget is a little misleading, however, since much of it is attributed to the completion or near-completion of citywide construction projects and their associated costs, including Ashland Fire Station No. 1 and remodeling of the Carnegie Library and the Hillah Temple downtown. If approved as proposed, residents will see a slight drop in the property tax rate, which is estimated for 2004 at $5.34 per $1,000 of assessed value. On the other hand, expected fee increases include a 3 percent increase for cable TV fees, a 5 percent increase for water fees, 6 percent increases for transportation and storm drain utility fees, a 7.5 percent increase in electric rates, a 10 percent increase in building fees and a 30 percent increase in the city's electric surcharge. "We continue struggling with increases in the electric bill because of the increases in wholesale electricity," Tuneberg said. While expenditures outweigh income for the city, a number of decisions have been made to stem the flow. The position of Administrative Services Director has been cut, resulting in significant savings, and proposed positions in the police, fire and other departments have been put on hold this year. No other cuts in existing personnel or services are planned for this year, and residents should experience no changes in important services such as emergency responses or water from the tap. Maintaining those services levels will become more difficult if the city faces more cutbacks in the next few years - a likely scenario if things don't turn around. "It seems like the economy is at a turning point, but we don't know which way it's going to turn," Grimaldi said. Tuneberg and Grimaldi have no expectations about what will happen in the state Legislature, how energy costs will change or what else is coming down the pike, but both believe this pared-down budget puts the city in a position where it can respond to change. "We manage the budget," Tuneberg said. "That's what we do." Info box The full Ashland Citizens Budget Commission meets from 7 to 10 p.m. Thursday at the Ashland Civic Center Council Chambers, 1175 E. Main St. to hear this year's budget message and presentations from the Finance and Public Works Departments. Remaining department presentations will be discussed from 8 a.m. to 2 p.m. Saturday in the council chambers. The meetings will be carried live on Rogue Valley Community Television Channel 30. LINKS: DAILY TIDINGS: Main | News | Sports | Business | Obituaries | Opinion | Columnists | AP News | Subscribe | Archives | Weather | Classifieds | Contact Us | Privacy REVELS: Main | Calendar | Dining | Movies | T.V. OTHER: Road Cams Copyright 2003 Ashland Daily Tidings 541.482.3456. 1661 Siskiyou Blvd., Ashland, OR 97520. Ottaway Newspapers, Inc. - Advertisers -