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City budget sparks debate By Myles Murphy Ashland Daily Tidings The Ashland Citizen's Budget Committee has jumped into the 2003-04 budget process with both feet, initiating some challenging discussion and fielding concerns from the public. The full committee met for the first time Thursday night to discuss aspects of the proposed $87.3 million budget. The budget predicts the city will spend more money than it brings in, resulting in a projected $478,000 drop in the city's general fund reserve money. "There's a cause for concern, but not a cause for great alarm," City Administrator Gino Grimaldi said. "We're not in a position where we're cutting back in services or cutting back in existing positions." Grimaldi and Finance Director Lee Tuneberg delivered the introductory budget message, then opened the floor for public comment before diving into presentations from city departments. Ron Roth, a businessman and Ashland resident for more than 20 years, came out swinging, calling for the committee to approve a recommendation for the creation of a new housing coordinator position to help create and maintain affordable housing in the city. "If the city doesn't do something soon for normal people who live here and want to raise kids and families, it'll become another Carmel or Aspen," Roth said, referring to tony towns in California and Colorado. Roth also asked the committee to discontinue the practice of borrowing money to fund the Ashland Fiber Network, which has internal city fund loans and capital loans expected to reach about $14 million by June 2004. "The City of Ashland shouldn't continue to borrow money to build something that's time is past," Roth said. "Let AFN fall or stand on its own. I think it's a big waste of money." The committee did not respond to Roth's comments, indicating the subject will come up at the Saturday continuation of Thursday's meeting. "We feel this is a good budget," Tuneberg said, summing up his opening statement. "It's balanced and the city is pretty well off financially, especially in comparison with other communities." Budget member Dave Williams expressed concern about the approximate $5 million drop in proposed ending-fund balances across various city departments. "We're not robbing Peter to pay Paul with these ending fund balances?" Williams asked. For example, Williams noted the $269,000 proposed reserve in the telecommunications budget, which was nearly four times higher at $861,000 in 2002-03. 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. Tuneberg explained that larger balances are needed when projects - such as the AFN buildout - are underway, but that the balances shrink when the work is done. Committee member Jim Moore noted that the city's population has jumped 15 percent since 1994 while the city's operational expenses - not even counting large capital projects such as the Siskiyou Boulevard redesign - have jumped 32 percent. "I have a concern about that," Moore said. "How do we stop this momentum?" Ashland City Councilor Don Laws pointed out that much of the increase can be attributed to new programs which add needed services for residents. "The fact that our budget is growing faster than our population is not because of inefficiency," Laws said. Moore was also skeptical of some revenue predictions, such as a 12 percent increase in hotel/motel tax income - a number which may be difficult to hit with potential decreases in Oregon Shakespeare Festival ticket sales and other tourism trade declines. "I'm worried we're being two optimistic about revenue � compared to what I'm seeing countrywide, statewide and in other cities," Moore said. But the main issue impacting the city's finances is a considerable anticipated rise in personnel costs. 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. The city is also facing the potential loss of $190,000 a year if an appeal from telecommunications giant Qwest does not fall in the city's favor. These costs - and a higher-than-normal level of uncertainty about the future increases - leave officials with little to do but wait and see how things shake out at the state level. "Are we trying to do something about the health care and PERS increases?" committee member Russ Silbiger asked. Tuneberg said the city has to wait for legislative decisions before steering much more of an active course. "We've appealed some of the recent (PERS) decisions and we've been lobbying for appropriate changes," Tuneberg said. The city has started increasing employees' contribution to health insurance, but the majority of employees have not yet come to an agreement on any changes, which must go through collective bargaining processes before being implemented. "Unfortunately in this area there are not a lot of heath care provider companies - that makes it difficult for us (to explore ways to lower rates)." The budget is $4.5 million less than the 2002-03 $91.8 million budget, the last in a long line of ever-increasing budgets. The 4.9 percent drop is deceptive, however, since much of it is due to the completion or near-completion of citywide construction projects, including Ashland Fire Station No. 1 and remodeling of the Carnegie Library and the Hillah Temple downtown. Looking at major items apart from construction projects, a comparison of an operational budget adding personnel costs, materials and services and the cost-making debt payments shows a 5.6 percent increase, rising from $54 million in 2002-03 to $57 million in 2003-04. 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. Expected fee increases, however, include a 3 percent proposed 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 electricity surcharge. While expenditures outweigh income for the city, a number of decisions have been made to slow the losses. The position of administrative services director has been cut, resulting in significant savings, and proposed new positions in the police, fire and other departments have been put on hold this year. The committee also heard presentations on proposed budgets for the city's finance and public works departments. The committee will hear the remaining department presentations when the meeting continues from 8 a.m. to 2 p.m. Saturday at the Ashland Civic Center Council Chambers, 1175 E. Main St. 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 -