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SUNNY Temp: 51 °F Wind: N at 3 mph Wednesday, February 5, 2003 SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics AP News Weather Classified Archives Site Map EXTRA HomeLife Magazine W3 Magazine Jobs @ Mail Tribune Tempo A & E Oregon CarZone Wellness Connection Real Estate Newspaper in Education Prime Times Outdoor Journal Personals Movie Times TV Times E The People CLASSIFIEDS Find a Car Find a Home Find a Job Find Everything E SOUTHERN OREGON Automotive Communities Entertainment Publications Recreation Calendar ABOUT US FAQ What's New Advertise Home Delivery Classified Ad Contact Us Media Kit Email Story to a Friend February 5, 2003 PERS shortfall could cost Medford millions By MEG LANDERS Mail Tribune Medford’s share of the state retirement system deficit could cost the city as much as $3 million over the next two years. The Public Employee Retirement System board is scheduled to meet Tuesday to decide how to pay off a $15.7 billion shortfall. The board warned city officials in December that Medford’s contribution could rise from 12.33 percent of salaries to 19.1 percent in July. City departments are planning worst-case scenarios such as postponing constructing a new police building, leaving vacated positions vacant and cutting road projects."It’s a 3.5 percent reduction effort required of each department over the biennium," said Deputy City Manager Jef Faw. He said the two-year period is from July 1, 2003, to June 30, 2005. The city’s total budget for 2002-2003 is $89 million, of which $47.8 million is the general fund. Faw said the city was told in April that the contribution rate would be 16.5 percent, which is what the city was planning on. "This 19.1 has just wrecked that," he said.Mike Dyal, Medford’s city manager, met with the department heads Monday to ask them to look at ways to make cuts in their biennial budget to cover the additional PERS contribution. Of the state retirement system’s $15.7 billion shortfall, $25 million of that is Medford’s portion as of December 2001. Medford’s annual payroll is $22 million, according to Faw. As proposed, cuts primarily would be made from the general fund and could range from $1.1 million in the police department to $84,000 in the public works department. Medford Police Chief Eric Mellgren said his department would take the biggest hit because his $33 million budget is funded "almost exclusively" through the general fund. The police department would maintain its level of service, he said, but would make cuts by "delaying purchases or not filling some vacancies," said Mellgren. There also would be cuts in things like back-up responses for emergency situations in smaller communities. Public Works Director Cory Crebbin said his department wouldn’t be affected as much as the police department. He said only about 5 percent of public works’ budget comes from the general fund. The majority comes from utility fees, system development charges, state gas tax and grants. But he said they balance their budget with projects, so things like street and sewer upgrades would be cut first. "The state is stuck on the horns of the dilemma that they helped create," said Dyal. "This is obviously a system that’s run amok." Dyal said city staff plans to meet with council leaders Thursday to get some direction. Reach reporter Meg Landers at 776-4481 or e-mail [email protected] . Printer Friendly Version Email Story to a Friend Subscribe Archive: Click to Search Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright 1997-2002 Mail Tribune. All rights reserved. Privacy Policy webmaster feedback A D V E R T I S E R S