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Beaverton Budget Committee rejects property tax bump

Branch library, street lights funding to come from reserves


Beaverton Mayor Denny Doyle is confident a change in the proposed 2013-14 budget to draw from reserves rather than raise property tax rates to augment libraries and street lights will not adversely affect the city’s financial position.

In the last of three meetings to discuss the mayor’s proposed budget for fiscal year 2013-14, the city’s Budget Committee on Friday rejected a property tax increase of 11 cents per $1,000 of assessed property value. The unanimous vote favored keeping the tax rate at its current $4.24 for $1,000 rate of assessed value. Instead, $904,172 will be drawn from the city’s contingency fund to help cover expenses for the Murray-Scholls Branch Library as well as those related to the city’s 7,000 street lights.

Doyle asked to reconsider the increase request — which would raise property tax by $24.20 for those with a home valued at $220,000 — when it became clear through the meetings that it was a non-starter.

“It was obvious to me that citizen committee members didn’t want to increase the property tax at all,” he said on Wednesday. “We’re not in crisis mode, so I told (Finance Director) Patrick O’Claire to pull it off the table.”

While the decision will leave the city’s reserves below the recommended 16 percent minimum, Doyle and other city leaders anticipate strategic cuts in some areas and a gradual uptick in development-based property-tax revenues will mitigate a one-time drain on the general fund.

“We may have to leave some positions unfilled,” Doyle said. “We’ll make some choices that let us continue to provide services the citizens really want from us.”

City Councilor and Budget Committee member Cate Arnold admitted keeping the status quo on property taxes to augment libraries and lights amounts to deferring decisions that will have to be resolved through short-term cuts or revisiting a tax increase next year.

“We are building pressure on our contingency fund,” she said, noting anticipated new development could enhance property tax revenues in the near future. “Are we really going to cut positions or just kick the can down the road? If new property development comes in like we hope, we’ll be fine.”

Part of the problem stems from operating costs at the highly popular Murray-Scholls Branch Library. Because Washington County Cooperative Library Services received less than its usual funding allotment, the city had to invest more than anticipated for repairs and operating costs at the library.

“We’re obviously not going to close it,” Arnold said. “In the short term, we’re absorbing the costs, but this is not a long-term solution.”

The 11-cent increase proposal was based on the need to distribute revenue to the city’s library system, the street lighting fund and for services from, and replenishment of, the general fund, O’Claire noted. The branch library would require 6.5 cents of the allotment to cover the city’s $615,000 annual operating costs. Three cents would cover police services and building up the reserve fund, while 1.5 cents would go toward maintaining the city’s 7,000 street lights, including usage payments to Portland General Electric as well as repair and replacement costs.

“As with the general fund, we have been using a portion of the street lighting fund’s cash reserves for the past few years in order to not increase the city’s tax rate and keeping it level during this past economic downturn,” O’Claire explained.

The Budget Committee on Friday also voted on amendments to include a $7 million revenue bond issuance for the city government to move its offices to The Round at Beaverton Central. Budget proposals to slash $8,680 for travel related to Beaverton’s Sister Cities program and eliminate the annual Celebration Parade’s $50,000 in fiscal year 2013-14 were rejected.

Councilor and Budget Committee member Betty Bode said maintaining property tax rates as they are is a wise move, particularly given the extra funding voters recently committed to regarding schools and Metro green space levies.

“In light of the fact that citizens had just passed the Beaverton (School District) levy, Metro’s request for an increase, and the fact that the mayor wants to get out revenue bonds to pay for the move to The Round, all those together gave me a red flag,” she said. “We have to start to pay some bills and start living within our means. It’s not going to be in the best interests of our citizens to raise the property tax rate at this time.”



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