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City manager: Budget 'balanced but not sustainable'


Possible cuts will be unveiled tonight

City Manager Tom Coffee has released a 2013-14 proposed budget that appears to avoid slashing public programs and core services — although significant cuts could still emerge in the coming weeks.

The Lake Oswego Budget Committee, made up of the six city councilors, the mayor and seven citizen members, will begin reviewing the nearly $421 million spending plan today. The meeting begins at 6 p.m. at city hall, 380 A Ave.

Like the current budget, the next fiscal year's plan largely holds the line with spending on materials and services. At the direction of the city council, it also includes a tax rate cut to offset the usual growth in citizens’ annual property taxes.

But it includes a major caveat.

“It’s balanced but not sustainable, because it’s relying on reserves,” Coffee said during an interview last week. While the city can tap money left over at the end of the fiscal year to help cover expenses, the amount of excess cash is shrinking on an annual basis, as costs continue to outpace revenues.

Meanwhile, he said, “An underlying theme is not only do we have issues with our street system and maintenance of that type of infrastructure, but also our facilities and equipment funding needs aren’t being met. There’s equipment replacement in this budget, but not the big-ticket items.”

As a result, Coffee plans to unveil eight or nine “decision packages” tonight.

These packages will outline potential reductions in services — and in employees associated with providing those services — along with a discussion about how the council might fund pressing facility needs, Coffee said.

“The discussion is going to be how much of the operating levels and services we provide are essential, necessary or critical, versus those things we’ve been doing maybe to the detriment of our capital facilities,” he said.

In all, the city has about 360 employees, including police and fire personnel. The proposed budget already reflects a net decrease of the equivalent of 3.4 full-time employees by eliminating vacant positions. Because the coming “decision packages” could lead to cutting more positions, Coffee planned to inform employees whose jobs might be on the chopping block today.

Those reductions could help the city get a handle on ongoing jumps in personnel costs, which account for the bulk of the general fund. Although many employees now contribute more than they used to toward health care costs, the city faces mounting expenses for workers’ insurance benefits as well as retirement plans.

Revenue isn’t keeping up with the increases.

The council’s proposed property tax rate reduction would save the average homeowner about $50 for the year while shaving an estimated $800,000 less in the general fund.

The general fund could be down more if a proposed utility “rebate” is approved. The rebate, suggested by Councilor Jeff Gudman to offset the burden of recent utility rate hikes, wasn’t built into the proposed budget. If added by the budget committee, it would give utility customers an extra $100 for the year while slicing about $1.3 million from city funds.

Because of the recent creation of the Lake Grove Village Center urban renewal district, which aims to fund projects such as an overhaul of Boones Ferry Road, the general fund will take another $96,000 hit.

And the city is still paying down what it owes on the West End Building, whose value plummeted after its purchase in 2006. The city will make about $1 million in payments on the WEB in the next fiscal year; the remaining balance is $18.5 million.

Still, the city will fund a variety of initiatives in the coming year.

The jump from about $243 million budgeted in 2012-13 to about $421 million planned for 2013-14 includes spending on some massive infrastructure projects, including transfers, expenses and debt service related to the Lake Oswego-Tigard Water Partnership. Combined, the water and water partnership funds are projected at $279 million in 2013-14, according to the city.

Some other utility projects planned for the fiscal year include:

n $2.2 million to rehabilitate Kerr Parkway

n $342,000 for a Chow Corner regional sidewalk project

n $200,000 for citywide pavement preservation

n $1.3 million for wastewater pump station upgrades

n $500,000 for preliminary implementation of inflow and infiltration reduction efforts

Projects with an impact on the general fund include:

n $205,000 for police vehicle replacements

n $150,000 for playground replacement at George Rogers Park

n $117,000 for parks vehicle replacements

But Coffee pointed to unfunded projects coming down the pike.

In the next five years, the city is looking to replace two fire trucks for $1.69 million, the South Shore Fire Station for $3 million, city hall for an estimated $14 million and the public works operations facility for $17 million.

The city council has also pushed for a stronger focus on the condition of streets and roads. Bringing streets to “good” condition would require an investment of more than $3 million each year, according to the city.

“Every year there is a cliff down the road,” Coffee said. “I think this is an opportunity for this community to say, ‘We’re not too far from that area where the path we’re on is going to create some real problems.’

“Are we going to get serious about funding our capital facility needs, or are they going to deteriorate further?”

Meetings on tap

The Lake Oswego Budget Committee will begin fine-tuning the proposed 2013-14 budget at 6 p.m. today.

Additional meetings are planned for at least May 2 and 9.

Public input will be accepted at the start and end of each meeting. Budget committee members will be able to propose “puts” and “takes” for deliberation.

The council is expected to review the committee’s approved budget and adopt a spending plan in June. The budget would then take effect in July.

Sessions will be televised for cable customers on TVCTV and will stream live via the city’s website at mms://www.ci.oswego.or.us/live.