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City will cut staff, services to pay for roads

Council to adopt 2013-14 budget next week


The Lake Oswego City Council next week will consider a 2013-14 budget that eliminates city staff positions and reduces some services in favor of paying for street maintenance.

The budget committee approved a spending plan that would funnel $784,000 in general fund money toward road upkeep — about four times the amount initially proposed for street work in the coming year.

“The fact that we’ve only got $200,000 in the (proposed) budget is almost irresponsible,” said Kathleen Taylor, a citizen member of the budget committee. “Street preservation is not capital, per se, it’s really maintenance. It costs $3 million every single year and it will forever, and there is no funding source.”

In exchange for the street funding, the city will see service reductions and layoffs in the long-range planning, parks and recreation, public affairs and economic development departments starting July 1.

City Manager Tom Coffee in April proposed a $421 million spending plan mostly holding the line on programs and services. However, he later recommended additional cuts — and some additions — to the budget committee, made up of the mayor, the six city councilors and seven citizen members. The idea was to rein in ongoing spending on salaries and benefits, which account for the lion’s share of general fund expenditures each year, and to free up money for street maintenance and some major equipment purchases coming down the pike.

Growth in property tax revenues is gradually falling behind the city’s rising costs to pay employees, in part because of ballooning retirement and health insurance expenses. In addition, the city typically relies on its fund balance — money left at the end of the fiscal year — to cover expenses. But the amount left over has been on the decline annually, according to the city.

The budget committee spent several meetings mulling these ideas and approved a plan May 9, advancing it to the city council for adoption.

Approved plan includes cuts and additions

Cuts include a major position in economic development — Economic Development Manager Jane Blackstone has apparently offered to leave her job, which will allow another employee slated for a layoff to stay. Public Affairs Manager Christine Kirk’s job will be cut, as will several long-range planners’ positions. Additional positions will be sliced from the parks and recreation department.

Although the committee voted multiple times on whether to eliminate the job of Sustainability Coordinator Susan Millhauser, it ultimately kept her position intact. Debate centered on whether the program, while focused on environmental sustainability, actually results in financial sustainability as well, because Millhauser has landed grant money for city projects. She also oversees efforts to reduce energy costs, and that saves public money.

The final vote on sustainability was a close one, with a majority of council members on the committee voting to eliminate the program.

Mayor Kent Studebaker and Councilors Karen Bowerman, Jeff Gudman and Mike Kehoe voted to end the sustainability program, while Councilors Jon Gustafson, Donna Jordan and Skip O’Neill, along with five citizen committee members, supported keeping it.

Meanwhile, the budget committee approved a new program to fund maintenance of trees and vegetation in public rights of way, and it earmarked funds to hire a consultant to implement alternative methods to existing regulations on environmentally sensitive lands. It also voted to spend more money on protecting streets.

Council could take up road financing

in the future

The group discussed whether to recommend that the council review two alternative methods of financing more road projects: asking voters to consider a citywide gas tax or moving to charge the full amount of franchise fees allowed.

Committee member Craig Prosser said finding money for street maintenance has been an issue in Lake Oswego since the 1990s, if not earlier, and applying “little Band-Aids each year is not solving the problem.”

“I feel we need to take a look at the larger solution,” whether that means establishing gas tax similar to Multnomah County and Tigard or charging franchise fees, he said. Today, Lake Oswego charges less than neighboring jurisdictions in franchise fees, paid by residents on utility bills. Charging the full amount could raise a million dollars the city could put toward street maintenance, he said.

In Oregon, Prosser added, the general fund is “not a traditional source of funding for street maintenance.”

The committee didn’t advance these ideas to the city council, although councilors could revisit the discussion in the future. The mayor was among committee members against raising franchise fees.

“I’m adamantly opposed to imposing more taxes on the citizens,” Studebaker said.

Taylor said it was easier for the city to get by without a stable funding source in the past, in part because the state provided more in revenue sharing from its gas tax.

“I don’t really think that a franchise fee is onerous,” she said. “Is it preferable to not have one? Yes, but on the other hand, we do have a responsibility to maintain the assets that we own.”

The city council will hold a public hearing before adopting the 2013-14 budget next week. The meeting begins at 7 p.m. Tuesday at city hall, 380 A Ave.




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