There is a way forward for our operations/maintenance center
Lake Oswego City Council can potentially fund the operations/maintenance facility within existing resources. Funding the operations/maintenance facility is one the highest 2014 council goals. There is nuance and trade-offs, but there is a way forward.
How to fund the project? Value engineering, phasing and a variety of resources provide a path forward for this needed, core-earthquake-resistant city service. Subject to caveats, replacement of the facility can be done in two phases over 3 to 5 years.
The capital improvement plan estimates replacement at $13 million, down from an initial estimate of $17 million. Funding to replace the facility must be split about 38 percent / 62 percent between the general fund and public works (street, wastewater, surface water, water), although general fund contributions can be higher.
1) Unassigned General Fund balances There are about $5.1 million in unassigned reserves (above policy requirements) after completing fire truck and regional computer automated dispatch system funding. Dollars can be assigned/reserved to the operations/maintenance center. Certainty high.
2) Wastewater Fund existing resources The wastewater fund has sufficient existing resources to fund its estimated $1.9 million share for the operations/maintenance facility. Certainty high.
3) PERS Reserving the PERS differential between budgeted and actual paid. In 2013/2014 the city budgeted as if 2013 state legislative PERS actions will not survive judicial appeals. The difference is $1.2 million. This is prudent, and legal analysis provided to the Legislature supports PERS legislative actions passing judicial muster. A court decision on the legislation is possible in 2015. Future years could bring more dollars. Certainty medium
4) West End Building payments Another source of dollars is the $1.2 to $1.5 million the city will not be spending on yearly WEB debt and operating expenses if the WEB is sold. Within 3 to 5 years that could be as much as $3 to $5 million. Certainty medium.
5) Water Fund existing resources The water fund could, depending on final expenditures for the Lake Oswego/Tigard water project or by deferring existing funded projects, fund some of its share of the maintenance/operations center. Over 3 to 5 years, dollars could range from $0.5 to $1.0 million. Increasing water rates above current projections is not necessary at this time. Certainty low to medium.
6) Future General Fund dollars - For 2013/2014 and likely for 2014/2015 the city will budget a breakeven (revenues = expenses) budget. Likely the city will be somewhat positive each year going forward. Over 3 to 5 years, dollars could range from $3.0 to $4.0 million. Going forward, sweeping those funds from department contingencies would have consequences for maintenance and small capital projects. Certainty low to medium.
7) Street and Surface Water funds existing resources The street and surface water funds could by deferring existing funded projects, fund some of its share of the maintenance/operations center. Over 3 to 5 years, these dollars could range from $1 to $2 million. Doing so will require deferring needed street and surface water projects or increasing rates more than planned not a good outcome. Certainty very low.
These seven sources total $15.7 to $20.2 million, which is more than the estimated $13 million needed.
Completing the operations/maintenance project without requesting a tax increase is a powerful message: We are good stewards of our limited dollars. It just requires the will.
Jeff Gudman, Lake Oswego, is a member of the Lake Oswego City Council; the views expressed are his own and not necessarily those of the entire council.
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