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Clackamas County set to consider budget

Plan proposes to tap funds for modest additions, pension reserve.


Clackamas County proposes to dip slightly into contingency and reserve funds for modest additions to a billion-dollar budget that otherwise maintains services for the coming year.

The proposed 2016-17 budget will be presented Tuesday (May 31) by County Administrator Don Krupp to the budget committee, which consists of the five elected commissioners and five public members.

Krupp’s message will start five days of reviews, including public testimony Thursday night (June 2), of a proposed all-funds budget of $973.3 million for the year starting July 1. The actual amount for county government is $720.6 million; the rest will go to seven special-purpose districts governed by the county commissioners.

The budget assumes an increase of 4.7 percent in collection of property taxes, the largest and most flexible source in the county general fund. The rate is the same as in the current budget, and slightly down from the 4.79 percent increase in the 2014-15 budget — but it's more than that year’s assumption of 4.25 percent.

Just four years ago, when economic recovery had not yet taken hold, property tax growth was at a low of 1.82 percent.

“While the (current) budget saw modest improvement in county revenues, particularly property taxes, the county is still operating in a constrained fiscal environment,” Krupp said in his written budget message.

General fund personnel costs will rise 2.6 percent, but general-fund spending will go up less than 1 percent.

Although the proposed budget maintains services, few additions are envisioned. The number of full-time employees will rise from 2,012 to 2,017; it was at 1,947 in 2014-15.

Budgets for three county agencies will be evaluated under the guidelines set out by Performance Clackamas, a 2014 plan that aims to align county spending with progress toward specific goals. Budgets for 13 more agencies will follow in the next year, leaving four agencies to be done later.

Proposed shifts

Krupp did propose to tap the county contingency fund for $1.1 million, and shift $700,000 from the general fund reserve to a public-pension reserve already at $2.3 million.

“There are some critical needs that I believe we must address to ensure future stability, primarily in key support services areas,” Krupp wrote. “I am proposing some modest funding infusions from our general fund contingency to begin to address the direct needs.”

Among them: One additional deputy district attorney; added staff for finance and human resources systems, new software for management of the dog shelter, and additional money to replace dwindling state grants for emergency preparedness.

Like all local and state governments, Clackamas County is preparing for a big jump in public-pension contributions after July 1, 2017, when higher rates will take effect. The Public Employees Retirement System board will set the final rates this fall for 2017-19, which will cover the next two years in the state government budget cycle.

The rate increases were prompted by a 2015 decision of the Oregon Supreme Court, which ruled that lawmakers could not make retroactive reductions in cost-of-living payments to PERS retirees. The decision negated most of the savings projected in 2013 legislation.

The proposed shifts in the county budget, if adopted by the budget committee, would reduce general-fund contingency from 5 percent ($8 million target) to 4.3 percent, and the general-fund reserve from 10 percent ($12 million target) to 9.4 percent.

Krupp said if property taxes exceed estimates, restoring money to the two funds should take priority over new programs.

Once the budget committee approves a budget, county commissioners can make small adjustments before formal approval, which usually occurs before July 1.

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Clackamas County budget message from Administrator Don Krupp:

www.clackamas.us/budget/documents/budgetmessage.pdf