Some painful decisions await city's budget panel
Lake Oswego City Manager Alex McIntyre proposed a 2010-11 budget this week that slashes spending across departments while funneling millions into projects considered long-term investments in the city's economic health.
Next Monday, members of Lake Oswego's Citizen Budget Committee will begin fine-tuning the spending plan.
The good news?
Lake Oswego remains fiscally stable and has proven more resilient than many other local governments. And the city will continue to fund core public services as well as a number of one-time initiatives supporting community goals and aspirations, in addition to continuing work on its aging utility systems.
However, the city is not immune to challenges posed by the ongoing economic slump.
Officials are looking ahead to a major readjustment of citizens expectations, something the city manager calls the 'new normal.'
'We have a tendency to not really say no to our residents,' McIntyre said. 'We can't afford to do that anymore.'
The proposed budget for the next fiscal year, from July 2010 through June 2011, balances the costs of providing services with anticipated revenue.
Spending is projected at $76.3 million, about 8 percent higher than the prior year. But revenue has remained stagnant, forcing department heads to handle a potential $1 million shortfall.
The resulting service cuts will be obvious to many residents.
Eliminating staff at the city skate park will close the facility, resulting in projected savings of $47,000.
Staff will also be cut at the swim park, although the pool will remain open without lifeguards. Anticipated savings? $21,000.
The library's book purchase and replacement budget will drop by $50,000. The proposed budget also curbs $25,000 in funding for community grants.
In an effort to save money needed to update the city's comprehensive plan, staff will be reassigned to that project from the neighborhood planning program.
Shifting responsibilities, reducing overtime and some full-time positions in the fire and police departments could save as much as $300,000.
The plan also delays completing a council goal to redevelop the city Web site and design a new logo, previously estimated to cost $100,000.
'The question is how do we balance the quality of life of residents with the financial constraints of our organization?' McIntyre said.
There's no easy answer.
Money coming in from building, planning and engineering fees has yet to recover from last year's drop, a decline that caused the city to make adjustments in the past year, said Jordan Wheeler, city management analyst. Officials are forecasting only small increases in those areas in the coming year.
Revenue streams overall are not as robust as they were in the past, Lake Oswego Finance Director Ursula Euler said.
Property tax collections, which represent the bulk of the city's income, aren't growing as much as they did in past years. Money received through franchise agreements with companies like NW Natural and Allied Waste has lagged.
However, Euler added, 'It could be a lot worse.'
With an eye on a coming increase in its contribution to the state's Public Employee Retirement System, Lake Oswego is setting aside money in 2010-11 to soften the blow in the following fiscal year. That includes $600,000 spent now toward an estimated $1.6 million increase in future PERS contributions.
Officials are looking to the future in other areas as well.
A $1.5 million loan to TriMet to accelerate development of a streetcar line between Lake Oswego and Portland will be paid back with $300,000 in interest.
The city will spend $1.1 million on planning in Foothills, developing a framework for the 120-acre area's future redevelopment.
'It will pay off in the long run,' McIntyre said.
Despite some staff cuts, jobs will be added in a few departments, including an administrative position in planning and building services that will be funded through fees. Financing for another position supporting the city's new economic development team will come in part from the Lake Oswego Redevelopment Agency.
Short-term spending includes more than $1 million in one-time expenses for community or city council priorities, including the centennial celebration, the second phase of the Boones Ferry Refinement Plan in Lake Grove Village, a new 9-1-1, court and public safety facility plan and development work on a new indoor tennis building.
A $56 million capital budget covers public works projects, including $42 million for the Lake Oswego Interceptor Sewer and $7.8 million for the city's water supply partnership with Tigard.
The proposed budget now goes to the Citizen Budget Committee, which includes the seven city council members and seven citizens, who will meet for the first of at least three meetings at 6:30 p.m. Monday at the West End Building, 4101 Kruse Way.
The city council will consider the committee's recommendations in June.