Oregon council last Monday passed a budget for next year that is among the smallest ever due to the lingering economic recession.
Administrator Mike Beazley said there were three hearings on the budget in the last few weeks.
“The greatest challenge that Oregon faces is that our revenue has declined,” said Beazley. “This will be the smallest budget passed by the City of Oregon in the last five years. I can’t find a time, going back through the records, that we passed a budget that was smaller than the previous five years.”
The budget also forecasts the smallest revenue that will be collected by the city in the last six years, he said.
“Our budget is smaller and our revenue has declined,” he said.
“I thought at the beginning of 2010, when I came on board, that the city had a very responsible revenue projection. And it was responsible at the time. The fact is, for a community the size of Oregon, you’re going to have fairly large swings of revenue in a fairly short period of time. This was the most significant decline in revenue I have seen in Oregon looking back in the records,” he said.
Income tax revenue for the general fund is projected to be approximately $16.1 million, he said.
“We’re going to come in at $15,900,000, if we’re lucky. We’re about $1.5 million less in revenue than in 2009,” said Beazley.
On an upbeat note, it looks like December will be one of only two months that exceeded last year’s revenue, he added.
“People are talking about the recession coming to an end, we feel good about that,” he said.
“A couple of things make us optimistic about revenue for 2011,” he noted.
The sale of Sunoco Refinery, expected to close in February, he said, “will be good news for the city.”
“I do feel an upbeat sense of expanded work that will take place at the Sun site,” he said.
Beazley was also optimistic about the city’s future with BP-Husky Refinery.
“We obviously had a major announcement for one of our largest economic drivers at the BP site. They’re going to bring in new folks to do new work there that I think will benefit us. We’re going to increase our ability to communicate with BP on making sure that some of the smaller companies that come out of there can officially pay their city income taxes as well,” he said.
“On the revenue side, it’s been a challenging year,” Beazley continued. “We’re expecting that to bounce back a little bit in 2011. The end of 2010 does indicate that. As we talk through our hearings, there’s not a lot of drama in this budget. It is a small contraction with attrition – a pull back on things like travel. We’re just trying to responsibly downsize a little bit – a kind of `wait and see’ mode. There’s no significant, major new projects that we’ve initiated this year. We’re in the middle of very important ones that have been on the drawing board for a while. We’re finishing up on our new water tower, our Big Ditch project, the Wheeling Street widening project, and we’re taking the first steps toward some new ditch work in the BP area. But nothing significant that’s new here.”
The public expects a high level of service, he said, “and I think this budget will provide it.”
“We think we can achieve that without filling some of the positions that have become vacant,” he said.
Beazley said the city has projected no wage increases for bargaining and non-bargaining employees for 2011.
“We do have a 2-percent increase that went into effect in the middle of 2010, which adds to costs. Essentially 1-percent of that cost is a growth for 2011. It adds about $120,000 of new wages for our current employees for the 2011 budget. But I would like zero to be the number that is our target at the bargaining table for our reopener. Obviously, as we get closer to that, we’ll brief elected leadership and get direction. In light of the current economy, we think that’s a responsible direction to go in,” he said.
Council voted unanimously for the budget, but Councilman Sandy Bihn said it was important to take a look at the year-end figures and revisit the capital improvement program in March.
“I personally do not think it’s a good idea to have both the operating budget and capital improvement budget passed at the end of the year before all the end of the year figures are in. Sometimes there’s more opportunity, sometimes it’s less,” she said.
Mayor Mike Seferian assured Bihn that the administration will often be looking at the figures.