The City of Oregon took in considerably less revenue last year than the year before, according Administrator Mike Beazley, who gave an end of the year financial assessment to city council at a meeting on Jan. 10.
“Our revenues came in about $1.6 million under budget,” he said. “Last year, we took in $17 million. This year, we took in $15,496,000.”
Income tax revenue fluctuated between $17.4 million and $17.6 million each year in 2007, 2008, and 2009, he added. “There was an overpayment by a large corporate taxpayer that got refunded the following year. This year, on the income tax side, we took in $15.9 million. That’s a fairly significant downturn,” he said.
“We did manage to control the impact on our revenues by really curtailing expenditures this year by $800,000. We ended up this year with a hit to the reserve of about $780,000. We expected it to be something north of a million, and it ended up coming in a couple hundred thousand dollars short of that.”
After the meeting, Beazley said the city has about $11 million in reserve.
“When we passed our budget a year ago, we had scheduled a hit to the reserve because of the economic downturn. We had budgeted a $1.1 million hit to the reserve, but ended up with less,” he said.
The city funds the reserve in two ways: carry over in the general fund, and by a separate fund designated specifically for the reserve.
“We actually deposited $1 million to the reserve, but in terms of net overall impact, we used about $750,000 of our cash,” he said.
“When you look at our expenditures for the year, the first thing to note is, the year-to-date expenditures for 2010 were about $17,765,000. Just so you don’t get sticker shock, that does include about $1.5 million in deposits to reserves,” he said to council.
Revenue for December was the strongest month of the year compared to the previous year, he said.
“Our December revenues came in very, very strong compared to December, 2009. It was the best month of the year-to-date comparison. We came in 10-percent over 2009, so we ended the year on the upbeat for November and December. But we finished the year about 9-percent short from 2009-2010 in income tax revenue,” said Beazley.
“Our other categories of revenue continue to be challenged as well - interest income in a climate where the feds are keeping the overnight lending rate close to zero, some of our higher interest rate instruments are expiring, and we’re ratcheting back our revenue on our investment income portfolio as well,” he said.
“As we get to the close of our books in the coming weeks, we’ll talk to the Finance Committee Chairman about scheduling a hearing at some point, perhaps in February, to kind of go through the close of the year, where we are for this year, and start the process to make sure we are on top of our expenditures to revenue for the year,” he said.
Councilman Sandy Bihn asked Beazley when he analyzes the income tax, if he could tell what the trends are with the payroll versus corporate income tax to determine a baseline and if the fluctuations are permanent.
“We’re 9-percent down across the board,” said Beazley. “We’re 7-percent down on payroll withholding. The biggest category that’s down is corporate income tax. But payroll is down as well.”
He said the matter could be discussed further in the committee meeting.
Also at the meeting, Bihn said the bike path on Bayshore Road was not getting plowed. “I’ve called the Street Department. It’s not getting done. We have a lot of people walking in the street, which isn’t always safe at this time of year,” she said.