Oregon will see its budget revenue drop by $2 million in the next couple of years as a result of the continuing economic recession and cuts in the state budget. But not to worry. Through attrition, the city is confident it will keep expenses in check.

“We have a good cooperative relationship with our employees,” said City Administrator Mike Beazley. “We have to find ways to make sure we deliver excellent services with a smaller government. We can get smaller by not filling vacancies and being more efficient. It’s something the private and public sectors are going through together. It’s not a real surprise.”

The city last year had a general fund budget of $15.9 million, down from an average of $17.5 million in previous years. This year, the budget is expected to be somewhere in between those two numbers, said Beazley.

At the last Finance Committee meeting, there was discussion about the half year end budget, revenues and expenses.

“As we got to the mid-point of the year, as we look at our revenues and expenditures, we are tracking about as council has budgeted in terms of our revenue expectations, and a little bit under on the expenditure side,” said Beazley.

Due to changes in personal property taxes, the Local Government Fund, and estate taxes, there will be fewer dollars going into city coffers, Beazley told The Press last week.

Councilman James Seaman, chairman of the Finance Committee, said the city stands to lose nearly $2 million in revenue by the time the cuts are phased in by 2014.

“That is significant, but there are definite contingency plans by the administration that will compensate for these reductions,” said Seaman at a recent council meeting.

“Council, the mayor and the administration have responsibly built up a cash reserve so we can phase in our cutbacks over a two year period so we don’t have to lay anyone off,” said Beazley last week. “We can accomplish this without any real impact on services. That’s our goal. Changes from the state are permanent, but the downturn in the economy is temporary. So we have both of those things going at once.”

Another challenge is that Oregon, like other communities, is seeing lower returns on its investments in bonds and CDs, he said.

“We used to get a fairly good return on such investments. Now, as our residents who have investment portfolios are aware, they’re not returning much. The interest rates are low,” he said.

Helping to cushion the impact is the city’s $11 million reserve fund that is the envy of other governments struggling to make ends meet.

“We used some of that last year, and we’ll use a little bit of it for this year as well,” said Beazley. “The reason we built the reserve is so we can continue to smoothly deliver services during a time of economic downturn, which is what we got. We balance our budget using part of our operating cash. We don’t dip into just the reserve. We have essentially a carry-over within our general fund, which is used for what we need to get through the year.”

Northwood improves
The drop in revenues that caused steep budget cuts and layoffs in the last two years in Northwood has not plagued the city this year, according to Northwood Mayor Mark Stoner. In fact, revenue has begun to climb.

“Last year was not a banner year,” said Stoner last week. “Through June, we are up 19.9 percent, or $440,000 compared to last year. We’re still not up to the record highs we had a few years ago, but I’m still encouraged by the numbers so far.”

Among the signs that things are looking up: The city last month covered increased health care costs for city employees to the tune of $40,000, and council is looking at implementing a proposed $260,000 Advanced Life Support (ALS) system Stoner proposed last month that would guarantee a paramedic would respond to EMS calls.

The city is getting ready to put together next year’s budget, said Stoner, and department heads, which have had to do without for so long, are putting in their requests.

“The police chief is talking about getting a couple of part-time people, and the streets department needs new equipment,” said Stoner.

The city had cut four police officers during its budget crunch.

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