Ontario officials review city finances
Meeting yields few new answers
By Katie Pizza
Argus Observer
Monday, December 15, 2008 10:16 AM PST
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| Georgiane Waterman, 83, Ontario, swims at the Aquatic Center Friday morning. The center was a point of discussion at Ontario’s budget meeting, Thursday afternoon, with City Manager Henry Lawrence calling the facility inadequate. |
Ontario — Ontario City Manager Henry Lawrence and Ontario Finance Director Rachel Hopper gave budget committee members, revenue committee members and city officials a closer look at a draft of the city’s financial forecast through 2017 at an Ontario budget meeting Thursday.
This forecast, Lawrence said at the start of the meeting, focused mainly on the city’s general fund and did not include input from other members of city staff or the City Council.
“We don’t have any input from anyone but two people,” Lawrence said.
He also said the outlook, which was billed as a 10-year forecast, really only covered about eight to nine-and-a-half years, and it was built upon a lot of assumptions.
Lawrence said the information he presented was not going to be new to anyone in the room who spent a great deal of time with the budget. In a spreadsheet, he showed the beginning general fund balance decreasing by $300,000 a year from the 2008-2009 fiscal year until the 2013-2014 fiscal year, when that number is reduced to a $200,000 annual decrease. This change, Hopper said, is because the city will have paid off the irrigation loan for the golf course in 2012.
Lawrence also said the forecast was based on revenue assumptions, such as a 1 percent property tax increase per year. Currently, Ontario residents pay $13.2261 per $1,000 of assessed value, with the city receiving 36 percent of that money. Other recipients include the Ontario School District (30 percent), Malheur County (20 percent), Treasure Valley Community College (9 percent), Malheur Educational Service District (2 percent) and the Malheur County Jail Bond (2 percent). He also referred to property tax rates for other Oregon cities such as Nyssa, Vale, Burns, Baker City, La Grande and Pendleton. Burns was the only one with property taxes lower than Ontario’s — $4.64 to Ontario’s $4.83 per $1,000 for the city rate.
However, Ontario Budget Committee member Ralph Poole said he did not believe it was fair to compare Ontario’s property tax rates with other cities because of the increased number of police calls the city has to fund “by virtue of our retail center.”
Lawrence also said he and Hopper believed there would be a decrease in state shared revenues for the next two years because of the current economy with a 1 percent increase per year after that. Lawrence also showed a graph of the general fund resources versus expenses. As time progresses, the two lines get closer together, meeting in 2016-17.
“The bad news is we’re spending down our cash reserves,” he said. “But the good news is we’re not spending our cash reserves as fast as we thought we were.”
Lawrence also said the city is seeing a slowing of the annual “burn rate” of the cash reserves, based on issues such as the passage of the library district, which saves approximately $180,000 annually, and the golf debt service maturing in 2012, which will save $100,000 annually.
Lawrence said, however, this “spend down” cannot be sustained, but added the slow burn rate gives the city time to evaluate what level of service the public is willing to pay for.
“The economy is bad,” he said. “And the public is not in a great mood to give us new revenue.”
He said the city is currently aggressively pursuing economic development opportunities, but grant matching can often cause issues within city budgets.
Lawrence called the Aquatic Center facilities “not adequate,” a term he also used for the police department facilities. He also said the streets fund needs an infusion of millions of dollars.
Lawrence said there are two possible solutions to the city’s financial dilemma — increase revenue through additional fees and stable revenue sources or reduce expenses. He also presented a timeline of what the city has done in the past. In 2002-03, the city cut $300,000 in material/ supplies and capital. In 2003-04, the city cut half a million dollars by eliminating administrative, finance, police and legal staffing, as well as out-sourcing custodial and legal needs and cutting the transit bus. Lawrence said while city transit has been reintroduced, he believed it is running more efficiently, and the city only paid a flat fee for the current service.
He also pointed out a $360,000 worth of staffing cuts in 2004-05, as well as a $500,000 decrease in 2005-06, by moving all library staff to part time and merging the parks and cemetery supervisor position with that of the parks and recreation supervisor. The city also out-sourced building inspection services by combining the city’s needs with Fruitland’s. In 2006-07, the city further out-sourced by creating a technology contract with the 8C School District.
“Basically, I think we’ve cut to the bone,” Lawrence said.
At the end of the meeting, Lawrence said preparation for the next budget cycle begins in January.
At least one council member was succinct in his opinion about the meeting.
“I hate to break your heart, Henry,” Ontario City Councilman Dan Cummings said. “But you haven’t told me anything new.”
Homer wrote on Dec 29, 2008 2:07 PM: