ONTARIO — During the first Ontario City Council meeting of the new budget year on Tuesday, City Manager Adam Brown explained that the city would not likely meet the projected revenue for the 2020-21 fiscal year, which ended on June 30 and that pattern was likely to repeat for the 2021-22 cycle, which began on July 1.
The overall shortfall is unknown at this time, as the city is still waiting to collect its payment for the final quarter of the fiscal year. However, Brown told the council that if it was similar to the third quarter, which was $627,000, they would be about $250,000 short for that fiscal year.
For the current fiscal year, the city projected $3 million, but Brown said he anticipates the city may see about $2.5 to $2.6 million instead. This was done during a post-budget forecast by the budget committee following the first two quarters of funding growing fast in the 2020-21 cycle.
With this new information in mind, Councilor Ken Hart noted that the shortfall for the current budget year may be between $400,000 and $500,000.
“I know we don’t spend all the money on day one, the first of July in a new budget year,” Hart said, however noted that over time “we all need to cut back.”
He noted that one big debt budgeted to be paid down with the expected marijuana revenue was the PERS liability, preferring to cut funding from other things. Hart asked Brown whether staff would make decisions regarding cuts.
Brown said he and staff would not, but that they would make recommendations and give the council options.
“You should probably start sooner than later,” Ontario Mayor Riley Hill said.
Brown said he would likely be able to bring something back to the table in September. He said that they would likely look at cuts for projects that are “stuck for one reason or another.” Brown gave the water trail as one example. The trail, which was moved from its proposed location on the Malheur River to the Snake River, still needs a safety study, he noted.
“We will try not to cut anything of high strategic priority to you guys,” Brown said.
“This might really be an event,” Councilor Ken Hart said, playing on an earlier clarification by City Engineer Paul Wood that in engineering terms, “an event” refers to a “contingency” or the amount added to an estimate to allow for certain conditions.
At the top of the meeting, Hill said his understanding is not that the city overshot its budget, but that sales overall have declined. While sales have trended upward in the state and county year after year since 2017, the total sales during the city’s 2020-21 fiscal year for Malheur County have not specifically declined, but they do show more of a yo-yo pattern than in past years.
According to data provided by the Oregon Liquor Control Commission, there were $8.593 million in sales in July of 2020, which steadily dropped through September, when the total sales were $8.311 million. Another surge came in October at $8.682 million, but this dropped off again in November to $8.025 million. In December sales climbed to $8.582 million, and still climbed in January to $9.457 million. Then, it quickly tapered off in February to $7.981. In March, Malheur County saw it’s highest ever sales at $10.368 million. This has steadily declined since then, to $9.916 million in April, $9.638 million in May and $8.774 million in June.