Bend City Council Meeting: Budget, Work Session, and Regular Meeting - May 3, 2023
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Bend City Council Meeting: Budget, Work Session, and Regular Meeting - May 3, 2023
The City of Bend held a combined Budget Committee meeting, City Council Work Session, and Regular Meeting on May 3, 2023, starting at 5:00 PM. The meeting covered the proposed 2023-2025 biennial budget, solid waste franchise updates, legislative priorities, and a series of consent and regular agenda items including infrastructure projects, code amendments, and proclamations.
Consent Calendar
- Approved minutes from April 19, 2023 work session and regular session.
- Accepted the OLCC report, investment report, and monthly financials for March 2023.
- Authorized a two-year contract with CivicPlus, LLC for the SeeClickFix public service request platform, not to exceed $112,750.
Public Comments & Testimony
- Chuck Hemingway (county resident, service provider on Hunnell and Clausen) requested the city create a special district or overlay zone for the Hunnell/Clausen encampment, citing a petition from residents and support from private citizens. He urged the council to allow unhoused persons to live in dignity and community.
- Nicholas Schindler (Bend resident, service provider) supported the Hunnell/Clausen encampment, describing it as a productive neighborhood of people helping each other. He urged the council to make it a sanctioned camp.
- Michelle Hester (Bend resident) presented a petition supporting the encampment and asked the council to work together to find a solution.
- Eric Gardy (Prineville resident, works in Bend) criticized the city's camping code, arguing that 72-hour notices and sweeps prevent people from accessing services, exacerbate trauma, and invite legal scrutiny. He urged the council to repeal the code.
- James Tudor (Bend resident, known as “the coffee dude”) thanked the council for a timeout on enforcement and asked for a low-barrier encampment for 50–60 people, noting that the Hunnell/Clausen neighborhood consists of fine people who are not drug addicts or criminals.
Discussion Items
- Budget Committee (5:00 PM – 5:30 PM)
- City Manager Eric King presented the proposed 2023-2025 biennial budget, highlighting revenue pressures (property tax rate of $2.80 per $1,000 TAV, low compared to peers) and the structural challenge of 78% of general fund going to public safety. The five-year CIP includes $545 million in infrastructure investments, with $260 million in the biennium. The budget assumes $64 million in long-term debt issuance for the transportation bond. Fee increases of 10–30% for development services are proposed, along with a new transportation fee. Shelter operations rely on state and federal funding.
- Public hearing held on state shared revenues for FY2023-24: $3.7 million for general fund (police, fire, street maintenance) and $8.2 million for street operations from state gas tax. The hearing was closed, and the proposed uses were approved unanimously.
- Solid Waste Franchise Reporting (Work Session, ~5:30 PM)
- Representatives from Cascade Disposal (Waste Connections) and Republic Services presented on rising costs: labor (wage increases of ~11% over 365 days), fuel (doubled from 2021 to 2022), and recyclable commodities (negative $130/ton in 2022, sliding to negative $180/ton in Q1 2023). Disposal tip fees at the landfill are also rising due to the need to site a new landfill. The franchisees indicated they will request a rate increase; the city manager reported that parity has been reached between the two companies. Discussions are underway to potentially transfer franchise oversight to Deschutes County for consistency.
- Legislative Priorities (Work Session)
- Eric Kancler, city lobbyist, reported on capital requests: $10 million for the Hawthorne Overpass, $19 million for Outback water filtration, and $8 million for Southeast sewer improvements. An operational ask for shelter funding ($4 million range) is being pursued, with city staff heading to Salem for meetings. The Climate Friendly and Equitable Communities (CFEC) implementation funding is uncertain, with the city projecting $2.5–3 million in needs. Housing bills SB 1096/HB 3620 on UGB expansion and urban reserves are being shaped, and infrastructure bills HB 2980 and HB 2981 (revolving loan fund for affordable housing infrastructure) are seen as critical.
- Tree Regulation Update Advisory Committee (Item 6)
- Staff presented a resolution to create the Tree Regulation Update Advisory Committee (TRUAC) to propose amendments to city codes for tree preservation. The committee will have 11–15 members including one councilor and one planning commissioner as non-voting liaisons, plus representatives from the Human Rights and Equity Commission, Environmental Climate Committee, Affordable Housing, and Neighborhood Leadership Alliance, as well as arborists, developers, and community organizations. The council amended the resolution to broaden the community organization slots and make Bend Park & Recreation District an ex-officio member. The resolution was adopted.
- CDBG Consolidated Plan and Funding Awards (Item 7)
- The 2023-2027 Community Development Block Grant (CDBG) Consolidated Plan and 2023-2024 funding awards were approved. Awards include $300,000 for Simpson’s pre-development and $66,000 for down payment assistance, plus four public service programs. The public service cap limits total to ~$106,000; $594,000 in commercial and industrial construction tax funds were also awarded. The plan remains open for public comment through May 31.
- Wilson Avenue Corridor Project GMP Amendment (Item 8)
- Authorized a $10,577,015.85 guaranteed maximum price amendment to the CMGC contract with K&E Excavating for the western portion (2nd to 9th Street) of the Wilson Avenue Corridor Project. The project includes a new signal at 3rd and Wilson, two roundabouts, water and stormwater upgrades, and bike/pedestrian improvements. Inflation (15–25%) and scope expansion (additional $5–7 million) contributed to cost overruns.
- Awbrey Butte Distribution Improvements (Items 9, 10, 11)
- Three items approved: (9) A resolution authorizing eminent domain for a waterline easement if negotiations fail; (10) A $11,658,645.51 amendment to the design-build contract with K&E Excavating for the first construction package (including early procurement of 30-inch pipe); (11) A $420,409 amendment to the contract with Consor North America for construction management services. The project replaces aging water infrastructure (70-year-old 18-inch pipe) and includes synergies for future in-conduit hydro.
- Second Readings of Ordinances (Items 12, 13, 14)
- Item 12: Amended BMC 1.40.060 to change appeals of civil infraction decisions in Municipal Court. Approved unanimously.
- Item 13: Amended BMC 1.60.015 to remove the requirement that the City Manager submit emergency declarations to Deschutes County. Approved unanimously.
- Item 14: Amended BMC 1.50.040 to add a process for selling city-owned real property for affordable housing development. Approved unanimously.
Key Outcomes
- Budget Committee: Approved proposed uses of state shared revenues for FY2023-24. Next budget deliberations are set for May 22–23 at the Fire Training Center, with fee work session on June 7 and adoption on June 21.
- Solid Waste: Rate increase will be presented at the June 7 work session. Potential transition of franchise oversight to the county is under consideration.
- Legislative: City will continue to pursue capital requests, shelter funding, CFEC implementation funding, and housing/infrastructure state bills.
- Tree Committee: TRUAC established; applications due May 12; committee appointments to be confirmed June 7.
- CDBG: Five-year consolidated plan and funding awards approved.
- Wilson Avenue: GMP amendment approved; construction continues with 15th Street roundabout opening expected by end of next week.
- Awbrey Butte: Eminent domain authorized; construction contracts approved; public meeting set for May 9 at Westside Church.
- Ordinances: All three second readings passed unanimously.
- Council Reports: Councilors reported on committee updates, including fire levy campaign (2.8% ballot return as of May 3), core area planning, neighborhood association meetings, and enforcement efforts at Hunnell/Clausen encampment.
- City Manager's Report: Bond sale completed at 3.7% interest with AA+ rating; paving season underway; Newport Avenue paving expected to be complete in two weeks; Pettigrew septic-to-sewer project delayed to start after Wilson roundabout opens.
Meeting Transcript
As well during that budget deliberation meeting on uh May 22nd and 23rd. Um you will also today be holding a public hearing on possible uses of state shared revenue. That's a required public hearing per Oregon revised statutes. Uh this will be there'll be one here today, and there'll be another one in June when uh council adopts the budget. And um the there won't be um fees are included, of course. There were some of the premise and the assumption for uh our different fees that we charge out, um, are in the budget, but the budget committee itself doesn't approve the fees. Um, it's not a something that you will take action on. Um, you will be approving the budget as a whole, which includes the fees. The fees will be presented at a work session on June 7th to council, and then will actually be adopted with the formal budget along with formal budget uh at the June 21st meeting of council. So council actually takes that part of that action. Um we uh gave an update. Uh, I think many of you uh were able to participate in the update that we gave kind of mid-year around um uh around the budget, um, you know, kind of where we were at in our budget uh development process in March on March 1st of this year. Um so many of you heard just some of the um challenges that we have um around our budget this year, and so with that, I'm actually gonna um hand it over to Eric to talk about uh the budget message. Right. Hello, my name is Harry King. I'm the city manager of Benn, and it's my honor to present the proposed biannual budget for this week year 23 through 25 biennium. The budget reflects the city's commitment to providing essential services to the community within the council's guiding continues of equity, inclusive leadership, fiscal stewardship, good governance, and partnership. Development of the 2325 biannual budget reflects revenue pressures associated with modest revenue growth forecasts and headwinds associated with potentially slowing economy. Coupled with the pressures on expenses. There's an imbalance of money coming in versus money going out across most funds. Without additional revenue or funding increases, annual operating revenues are projected to increase 3.4 and 5.7 percent for each year of the biennium, which is not sufficient to keep up with the rising costs. Therefore, the proposed budget reflects funding increases that are needed to keep operations at current service levels. Many of the budget challenges relate to the city's low property tax rate. Our property taxes make up the majority of the general fund revenues. The city's permanent rate of two dollars and eighty cents per a thousand of tax assessed value or TAV is significantly less than our peer cities. And measures five and fifty approved by the voters in 19 in the 1990s, restrict the city's ability to increase our permit rate. Consistent with previous budgets, roughly 78 percent of the general fund is used to fund public safety, and this structural challenge directly impacts their ability to keep pace with the changing needs of our communities. As you know, there is a fire operations levy on the May 16th ballot. It's important to note if the measure if the fire levy measure passes, the general fund support for that for the fire department will not change. If there's been some misinformation on that, we'll be really clear. Our uh support uh in terms of general fund is not decreasing one bit. To mitigate the impact of funding increases on the community, the city plans to draw down its reserves and contingency levels. We've all we've also limited any increases in staffing during the biennium to areas where it's needed to keep pace with uh growth and uh and just other needs, primarily and infrastructure for service areas. So let's first talk about expenditures. And I should mention the full budget message is in the book. I'm not gonna go through the whole message in detail, just kind of some excerpts. So for expenditures, the proposed investments in infrastructure reflect the largest portion of our budget expenditures. Many of the projects outlined in the capital improvement program or CIP are complex multi-year projects involving improvements to water, water reclamation or sewer, stormwater, and transportation infrastructure. Increasing project costs driven by inflation coupled with a slowdown development activity, which provides some of the funding for infrastructure projects has necessitated that the city adjust the timing of projects in the five-year CIP to match funding available. The five-year CIP includes total infrastructure investments of 545 million with 260 million of that uh programmed in this biennium. To achieve the level of infrastructure infrastructure spending, the city will leverage fee and rate increases to ensure the community today and future generations equally share in paying for investment and replacement of aging infrastructure. The proposed budget also includes the issuance of 64 million in long-term debt or the second series of the general obligation bond, which has been a reviewed and prioritized by the transportation bond oversight committee. Of the 480 million in citywide operating, now I want to talk about revenues. So talk about expenditures, revenues of the 480 million of citywide operating revenues, about 136 million is in the city's general fund. The key revenue drivers include anticipated increases in tax assessed property value of 5% for each year of the biennium. These property taxes primarily fund police, fire, and street maintenance services. Additional revenue drivers include projected really flat tax room tax revenues in 23 and 20, and then in the next year of the biennium a 5% increase in tourism activity. So 2.5% for sewer, 3.8% for water, and 7% for stormwater to keep pace with existing infrastructure deficiencies and future needs. Based on the outcome of an external fee study, development revenues for building planning and private development engineering reflect respective fee increases. Although the printed budget includes proposed development fee ranges, fee increases ranging from 10 to 30%, as well as an increase of the long-range planning surcharge.
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