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.
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.