The Start of FY12 Budget Process

The first meeting of the Citizen’s Budget Committee was Monday night. The Citizen Budget Committee is made up of the six elected Councilors, the Mayor, and seven citizen volunteers, and they will spend about 30 hours this Spring making sure the City’s budget meets the needs of the community.

The City Administrator and Administrative Services/ Finance Director presented a balanced budget of just over $94 million. Overall, the budget would fund City programs and activities at about the same level as last year. The City’s General Fund and Parks & Recreation Fund, which fund Police, Fire, Planning, Municipal Court, and Parks & Recreation are actually in better shape, financially speaking, than they have been since the Great Recession started in the Fall of 2008.

The proposed budget would reduce the property taxes used for operations by 1.6 cents per thousand. If the voters approve a General Obligation Bond levy to replace Fire Station 2 on May 17, the total tax rate in the next fiscal year will go up by about 10 cents per thousand from the current fiscal year.

Despite the relative health of the tax-supported funds, both the water and the wastewater utility funds are struggling financially. The proposed budget includes potential rate increases of 6% for electric rates, 5% for water rates, and 4% for sewer rates. The electric rates would go up in the Fall, and the water and sewer changes wouldn’t happen until May 2012. The Budget Committee will discuss water and sewer in more detail when the Public Works Department presents their budgets on May 4, 2011.

The proposed budget is about $4 million more than the previous year, for three main reasons – an increase in Oregon Public Employee Retirement System rates, a projected electric wholesale power rate increase from Bonneville Power Administration, and the federally funded Ashland Forest Resiliency Project. City union contracts, the possible construction of a replacement Fire Station on Ashland Street, and general inflation also have caused budgets to rise.

Each of the City Departments will present their portion of the budget to the committee in several meetings in the next few weeks. A schedule of these meetings can be found HERE. The meetings are open to the public and televised live on channel 9, Rogue Valley Public Television.

We’ll blog about this process in the coming weeks and we hope interested citizens will send their comments to stateofthecity@ashland.or.us.