Jacksonville Review – June 2024
Editor’s Note: In preparation to adopt the next city budget in June, the following Budget Message was prepared by staff and presented to the full Budget Committee for review at its May 9 meeting. The letter outlines includes commentary from staff and draws attention to areas of concern. The Budget Committee is comprised of the full City Council and community volunteers Larry Smith, Eric Rogers, Dane Johnson, Diana Crabtree Green, Linda Graham, Brian Barr and Laurie McKenzie-Carter. A full copy of the entire budget document may be found online at the city website www.jacksonvilleor.us.
Mayor Donna Bowen, Councilors and Budget Committee Members and Citizens:
This year you will see a completely reformatted budget document for FY 2024-2025. You will now see the description for each line item in the far-left column followed by historical data, representing actuals instead of the budgeted amount for FY 2021-2022 and 2022-2023. The amounts shown in the column for FY 2023-2024 is the adopted budget amount, however the beginning cash fund balance is the actual amount based on the previous year audit. The next three columns are budget amounts for FY 2024- 2025 starting with the amount proposed by Budget Officer. In the far-right column is a projected budget for FY 2025-2026. Many municipalities are now budgeting biennial budgets, and although we have not created this document as a biennial budget for this coming fiscal year, we did want to show how a biennial budget might function, as well as the projection for the following year. We are approaching the end of the FY 2023-2024 budget year and are presenting the proposed budget for FY 2024-2025. Since this process begins early in the spring, the final results of FY 2023-2024 and their impact on FY 2024-2025 in terms of cash and working capital carryovers are more uncertain, particularly for those operations that are seasonal (Streets, Park, Water etc.). This budget has been prepared on a basis consistent with prior years on a modified accrual basis of accounting and the legal requirements of Oregon Local Budget Law for all Funds. No new Funds have been created. There have been no fundamental changes in the city’s financial policies from last year. FY 2023-2024 saw several challenges, which will continue into FY 2024-2025. Among them are: • Providing essential public safety services, in the face of staffing issues, rising costs and insufficient revenues. • Insurance and PERS rates continue to increase. Overall this budget reflects the same types of activities and programs as in prior years. First, here are some comments on some general trends in the finances of the City: Revenues We do not anticipate any significant new types of revenue in FY 2024-2025. Revenues in the General Fund are expected to remain essentially flat in FY 2024-2025. We expect an increase of about 3% in property taxes based on anticipated increases in assessed value. State Shared Revenues, such as OLCC Tax and Highway Tax, are estimated to increase slightly. In the Water fund, revenue will increase per the ordinance in 2017, which raises the base water rate by $1 each year, in July. Page 11 As staff has stated before, the General Fund is the only Fund within the City Budget that can support other Funds; and the main source of revenue for the General Fund is property taxes. Therefore, we are continuing the transfers to other funds to help supplement operations. The transfer to the Police Protection Fund, to help with proposed operations relating to Personal Services, remains at the increased amount of $350,000 from last year. Personnel Expenses Wages are up an average of 8% overall from a wage adjustment and step increases dictated by the terms of the collective bargaining agreement (CBA) under which the City operates. Of course, when wages rise, all costs based on wages increase (payroll taxes, PERS, etc.). Health insurance rates increased in this current fiscal year and we have budgeted for a potential 3% increase in January 2025. Workers’ compensation rates are expected to increase slightly. PERS rates increased by about 6.5% on July 1, 2023, based on the PERS Actuarial. We have continued funds budgeted for temporary firefighters during the summer months, which is at the highest risk for wildfires. Materials & Services Materials and services budget amounts have increased slightly. Our department heads have done an excellent job controlling materials and services expenses in many categories in FY 2023-2024. Their frugal habits will extend into FY 2024-2025, with their budgets reflecting this. Contract Services for the Planning Department remain the same as we continue to work through the revisions of the Land Use Codes through CCI. We also continue to carry a budget item for Buildable Lands Analysis / UGB Analysis as we begin working on the revised look at our building and lands inventory through the UGB TAC (technical advisory committee). Debt Service Debt service costs will remain similar to the prior year as no new debt was incurred. • The Safe Drinking Water Revolving Loan repayment began in December 2021, which is $60,108 per year. • The GO Refunding Bond Series 2012 will be paid off in fiscal year 2025-2026. • The 2019 Urban Renewal loan was paid off in fiscal year 2023-2024. As we begin to look at the next Urban Renewal Projects, we have budgeted for an Intergovernmental Loan between the General Fund and Urban Renewal to fund those projects. Capital Outlays The City is also looking at other ways to do additional Water Master Plan capital projects and is continuing to build reserves for this purpose. Projects include replacing the water tank at Britt reservoir and also a lead service line study, which is required by the state. We also need to GIS our water system utilities to have on a CAD program. An inventory of the need for upgrades on our streets will be started as well as the process of overlaying the streets requiring maintenance. Page 12 Tourism Activities Tourism activities are a source of business for Jacksonville, we continue to work on ways to enhance our tourism and the historical element that Jacksonville provides, with the addition of a museum in the form of both a walking tour and brick & mortar museum. Admission Tax comes primarily from Britt Festivals. Per Resolution, the Admission Tax for Britt is capped at $70,000. Transient Lodging Tax revenue was lower in fiscal year 2023-2024, therefore we continue to budget conservatively for revenue in this area. Public Safety The costs of providing public safety services continue to be the major financial issue for the City. This budget has been prepared based on operating as in past years, providing full-time police and fire departments. Staff presented an overview of the financial picture of a levy vs. surcharge to the Budget Committee. The Fire Protection Surcharge will increase an additional $1 per month in FY 2024-2025 and in FY 2025-2026 per Ordinance No. 02022-002, which sustains the Fire Department In addition, Fire Chief Painter has successfully obtained several grants, which will be utilized as of now to offset budget expenditures. The Police Protection Surcharge remains at $35.00 per month per unit, which was increased in 2023. Summary: This budget has been prepared on the same basis as the prior year and assumes the same scope of operations in order to start the discussion, but it introduces the possible courses of action needed to approach a truly balanced budget. Staff began this budget process with a review of the financial analysis for all departments as well as a projection into the following year. Mayor Bowen and the Council continue to have Council Work Sessions at the second meeting of each month and have been working through various identified goals. We would like to thank the department heads for their excellent efforts to manage their prospective budgets. We also want to thank the many volunteers who selflessly commit their time as City Councilors, in citizen committees, and individuals that serve the city so well. Finally, we want to thank each Budget Committee member for the time you will spend understanding, molding, and adopting this budget.