Committee trims city budget

Baker City’s Budget Committee recommends the city trim about $300,000 from the spending plan the city staff prepared for the fiscal year that starts July 1.

The committee’s budget — which was approved by a 9-3 vote on June 1 and now goes to the City Council for final adoption on June 22 — would leave unfilled two vacant positions in the police department and cut one job in economic and community development

“We tried as a budget committee to bring city expenditures back in line with revenues,” said Randy Daugherty, chairman of the Budget Committee and a former city councilor. “The city was planning on spending about $300,000 more than their revenues were.”

Daugherty contends the cuts are necessary to maintain the city’s reserve fund.

That fund contained about $2.3 million four years ago, but the proposed budget that City Manager Steve Bogart submitted to the committee would have pared the reserve to $686,000.

The budget the committee forwarded to the Council boosts the reserve to $905,000.

“This budget is the first step in bringing the city expenditures back in line with resources and re-establishing fiduciary responsibility,” Daugherty said.

The Budget Committee consists of the seven councilors (there are six now, since Andrew Bryan resigned May 28) and seven city residents appointed by the Council.

Of the six remaining councilors who have a vote on adopting the final budget June 22, four voted in favor of the pared down budget June 1, and two voted against the cuts.

The four councilors who endorsed the cuts are Dennis Dorrah, Aletha Bonebrake, Clair Button and Beverly Calder.

The two opposed are Sam Bass and Milo Pope.

Pope said he voted against the proposed budget because he doesn’t think the city should maintain as large of a cash reserve since that money might not be needed.

“There is no point to accumulating the reserve at this point,” Pope said. “This budget is not in trouble, and if problems develop next year, we can deal with that at that time.

“Our student enrollment is declining, our population is aging. We need to pick things up,” Pope said. “We’ve got some good people doing good things in economic development, as well as public safety. To lose good people and reduce public safety seems wrong.”

The committee-approved plan would trim $200,000 from the police department and $135,000 from economic and community development.

Bogart said those cuts would eliminate the economic developer position held by Gene Stackle, and preclude the city from filling two vacant positions in the police department.

No current police staff would be laid off, however.

Bogart said the Budget Committee did allocate an additional $10,000 for overtime pay that officers could incur as part of the shuffling likely to be required to cover all shifts.

The police department’s overall budget would drop from $1.6 million in the current fiscal year slightly more than $1.4 million.

The elimination of Stackle’s job would cut the economic and community development department’s budget from $264,000 to $159,000. However, Bogart said by cutting Stackle’s position, the city could be at risk of losing $136,000 in Baker County economic development funds as well, which could mean doom for the entire economic development department.

Mayor Dennis Dorrah said he and most Council members are aware of that possibility, and are OK with deferring area economic development activities back to Baker County, which ran the program prior to 2008.

The city’s overall total funds budget recommended by the budget committee comes to nearly $16.4 million, down from nearly $17 million for the current fiscal year.

The budget committee recommends a general fund budget of about $5.6 million, down from about $5.8 million this fiscal year.

Most of the revenue for the general fund comes from property taxes or from franchise fees paid by utilities.

Bogart said the cuts are actually deeper than they appear because the budget committee also recommends maintaining a reserve fund (unappropriated balance) of $905,000, which is $218,000 more than he proposed.

“The unappropriated funds is money that you really can’t touch during the budget year, except for a big natural disaster or something like that,” Bogart said.

Daugherty said the budget committee was committed to putting more money aside as a hedge against the possibility that salaries, health insurance and retirement benefits for city employees will rise faster than revenues next year.

Daugherty pointed out that retirement benefits, namely the city’s bill for the Oregon Public Employees Retirement System (PERS), are projected to increase from 11.93 percent of the city’s total payroll as of June 30, 2011, to 18.16 percent on June 30, 2013.

That could boost the city’s annual PERS cost by about $750,000.

The city’s health insurance tab, meanwhile, is projected to rise from around $16,500 per year per employee to $18,400 per year, Daugherty said.

“City employees contribute zero to PERS and pay just 10 percent towards their health insurance premiums,” he said.

Despite the cuts, Daugherty said the committee’s recommended budget is by no means bare-bones.

“Everybody got their raises. All of the union employees got their 2- to 4-percent raises, and it includes some raises for non-represented employees too,” Daugherty said. “There’s ways to manage it so there’s no reductions in force.”

The pay hikes for union workers are guaranteed, as the increases were negotiated in 2008 as part of the unions’ five-year contracts that continue until June 30, 2013.

Daugherty said the budget committee wouldn’t have needed to cut any positions, including the two vacant jobs in the police department, if city employees paid their required 6 percent PERS contribution and would either pick up a larger percentage of health insurance costs or agree to a less expensive health insurance plan.

The city agreed many years ago to pay employees’ 6-percent PERS contribution in exchange for other financial concessions.

Other general fund cuts by department included a $40,000 cut in the planning department to reflect the termination of part-time contract planning services provided by Don Chance.

Daugherty said the $80,000 left in the planning budget covers the cost of one full-time assistant planner currently working under contract.

 “Chance came into the first budget committee meeting and said he didn’t have anything to do, and suggested we cut $40,000 for his services,” Daugherty said.

Some of the recommended budget reductions would be partially offset by increased spending recommended by the budget committee, including $55,000 added to cover employee termination costs, unemployment and overtime; and $45,000 added to the general administrative services budget at Bogart’s request.

“He (Bogart) didn’t want that $45,000 added back into police or community development, he wanted it in the administration budget to use as he sees fit, and that’s what we did,” Daugherty said.

In addition, the committee put another $45,000 in administrative services for a list of special projects: $7,000 for city contribution to the Kirkway Powder River bank stabilization project, $4,000 for Kirkway Park irrigation, $12,000 for airport improvement projects, $11,000 for cemetery roads, irrigation and headstone projects, and $11,000 earmarked for restroom renovation at Geiser-Pollman Park.

“The restrooms in the city park are an embarrassment. You ought to go look at them,” Daugherty said.

Daugherty said the recommended budget also adds $18,000 to the fire equipment reserve and bring the annual amount accumulated to around $30,000 a year, so there’s enough money accumulating over the next four or five years to buy a new ambulance.

Baker City Budget Basics

JOB CUTS

•  Leave unfilled the two vacant positions in the police department — no current employees laid off; approximately $200,000 in savings

•  One position (held by Gene Stackle) in economic and community development; approximately $100,000 in savings

•  Don Chance, the city’s planning director, has asked that his contract end; $40,000 in savings

NEW SPENDING

•  $11,000 for renovating restrooms at Geiser-Pollman Park

• $12,000 for airport improvements

• $11,000 for Mount Hope Cemetery roads, irrigation and headstones

• $7,000 to stabilization project on Kirkway Reach of the Powder River