Oregon to rein in spending in next year’s budget

Kelly J. Kaczala

        As Oregon plans its budget for next year, City Administrator Mike Beazley expects to rein in spending due to the pandemic.
        “Obviously, everyone knows our revenue took a substantial hit,” said Beazley at a recent city council meeting. “Industries that have been important to our revenue have had some challenges. Our cash to cash income tax collection is down over $4 million to date.”
        As a result of COVID-19, the city held back on spending as revenues dropped, he said.
        “When the economy took some turns, we really reined in spending significantly.”
        The city received $14 million in revenue for the General Fund, he said.
        “But we spent only $13 million. So we actually have taken in more than we spent. The bad news is that some of that is timing and accounting. We budgeted to spend $22 million in the General Fund this year. And we’re thinking we’re going to end up spending $19 million. So we’re looking to under spend by a little over $3 million on the General Fund side,” he said.
        “The city is also benefiting from good returns on workers compensation. And some of the COVID-19 relief money from the federal government is also helping the city,” said Beazley.
        “We’re doing OK,” continued Beazley. “Our General Fund reserve will probably take somewhat of a hit this year. Until we get closer to the end, we won’t know exactly what that is,” he said. “Some of it is just the timing of project dollars and funds going out the door. We budgeted it and we plan to spend it. Our one account has sufficient reserve to afford that. We planned to spend more than we took in. The bad news, though, is instead of getting more projects done, we’re just getting less revenue. The city and council have been careful with our dollars over the years. We do anticipate challenges. We’re mindful that our major industries are being hit. We’re in regular conversations with them. In cutting back and pulling the reins in on spending, the mayor, administration and council have underspent by a good amount. We haven’t filled vacancies, we have fewer seasonal workers, omitted some of our projects.”
        The city will fill some vacancies in the police department, he said.
        “In general, we have a pretty good number of vacancies. We have a good number of retirements coming. We don’t think it’s very practical to get much smaller than we are right now. We’re looking to see if we can hold the line on where we are. If more people retire, we think we will be responsible filling those vacancies. But we’ll only do that in the context of the overall plan to be long term, sustainable budgeting. We think we’ll have that.”
        He is also confident in the workforce attrition rates.
        “If somehow we are wrong in our assessment, and things are worse than we think, we will have opportunities to make that up with other attrition. We feel good about the dollars we saved,” he said.
State, federal funds
        Councilman James Seaman asked if there would be any federal or state funds available after the election.
        “Could there be some support coming from state or federal that’s not so much directly related to COVID-19 procedures but from the tax loss that so many cities and states have lost because of low employment.
        “The dollars that are coming in, we can use in a way to help us along those lines. We felt we had completed negotiations to get something that would have benefited local governments about three different times. It disappeared at the last minute. We have an opportunity to get our voices heard. I’m not expecting a lot from the state, but from the feds,” said Beazley.
Hard hit
        Oregon has been particularly hit hard due to industries like BP-Husky Toledo Refinery and Toledo Refining Company.  
        “I don’t know of any other community that got hit as hard as we did because of the shape of our industries. Some of the industries that are important to us in Oregon are taking larger hits than others. Oil demand is back up to 90 percent of where it was in 2019, which is a big barometer for us. More people are driving. Demand for flights and air travel is closer to 50 percent. So those numbers affect us a lot in a community that has large industrial partners. We’ll continue to work with them and with Washington. I do expect something to pass, especially with the economic uncertainty. We think there will be some stimulus. Communities that are ready and put themselves in a position to have projects ready can benefit from stimulus dollars that come. I can assure you, Oregon will be ready should there be something out there.”


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