Revenue is up in Oregon, but challenges lay ahead

Kelly J. Kaczala

        Oregon City Administrator Mike Beazley recently gave an update on the state of the city that was a mix of good news and bad news.
        “Our revenue continues to be strong for us this year,” said Beazley. “We knew this year would be strong. Our revenue goes up and down not so much with the economy as it does with projects that are with major industrial employers. We’re probably running $3.5 million up from where we were last year at this time. So the good news is, it’s coming in as well as we had hoped.”
        He was also upbeat on employee health care.
        “In an inflationary time when people are seeing costs go up, we’re spending less on workforce health care with a good, robust plan. We haven’t reduced the plan. We worked on the shape of it. We’re probably spending a good $500,000 to $600,000 less than we had expected,” he said.
        The bad news: “We continue to battle cyberattacks,” said Beazley. “Oregon is out about $350,000 to $400,000 so far this year on an attack we had earlier this year. At the end of the day, we hope we’re out zero when we go through our insurance efforts. It was a spear phishing effort. We continue to work through the investigation and insurance claim process. This is a case where pirates might have embed themselves in the servers of vendors. In those cases, they have access to communications between the city and the vendors. If policy had been followed, it would not have happened. But we should have better policies if a simple mistake could allow that to happen. Finance has changed our practice. I know of other local governments that had the exact same thing happen. I know of a local bank that was getting attacked the same way.”
        The city is working with the FBI, he added.
        “It could well be toward the end of the year before we get final insurance,” said Beazley. 
        Beazley also noted the challenges faced by the city as it deals with inflation.
        “Projects are all costing more than what we budgeted for,” he said. “Council is going to have to be dealing with this as we go toward the end of the year. We budgeted rationally and fairly conservatively. But we’re going to have some projects that go up in costs. It’s just the way it is. Bids are coming in higher. We’re carefully looking at our budget as we go along.”
        A longer term issue, he said, is trying to find enough people to recruit into the workforce as employees retire.
        “This is a challenge for all employers, governments especially, because it’s harder for us to cut back. We’re not as good at it. But we’re going to have five to six more years in a row where we have more people leaving the workforce than joining it. It takes about 2.1 births per 1,000 to keep a population stable. In the U.S., our birthrate is 1.6 per 1,000. That math doesn’t work. Once we wash the Baby Boomers out of the system, we’ll have some equilibrium for a while. Then it will take another dip. The private sector is making changes by having fewer workers. It’s harder for us to do that, but there will be pressure to do that. So we’re challenging each department head. I’ve talked to the bargaining unit leadership. We’ve got to find a way to be aware of this. In some cases, we literally have no applicants for positions. Do we lower standards, or do we have fewer people? After I’m gone, this council will have to deal with this. We’ve met with cities in the area a couple of weeks ago and the solution is not to cannibalize each other in the workforce. We’re going to be asking for more flexibility in allowing that sort of lateral movement. But that’s not a solution. There literally are not enough people to fill job vacancies. There’s 11 million job vacancies in the United States and 6 million applicants. And it’s going to be worse as more Baby Boomers retire. So we’re just going to have to be mindful of that.”


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