The city of Eugene will have to trim at least $775,000 worth of existing services from next year’s budget, and possibly as much as $1.3 million, but city budget committee members aren’t sure yet where reductions will come.
The city has to cut $375,000 from its general fund due to a budget shortage. In addition, $400,000 will be re-allocated to increase the city’s Permit and Information Center budget. The center provides zoning information and issues building permits, and currently receives most of its funding from fees for the building permits.
The center currently doesn’t receive money from the city’s general fund.
City Councilor David Kelly said the increase to the Permit and Information Center will be included in next year’s budget “with much dismay by the city council,” because, with the current economic conditions decreasing permit purchases, the added revenue wouldn’t make enough of a difference.
The city manager’s office, which is required to present options for each year’s budget to the city’s budget committee, has also proposed increasing funding to four other programs, which could bring cuts to existing programs to $1.3 million.
Kelly and budget committee member Craig Wanichek said it’s too early to predict what city programs could have budget cuts. Kelly, however, said he’s totally opposed to a suggested 10 percent reduction in the Metro and Community Planning Department.
“They plan out the future of the city,” Kelly said. “We have less planners now than we did in 1990, when we were a smaller community, and I know how overburdened they are.”
The city manager’s office offered reduction options for all 39 departments receiving money from the city’s general fund.
Several factors resulted in the city’s need to trim $375,000 from its general fund.
First, Qwest Communications has refused to pay franchise fees to many Oregon cities this year, including $1.5 million owed to Eugene. Their refusal to pay comes after a Washington state court ruled last year that the company did not have to pay franchise fees to the city of Renton, Wash.
An Oregon state court recently ruled in favor of several Oregon cities, including Eugene, suing Qwest for refusing to pay the franchise fees. Qwest still might appeal, however, and for caution’s sake, the city is creating its budget as if Qwest will not have to pay.
Also, state Measure 50, which passed in 1997 and rolled back property tax rates, has resulted in less property tax revenue and caused long-term budget shortfalls in cities across the state.
Finally, nationwide economic conditions have resulted in lower overall property values, which in turn resulted in less state revenue from property taxes. The amount of taxes that property owners pay on their property is based on its assessed value.
Next year will be the first time in several years that Eugene’s operating costs will increase faster than revenues, city budget manager Kitty Murdoch said.
The city budget committee will hear a tentative budget proposal April 15, and that proposal will be available to the public. The budget committee will hold meetings every Monday from April 15 to May 6 at 5:30 p.m. in the city council chambers, and will listen to up to half an hour of public comment at its meetings.
The city council must approve a final city budget by July 1.
This year’s general fund is $113.4 million, and the total city budget is $326.2 million. Oregon law requires that all of its local governments operate with balanced yearly budgets.