Budget trouble: Albany gets harsh projections – Hasso Hering

HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Budget trouble: Albany gets harsh projections

Written July 20th, 2020 by Hasso Hering

Weeds along the Cox Creek path on July 19, an apparent sign of cutbacks in parks funding.

Albany residents might as well get ready to expect cutbacks in city programs and services over the next few years.

The city council Monday got the same message it has received several times since the winter of 2019: Expenses are growing faster than income. And now the coronavirus outbreak is making things worse.

The message came from Manager Peter Troedsson in the form of budget projections over the next five biennia, by the end of which, in 2029-31, Albany’s general fund might be around $88 million short, with projected expenses of $140 million and only $52 million coming in.

The margin of error in these projections is significant, Troedsson cautioned. Still,”inevitably services will have to be cut.”

There will have to be cutbacks in everything from parks and planning to libraries and code enforcement, and police and fire services. One program that might be spared is the city buses, which are paid for with state and federal funds.

As before, the council kicked around a few ideas, such as starting a business license and registration program, sharply increasing the penalties on people doing construction without permits, and adding a city utility charge to the monthly water and sewer bills. None of them likely would come close to closing the funding gap, projected at $5.4 million in 2021-23.

Councilors wanted to know if there was enough time for them to call an election on a utility fee before the November general election. Troedsson will come back to them on that question at the next council work session in two weeks.

Councilor Bessie Johnson used the occasion to plug her proposal to close the Carnegie Library downtown. People may complain they can’t walk to the library, she said, but she can’t walk to the library either.

The structural imbalance between city expenses and revenue has been a known problem for a long time. But now there’s the virus. As Troedsson put it, “The pandemic has made an already serious situation even worse.”

Expect to hear more about this before, eventually, some Albany city programs and services will either slow down or be cut. (hh)

Peter Troedsson goes over projections in this screenshot of Monday’s virtual council work session.



9 responses to “Budget trouble: Albany gets harsh projections”

  1. Bill McLagan says:

    The weedy path reminds me that there are usually more than one way to do a thing. In this case we can rely on city “services” to maintain the path (at budget expense) or we can do it ourselves. There are plenty of retired people with energy left over, who are already being paid (Social Security), who would be willing to “own” that path.

    Something like that has been happening in Millersburg, where I live, with trash on the roadsides. A number of people have “owned” that issue and are de-trashing the roads on a regular basis.

    This is an opportunity for “ground level” political action — taking care of our own living spaces.

  2. Anon says:

    The CARA spending does not square with the financial reality the city finds itself in.

    • Johnny Scot Van Ras says:

      AMEN! I first met Councilor Konopa over 30 years ago at a public meeting to discuss City of Albany budget crisis. Today, she is Mayor Konopa and, together with the entire City Council, the City of Albany has an even an even greater budget crisis. To my knowledge, only the City Manager has taken a (voluntary) pay cut.

      The following are my suggestions:

      1. FIRE the mayor and ALL members of the City Council.
      2. immediately terminate CARA which has, for years, sucked revenue from ALL city residents and Linn County.
      3. City Manager to develop new operating budgets that are in line with existing revenue.
      4. NO tax increases or fees of any kind. City of Albany leadership created this problem and it will not be paid for by city residents who are experiencing the same crisis at home.
      5. immediately Stop ALL payments to the State of Oregon. PERS is a state issue, not a City of Albany issue.

  3. Gordon L. Shadle says:

    I like the progressive solution for cities. Tax and fee everything – property, sales, and income.

    This snippet was buried in a long list of proposals.

    “Eliminate corporate tax breaks at the city level, particularly Tax Increment
    Financing and Business Improvement Districts.”

    That sounds a lot like CARA, eh?

    https://localprogress.org/wp-content/uploads/2013/09/Municipal-Revenue_CPD_040815.pdf

  4. Albany Library Supporter says:

    Right close the Carnegie and you’ve saved exactly 1% of your shortfall. How about this you decide how much to cut each department’s budget by and let the directors and board for those city services decide what cut backs to make.

    Also why is no one talking about the elephant in the room? Until PERS gets a good fix, or city employees switch to a different SUSTAINABLE retirement system, this is going to continue to be a problem plaguing our city.

    • JF says:

      Actually, the entire library budget is about 1.5% of the city budget. Closing the Carnegie might save a bit of money, but not much. Also, I can’t imagine anyone wanting to buy the building as a business.

  5. Mike quinn says:

    We are being played. This November if the outcome prevails things should change. New mayor will be a start. A little tid- bit. The recent levy supposed to garner 4.5 million in revenue. It’s going to be almost double that. So police and fire should be ok. We’re being gamed

    • Steven Reynolds says:

      The fixed rate stays the same, the amount will go up 3% per year compounded against the assessed value, that’s about 24 years to double (Rule of 72). In theory without compression we’ve doubled our taxable rates since M5 and M50 were implemented. The levies are not the big problem, they’re controlled by the RMV limits in M5, it’s the credit card/bond debt that does you in as it does damage to a lot of families with high debt loads. By “law” that has to be paid first before you can spend anything on services, we won’t even get into the potential of losing our bond rating or our accreditations that keep insurance rates down as pointed out by the city manager. Add in what the city manager is saying at a conservative 36% (hoping it’s only 36%) additional of every dollar spent on public sector wages having to be paid into PERS and it doesn’t take a lot to realize we’re in deep trouble.

      City council looked shell shocked after the presentation, it was tough to listen to, their first instinct seemed to be raise fees and one councilor wanted to shift the burden to additional property tax. I was curious when the subject of the utility fee came up, why the first question from council wasn’t how many residents are delinquent or on payment plans with their current water and sewer bills and what’s the projected delinquency if you start having bills in the $140 to $150 range?

      There’s no easy answers, the mayor like all council are doing the best they can, I believe that. Perhaps some of the city assets need to be sold off or transferred to other groups to run. The pool can be run by a group like the Elks or Kiwanis or a private company, some of the concerts by private promoters, etc. You’re going to have to transfer non essential services to the private sector and let the market work. That’s what companies do when they’re over extended, they sell off assets or as Senator McConnell suggested let states reorganize.The big goal is to get expenses back in balance with your local economy.

      • hj.anony1 says:

        aha HA! Moscow Mitch? He and the rest of the GOP are the Problem.

        There is plenty of $$ swashing around. Here is what needs to happen:

        5% wealth tax for those making over one million a year. (So call for 1%)
        No we need to go big here folks.

        Wall Street transaction fee. 1% for every trade made.

        Corporate profit tax of 10% Period.

        Legalize Cannabis at the federal level and tax it.

        5 year sunset on these and more. Re-evaluate two years in.
        2022 for those counting. All funds distributed to the states.
        Surely Guv Kate will fully fund our little “A” town.

        But ….Never happen with Moscow Mitch and the lying 45 GOP.

        One thing is for sure. We will be forever changed by this pandemic.
        Better or worse… Stay healthy.

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