“The state of affairs that existed previously,” that is what the Latin term status quo ante literally means. Not only are the state of affairs that existed previously not working to achieve a financially sustainable budget, the status quo, keeping things the way they are presently don’t get us where we need to be either. Last month I presented the proposed FY 13-14
City of Corvallis budget message to the Budget Commission and in it, I made reference to difficult conversations that our community will need to have right away to have any chance of achieving a truly long term and financially sustainable budget.
Here is the reality we face in Corvallis today that makes having those difficult conversations all the more important:
• Slow growth in property tax revenue combined with the higher rate of growth in costs such as wages, insurance, power, and fuel will continue to cause challenges to the City’s long term financial sustainability.
• The 2011 Levy 02-74 expires June 30, 2014. With the expiration of the levy, this means that without renewal, the sustainable “green line” in the budget is once again projected to be negative for FY 14-15.
• Operating costs continue to increase even without built in cost of living adjustments or benefit increases for the majority of employees.
• Debt is projected to increase in FY 15-16 based on an FY 14-15 borrowing to build a Fire Training Drill Tower.
• Set-asides to grow the reserves to target levels set by the City Council continue through FY 15-16 and once we achieve the goal, unfunded liabilities need to be addressed.
• PERS rates are projected at the current rate through the end of FY 14-15; rates are projected to increase another 6% of payroll beginning July 1, 2015. Legislative action could change future rates and continue the uncertainty for City budgets.
• Moody’s has continued to leave the City on negative outlook; confirmed in 2012. Continuing the reserve policy adopted by the City Council and exercising fiscal discipline is essential to a better Moody’s rating in the coming years.
• Political will and additional action will be required to achieve and maintain stable operations of our City.
The Budget Commission and the City Council are continuing their commitment to a financially sustainable budget; however, as several Commissioners pointed out we may not be doing enough to get there anytime soon. It is very clear that over the last two years community members, partners, City staff, elected officials, and stakeholders have identified areas in our revenue and expense equation that we can agree needs fixing but the outcome of any changes to fix it may be overly risky so we do not act. Our City is in a transitional period where we recognize eventually change needs to occur and that openness to the potential that better solutions are emerging and need to be considered. As a community, we can’t simply decide against the status quo; action must be taken if it is to change. To that end, the City Council will hold a public hearing on June 3 at 7:30 pm to consider adoption of the budget. The meeting is at the Downtown Fire Station, and I encourage you to participate.
Special thanks to the citizen members of the Budget Commission, the City Council, and Chair Curtis Wright for their commitment and dedication to the process and for the thoughtful and measured approach they again exercised during their deliberation on the budget.
With summer rapidly approaching, remember to support our local community events. These events are vital to our local economy and contribute significantly to our quality of life in Corvallis.
Enjoy your summer!