A special meeting of the Eagle Point city council was held Feb. 3 to discuss needed budget reductions in the current budget.
City Administrator Dave Hussell explained that when the budget was prepared a year ago, the stock market was around 13000 (today it is in the 8000s) and the Inn at Eagle Point and its development was still going to be a significant addition to Eagle Point.
At the beginning of the current budget year, the general fund was reduced $500,000. The budget was based on 60 new homes, which Hussell says appears to still be on schedule.
Last week Hussell told the council another $233,577 needed to be cut from the general fund budget. No positions will be lost and every department was made aware of needed cuts prior to the council meeting.
A detailed list of reductions in each department was presented to the council.
The lack of construction is reflected in the revenue reduction in everything from franchise fees, to building permits and fees paid to planning. Reduction in interest rates and people not paying court fines are two additional sources of revenue that have been reduced.
Reductions will occur in each department and include a variety of items. The biggest reduction will occur in administration with just over $95,000 being cut. This includes $30,000 in professional services, which was primarily to be used for planning for city-owned downtown property and an audit of franchise fees. And $50,000 was cut from economic development.
The building official has been reduced to half-time until such time as development increases. He will work Monday, Tuesday and Thursday.
The other major reduction comes in the park department where additional plans for Harnish Information Center have been eliminated ($18,000), improving parking at Mattie Brown ($25,000) is gone and general park improvement is cut by $20,000.
Assisting the Eagle Point Community Association with $4,000 for flags and holiday decorations has been eliminated.
Although no money had been budgeted for the petunia baskets, that will not be in the upcoming budget, said Hussell. If the baskets are to be put up this year, the project will have to be funded as a community effort.
Hussell stressed the need to save as much as possible in the general fund and in contingency to have a cash balance to begin the year. New tax dollars don’t generally begin coming in until November, which means from July until November, there needs to be money to operate. And if those funds are short, the city could borrow from its Systems Development Charges (SDC) funds, but at a high rate of interest, which would actually put the city further behind.
There was some discussion about Oregon’s tax distribution process and the difference between real and assessed property value. Taxes are paid on assessed value. Eagle Point has a real market value of $925,571,509 but the assessed value is almost half that at $505,391,934. And with ballot measures approved several years ago by Oregon voters, each city has a frozen tax. Eagle Point’s tax is $2.4584 per $1,000 of assessed value.
The council was in agreement with the needed reductions and was most appreciative of the effort put into the process and for the detailed information provided to them.
By Nancy Leonard
Of the Independent