Bend residents may face new taxes
As budget shortfall looms, officials seek revenue to pay for city services
Published: October 21. 2009 4:00AM PST
Faced with a growing budget gap to pay for police, fire, street maintenance and other basic city services, Bend officials have started talking about finding new revenue — including possibly asking voters for a tax increase sometime next year.
Discussions are still in the early stages, and the issue isn’t scheduled to go to the Bend City Council until December. But city officials said this week that they’re already crunching the numbers to see how much money will be needed to keep services running or what level of cuts will have to be made if the city doesn’t find a way to make up the difference between revenues and expenses over the next few years.
City Manager Eric King said officials are projecting the shortfall in the city’s general fund could top $12 million over the next five years, despite the belt-tightening that’s been going on since the start of the economic downturn.
Since December 2007, the city has made five rounds of cuts, eliminating more than 100 positions and trimming services, but King said it hasn’t fixed the budget crunch.
“We know it’s really bad timing to be in a position like this,” King said. “But we have to look at the long-term viability of the city and the level of service that is expected by the community and make sure everybody is well aware of the risks associated with not having those types of service levels people have been accustomed to and the cost of those services.”
The general fund, which is set at $78.7 million, or about 21 percent of the overall 2009-11 budget, helps pay for police and fire operations, code enforcement, public transit, accessibility work, street maintenance and other services. The police and fire budgets account for nearly 80 percent of the general fund budget.
Property taxes fall short
Finance Director Sonia Andrews said the city’s biggest financial hurdle is one it can’t do anything about — a permanent tax rate of $2.80 per $1,000 of assessed property value — for a city of 80,995. That’s lower than the rate for other cities of comparable size, she said.
Medford, with a population of 76,850, has a permanent rate of $5.29 per $1,000, while Beaverton, with 86,205 residents, charges $4.62 per $1,000, Andrews said.
“Part of the problem with Bend is that our property tax rate has never been sufficient to cover the basic services we need to provide,” Andrews said. “(A rate of) $2.80 has never been adequate, but we lived off of that $2.80 because we had phenomenal growth in our tax base, so that kind of bailed us out for the last five to seven years. But when the growth disappears, you’re faced with the reality of the $2.80 being inadequate to begin with.”
Andrews said the city’s projections for growth over the next five years are conservative, but without the kind of building boom that Bend experienced a few years ago, she said even a little growth wouldn’t be enough to make a difference.
Layoffs ahead?
King said it’s too soon to say how much money the city will need to raise over the next few years, but at the council’s financial strategy session earlier this month, he warned that the city could have to lay off about five firefighters and five police officers each year over the next five years without a new revenue source.
So far, both departments have avoided layoffs, but each has had to leave positions vacant and find other ways to trim expenses.
Police Chief Sandi Baxter said her department has 85 sworn officers, which puts the city’s service level at about 1.04 officers per 1,000 residents — short of the statewide average of 1.4 officers per 1,000 residents. Bend had 1.58 officers per 1,000 residents in 1994.
Baxter said she doesn’t necessarily want the city to hire more officers just to get up to the state average, but she said the department has already made all the cuts it can without compromising service.
With a smaller staff, the department has stopped responding in person to take reports on some minor crimes and scaled back some patrols, including the regular summer patrol in downtown Bend.
“There’s just so many efficiencies: to how we respond to calls, to the type of calls we respond to, to our shifting the assignments, the officer assignments, to looking at the department from top to bottom to look at every way to make ourselves more efficient,” Baxter said. “At some point ... we’re going to have to come to a point when there’s no responding to certain calls anymore.”
The Bend Fire Department has 73 positions, but four are currently unfilled, said Doug Koellermeier, the deputy chief of operations. The department runs three shifts each day and can only operate with a minimum of 18 firefighters per shift, for a total of 54, Koellermeier said.
When firefighters are out sick or on vacation — or if several calls come in at once — Koellermeier said the department doesn’t have much wiggle room, especially because it also provides ambulance service.
Looking for options
City Councilor Oran Teater said he’s not sold on the idea of a tax levy but is opposed to cutting public safety services. He said the city needs to find a way to make up the budget gap, but he’s not sure if voters will be willing to help make up the difference.
“Before we do that, I want to be doubly sure we’ve done everything we possibly can to trim our budget, everything, and I think we’ve gone a long way in that regard,” Teater said.
“Frankly, I don’t like it. I don’t think you raise taxes in the middle of a recession. That said, if we were to put something on the ballot, it may be next spring or a year from now, and by the time it hits the ballot, by the time it’s enacted, we may be coming out of this thing.”
If the council decides to send a tax levy to the ballot, King said it will likely take a long campaign to get voters to understand and back the idea.
In the meantime, he said he plans to keep looking for other ways to cut costs across the city. But he said it’s unlikely that more cuts will be enough to solve Bend’s budget woes.
“It’s a decision that’s in the works right now, and I wouldn’t say it’s definitive either way,” he said. “It’s something under consideration.”
Erin Golden can be reached at 541-617-7837 or at egolden@bendbulletin.com.
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