CANNON BEACH - Putting together the city budget was a tough order this year, in light of rising costs and necessary capital improvements, according to city officials.
But the Cannon Beach Budget Committee has recommended approval of the proposed budget for 2004-05, with all funds totaling $12.1 million and a general fund of $3.4 million.
The proposed budget will increase about 13 percent over last year and the bulk of that is in capital outlay, City Manager Peggy Coats said.
"It was definitely a real tough one," she said. "It's status quo in terms of our personal services and materials and services, but we're entering the first year of our five-year capital improvement plan, which is going to have major changes for our wastewater treatment plant and other public works projects. Our expenditures are increasing because we're going into the first year of that."
The city has set aside approximately $3 million for capital projects, including upgrades to the city's wastewater treatment plant, road improvements and the purchase of land to create the Ecola Creek Forest Reserve.
The proposed budget includes utility rate increases of about 33 percent, because the city is "behind the curve" of where rate increases should be to pay for services. During the last rate review in 2002, the council agreed to increase rates 33 percent then and 33 percent in 2004. The city is continuing to follow that gradual increase, Coats said.
Staff have projected two to three percent modest growth in the city's key revenue sources of lodging and property taxes, which barely keeps pace with the rising cost of city operations, through the use of reserves and contingencies. But in the long run, the city will have to look at other ways of raising revenue sources as personnel costs continue to rise and health benefits increase in double digits over the next five years.
"It's not manageable as is and we'll have to do some planning around that," Coats said. "The fact that we're projecting flat revenues is a reflection of the economic situation in Oregon. Certainly, we hope that tourism will continue and that we'll continue to receive income as a result of that, but we're basically saying that we don't think much is going to change. We're being very conservative in the way we're projecting revenues."
To balance the budget, the city plans to use approximately $150,000 of its transient lodging reserve fund to cover operating and capital costs. That will leave a balance of approximately $335,000 to cover emergency and unexpected expenses. The room tax is expected to generate $1.58 million this budget cycle.
The city has 30 full-time-equivalent employees. Staff count the number of full-time and part-time employees, and calculate, based on the hours they work, how many full-time employees they would equal. The proposed budget includes a 3 percent cost-of-living increase, which may change once the city ratifies union contracts.
Non-represented employees who have not reached the top of their pay grade may get up to a five percent merit increase based on a positive performance review. Represented employees are eligible for five percent step increases up to the top of their pay grade as allowed by union contracts. The amount the city pays into PERS, the Public Employees Retirement System, is 13.3 percent, and it is anticipating an 18 to 20 percent increase in health insurance rates.
The proposed police budget is $919,883 which includes police, lifesaving and 9-1-1 dispatch. The city plans to purchase a $32,000 four-wheel drive patrol vehicle as part of its five-year vehicle replacement plan and a $5,000 all-terrain vehicle for lifeguard use.
The community programs budget of $224,038 supports the Haystack Rock Awareness Program, community grants and the city's contract with the Chamber of Commerce to run the visitor's information center.
"The council really wants to be able to give back to the community," Coats said. "I think it's definitely a priority for council, as long as we've got funds available. But they would be the first to go if we got in a really bad crunch."
The budget committee decided to eliminate the flower basket program from the budget, which cost the city about $12,700 last year. The city agreed to fund the program temporarily two years ago after the Chamber said it could not longer afford to do it. City staff have developed a volunteer program where merchants and property owners can adopt a flower basket.
City councilors will consider adoption of the approved 2004-05 budget with a public hearing at 7 p.m. June 29. A copy of the budget is available for public review at City Hall, 163 East Gower Street, or online at www.ci.cannon-beach.or.us.