There's a million-dollar hole in Astoria's budget for the fiscal year that starts July 1. To help fill it, City Manager Paul Benoit proposes closing the Aquatic Center and laying off the four employees who work there.
Benoit is also asking all city employees, union and nonunion, to agree to a wage freeze with no cost-of-living adjustments for the next fiscal year. No new employees will be hired in any city department, he said, and he intends to reduce the premiums the city pays for employees' health insurance coverage by 20 to 25 percent by switching to a different insurance plan.
The manager was meeting with city employees Thursday and today to break the news and seek cooperation.
Benoit is also proposing a freeze on materials and supplies to keep the expenditure rates the same even though costs have increased. And he proposes to halt the City Hall renovation project as soon as the architect, who is already under contract, finishes the blueprints, instead of beginning the actual improvements to the building.
A deep recession is gripping the entire nation and Astoria has not been spared. Revenues are down and expenses are up, Benoit said, and there are very few options for making the cuts necessary to erase the million dollar shortfall and balance the budget. He said it's especially hard because Astoria began trimming expenses in the early 1990s. That's when citizen initiatives like ballot measure five limited property tax rates, which cut the city's general fund revenue by about 25 percent. It was followed by two other tax-cutting measures.
"So throughout the '90s we made adjustments to our personnel levels to make sure we could keep the doors open," Benoit said. For example, firefighters went from more than 20 in the 1980s and early 1990s to nine today, and the finance department went from 12 to nine employees. The same was true across the board in every department, he said, but the city continued to work well and provide essential services.
"But the challenge today, 2009 to 2010, is a lot of the reductions that could have been made, were made, and today there are much fewer options," Benoit said. It's a lean operation without surplus employees or surplus programs, he said, and it's a real challenge to cut a million dollars out of an approximately $7 million general fund. "That's a 12 percent cut. That's not small," Benoit said. "Looking at doing that, I can't find ways to reduce personnel without significantly impacting programs."
By closing the Aquatic Center, the city would save $408,000 in salaries and benefits for the three full-time employees - a supervisor, assistant supervisor and maintenance person - and a part-time head cashier, plus 45 part-time temporary employees who work as cashiers, lifeguards and swim instructors. Another substantial saving would be the cost of natural gas used to heat the pool. That expenditure is $130,000 in this year's budget. And it costs $60,000 for electricity.
Then there's the annual subsidy for the Aquatic Center, which in this year's budget amounts to $420,000. Benoit said it should come as no surprise the city can't afford that kind of subsidy in these hard economic times.
The Aquatic Center, which opened in June 1998, is part of the Parks and Community Services Department, headed by Kevin Beck, who said he is "disappointed and saddened" by the proposed budget cuts which, if adopted, would close the facility. He said the Aquatic Center serves a huge recreation need for the community and provides positive opportunities for youth and adults to have an enjoyable experience.
During spring break this week there were 230 youth and adults in the pool on rainy days. User groups include Tongue Point Job Corps, the U.S. Coast Guard, North Coast Swim Club, Astoria School District, and Clatsop Community College. In busy months, the facility provides jobs for 30 seasonal employees, including lifeguards. "We're one of the major businesses in the community that employ youth," Beck said.
When it was built, the City Council knew the Aquatic Center, like all similar facilities, would always need to be subsidized by the city. But the council believed the yearly subsidy would be $40,000 to $50,000. However, the figure soon rose to $100,000. By 2005, the Aquatic Center subsidy had ballooned to $240,000 a year and this year it topped out at $420,000.
In April, Benoit will present his draft budget to the city's budget committee, which consists of the city council and five other citizens. If the council accepts Benoit's proposal to close the Aquatic Center and approves the other reductions in his proposed budget, the savings would amount to approximately $980,000, he said, just shy of the million dollars needed to fill the budget gap.
"It's a horrible situation, but it's just a reality of the world we're living in right now," Benoit said. "We can't operate the city at a deficit. We can't go forward without an adequate fund balance to begin the new year. If the unions say no, then I'm going to have to look at staff reductions in departments that can't afford staff reductions. There's no choice."
Astoria is by no means the only city facing agonizing budget decisions.
Most cities in Oregon are in the same boat, according to Astoria's former city manager Dan Bartlett. Eugene has major budget shortfalls, so does Portland, and the manager of Multnomah County is "tearing his hair out," said Bartlett, who advises city and county administrators as part of the Oregon City/County Management Association's Range Rider Program.
"I've been up and down the Coast and in the Valley and many communities are seeing declines in revenues and increased costs of health insurance well beyond the consumer price index," Bartlett said. Forest revenues have tanked, he said, timber values have declined, mills are shutting down and statewide unemployment has reached nearly 10 percent. "Cities that have not seen economic crunches and have been pretty well off are seeing a situation they have not seen since the 1980s, the last significant recession," he said.
Bartlett calls Oregon's financial problems "systemic," a result of the way the state's local and state government tax systems are built. Cities in Oregon are reliant on property tax and the state relies on income tax, he said, but the third leg of the three-legged stool commonly used as a metaphor for tax systems is missing. That would be sales tax.
So even though people continue to buy some things even during bad times, Bartlett said, Oregon misses some of the benefit because the state has no sales tax to fall back on.