FISCAL CHALLENGES TO THE SUSTAINABILITY OF OREGON'S CITIES Providing Basic Services in “Your City”

Services Provided  Cost of Basic Services  Funding Sources Financial Outlook  Community Distress Signals  Challenges  Trends "Your City" – Month 20082

We Are Not Alone – Statewide Trends Where are "Your City" Revenues and Expenses Headed? What Has "Your City" Done So Far? What Does the Future Hold for "Your City"? "Your City" – Month 20083

4

Services Not Receiving Property Tax Support  Economic Development  Streets  Code Enforcement  Municipal Court  Water  Sewer Property Tax Supported Services  Police  Fire  Parks  Library  Planning  Cemeteries  Airport "Your City" – Month 20085

Police  Total Police Budget$_______  ## Sworn Officers  ## Clerks & Support Staff  ## Patrol Cars  ## Dispatchers (or dispatch services)  Facilities  Dare, Neighborhood Watch, Community Policing  Etc. "Your City" – Month 20086

Parks  Total Parks Budget$_______  ## Personnel  ## Parks (# Acres)  Facilities  Equipment  Utilities  Capital Improvements & Maintenance  Etc. "Your City" – Month 20087

List Other Funds/Examples Here Fire Library Court Etc. "Your City" – Month 20088

Economic Development Streets Code Enforcement Municipal Court Water Sewer Etc. "Your City" – Month 20089

10 Funding for Basic Services does not include Utility Fees. Most utility funds are enterprise funds, meaning they operate like a business and must be self-supporting. Utility rates are not eligible to be used for purposes other than supporting the utility system. How Does "Your City" Pay for Services?

"Your City" – Month How Does "Your City" Use Property Taxes?

"Your City" – Month

"Your City" – Month

1. City heavily dependent on one economic sector 2. City has experienced disruption of a major employer 3. Partner organizations in community having economic trouble (county, school districts, etc.) 4. A number of city’s businesses and industries having economic difficulty 5. City has limited economic development options "Your City" – Month Check indicates "Your City" has experienced distress signal

6. City has a fast-growing population without off- setting revenue growth 7. City is heavily dependent on property taxes (more than 50%) 8. More than 1% of property taxes lost due to Measure 5 tax limits (compression) 9. Limited growth in assessed value (less than 3%) 10. Expenses exceed current revenues in one or more funds "Your City" – Month 2008 Check indicates "Your City" has experienced distress signal 15

11. Declining unrestricted fund balance 12. City has developed alternative revenue sources (little or nothing left in the “bag of tricks”) 13. Discretionary revenues aren’t keeping pace with general government expenses 14. Limited capital investment in new city facilities, equipment & deferred maintenance 15. City is providing or considering provision of traditional city services via special districts "Your City" – Month Check indicates "Your City" has experienced distress signal

1-3 Signals Checked Provides a good opportunity to attach specific problems, seek targeted resources 4-7 Signals Checked Growing distress; calls for long-range financial planning, identification of service impacts if no change is forthcoming, identification of new internal and external resources to help the city, communication with citizens "Your City" – Month

8-12 Signals Checked Significant distress; requires multi-faceted approach on variety of fronts and strong communication with citizens about the potential effects on services Signals Checked Serious distress; requires significant external resources, community leadership and citizen involvement to resolve "Your City" – Month

Measure 5 Tax Limitations  "Your City" lost $_______ due to Measure 5 compression during FY Measures 47/50 Tax Limitations  "Your City" has averaged a(n) __% annual increase in assessed value during the last 10 years  Tax limitations compounded by lack of regulatory compliance costs "Your City" – Month

"Your City" – Month Providing services to keep up with growth (this bullet to be removed if no growth) State budget cuts Overall costs for “Your City” have increased by __% during the last 10 years  Health, Property, Liability, Workers Comp. Insurance  PERS  Utility costs  Fuel

"Your City" – Month Difference between current revenues and expenses balanced by using reserves. Rising Costs and Unstable Resources

"Your City" Now Providing Services Cut by Others  School Security  Swim Team  Elementary and Middle School Sports Programs  Etc. "Your City" – Month

"Your City" – Month Health Insurance Increases Exceed Inflation

Drawdown of Reserves – Nothing Left for a Rainy Day "Your City" – Month

"Your City" Has Reduced Capital Spending – Deferring Maintenance Leads to Higher Costs Down the Road "Your City" – Month

"Your City" Population as Compared to Statewide Population Change from 1997 to 2007 "Your City" – Month

Highway Fund Revenues are Declining "Your City" – Month

Revenue Losses Due to Ballot Measure 5 Compression "Your City" – Month

"Your City" Revenue Growth Lags Behind Statewide Average "Your City" – Month

"Your City" – Month

Since 1995, property tax revenues per capita have remained flat or have decreased in most communities (inflation adjusted) 152 cities are in compression today  Up from 147 previously In , over $16 million was lost due to compression "Your City" – Month

General fund/property tax revenues are decreasing as a share of all city revenues Capital funding has generally decreased as a percent of total expenditures Ending general fund balances declined in many cities since the 1990’s Payroll costs for insurance and retirement have increased faster than inflation throughout the state "Your City" – Month

89% of 2007 survey respondents said they have felt, or will soon feel, the effects of Measure 5 & Measure 50 (77% in 2001 survey) 60% of respondents said property tax limits have already negatively affected city revenues and core services 54% of respondents said they expect to experience deteriorating financial conditions Only 38% of cities said they were better off financially in 2007 than a year earlier "Your City" – Month

"Your City" – Month * Compares Oregon with results of a survey conducted in April-June 2007 by the National League of Cities of 359 cities.

"Your City" – Month Cities Increase Was Less Than 3% Cities Assessed Value Declined

"Your City" – Month Cities Losing Less Than 1% of Property Taxes Cities Losing Less Than 1-5% of Property Taxes Cities Losing More Than 5% of Property Taxes

"Your City" – Month

Public expectations for services continues to grow: faster, better, more Pension/health care costs continue to increase State/Federal mandates, especially environmental, will impact the cost of regulatory compliance "Your City" – Month

Other uncontrollable costs will impact city finances:  Energy, including fuel  Property/liability insurance  Litigation  Natural disasters  Binding arbitration for public safety and other employee bargaining units  Unquantifiable expenses related to homeland security and terrorism response "Your City" – Month

Impacts of Measures 5, 47 and 50 will continue to limit property tax revenues Inflation and population will outpace gas taxes End of COPS grant funding for some cities Economic recovery will be slow "Your City" – Month

Other revenue sources such as State Shared Revenues, Timber Receipts, Franchise Authority, Investment Income, etc. will decrease or remain stagnant SDC’s will be inadequate to cover the cost of growth "Your City" – Month

"Your City" – Month

Switched Health Insurance Providers Annual Savings: $ ____ Energy Conservation Measures Annual Savings: $ ____ Joined Local Purchasing Pool Annual Savings: $ ____ "Your City" – Month

Reduced frequency of parks maintenance  Annual Savings: $ ____ Contracted economic development activities out  Savings: $ ____ Etc. "Your City" – Month

"Your City" – Month

Service Cuts  Closure of fire station - 5 fire fighters  Elimination of after school sports programs  No improvements to Main St. intersection  Deferred maintenance to community center Local option levy for ______ "Your City" – Month

Street Utility Fee Business License Tax Special Service District Community prioritization of city services (Corvallis model) "Your City" – Month

"Your City" – Month

Contact City Hall "Your City" #1 Main Street "Your City", Oregon Telephone: (###)###-#### Fax: (###)###-#### Website: "Your City" – Month