Over the course of 3-1/2 hours of motions and deliberations Wednesday evening at City Hall, Philomath’s Budget Review Committee approved a package of budget cuts and adjustments that would allow the city to potentially reduce a proposed city services fee from $14 per month to $5 per month — with the entire amount directed toward police operations.
The committee also approved the city’s fiscal year 2026-27 budget totaling $34.9 million, along with the Urban Renewal Agency budget of $3.6 million and the city’s property tax rate. The tax rate of $5.3005 per $1,000 of assessed value — unchanged since 1995 — was approved unanimously by an 11-0 vote.
The budget and the reduced fee now advance to the full City Council for final action.
Mayor Christopher McMorran arrived at the meeting with a detailed list of proposed cuts designed to reduce or eliminate the city services fee, which had been opposed by many residents concerned about its impact on household budgets already strained by recent utility rate increases.
McMorran’s plan called for temporarily scaling back spending in areas such as travel and conferences, savings toward building renovations and public beautification programs — holding off until the city’s Urban Renewal Agency expires, which he said is expected near the end of 2028.
“I firmly believe that a $14 per month city services fee, on top of previously approved utility fee increases to pay for water, sewer, storm and street infrastructure, is simply too much to ask of our residents right now,” McMorran wrote in his proposal. “I am not doubting the merit or importance of the services that the city provides — but we need to do everything we possibly can to reduce costs before we ask for more from our community.”
The URA expiration, McMorran explained, would return an estimated $320,000 in additional property tax revenue annually to the city’s general fund. Urban Renewal Agencies are quasi-governmental bodies created under state law to stimulate economic development and address blight in designated areas. As property values rise within the district, the additional tax revenue generated is diverted to the URA rather than flowing to the city. When the plan expires, the full assessed value reverts to general taxation.
“This does hinge on the council committing to using Urban Renewal’s expiration to fund the general fund, rather than just renewing it one-for-one for a new Urban Renewal plan,” McMorran said. “Depending on where the general fund is near the end of 2028, we may have more development in town. Our general fund may have increased anyway and maybe there will be some wiggle room to do some sort of new Urban Renewal plan.”
The budget cuts
To reach the $5-per-month fee threshold, the committee needed to identify $259,200 in reductions. The approved package of line-item cuts included:
The committee approved the following line-item adjustments in various areas of the budget:
- Land, Building and Equipment fund — $91,620. Includes cuts to funds set aside for a future library expansion ($34,447), City Hall renovations ($1,880) and police department facility improvements ($55,293). Money for HVAC-related expenses was preserved.
- Administration — $7,275. Reductions of 50% in education and training ($3,150) and travel and meals ($3,625), along with vehicle repair and maintenance ($500).
- Building Permits — $1,250. Reductions of 50% in education and training ($500) and travel and meals ($750).
- Finance — $13,250. Reductions of 50% in education and training ($1,750), travel and meals ($1,500), and credit card fees ($10,000).
- Municipal Court — $1,625. Reductions of 50% in education and training ($750) and travel and meals ($875).
- City Council — $29,000. Cuts to community support funds ($2,000), the public art program ($5,000), education and training ($5,000), additional holiday décor ($2,500), tourist-related activities ($13,000) and travel and meals ($1,500).
- Streets — $22,000. A reduction in general fund transfers to the street fund.
- Parks — $1,500. Tree canopy project.
The package was completed when the committee agreed to move $91,680 from a “reserve for future expenditures” account — which had a total balance of $183,815 — into the general fund to help close the remaining gap.
“It doesn’t strip everything away … we’re still saving that $92,000 this year in that reserve for future expenditures,” said committee member Cody Valencia, who seconded the motion. “I think it’s a good balance of ‘hey, this is prudent to save but let’s start slow before we go fast.'”
The motion passed unanimously.
A related proposal by committee member Van Hunsaker to move the entire $183,815 reserve — which would have potentially eliminated the city services fee altogether — died when no second was offered.
Police budget debate
The most contentious portion of the meeting centered on whether the police department should absorb cuts along with other departments. While the committee approved cuts across several areas, the majority declined to reduce the police budget, rejecting multiple motions.
City Manager Chris Workman reminded the committee that any reductions to the police budget would run counter to direction the City Council had given staff — direction tied to ongoing contract negotiations with the police union, which he said he could not discuss publicly given the executive session context.
“We follow council direction, that’s what we’ve done, that’s what the budget shows and reflects,” Workman said. “Any changes to the budget from what was there will be in contrast to what the council directed staff to prepare.”
Finance Director Mike Murzynski vouched for the tightness of the police budget submitted by Chief Dave Gurski, noting the chief had already trimmed his budget by $50,000 compared to the prior year.
“That $60,000, it’s almost impossible to cover in his budget,” Murzynski said, referring to McMorran’s initially proposed police cuts. “It would be people, so I don’t recommend that one at all.”
When Andrade later moved to cut $30,000 from the police budget, Murzynski was even more emphatic.
“That’s crazy — his budget is the tightest budget we’ve ever had,” Murzynski said. “He’s the best chief I’ve ever worked with — he gives me money back. He’s not going to be able to give me anything.”
A motion to accept McMorran’s suggested $60,380 in police cuts failed on a 7-4 vote. Andrade’s motion to cut $30,000 from the police budget failed 9-2. A final Andrade motion to cut $4,000 — tied to roughly $16,800 budgeted for outreach, travel, meals and car washes — also failed, 8-3.
Councilor Brent Kaseman explained his reluctance to trim public safety funding.
“There are very few professions where you put your life on the line every day and protecting our community and keeping the community safe,” Kaseman said. “Within reason, I would always hesitate to say we’re reducing something that seems reasonable.”
Andrade, however, expressed discomfort with leaving one department untouched.
“I don’t know what to say besides money is tight,” she said. “We all know that and it sucks. … I don’t want people to lose their job and also, I don’t know what else we can do.”
Councilor Diane Crocker pushed back on the premise that all departments should face the same standard.
“They’re not all the same and I just don’t think that should be a push,” Crocker said.
Levy conversation
A separate thread of discussion involved whether the city should pursue a dedicated police levy rather than a city services fee. Valencia voiced support for putting the question to voters, a position echoed by committee chair Nichole Hasley in a written letter she shared with the group.
“As a voter, I would be far more comfortable supporting a dedicated police levy than a city service fee that flows into the general fund,” Hasley wrote. “General fund priorities can change over time. While today’s intent may be to support police wages, future councils could choose to reallocate those funds to other priorities. A dedicated levy provides transparency, accountability and assurance that the funds are being used for the purpose voters approved.”
McMorran suggested holding the police budget steady and pursuing a levy on the November ballot, which, if approved, would take effect in 2027. Workman was skeptical that the timeline was workable.
“Generally speaking, if you talk to anybody who’s run any type of campaign for a local option levy, to think that you’re going to do that in any short amount of time, you’re fooling yourself,” Workman said. “I mean, these things are a year or two out when they’re planned.”
He pointed to both the school district and fire district levies as examples of campaigns that required extensive groundwork.
“Those things are years in the making, so I think it’s a little unrealistic to think that we would put a levy in place that would be successful and pass the voters that quickly,” Workman said. “Next year, if we started now to get on the ballot in a year or two, would make sense.”
McMorran said he worries that moving forward with a city services fee now could poison the well for a future levy effort.
“I fear that if Philomath implements a city services fee, that would create ‘ill will’ in the future to the point that voters wouldn’t approve a levy,” he said.
McMorran also proposed a new policy that would pass along the cost of credit card transaction fees to customers rather than absorbing them in the city’s budget. He estimated the city spends about $18,000 annually on such fees, though the budget line item was listed at $10,000 to account for the time it would take the City Council to formally adopt an ordinance and set up a system.
Workman initially expressed reservations, noting the proposal had not gone through the council or received any public input. But the majority of the committee felt the item was relevant and left the $10,000 line-item reduction in the finance department budget.
Final votes and reaction
A motion to reduce general fund revenue by $259,200 passed 9-2. At $5 per month, the fee would generate approximately $144,000 annually — all directed toward police salaries.
The revised fiscal year 2026-27 budget of $34,874,485 also passed 9-2, with Hasley and committee member Kyle Cupp casting the dissenting votes.
McMorran noted that if the fee is approved by the full council, he would favor renaming it.
“I think it would be appropriate for the council to now call it a law enforcement fee because that is what it is going to exclusively,” he said.
The mayor also offered a candid assessment of his own position heading into the council vote.
“I appreciate the compromise that we’ve made and I want this to move forward,” McMorran said, “with the caveat I have not decided how I’m going to vote at City Council.”
Hunsaker, who had pushed to zero out the fee, said he could live with the outcome.
“I would’ve liked to have seen it at zero but in terms of maybe where I thought things would go when I came in here tonight, I can support what we’ve done,” Hunsaker said.
Workman offered a straightforward summary.
“At the end of the day, we’ve got a balanced budget for the city of Philomath,” he said.
There were no public comments at the meeting.
