Editor’s note: The views and opinions expressed in this guest viewpoint are those of the author alone, writing in their individual capacities only, and do not necessarily reflect the opinions or policies of the Philomath News. The Philomath News is not responsible for the accuracy of any of the information supplied by the author or reader responses.
Déjà Vu!
That’s the feeling, following Philomath’s 2026-27 budget deliberations. To balance the general fund budget, the City Council created a $5 police services fee to be added to utility bills, starting in October.
The last time a fee was enacted to fill a general fund budget gap was in 2017. At that time, I served on the City Council and was part of the decision-making that resulted in a city services fee.
Philomath voters may find it useful to understand how financing the general fund played out from the 2017-18 city services fee to the now-named police services fee.
Annually, starting in May, the city’s Budget Committee, composed of six Philomath citizens, and City Council meet to determine a budget for the next fiscal year, which begins July 1.
City officials and budget committees have acted in good faith establishing the annual budget. This entails responding to economic fluctuations and addressing changes to financial assumptions so valued municipal services and infrastructure continue to meet the demands of a growing livable city. Philomath is not immune to the forces affecting every municipality.
To appreciate the work of any budget committee, the annual budget message from the city manager is an excellent place to start.
The 2017-18 message pointed out relatively low property value assessments and low growth in residential, commercial and industrial sectors, making it difficult to meet the increasing costs of providing municipal services. Voter rejection of the Chapel Drive annexation eliminated the near-term possibility of new housing with the benefit of increased tax revenue.
To close the general fund revenue and expense gap, a $17 monthly fee was proposed, but the Budget Committee recommended and City Council adopted a $10 city services fee for the 2017-18 fiscal year. In contrast to the current budget, the fee had a sunset date. Although an originally higher proposed fee than this year’s budget, it was reduced to $5 in the 2020-21 budget. The 2021-22 budget saw a reduction to $4 before sunsetting in 2022-23 — one year sooner than originally projected.
A notable statement by City Manager Chris Workman warned that over the prior three years short-term strategies had been used to balance the general fund. Expanding the tax base was the way out of the problem. Otherwise, as Workman stated: “At this point, a meaningful reduction in general fund expenditures is only possible by cutting savings for future capital projects or cutting personnel within the police department … current residents will have to decide whether to shoulder the increasing cost of providing basic municipal services or identify where cuts should be made.”
Despite the general fund fee closing the funding gap, subsequent annual budget messages continued to echo concern. The 2018-19 budget message identified the need for expense restraint while acknowledging the fee was needed to stay the course while new growth would eventually lead to increased tax rolls.
The 2020-21 budget message reflected progress. The fee was reduced by half because of a $133,000 increase in property value and an expanded tax base. Expense containment continued but with mixed remarks concerning personnel costs.
The optimistic 2021-22 budget message focused on infrastructure projects such as the new reservoir, water treatment plant and the long-awaited Safety and Streetscapes project. Workman wrote: “In Philomath’s case, we believe the city is in the phase of reaping the financial rewards of important and difficult past decisions to raise revenue and hold spending in order to one day be in a position to take on big and important projects … that day has come.”
The budget message also stated revenue had grown with new residential properties increasing tax rolls, allowing a further reduction in the city services fee. Greater-than-anticipated revenue allowed the hiring of an assistant city manager, maintained transfer levels and increased the general fund ending balance by $112,000.
Budget messages are not evident in the city’s online archives for budget years 2022-23 and 2023-24.
The 2024-25 budget message discussed inflation and supply issues increasing materials and services expenses. Again, personnel expenses were of concern and attributed to inflation and employment conditions. Emphasis was placed on maintaining public safety. Although tax collection was growing, the lack of new construction was not allowing it to grow fast enough, resulting in expenses exceeding revenue.
Once again, Workman offered caution: “As a city, we have to prioritize spending on the things we need most, essential government services, look for ways to sustain revenue sources and continue to save for our future.”
The 2025-26 budget message reported revenue from tax rolls was expected to increase modestly, with franchise fees decreasing slightly. General fund expenses were projected to increase by approximately $300,000. Furthermore, over the past three years the general fund has decreased by a cumulative $770,497.
Workman stated: “City officials should start having serious conversations to consider reductions in services in conjunction with additional revenue streams in order to improve next year’s ending fund balance.”
However, this year’s budget message did not address adding revenue streams other than proposing a $14 fee, which, by the end of the process, was reduced to $5. Service reductions were not mentioned. Instead, the focus was on police compensation being competitive with that of Benton County. Concurrently, the importance of maintaining an adequate general fund ending balance was emphasized. As for infrastructure expenses, costs for the new water treatment plant have escalated to the point that $6 million will need to be borrowed from Business Oregon. The debt is projected to be serviced by increased water rates once construction is completed.
So, here we are. Annual budgets consistently pit revenue sufficiency against ever-increasing expenses. As mentioned earlier, City Manager Workman, in his 2017 budget message, cautioned the Budget Committee about the use of short-term strategies to balance the general fund. Those prophetic words apply even more today and should be a catalyst for preparation for the 2027-28 budget.
The time has come to enact a long-term strategy. What that looks like remains to be seen. The process will challenge the City Council and city manager in new ways. One thing is certain: If budget déjà vu is not addressed, it will just keep happening over and over again.
(David Low is a former Philomath city councilor and past president of the Philomath Community Services Board of Directors. He has also served on various other committees and nonprofit boards.)