Given an early look at future budgets, the Pendleton City Council has some concerns.
At a workshop Tuesday, City Manager Robb Corbett shared a memo with the council that showed some projections for the general fund, the city’s sole discretionary fund that covers services like police, fire, parks and the library.
Corbett’s memo projected revenues would rise by 2.7 percent per year while expenses would go up by 3.2 percent annually. That means the projected gap between expenses and cost would go from $120,000 in the 2018-2019 fiscal year to $430,000 in 2022-2023.
Additionally, the city’s beginning fund balance would fall from $3 million in 2018-2019 to $1.8 million in 2022-2023.
“To me, this is a little disturbing,” Councilor Paul Chalmers said.
The beginning fund balance is important to the city because it tides Pendleton over from the start of the fiscal year in July to November, when the city receives property tax revenue.
While the city would ideally have $4 million in the beginning fund balance, Corbett downplayed the numbers, saying it was lower than usual because the city was diverting money to its facility maintenance backlog.
As of July 1, Pendleton facilities had an estimated $4.7 million in deferred maintenance in addition to $1.1 million in annual maintenance costs.
The city isn’t expecting any breaks from the Public Employee Retirement System either, projecting a system-wide increase of $400,000 in 2020-2021, half of that coming from the general fund.
Although he considers himself a conservative budget maker, Mayor John Turner said there could be some new sources of income for the city that could boost revenue projections.
Turner said a few new housing projects could provide more revenue from property taxes and he estimated the Pendleton Unmanned Aerial Systems Range could start generating money for the general fund in three to five years.
When Pendleton’s urban renewal district expires in 2023, Chalmers, the Umatilla County director of assessment and taxation, said the city could receive as much as $400,000 to $500,000 per year in property tax revenue.
Beyond future possibilities, Pendleton already developed a new source of revenue that is starting to bear fruit in 2018: marijuana. Turner said the council will need to figure out how to spend money from marijuana sales tax revenue, which is projected to exceed $200,000 in the 2018 calendar year.
But some councilors’ worries weren’t alleviated.
Councilor Scott Fairley said Corbett’s memo confirmed his suspicions that Pendleton’s financial health wasn’t as robust as it should be.
Councilor Dale Primmer said the city needed to target “soft pockets of money” to fortify its income, a practice he used as an administrator for the Umatilla County Department of Community Justice.
During the recession, the department was trying to avoid instituting a second round of layoffs when staff noticed that supervision fees weren’t being collected consistently. By being more consistent in collecting practices, Primmer said revenue from supervision fees increased from $60,000 to more than $200,000 in the span of one year.
Councilor Neil Brown said the city needed to take inventory of all of its assets and consider what should be kept or not, referencing Pendleton’s vast collection of parks and recreation properties, an above average amount for a city Pendleton’s size.
“We need to define how much stuff we need to keep. ... We need to do a ‘stuff analysis,’” he said.
Corbett said they’ve already done that with some of their properties, like the old police station at 109 S.W. Court Ave., which the city is trying to sell.
Contact Antonio Sierra at email@example.com or 541-966-0836.