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Any way you add up the money, the City of Sisters is coming up short. And the
problem may be that the city is simply providing better service than it can
afford.
After weeks of crunching numbers and estimating resources, the Sisters Budget
Committee figures the city is facing a budget shortfall this year of about
$86,897.
By eliminating pay increases, payroll reserves and deferring capital
improvements, the city thinks that figure can be knocked down to about
$60,097.
The city is not broke; according to City Administrator Barbara Warren, the
$60,097 shortfall can be covered out of the $274,112 cash carry-forward fund
from last year.
But cash carry-forward dollars act as a kind of savings account for the city,
and if the city continues spending more than it takes in, that savings account
will slowly bleed dry.
The budget committee met Thursday, October 17, trying to find ways to stop the
bleeding and restore the budget's health. To do that, two sub-committees were
formed, one to explore ways of generating more revenue and the other to find
ways to cut spending.
According to Warren, the main budget buster is personal services.
"Where we're overspending is in staff," she said.
This overspending, Warren and other budget committee members acknowledged, is
the result of an effort to raise Sisters' pay rates to a level comparable with
other municipalities in the region (Madras was used as a benchmark).
For the past seven or eight years, city employees have received 5 percent
"step" increases in pay almost every year, as well as a 3 percent cost of
living increase. With improved pay, the city has been able to keep qualified
employees.
Sisters Police Chief Dave Haynes summed up the city's dilemma:
"I'd like to point out that, until five or so years ago, you never had anybody
stay around," Haynes said. "You've got stability. What you're dealing with here
folks, is the price of success, and it looks like you can't afford it."
Warren told The Nugget that the city is more heavily staffed,
particularly in the police department, than comparable cities because Sisters
is a tourist town. But, she acknowledged, residents, especially seniors,
benefit from 24-hour police coverage and nobody wants services cut. If the city
wants to avoid cuts in personnel and service, it must increase its revenues.
One way to do that is to make tourism foot more of the bill for added
services.
Chief Haynes noted that communities such as Ashland have had some success with
taxes on prepared food. According to Haynes, such taxes are not always popular
with businesses, but they help relieve the financial burden on local
residents.
"The business people aren't going to do handsprings over having to collect and
deal with the tax," Haynes said. "But the local people like it."
Haynes also recommended that the city explore merging the police department
with the Deschutes County Sheriff's Department, a move that holds out the
promise of reducing costs and spreading cost burdens over a wider population.
The revenue-generation committee will look into other avenues for increasing
resources such as hikes in garbage, planning and licensing fees and having
water and garbage funds contribute to overhead costs.
And, the committee acknowledged, the city may have to raise taxes.
But the specter of Ballot Measure 47 casts that possibility -- and the whole
budget picture -- into doubt.
The measure rolls back property tax rates to last year's rates less 10 percent
or to the rates of two years ago, whichever is lower, and restricts increases
to 3 percent per year. It also restricts how local governments can pursue tax
elections.
According to Warren, the city stands to lose $42,582 in tax revenues if Ballot
Measure 47 passes. That figure represents 17.2 percent of the city's tax
revenues. That loss in revenue further darkens the budget picture for the city,
and, Warren said, probably takes a tax increase off the table.
The sub-committees were to begin work on developing spending cut and revenue
generation plans this week. The full budget committee is set to meet Wednesday,
November 13 at 7 p.m. at Sisters City Hall.
