Council members consider ways to fix budget shortfall

By Sarah Brown
Lebanon Local

Prior to its regular session on July 12, the City Council held a work session to discuss potential revenue alternatives following the adoption of the 2024 fiscal year budget that cannot support the jail and has a general fund projected to exceed revenue by $1.2 million. Cost to reopen and fund the jail was estimated at $775,000
“(Financial sustainability) can be done completely by budget cuts, it can be completely done through seeking new revenue, it can be done through a balance of those two things, but continuing on the path that we are and doing nothing is probably not suitable,” City Manager Nancy Brewer said.
While federal and state grants may be available, Brewer reminded the council those funds have “a lot of strings attached.” Also, a permanent property tax rate was constitutionally set in 1997 and cannot be changed except by an amendment to the constitution.
Brewer presented six revenue sources the council could consider over the next year or two, including local sales tax, income tax, restaurant or meal tax, and utility fees.
Another idea was a local option levy, which is a property tax levy approved by voters to raise money for operating costs of the council’s choosing, and can range from one to five years. Brewer noted several surrounding communities have successfully acquired local option levies.
“It’s a pretty common way for communities to raise money,” she said.
A final option is a payroll tax paid in part by the employer and in part by the employee. It can be implemented through an ordinance or by vote of the people, and is used to fund a budget line determined by city council. According to Brewer, the three largest cities in Oregon – Portland, Eugene and Salem – have implemented a payroll tax, but no municipality as small as Lebanon has done so yet, but “it is a viable alternative.”

Julie Jackson, relations manager for Republic Services, provides an update on the company’s efforts to improve customer service.

“Nobody’s gonna like a property tax bill, no one is gonna like an income tax or a payroll tax, no one’s gonna like a fee on the utility bill,” Brewer said. “But if you’re gonna look for revenue, that’s really the places to go.”
Councilor KJ Ullfers asked for clarification because his initial understanding was the discussion about increasing revenue would be to reopen the jail, but it was becoming a conversation about filling in the $1.2 million loss.
“I think before we start looking to backfill $1.2 million in the budget, I would want to open the budget back up and reexamine it in a lot more detail,” Ullfers said. “I think the jail is a separate issue from the budget shortfall.”
Councilor Dave Workman perceived the jail as part of the budget shortfall, essentially totalling $2 million.
“We need to make our community successful enough to earn this money somehow,” Workman said. “That’s our challenge. You never grow and get better by cutting.”
Ullfers agreed, but said they need to look at the budget again, get more input from the community and come up with “out of the box ideas.”
Councilor Michelle Steinhebel noted the city is currently paying on bonds for the library and the jail. By voting on a bond for the jail in 2006, she said, the community essentially said it was an important issue to invest in.
“I’m super not excited about having to go for an operating levy for the jail, but that’s something we said we would do and our community and all of us sitting up here are still paying on that bond for that jail as it sits empty,” she said.
The $775,000 for the jail would fund full-time staff, and medical and mental health (required by insurance), Police Chief Frank Stevenson said.
“As of right now I do not have the staffing available to run that jail successfully,” he said. “Running a jail is a whole separate animal than a police department.”
Brewer added the bond for the jail was also supposed to include an increase in staff over time, which never happened. As such, the department had to fill that gap by pulling officers off the street.

Susana Arroyo makes a request to city council for help in obtaining a school bus route for children who reside in the Colonia Paz complex next to Walmart.

“The low level crimes are starting to rise because there’s no accountability for their actions,” Stevenson said, “That’s unacceptable to me and I know it’s unacceptable to the community, but at the point where if we want the jail to operate in the safest manner we want, then we have to have certain things in place in order for that to happen. I can no longer rely on patrol officer to come off the street to help maintain the individuals that are housed.”
In other business during its regular session, the council:
♦ Heard an update from Republic Services regarding its efforts to improve customer service;
♦ Heard an update from the Oregon Cascades West Council of Governments;
♦ Heard from Susana Arroyo, an employee at Colonia Paz, who requested help to obtain busing for school students at the new apartment complex;
♦ Heard from Anna Creel about continued safety concerns at the Lebanon Skate Park;
♦ Authorized staff to apply for a grant through the Department of Land Conservation and Development to fund a consultant who would help implement action items identified in the Housing Production Strategy;
♦ Awarded a Cheadle Lake Park Utilities Project to Northcore USA, LLC, which made a bid of $2,191,542.07 for the installation of a water line and sanitation sewer extension;
♦ Passed a resolution restricting parking on a portion of Vaughan Lane where complaints were made about vehicles parking for long periods of time between 5th and 7th streets;
♦ Heard an update from Brewer regarding a sewage leak into the South Santiam River on July 10. The City issued a press release about the “upset” that caused a discharge of solids into the river, and warned residents and nearby communities to stay out of the water until warning signs are removed.
Brewer said the issue is still under investigation while staff perform regular tests to ensure the water maintains safe levels. Staff are “working through what happened, what are the corrective actions, and what are the changes and procedures to make sure it doesn’t happen again,” she said. Recent tests show the river water is clean.