John Day’s proposed operating budget for the next fiscal year is about 21 percent higher than last year because of additional revenue and grant proceeds that will be used for capital improvement projects, City Manager Nick Green said in his budget message.
“Since launching our strategy for growth in 2017, we have taken on several significant capital improvement projects and a few internal restructurings that have changed the way we operate as a city,” Green said.
The $13.9 million proposed budget was presented to the city’s budget committee during its first meeting April 16. Committee members include Tom Olson, Vincent Maurer, Darin Toy, Robert Raschio, Katrina Randleas, Ron Hasher, Mike Miller and Beth Spell. The city council will hold a budget hearing May 28 and adopt the proposed budget June 12.
“Prior to my administration, the city had become overextended, particularly in public safety spending,” Green said. “In 2017, our total public safety expenditures exceeded $1 million for the first time. We were providing too many services for too many external organizations with too little cost recovery.”
The city addressed this problem by discontinuing 911 dispatch service for the county, police service for Prairie City, victims assistance service for the district attorney and financial support for the Grant County Economic Development Office.
The city contributes to the Grant County Emergency Communications Agency for 911 dispatch at $10 per police or fire call and pays 12.8 percent of the operating deficit left after accounting for state phone tax revenue.
The city is also in the first year of a two-year operating agreement with Grant School District 3 to provide a school resource officer. The district pays $45,000 and the city pays about $55,000 for this service, which enables the city to provide a fourth police officer at about 45 percent reduced cost, Green said.
Ron Smith plans to retire as John Day fire chief this year, and the city plans to create a new position to replace him. The budget calls for a combined public works and fire chief position to keep costs affordable, Green said.
One of the most talked about changes in the city is the possible sale of Gleason Pool and construction of a new pool. The city has been “very rational and deliberate” about the process, Green said, establishing a steering committee and spending more than six months assessing options.
“We recognize the pool is near and dear to the hearts of a lot of people in the community,” Green said. “This is also a very frugal area. We like to own assets far and beyond their typical lifespan but do not like to pay taxes to maintain those assets.”
The city sees the sale of the city park next to the Kam Wah Chung State Heritage Site and Gleason Pool “as a strategic opportunity and one we are going to take seriously,” Green said. The city’s responsibility is to John Day taxpayers who will end up paying for the pool’s maintenance after 2020 if it’s not replaced, he said.
Green said the city’s goal is to establish a county service district for residents within a reasonable driving distance of the pool. The new district could issue operating levies or capital improvement bonds and spread the pool’s cost among all its users, rather than just John Day.
Revenue and debt
With the transfer of 911 dispatch service to a new independent agency, city staff was reduced by 30 percent to 12 full-time and three part-time employees, Green said. With assistance from the Local Government Personnel Institute, most staff received salary adjustments that made John Day salaries more competitive while providing staff with more room for career growth, he said.
Green said he will present ideas for new revenue sources in the coming months. One idea is to implement a transient room tax for John Day that could be used to promote recreation, tourism and economic development.
Another idea is to sell city land that is not in productive use at fair market value, including a portion of the industrial park next to the airport and a portion of the former Oregon Pine mill property. The city will also look at building and operating a campground.
In terms of the city’s overall financial position, Green noted the city “has been operating at an incredibly fast pace in terms of fundraising.” Not every fund has been performing the way the city would like, he said, but the city’s overall financial position is improving.
“We are making smart investments, and we have been proactive in evaluating our decisions and re-evaluating them when conditions change,” he said.
Following consolidation of several loans through Washington Federal, the city now has four outstanding debt obligations: $550,000 through 2030 in fire station bonds, $493,000 with 27 payments remaining for the purchase of the Oregon Pine property, $2.1 million to Washington Federal through 2022 and $57,000 in accrued compensated absences.
Payments on the $350,000 Business Oregon loan to build three greenhouses may not start until the next fiscal year, Green said.
Items of note
Specific proposed budget items of note include:
• Electrical costs increase 10 percent across the board
• Insurance costs increase 15 percent across the board
• $379,380 cost for police personnel
• $73,484 cost for fire personnel
• $20,000 cost to remodel police offices after 911 dispatch move
• Chlorine/phosphates for water system increase 10 percent
• $115,000 set aside for water meter change-out
• $585,000 in revenue from water sales
• Heating costs for sewer increase 10 percent
• $570,000 in revenue for sewer service
• $72,036 in revenue from Canyon City for sewer service
• $83,192 cost for greenhouse personnel
• $65,900 cost for materials and services for greenhouse
• $14,500 cost for propane for greenhouse
• $43,250 in revenue from sale of greenhouse greens
• $43,250 in revenue from sale of greenhouse vine produce
• $276,612 net working capital balance available for street fund
• $162,000 in revenue for street fund from federal forest payment
• $75,000 cost to improve and re-deck bridge at Oregon Pine
• $200,000 cost to improve Charolais Heights intersection
• $22,280 set aside for fire truck replacement
• $100,000 carried forward for improvements to the shop at the Oregon Pine site, as the old city shop will be torn down along with the sewer treatment plant