By JASON COX
Of The Keizertimes
Keizer is experiencing its tightest budget in years, and the future could bring more pain, the city manager said Tuesday night.
“I’m beginning to believe our worst year is not this year,” said City Manager Chris Eppley, despite cuts including two layoffs, keeping four police officer positions vacant, no employee cost of living allowances and no step increases for non-represented staff. “Our worst year could be five years out.”
His presentation to the Keizer Budget Committee was “not pleasureable” to put together, Eppley said. They met Tuesday and Thursday, and will meet again at 6 p.m. Tuesday, May 10.
Eppley believes that more than four years’ worth of foreclosed home inventory could, in the worst-case scenario, begin to actually drag down assessed property values. In Oregon, a property’s maximum assessed value (MAV) is generally only allowed to climb 3 percent each year regardless of real market value (RMV), and taxes are based on the lower of the two figures.
Currently there’s a gap between MAV and RMV, meaning tax assessments on residential properties are still climbing by 3 percent yearly. But Eppley fears the two “are going to collide and our revenues from property taxes will stop going up.”
As far as tax and utility bills, Keizer customers may see a 2 percent sewer increase (imposed by Salem) and 3 percent water rate hike in January 2012. The street lighting fund assessments are set to fall 8 percent. These are included in Eppley’s proposed budget but must be approved by the Keizer City Council and budget committee.
Eppley said the city has done what it can with a total tax burden of about half what the average Oregon city resident (minus coastal cities) pays, and just less than half the employees. An internal study shows the average municipal resident pays $6.043 per $1,000 of assessed value and the average city has 8.1 employees per 1,000; by contrast Keizerites pay $3.68 per $1,000 and have 3.2 employees per 1,000. Keizer Fire District employees and taxes were included in the figures, he said.
Franchise fees came in below what was anticipated, and Eppley expects at least some of those, like telephone, to continue to fall. Meanwhile, “generally the cost of business is going up,” he said. Health insurance will go up 10 percent, and non-represented staff will now pay 10 percent of that cost, up from 5 percent. Costs for retirement pensions are going up $160,000 citywide. Materials and services are rising from $8.1 million to $9 million in all funds, due in part to moving some costs from urban renewal to the general fund.
One budget balancing measure proposes the city keep all of an anticipated $57,700 in hotel-motel taxes. The Keizer Chamber of Commerce, which promotes tourism in the city, and the Keizer Fire District each got $11,900 from that fund in the current budget year.
Christine Dieker, the chamber’s executive director, suggested Eppley’s proposal to keep the funds “may not be consistent with state law.”
“(The law) does say those dollars must remain in tourism promotion or facilities,” Dieker said, adding “your chamber will be here … Keizer will grow, but it won’t grow as much.”
Eppley said later in the evening he believed the move was legal, in part because the civic center’s community rooms bring more visitors to town.
“We believe based on the type of business we’re seeing that it certainly passes the test,” Eppley said.
Bruce Mazell, a Keizer resident, urged the committee to keep in place proposed utility increases. The water rate hasn’t gone up since 2008.
“Three or four dollars is a kid’s Happy Meal,” Mazell said. “That’s nothing. And if they’re going to get upset over nothing you’re going to lose some quality folks around here.