With a bench full of members from the Keizer City Council and city staff, the Long Range Budget Task Force met on Feb. 12, in the Keizer Council Chambers to discuss how the city will manage its budget in the upcoming year(s) and what to expect.
Several written comments from former city councilors Marlene Parsons and Amy Ryan Courser were noted as well as Dick Withnell.
Write-in comments both supported and lambasted the initiation of police and parks service fees as well as calling for maintaining lowered property taxes.
No in-person comments were made.
Assistant City Manager Tim Wood described the meeting’s purpose as a chance to provide a better look into the city’s finances in anticipation of the upcoming budget process and to provide a general overview of the city and its operating and funding trends.
A video of the meeting can be found at Keizer.org along with a copy of the task force’s agenda.
The Feb. 12 meeting was the first of two meetings to discuss the city’s finances, with the next meeting covering the city’s water services as well as how American Rescue Plan Act (ARPA) funds were spent.
The city’s budget is broken down into its governmental activities such as the city administration, police and park programs, fees and associated revenues and costs as well as the city’s business activities which involve businesses owned by the city, such as the Event Center, or other businesses in the city.
Population-wise, Keizer has grown by .65% each year (between 5 and 873 people) over the last 10 years.
This limited population growth has affected the amount of property taxes and franchise fees collected as well as how the city allocates intergovernmental funds, according to task force documents.
City Manager Adam Brown noted that the population estimates given (39,169) may not be accurate due to recent residential building that has occurred.
As of now, Keizer is the 15th largest city in Oregon.
In terms of expenses, Keizer is comparable to other Oregon cities with a majority of costs coming from both materials and services the city needs (36%) as well as personnel services (43%) such as employee payrolls.
Funding-wise, the city has a variety of sources including enterprise funds (34%), contingency funding (22%), the general fund (20%) as well as internal services funds (9%) and debt services fund (3%).
For city staff, the average work experience of those hired has grown by .7 years, going from 10.9 years to 11.6 years of previous experience.
Cost of living reviews of salaries and wages were discussed and noted to occur every year to ensure fair comparison to other cities.
The 2023 adjustment for Keizer was 4.3%, with union entity’s, Keizer Police Association and those represented by the Local 737 organization, receiving adjustments of 5% and 3.5% increases while unrepresented employees received a 3% COLA increase.
Keizer participates in the Public Employee Retirement System (PERS) in lieu of contributing to Social security, of which city employees are informed.
PERS contributions are calculated as a percentage of an employee’s gross compensation.
Advisory contribution rates, which will become effective July 2025, are 35.7%, 30.46% and 25.87% for Tiers one and two, Police and Fire departments and general city staff, respectively.
These rates do not affect the accounting issue regarding PERS and underpayments to the system from the city for employees going back more than 30 years, according to Brown.
In regards to health insurance, the city of Keizer provides it to all permanent status employees.
Keizer has brokered insurance deals with a variety of insurance providers while other cities often stick to one, Country City Insurance Services (CIS), in order to save money.
Union-represented employees contributed 5% towards their insurance while non-represented employees contributed 10%.
This year, the health insurance cost for the city is expected to raise another 5.1%.
Keizer will remain with the carriers they have in order to save money rather than get insurance from CIS, according to Brown.
The city’s general fund covers all revenues and expenditures and covers police (66%), general government (19%), parks (9%), planning (4%) and municipal court (2%).
Despite the police budget comprising 66% of the general fund, both Brown and Jane Herb of the Volunteer Coordinating Committee noted that this figure is comparable to cities with larger budgets in that Keizer’s outsized police budget is the norm in Oregon.
Wood noted the general fund was also the most constrained fund.
The city experienced a spike in revenues during 2020-21 from the $1.1 million CARES act grant given in response to the COVID pandemic.
Currently, the city’s projected expenditures are more than the projected revenues though there is contingency funding that will help supplement the gap, according to Brown.
Primary revenue sources for the city are from taxes and assessments, utility licenses and fees, intergovernmental sources and police and parks fees.
The city is continuing to try and diversify so as to not rely on one source of income.
For property taxation, rates are accessed using a levy rate which tasks a percent of each $1,000 of assessed valuation.
The city’s levy rate is a function of the permanent tax rate and here in Keizer is $2.08 of every $1,000, which is half the state tax average and in the bottom five lowest property tax rates.
This lowered rate, which was cemented by Measure 50 in 1998, allows lowered rates for homeowners but negatively affects how the city can afford and manage its budget as well as provide needed services to citizens.
A city often has different types of taxpayers such as residential, commercial and industrial, though Keizer has no industrial tax income which does affect the other groups, according to Wood.
The task force highlighted an important issue in that new construction in Oregon is not added to property tax rolls at its construction or real market value but instead reduced to an assessed value via the change property ratio, a method of determining how a property should be monetarily assessed based on the combined assessed rates of surrounding properties.
An example given at the meeting took a three bedroom, two bathroom house originally valued at $490,000 with a .50% change property ration added, which brings the assessed value to $249,263.
The assessed value is what the city will tax which for Keizer is $2.08 per $1,000, which means this property would only net only a little more than $500 a year.
Ultimately, this creates a scenario where there are a greater number of people coming to Keizer that all require more services that the city will struggle to provide based on what taxes are collected, unless something can be done at the state level to adjust Measure 50.
When one task force member voiced concern over how the city will manage this budgetary issue in the future, Council President Shaney Starr replied, “Welcome to long range budgeting.”
Contact Quinn Stoddard
[email protected] or 503-390-105
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