NORTH BEND — The 2017-18 FY budget passed unanimously Tuesday night at North Bend City Council’s regular meeting.
Only Mayor Rick Wetherell and councilors Larry Garboden, Timm Slater and Howard Graham were present at the meeting, the minimum amount needed to attain quorum.
The $28,087,934 budget includes $25,699,573 for the city and $2,388,361 for its Urban Renewal Agency.
North Bend’s general fund will operate at nearly $8.5 million, with $3,351,893 going to the city’s police department and nearly $2 million allocated for the fire department.
The fund rose 4.5 percent — or $372,179 — compared to last year.
Police Chief Robert Kappelman said the increase in the police budget wasn’t as large as it appeared, pointing out that it included 75 percent of the School Resource Officer’s salary, which is paid by the school district.
According to Kappelman, the budget only increased 1.6 percent compared to last year, even after factoring in a 2 percent cost of living adjustment as part of union contract negotiations.
North Bend’s police chief received approval from the city’s council this spring to hire four new police officers in an effort to reduce overtime hours and ease case workloads.
The largest chunk of the budget — aside from the general fund — is devoted to wastewater treatment infrastructure and capital improvements to the tune of roughly $8 million.
In his budget message to North Bend’s city council and budget committee, City Administrator Terence O’Connor noted uncertainty across the state following the defeat of the corporate sales tax measure in November and the $1.7 billion budget shortfall facing lawmakers in Salem.
He said the budget’s makeup reflected uncertainty related to Oregon’s Public Employees Retirement System (PERS), which saw more than $180,000 in increased annual costs compared to last year.
“The State of Oregon is telling us (it will be) four to six years before we see double digit increases in PERS rates for employers,” O’Connor added. “The $500,000 increase each year is ultimately what we are looking at.”
He said that while North Bend has sufficient reserve funds to handle the rising costs associated with PERS, the city’s budget could find itself strained in future years.
“I am hoping our friends at the (state) legislature will find a way to help municipalities and schools.”
According to O’Connor, North Bend managed to avoid dipping into its PERS Reserve Fund this year, even with a 25 percent increase in costs.
How long that reserve can be maintained however, remains to be seen.
The PERS Advisory board will meet in July to determine what earnings rate should be projected for the fund.
“(That) has a direct bearing on the future costs to North Bend and all the cities, school, districts, counties and state retirement costs,” O’Connor said.