Budget in Brief FY 2019 - cityofsalem.net · Budget in Brief—FY 2019 edition This document provides an overview of the City’s ... business retention and recruitment, and a thriving

City of Salem Page 1 FY 2019 Budget in Brief

Preparing for the

Future

Published September 2018

What’s Inside

Message from the City Manager

How It All Works Together

Vision, Mission and Values

Service / Result Areas

Funding City Operations

General Fund Highlights

Understanding Property Tax

Supporting Community Outcomes

City of Salem, Oregon

Budget in Brief FY 2019


I am pleased to present this summary of the City Council-adopted FY 2019 budget.

A well-developed budget is a financial plan toward the achievement of identified goals. The FY 2019 budget

is guided by the Salem Strategic Plan and the City Council Policy Agenda for 2018. The strategic plan and

policy agenda focus on issues of top concern for Salem residents and set the City’s policy foundation and

provide direction for the allocation of resources. This budget delivers resources to identified priorities and is

responsive to current needs. It supports ongoing services, provides for a significant restoration of service

through the reopening of Fire Station 11, and includes increases to fees to augment revenues.

Salem is “At Your Service.” Over two-thirds of Salem residents believe the City is on the right track and 90

percent of residents are satisfied or very satisfied with the services provided. City Council policy direction and

oversight and competent implementation and management of City resources have allowed the organization

to deliver services despite challenging fiscal constraints.

Salem benefits from steady economic growth. Growth can increase property tax receipts and activity-related

revenues to support services. Despite the economic growth, the City’s financial stability and ability to sustain

services are at risk. Costs of services are escalating faster than the revenue growth realized by the City from

property taxes and fees. Of greatest concern are services within the General Fund, such as police, fire, and

community services. The expense escalation will continue because of projected PERS increases and other cost

drivers.

There is much to accomplish in the coming months to formulate a plan for dealing with the imbalance of

revenues and expenditures that intensifies in future years. Good financial management has provided us with

some time to determine how to continue programs and services, address operational capacity needs, and

continue work on deferred infrastructure. A comprehensive review of current and potentially new revenue

sources, in conjunction with Priority Based Budgeting, will be essential for the City to achieve its Sustainable

Service Delivery goal and accomplish our mission of providing fiscally sustainable and quality services.

Sincerely,

Steve Power

City Manager

Message from the City Manager

Budget in Brief—FY 2019 edition

This document provides an overview of the City’s

budget, which was adopted by the City Council on

June 25, 2018. To view the entire budget (including

the Salem Urban Renewal Agency budget) and

other financial reports, please visit our website at:

www.cityofsalem.net/budget


Coffee with a Cop Make Music Day

How It All

Works

Together

The budget is one component in an annual cycle of collaboration

among the community, City Council, and City staff. The City Council

looks to the community for advice and feedback through survey

responses, board or commission service, and neighborhood association

participation to inform its policy agenda. The City Council’s policy

agenda reflects spending priorities for the upcoming fiscal year, which

transition into the budget. The results achieved through resource

allocation in the budget benefit the community and are featured in an

annual community report.


Defining the City of Salem’s Result Areas through our Vision, Mission, and Values

Vision A safe and livable capital city with a sustainable economy and environment

that is open to all.

Mission The City of Salem provides fiscally sustainable and quality services to enrich the lives

of present and future residents, the quality of our environment and neighborhoods,

and the vitality of our economy.

Values Opportunity: Salem is proactive and forward-thinking.

Compassion: Salem is fair, equitable, and safe.

Responsiveness: Salem is at your service, with capacity and partnerships to

prepare for the future.

Accessibility: Salem is open and inclusive.

What is a Result Area?

Great question!

It’s all about delivering services

benefitting the community.


Good Governance The enterprise is managed to be fiscally sustainable, provide quality services,

proactively engage residents, be forward thinking, and build capacity and

partnerships to prepare for the future.

Natural Environment Stewardship Protect natural resources including healthy streams and the Willamette River,

and reduce the impact from the built environment and City operations on the

environment.

Safe Community Providing an emergency response while proactively reducing the risk of crime,

fire, natural disasters, and health emergencies to residents, businesses, and

property owners.

Safe, Reliable, and Efficient Infrastructure An integrated municipal asset system of streets, bridges and sidewalks, civic

buildings, technology and utility systems.

Strong and Diverse Economy A diverse economic base, robust job growth, business retention and

recruitment, and a thriving downtown.

Welcome and Livable Community Neighborhoods are safe and clean, with a mix of quality housing with access to

parks, recreation, historic and cultural resources, and the arts.

A Result Area represents a

broadly-defined outcome

derived from City services.

We all want to live in a

safe community—right?

I really care about

Salem’s economy.

I want my

community to

be welcoming

and livable.


The City has engaged the services of

ResourceX to implement a National

League of Cities and International City /

County Management Association best

practice for budgeting. Priority Based

Budgeting will assist the Budget

Committee and City Council with

allocating available resources through an

approach that identifies the

organization’s desired outcomes and

examines the influence of each program

and service in achieving those results.

Result Areas and Priority Based Budgeting

The City’s FY 2019 operating budget viewed

through the lens of the six result areas. The result—or service—areas were used to build

the budget and will be used as the City fully

implements Priority Based Budgeting.

In millions, excludes

Capital Construction

We’re Here!

Why Priority Based Budgeting?

The purpose of Priority Based Budgeting (PBB) is to identify what the City is in the business of doing and ensuring resources are allocated to the highest and best use.

The City’s implementation of PBB follows direction from the City Council to define the desired level of City services and the associated costs, and to explore new, additional revenue sources for the General Fund and alternative methods of service delivery.

At publication of this document, the implementation timeline (below) reflects the City is in the midst of performing peer review of each department’s program scoring. PBB will be one of many tools employed by the City Council and City staff to help deliver results for the community.


Where Does the Money

Come From? Total FY 2019

City Resources Budget

$678,663,990

The category of Taxes includes property taxes that support General Fund operations; transient occupancy taxes paid by visitors to Salem, who stay overnight; and marijuana sales tax.

Taxes also include voter-supported levies for infrastructure improvements. In FY 2019, taxes levied to support debt service on infrastructure projects include two recently approved bond measures—$61.8 million for a new police station and $18.6 million for seismic and other improvements to the Salem Public Library.

Working

Capital is

funding leftover

from the prior

year to begin

the new fiscal

year.

Some of the money in the Internal / Intergovernmental category comes from employee insurance premiums paid by City departments and the benefiting employees to the Self Insurance Fund; revenues shared by the State of Oregon from liquor, gas, cigarette, and 911 taxes; grants anticipated to be received; reimbursements from other agencies, cities, and counties; and transfers from one City fund to another.

All Other revenues include “rent” from parking meters and meeting rooms at the library, court and parking fines, interest earnings, and bond proceeds.

Internal and Intergov. 20%

Sales, Fees, Licenses, and Permits

20%

Taxes

13%

Working Capital

41%

All Other

6%

Sales, Fees, Licenses, and Permits encompass 70 different charges for everything from franchise fees paid by utilities (electric, cable, natural gas, telecom) for use of the City’s rights-of-way—to library overdue book charges—to building permits.


And How is

the Money Spent?

Supplies and Services are the purchases required to deliver City programs

and services—construction contracts, training courses, firefighter safety gear,

computer software licenses, library books, emergency dispatch services,

wastewater treatment chemicals, electricity, tools to maintain parks and

buildings, radios, uniforms, and so much more.

Equipment, Buildings, and Land represent purchases that exceed $10,000 and are longer-term assets of the City.

Debt Payments for

streets, bridges, fire

stations and trucks,

utility system rehab and

additions.

Employee Costs—or Personal Services—include

salaries, incentive pay for specific skills or certifications,

overtime, and retirement and health benefits. Costs in this

category equal $163.14 million in the budget for 1,236.30 full-

time equivalent career staff and dozens of part-time or

“seasonal” workers. City employees are represented by five

labor unions for sworn police officers, firefighters, general

employees, 9-1-1 call-takers and communication specialists,

and city attorneys.

Contingency provides funding for

unanticipated costs and must be

transferred into one of the other

categories included in this display to be

expended.

Transfers move money from one City

fund to another to support a specific

project or service.

Total FY 2019

City Expenditures Budget

$602,680,900

Kuebler Boulevard water main Assisting with wildfire response Stream cleaning crew


The General Fund

Where Does the Money Come From?

At 46 percent of all estimated funding (total resources),

Property Tax is the largest source of support for

general services in Salem. All other new sources of

funding equate to 37 percent. Working Capital—funds left over from the prior year—provides another

17 percent. The category of Internal /

Intergovernmental includes—among other

sources—anticipated grants and reimbursements from

other agencies; a transfer of transient occupancy tax

revenue to support landscape maintenance; and the

City’s share of state revenues derived from alcohol,

cigarette, and 9-1-1 taxes. Fees, Licenses, and

Permits includes revenues derived from public rights-

of-way use (franchise fees); recreation program

participants; planning, site plan, dwelling plan, and fire

safety reviews; and citation of City code violations.

And How is the Money Spent?

The General Fund supports police, fire, emergency

response, library, parking, Center 50+, planning, parks,

code enforcement, economic development, and all of

the behind-the-scenes activities (like finance,

information technology, legal, human resources, and

facilities maintenance) to ensure direct services reach

all members of the community.

The middle chart breaks down the costs for these

services by expense category. Employee costs comprise

76 percent of the total for the General Fund.

The bottom chart provides a cost breakdown by result

or service area. In this view, Safe Community services comprise the majority of expenses at $82.04

million and includes Police, Fire, Court, and Legal

Prosecution.

Welcoming and Livable Community includes

Planning, Neighborhood Enhancement, Center 50+,

Parks and Recreation, Library, and the Homeless Rental

Assistance Program. Safe, Reliable, and Efficient

Infrastructure includes Facilities Services and

Information Technology. Good Governance includes the behind-the-scene programs such as

Finance or Human Resources.

Resources by Category

$150.26M

Expenses by Category

$136.29M

Expenses by Result (Service) Area

$136.29M

Strong and Diverse Economy includes the

majority of the Urban Development Department.

Natural Environment Stewardship contains a

small program provided by the Urban

Development that promotes and implements

environmental best practices.


Measure 5 was fully implemented in 1995 and

introduced limits of $5 per $1000 of real market value

(RMV) for schools and $10 per thousand of RMV for

general government. If the assessed taxes exceed

these limits, the amount taxed is reduced until it is

within the limits. This process is called “compression.”

Measure 50 was drafted in 1997 and created

permanent rates for taxing jurisdictions. It also limited

the annual growth in assessed value (AV) to 3 percent

annually.

These property tax measures contribute to the

forecasted imbalance between the City’s revenues

and expenses, as the expenses grow at a faster rate

than the 3 percent limitation on property tax revenue

growth and the varying growth rates for all other

combined revenues.

Understanding Property Tax

Supporting Community Outcomes—FY 2019

In Oregon, property taxes are the primary

funding source for local government

general services. Salem property taxes

provide more than 55 percent of the new

revenue in the General Fund budget for FY

2019. The City has a permanent tax rate of

$5.8315 per thousand of assessed value.

The permanent rate does not include any

voter-approved bond measure or local

option levies.

Fire Station 11 Reopening

2018 Policy Agenda Item—$1.25M

Reinstatement of Engine 11 adds resource

capacity in West Salem and improves

citywide reliability for fire and emergency

responders. Response time performance

against the standard is expected to increase

2.6 percent, to 73 percent, equating to

approximately 350 more individuals

receiving the desired response time when

experiencing a critical emergency.

Homeless Rental Assistance Program

2018 Policy Agenda Item—$1.4M

The budget continues support for the housing first

program operated by Salem Housing Authority. The

Homeless Rental Assistance Program (HRAP) provides

housing and support services to 100 chronically

homeless individuals in Salem. Assistance under the

program includes 12 months of rental assistance;

funding for security deposits, personal care items, and

medical needs to remove the initial barriers to housing;

and intensive case management and life skills training.

Property Taxes for a Salem Homeowner

The dollar coin of property taxes is based

on FY 2018 information as it relates to a

Salem property (in Marion County). This

illustration demonstrates the distribution

of all property taxes—the Measure 5

imposed limits, as well as all voter-

approved bonds.

*Other includes:

Soil and Water, 4H, Regional Library, Chemeketa Bonds, and the Willamette Education Service District


Supporting Community Outcomes—FY 2019

Green House Gas Inventory

2018 Policy Agenda Item—$40,000

In conjunction with the community visioning effort for the

Comprehensive Plan update, the City will work with local utility providers,

educational institutions, and a number of stakeholders to develop a

baseline of community-wide emissions and environmental impact. This

work is expected to inform strategies within the community visioning and

plan update.

Mill Creek Corporate Center

Development efforts supported by staff in multiple City departments.

At the point of FY 2019 budget development, the

center had 85 acres currently with construction

planned or underway. New additions include

Capstone Partners for Amazon and PacTrust for

commercial and industrial flex space. Another

approximate 230 acres of development is

proposed to support growth / expansion of local

businesses as well as locate new business.

Pedestrian Safety Crossings, $1.47M

Design will begin on a new pedestrian crossing

to the AMTRAK station from the Salem

Promenade at Mill Street SE. The City is also

establishing a program to design and construct other

pedestrian safety crossing improvements. Locations will

be determined annually based on opportunity

partnerships or identified crossing safety issues.

Sobering Center


As recommended by the Mid-Willamette

Homeless Initiative Task Force, the City, Marion

County, Salem Health and social service partners

have developed a framework for a Sobering

Center. The center will offer individuals a safe

location for sobering and reduce the demand for

needed emergency services and hospital beds. The

facility will have 8 to 10 beds and will be operated

by a non-profit addiction treatment provider on a

24 hour-per-day basis.

Blight to Bright Program, $100,000

The City has nine designated dangerous buildings and 23 derelict structures. Many of these

properties have been managed in the current code compliance program without measurable

progress. This program applies dedicated financial resources to the most dangerous and problematic

properties to convert properties into new, developable parcels. The Self Insurance Fund will seed the funding

for the program in FY 2019.

The Mill Creek Corporate Center with the Home Depot Distribution Center in the center of the photo and Highway 22 along the left side.

Public art mural,

Mirror Maze, installed

off Chemeketa Street

NE.


Salem Public Library—$5.03M

Police patrol, investigations, and support services—$44.84M

Fire emergency rescue and paramedic response—$34.36M

Municipal Court—$2.05M

Current and long range planning, code enforcement, and neighborhood services—$4.79M

Recreation, softball, and Center 50+—$2.38M

Tourism promotion and Convention Center marketing—$1.41M

9-1-1 call taking and dispatch—$11.46M

Federal community development and housing programs—$4.58M

Information technology support—$8.61M

City attorney and recorder—$2.34M

Airport operations—$2.27M

Maintenance / repair / operation of City streets; traffic signals, signs, and markings; and sidewalks—$17.78M

Stormwater, wastewater, and water utility—$116.14M

Downtown parking including 3 City garages, enforcement—$3.04M

Maintenance, systems management, and custodial for City buildings—$4.31M

Total capital construction budget—$208.44M

Outcomes—FY 2019 Union Street Family Friendly Bikeway, $3.8M

Design will begin on bicycle

improvements along Union Street NE

from Commercial Street NE to 12th

Street NE to connect Riverfront Park

and Marion Square Park to the North

Capitol Mall and the 12th Street

Pedestrian Promenade as identified in

the Central Salem Mobility Study.

Priority Based Budgeting


Priority Based Budgeting will

be one tool to help with identifying

priority outcomes, the relative impact

of individual programs and services on

achieving results, and opportunities

for partnering or redesigning service

delivery.

Park Plans, $200,000

An annual program for master plan updates is being

established for review of parks with older plans or new

facilities; a City Center Park and Trail Master Plan will

identify trail connections between key central City parks; a master

plan will be developed for Stephens-Yoshikai Park; and interim use

plans will be developed for Eagles’ View Park and Secor Park.

Park Improvements, $1.5M

A variety of park improvements are planned for the following areas:

Riverfront Park site improvements identified in the master plan;

Wallace Marine Park soccer area playground;

Cascades Gateway Park parking lot improvements;

McKay Park playground; and

Salem Park Improvement Funds to match local donations.

Rosemont Avenue NW Sidewalk, $580,000

A new retaining wall, sidewalk,

and handrail improvements

will be designed and constructed

along the east side of Rosemont

Avenue NW to improve traffic and

pedestrian safety. Funding is provided

by state highway revenues.

Solids Handling Facility,

$5.9M

Significant funding is

dedicated in FY 2019 for the

construction of the $12 million

storage facility at the Willow Lake

Water Pollution Control Facility to provide interim storage of solid waste

prior to transportation off-site.

Supporting

Community Franzen Reservoir floating cover

Documents

Budget in Brief FY 2019 - cityofsalem.net · Budget in Brief—FY 2019 edition This document provides an overview of the City’s ... business retention and recruitment, and a thriving