EDITORIAL: Baker City’s budget challenge

Published 1:00 pm Monday, May 15, 2023

The shortfall in Baker City’s general fund budget, which the city council has taken steps to address, has multiple causes. Some are outside the control of city management and the elected city councilors, and some are not.

The general fund is only part of the city’s overall budget. But it’s an important part, as it includes the police and fire departments, which we all rely on when our life or property could be in danger. Combined, those departments make up about 57% of the $7.5 million general fund. It is difficult, then, to deal with a general fund shortfall without involving those two departments.

The biggest source of revenue for the general fund is local property taxes, which bring in about $2.9 million annually (the city collects in all about $3.9 million in property taxes, with much of the money that doesn’t go to the general fund used to maintain streets and operate the city-owned Sam-O Swim Center.)

Property tax increases are limited, though, to 3% per year (with some exceptions). The city can’t do anything about that. So if other expenses — fuel, personnel costs, equipment — rise faster, as they sometimes do, the buying power, as it were, of the city’s property tax revenue drops.

The city council does approve labor contracts with the city’s three unions, as well as pay raises for the dozen or so nonunion workers, and modest raises are reasonable.

But other decisions are less defensible.

The budget for information technology in the general fund, for instance, rose from $49,000 in fiscal 2020-21 to $115,000 in fiscal 2021-22. The budget for the current year is almost $133,000, and the proposed amount for the fiscal year that starts July 1 was almost $135,000 before the budget board diverted $35,000 to the general fund’s unappropriated ending fund balance. The increase — 171% over two years —is due in part to the finance department switching to new software, a process that started in 2021.

The city ended a decades-long business relationship with Chaves Consulting, which had provided software and support since the early 1980s, without giving the Baker City company a chance to address any new needs the city had.

The city, like many public employers, also pays employees’ 6% contribution to their retirement accounts, though that’s not required. That will cost the city around $160,000 this fiscal year.

A bigger problem is the council’s decision last year, at City Manager Jonathan Cannon’s behest, to end ambulance service through the fire department. That cost the city potentially $1 million annually in revenue from ambulance bills, yet the city reduced spending in the fire department for the current fiscal year by less than $500,000 compared with the 2021-22 fiscal year. The bottom line is that the net cost of the fire department has increased, yet the department’s workforce has dropped from 16 full-time equivalents to 10.5. Spending more for reduced service is poor management, and has contributed to the general fund shortfall.

The city council and budget board have taken reasonable steps to deal with the situation, including cutting personnel costs by $100,000 in the administrative services department, which includes the city manager, human resources director, finance director and several other positions.

The council is also considering asking voters this November to approve a local gas tax, the amount of which hasn’t been set.

That’s not ideal, but it’s a better option than the $10 monthly public safety fee Cannon had proposed because the burden of a gas tax, unlike the public safety fee, would be borne by visitors as well as residents.