The Medford City Council was recently asked: "The Medford City Council voted to raise utility fees to pay for a $32 million bond. What law allows the council to impose a utility fee? How can the council approve this large expenditure without voter approval?"
First, the legal answer is that the Medford Charter and Oregon Home Rule law allow the City Council to impose the utility fee without voter approval. State law allows issuing non-general obligation (G.O.) bonds without voter approval. But we take the second question to be more than a purely legal inquiry, and thus provide the following information for the public.
On Oct. 3, the Medford City Council unanimously voted to approve a utility fee increase for public safety facilities. This action was taken after being presented with evidence of the need to improve our police and fire facilities and options to pay for those improvements. The needs and options that informed our vote are summarized below. There is more detailed information, and we are in the process of establishing an outreach program to provide such detail in the event of further inquiry.
The Police Department moved into its current location in the Medford City Hall in 1967. The idea was that it would be temporary. A separate police facility was to be constructed on city property once the population of Medford reached 45,000. By the early 1990s Medford surpassed this mark, yet the department remained at City Hall.
Facilities are undersized and do not meet current seismic standards. The funds will provide improved safety when handling suspects in custody and privacy when conducting victim and witness interviews.
The Fire Department operates out of five fire stations throughout the city, yet faces many of the same challenges as the Police Department's City Hall location. Two of the fire stations were built in the 1950s; a total of four stations have exceeded their useful life. Since initial construction, the department has assumed additional tasks and the stations cannot house all of the department's engines, equipment and employees. The buildings are not seismically sound, and the funds would allow needed improvements to prevent contaminants from entering staff living and working areas.
When presented with the need, the council was faced with the option of increasing the public safety utility fee or submitting to the voters a general obligation bond that would be paid by a property tax. We chose to increase the public safety utility fee.
A utility fee is a flat monthly rate applied equally to all business and residential utility customers in Medford. The $2 monthly increase will be used to fund the portion of bonds issued for new police and fire facilities. The total bond will be $38 million, some of which will complete US Cellular Community Park, paid for by an increase to the airport car rental tax.
The utility fee option was preferred over a general obligation bond tax. The increased tax for a home assessed at $150,000 (the current median) would be 35 cents per $1,000 assessed value — approximately $53 a year. Some homeowners would pay less in property tax than in the utility fee option, but many would pay more. Further, a real property tax unevenly places the burden of payment on non-exempt property owners only. A utility fee reflects payment by more of those who benefit from the improvements.
Increasing the utility fee is financially sound. Though bond rates are historically low, there has been an approximate 1.25 percent rate increase over the past year, and we expect this rise to continue. The time and expense required to place a bond on a ballot, combined with rising rates and construction costs, were reasons the council opted against issuing general obligation bonds.
Members of the Medford City Council take their charge seriously. They were elected to represent the citizens of Medford, and to make decisions on their behalf. Not all decisions are easy or popular, but the City Council remains focused on the safety, security and livability of the community for all its citizens. Under the 2012 Medford Strategic Plan, the first goal of the city is to "ensure a safe community by protecting people, property and the environment." The decision to fund police and fire facilities does just that.
City leaders diligently worked to explore options to fund the improvements. While we in no way downplay the impact of a $2-per-month fee increase, we believe we arrived at a reasonable solution to a difficult problem faced by the city and its citizens.
Dick Gordon is president of the Medford City Council.