The Ashland Police Department got the go-ahead to hire two more police officers on top of two recent hires, but exactly how the city will pay for them remains unsettled.
City Council members unanimously approved the hiring of five officers last March at an estimated cost of about $110,000 each. They later approved funding sources for two of the officers, but failed to reach consensus on how to fund two more positions. The fifth position was filled by reassigning an officer from a regional partnership to Ashland duty.
Funding for one officer came from a property tax hike. The second will be funded by a fee of 50 cents per month per electric meter, plus a share of marijuana tax proceeds. The 50-cent utility fee is due to take effect July 1.
The additional officers will add one officer per shift and reinstate the school resource officer program, said police Chief Tighe O'Meara. That will allow APD to respond to more than one confrontational situation at a time without calling for backup from outside the city.
Councilor Greg Lemhouse urged action at a Jan. 2 meeting on funding the final two officers, saying the city is “playing with fire” the longer the council postpones its decision.
Mayor John Stromberg reminded the council twice of a $1.7 million deficit in the current biennial budget of $286 million. Unless revenues exceed expectations or expenditures come in low, the council will have to tap into the reserve fund or find new sources of funding before the next budget cycle.
Staff presented five funding options for the final two officers, all of which involve raising taxes and creating new fees for either Ashland residents or local businesses and tourists.
'Public Safety Support Fee'
The council passed a proposal from Councilor Rich Rosenthal for a temporary utility surcharge of $2 per month, buying time for staff to produce a more comprehensive report on other options. The $2 fee is separate from the previously approved 50-cent fee.
“I think the object is to reduce the financial impact on residents and homeowners as much as possible,” Rosenthal said while proposing the public safety support fee as a temporary solution.
“We owe it to the residents and taxpayers to look at all possible revenue strings … so we could say we fully analyzed the weaknesses and strengths of all of them,” Rosenthal said.
The $2 temporary surcharge is tied to the city’s property tax collections, said Mark Welch, director of Administrative Services. If property tax revenue exceeds the budget by 3 to 4 percent, the excess money will replace the surcharge. Welch added the fee could only be reduced and not increased if property tax collections come in below expectations.
This was the staff’s recommended option.
Transient Occupancy Tax
The option to raise the Transient Occupancy Tax drew interest from councilors Lemhouse, Stefani Seffinger, Mike Morris and Traci Darrow. The Transient Occupancy Tax is a hotel, motel tax established in 2003. Staff proposed an increase of 1 percent to 10 percent, which would put Ashland’s hotel tax above the state average, but still below Bend at 10.4 percent and Portland at 11.5 percent, Welch said.
Seventy percent of the 1 percent hotel tax increase would be restricted to tourist infrastructure and facilities, according to state legislation. The remaining and unrestricted 30 percent could be used to fund an officer, Welch said.
Several councilors were wary as staff said the city hadn’t communicated with the stakeholders of the tourism industry in town, including the Chamber of Commerce, Ashland Visitor and Convention Bureau, Bed and Breakfast Network and Oregon Shakespeare Festival.
“I’m not comfortable with increasing the tax without talking to the industry,” Councilor Dennis Slattery said. His spouse, Sandra Slattery, is executive director of the Ashland Chamber of Commerce. Dennis Slattery clarified with City Attorney David Lohman at the meeting that taking part in the discussion was not a conflict of interest for him because the discussion was strictly about police funding.
Darrow, in support of the tax, said the city “over-relies on utility fees again and again,” adding the city instead should tap into the tourism revenue.
“We have the luxury of being a tourist town, and we don’t do a very good job collecting revenue to help our city from all the visitors that come through,” she said.
Live entertainment ticket tax
The city could generate an annual revenue of $200,000 by applying 1 percent tax, or $350,000 in revenue with a flat fee of $1 per ticket from live entertainment tickets at larger venues, staff said in its report. The idea is to put a fee on tourists who come to Ashland for live entertainment and have an impact on police services.
The tax has been implemented in other cities in the nation and would be collected the same way as the hotel tax in Ashland. In larger cities and entertainment hubs, the tax reaches up to 14 percent, city Administrator John Karns said.
Oregon Shakespeare Festival would be impacted, but the city hasn’t figured out what other venues and productions would be defined as “a large venue.”
Lemhouse, Rosenthal and Darrow were interested in the option, while Seffinger and Stromberg said the tax would potentially hurt the local entertainment industry, especially after this year’s “financial crisis” due to wildfire smoke. OSF lost an estimated $400,000 in revenues, about 2 percent of total ticket sales, due to refunds and lost ticket sales, forcing a staff reduction of a dozen employees toward the end of last season.
“I’m afraid of relying on the tourists after this year’s fire,” Seffinger said. “I’d rather like to see a combination of things.”
Karns also warned the council that the tax will be “a different ballgame” for staff to tackle if the council chooses to approve it at the next regular meeting.
"We don't know much about this tax," Karns said. "It would be ambitious to complete the research by (the next meeting Jan. 16)."
Parking meter fees
Staff presented a plan, included in the approved Parking Management Plan, to implement paid parking spots in downtown, along with a paid parking lot program.
The program would generate $75,000 per year but would also cost the city $25,000 in infrastructure costs, Welch added.
“The issue we discovered is that it could create issues in the neighboring streets,” Welch said. “We would have to explore and analyze the downtown parking plan more thoroughly.”
Staff recommended the council not use parking meter fees to fund the officers but continue to pursue the plan in the future.
To fund the first officer, the council voted in June to increase 2017-18 property tax rate 4.5 cents per $1,000 assessed valuation. Welch said at the meeting that the council could approve the same increase this fiscal year to fund another officer.
No councilors expressed interest in this option at the meeting.
The current budget
Slattery advocated for a more reserved approach — to borrow from the current budget or have it absorb the one-time cost for this year until a long-term solution is found. Slattery said he’s “very reserved in increasing any fees or taxes at this point.”
“Not until we get an idea what we are talking about here,” Slattery said, referring to the lack of information and communication between the city and stakeholders in the tourism industry who would be impacted by increasing taxes.
Darrow, who advocated for more fees on the tourism industry, later also supported Slattery’s approach, saying she believed there’s enough money in the current budget to bridge the city until a fitting solution is chosen.
Welch said Slattery’s proposal would “create a big hole in our budget,” as the city needs a dedicated funding source for the officers instead of a one-time expenditure.
The council voted to ask staff to come back with fleshed-out reports on each option before the beginning of the second fiscal quarter of this year.
— Reach reporter Tran Nguyen at 541-776-4485 or firstname.lastname@example.org. Follow her on twitter @nguyenntrann.