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Ashland proposes to cut jobs, raise fees

Ashland Finance Director Mark Welch presented a plan to City Council and the Citizens Budget Committee on Tuesday night that would use a combination of job cuts and fee increases to eliminate a $2 million deficit facing the city during the next biennium.

The general fund budget is projected at $29 million in 2019 and $30 million in 2020.

The plan recommends cuts to city departments and the elimination of at least six city employees.

“The solution to a balanced budget relies on a combination of expenditure reductions along with proposed revenue enhancements,” Welch said. “The choices to be made are not easy, but through a collaborative approach the city anticipates a solution that mitigates service level reductions and financial burden on the community. With the general fund consisting of 66% of its expenses in personal services, or staffing, the only mechanism to make expenditure reductions involves reductions in positions.”

The plan suggested eliminating two police officers, one position from the Community Development Department, one from city administration, one from Ashland Municipal Court and one from Administrative Services. In addition, it proposed reducing fire staffing from a minimum of nine personal on a daily shift to a minimum of eight.

Both the fire and police departments asked for additional staff and equipment during their budget presentations in March.

During his budget presentation, police Chief Tighe O’Meara said the police department has enough resources to respond to only one serious call at a time, and fire Chief Mike D’Orazi said due to the number and variety of calls the fire department responds to, they’re left with no resources when everyone is out at the same time, which happens often.

“The expansion of the staffing window may leave the fire department in an unfavorable position to respond to calls depending on call volume and type, but the change would reduce overtime expenditures by $100,000,” Welch said.

Also under the proposal, the parks budget would stay flat in the next biennium.

The savings from all of the proposals presented Tuesday was estimated at $892,260.

The city hired three firefighters two-and-a-half years ago without a sustainable way to keep them on board, Welch said. In order to keep them, the public support fee would need to increase $5, from $1.50 to $6.50. Otherwise, the positions might need to be eliminated, which would decrease the number of firefighters per shift.

“We don’t think we can get rid of three firefighters and be safe, but there are other options,” Welch said.

The options include finding revenue from another source or using a carryforward fund balance and work to identify other options before the next budget.

To enhance revenue, Welch proposed that the city increase its building and inspection fees, which are currently under billing, he said. The city should be recovering roughly 75% of its operating costs but is recovering only about 40%, he said. Increasing various fees would bring in an additional $95,000.

He said that when the city transferred from a self-funded health plan to the new C.I.S. plan it was able to build up a reserve of $800,000 in health savings to help mitigate future premium increases. He proposed to transfer $100,000 from that reserve fund into the general fund.

In the last budget, the city transferred $100,000 from the general fund local marijuana funds into the housing program for an affordable housing grant. He suggested that this year the money go to the general fund, and the $100,000 for affordable housing be paid by selling properties the city no longer has a use for, such as the B Street yard, a property on Clay Street and one on North Mountain Avenue.

He said there’s a chance the property on North Mountain Avenue would be sold to become affordable housing anyway, so that would doubly benefit Ashland’s affordable housing program.

He proposed that the Ashland Forest Resiliency fee, which has remained steady at $1.39 per single-family household since 2015, be raised to $3 to continue to fund the increased cost of the program.

“The AFR fee increase is not the only potential revenue source for these purposes, as the city could increase both the water and wastewater franchise fees to 10% to match the electric utility and generate an additional $300,000,” Welch said. “The impact of the 2% franchise fee would be minimal to utility rates.”

If the actions are taken, it’s estimated that the deficit would be reduced to around $60,000, which is much more manageable, Welch said.

Welch said the city adopted its last budget with a $1.25 million deficit and an additional $850,000 for Central Services, which was not accounted for in the general fund.

Since then, there’s been a significant decrease in tourism, and tourism-related revenue is forecast to see minimal or no growth in the next biennium.

He said challenges for the upcoming budget will be an inevitable increase in PERS and health care costs, even though the city’s health care plan will change Jan. 1, 2020, and employees will pick up more of the burden of health care costs.

Welch said the proposed balancing options for the general fund pose challenges in maintaining services expected by the community.

He said potential long-term revenue sources need to be explored for the next budget, such as a 2% increase to the food and beverage tax, bringing it up to 7%, which could generate an additional $1.2 million a year; increasing the property tax to the city’s limit of $150,000; and a potential operating bond levy, which could generate an estimated $1.5 million annually.

He said those options could replace utility fees depending on how they were structured.

“The general fund, utilizing all of the revenue and expenses within this balancing proposal, improves its net fund position by $2.5 million for the biennium and sets the fund up for sustainability over the foreseeable future,” Welch said.

During the budget process this year, various citizens have spoken up in public forums stating that they believe the city is financially irresponsible and that the budget is not sustainable.

The budget must be finalized by June 30. The 2019 fiscal year starts July 1.

Contact Tidings reporter Caitlin Fowlkes at cfowlkes@rosebudmedia.com or 541-776-4496. Follow her on Twitter @cfowlkes6.

Ashland Finance Director Mark Welch presented a plan to City Council and the Citizens Budget Committee on Tuesday night that would use a combination of job cuts and fee increases to eliminate a $2 million deficit facing the city during the next biennium.