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Talent budget impacts tallied for Almeda fire

Almeda fire impacts to Talent’s city budget will be cushioned somewhat for the current fiscal year as city officials had already made cutbacks in anticipation of pandemic impacts. Future years will present a bigger challenge.

City councilors learned about projected monetary impacts during a November study session that included participation by state Rep. Pam Marsh, who is working to gain assistance for communities impacted by the Sept. 8 conflagration.

“The city is in relatively good shape for this fiscal year as we did a really frugal budget projection due to the pandemic,” said City Manager Sandy Spelliscy. The city set up larger than usual end fund balances anticipating revenue impacts. Municipalities often carry large end fund balances to cover the period from July 1 until property tax revenues come in later in the fall.

“We haven’t run all the numbers. It’s possible we could make up all the losses for this year just through strong fund balances,” said Spelliscy. “The problem with that is that it leaves us drained for the next fiscal year and coming years.”

Three main budget areas impacted by the fire — water utility billings, property tax collections and other taxes and franchise fees — are projected to see a loss of $615,793 in revenues through June 30. For fiscal 2021-22, the figure jumps to $733,440.

“We have been hit far harder than other places in the state. It’s an urban fire that undermined the property tax base and the franchise fees,” said Marsh. “The need is understood by the governor’s office.”

Losses to the city’s general funds are projected at $341,371 for fiscal year 2020-21, and $400,726 for the following year. The fund supports administration, community development and public safety. The city’s budget shows a 2020-21 general fund total of $3,335,450.

Over 600 residences and more than 130 commercial structures were lost in the fire, which impacted about one-third of the town, said Spelliscy. The fire eliminated water services to those locations. That will result in a decrease of $198,996 in billing revenues for this fiscal year and $244,893 in the following year.

In addition to the water revenue, three city fees that support transportation, parks and public safety are collected through the water bill. Transportation fee losses will be $24,707 this year and $30,569 next year. Parks fee collection will decline by $31,575 this year and $39,067 in 2021-22. A public safety fee, which helps support police, will see a loss of $25,179 this year and $31,153 next year.

Property tax loss projections assume that all affected property owners requested proration of the amount due because structures no longer existed after Sept. 8. In the coming years taxes will be applied to bare land only unless new structures are built. A property tax loss of $220,924 is estimated for the current fiscal year, while it is anticipated to be $273,346 in 2021-22.

Franchise fees are predicted to decline by $86,378 in both years, a 25% loss for the general fund. The fees are assessed on gas and electrical utilities, recycling service and cable TV.

A local marijuana tax, which is directed to the parks fund, will see a loss of $8,082 in both years. A portion of the state marijuana tax the city gets will decline by $4,849 in both years. That loss will also impact the general fund. One marijuana business was lost in the fire.

Storm drain revenue will decline by $10,103 both years and impact the street fund. The storm drain fee is collected by Rogue Sanitary and passed back to the city. Lodging taxes will decline by $4,041 this year and $5,000 next year. The town’s only motel was destroyed in the fire.

FEMA’s community disaster loan program allows municipalities to borrow money to carry on existing essential services after a disaster. Under the program a city can borrow 25% of approved operating budgets for a fiscal year up to $5 million, as long as it can show revenue losses. Loans are for five years at a 2% interest rate with extensions possible. Loan funds can only be used for budgeted operational costs and not for capitals expenses, debt service and overages.

Talent, Phoenix and Jackson County Fire District No. 5 will meet loss thresholds requirements, Marsh said. A portion or all of the loan amount may be forgiven, she said.

Councilor Jason Clark asked about timelines for FEMA fund applications and awards. Spelliscy said the city is still collecting data and that funds are typically awarded two to three months after approval. She anticipates there should be some certainty on awards around the time the 2021-22 budget is considered in the spring.

Marsh said word on state funding aid may come out of the regular legislative session, which begins in January, but it will be a wait-and-see process.

Reach Ashland freelance writer Tony Boom at tboomwriter@gamil.com.

Photo courtesy cityoftalent.org