Bend keeps on growing through pandemic — and so does city’s new, $919 million budget

Revenues have come in stronger than predicted after cuts last year

BEND, Ore. (KTVZ) -- Bend City Manager Eric King kicked off the city’s budget adoption process Wednesday evening by delivering a message to the Budget Committee and presenting the proposed two-year budget for the 2021-2023 biennium -- one of record size, despite the many challenges of the COVID-19 pandemic.

“This balanced budget reflects the city’s response to the ongoing challenges of the COVID-19 pandemic while maintaining, if not expanding, services offered to the community,” King’s message said. “It also identifies funding to address City Council’s goals for the upcoming biennium.”

Next Tuesday and Wednesday, May 11 and May 12, the Budget Committee will conduct budget deliberations prior to the council’s final adoption of a two-year budget in June.

The proposed biennial budget of $919.4 million is a 3 percent increase over the last biennium. The $919.4 million number represents all operating revenues for the biennium (which are $395 million), as well as debt proceeds, interfund transfers, one-time grant funding, and reserves from the prior fiscal year.

The $395 million in projected operating revenues for the biennium is a 5 percent increase for the first year of the biennium and a 6 percent increase for the second year.

Of the $395 million of city-wide operating revenues, $124 million are in the city’s General Fund. The primary source of revenue in the General Fund is from property taxes, and about 80 percent of the General Fund pays for public safety. The General Fund is also where the Council and the Budget Committee have the most discretion for funding priorities.

“Balancing the budget was particularly challenging during the 2019-2021 biennium due to impacts of the COVID-19 pandemic,” King said.

When the pandemic began, its financial impacts were unknown. The city estimated revenue shortfalls around $8 million. All city department budgets were cut approximately 10 percent and 37 vacant positions were eliminated. However, revenues have been coming in stronger than predicted, and the 2021-2023 proposed budget assumes the majority of the COVID-19-impacted revenues will return to pre-pandemic levels or higher.

The city expects to add about 30 staff in the upcoming biennium, some to fill vacant positions that were eliminated when pandemic cuts were made.

Revenues

Revenues include anticipated increases in tax assessed property value of 5.5 percent for fiscal year 2021-22 and 5 percent for fiscal year 2022-23. Property taxes primarily fund police, fire, and street maintenance services.

The proposed budget also includes a $2.2 million property tax levy for fiscal year 2022-23 for the voter-approved Transportation General Obligation (GO) Bond. Another additional revenue increase is from projected room tax increases of 16 percent in fiscal year 2021-22 and 5 percent in fiscal year 2022-23, as tourism activity is anticipated to return to pre-pandemic levels.

Rate increases are proposed for water utilities (3 percent for sewer, 2.5 percent for water, 7 percent for stormwater), to address existing infrastructure deficiencies and future needs. Permit fee increases are also proposed for Building (3 percent), Planning (6 percent) and Private Development Engineering (3 percent) permits to support the additional staffing needed to maintain permit turnaround times.

Expenditures

Personnel, salary and benefit costs for Ccty employees, represents the largest category of spending in the proposed budget. Proposed investments in infrastructure make up another significant portion of proposed budget expenditures. The proposed budget includes the issuance of $24 million in long term debt for the first series of GO Bond projects. About $126 million of infrastructure investments are programmed in the 2021-2023 biennium.

Council Goals

In March, Councilors saw and approved a proposal to allocate about $3 million of General Fund discretionary revenue to support implementation of their Council Goals. Addressing homelessness is a priority, with approximately 40 percent of the General Fund revenues dedicated to Council’s Housing Goal.

More resources:

The full budget message can be found here.

The proposed 2021-23 budget is here.

You can find past and present budget documents at: www.bendoregon.gov/budget

This short, animated video explains more generally how the City's budget works.