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CITY OF FALLS CITY
BUDGET MESSAGE
2005-2006

CITY OF FALLS CITY BUDGET 2005-2006

To the honorable Mayor, members of the Council, members of the Budget Committee and citizens of Falls City. You will find in front of you the proposed 2005-06 City Budget. This budget presents a financial plan to guide the city through the next Fiscal Year. In addition to the individual budgets of the various City Funds, this notebook contains supporting material and detailed information on various subjects related to the budget. It is my hope that the materials supplied provide a more thorough understanding of the figures I arrived at and how.

It is my duty as budget officer to present a proposed balanced budget for the Fiscal Year 2005-2006, beginning July 1, 2005 for your consideration according to Oregon Local Budget Laws – ORS 294.305 to 294.520, 294.555 and 294.565.

The proposed budget has been distributed and made available to the public and legal notices within the local newspaper have provided this information to the public.

While I empathize with the fact that citizens of Falls City are on very limited incomes, the city needs to realize it must generate enough revenue to support itself and to effectively plan for future growth. Over the past few years revenues have not been able to keep up with expenditures, thus creating a decline in fund balances. I express concern that unless we as a city are willing and/or able to aggressively increase revenues we will not be able to sustain city services to our citizens.

When a budget does not work, you either reduce expenditures or you increase revenues or both. You’ll find I am recommending both. The city needs to review and adjust revenues on an annual basis to insure sufficient revenues to cover expenses, for which we have been lacking.

Rate increases should be made gradually to avoid large increases that can have a major impact on citizens who are on fixed incomes.
PERSONNEL:
The current city staff consists of three (3) full-time and one (1) part-time employee. The payroll costs are proportioned between the General, Water, Sewer and Street Funds.

Please note the budget supporting material contains two proposed wage scenarios. One with wage increases, (which the City Council determined needs to be maintained) and one without. Also note, even with the wage increases personnel expenses have been reduce this fiscal year.

The city needs to maintain its employees. In order to do so, employees must be given adequate wages. Staff turnover has caused considerable financial hardship to the city in the past few years.

Additionally, the budget reflects a proposed Health Benefit change significantly reducing the total annual cost for Health Benefits.
INTERPRISE FUNDS:
WATER FUND & SEWER FUND:
Recommended implementation of utility rate increases will be necessary to offset operating and capitol improvement costs. This will not only help stabilize municipal employment, but provide future revenues for needed quality of life improvements (capitol projects) in the community.
SUMMARY:

Adopting an annual budget is one of the single most important policy issues the governing body will make. This document is much more than an allocation of revenues and expenditures. It is a plan of work, an allocation of human resources and talent, a contract with the citizens of Falls City, committing us to high standards of performance and conduct.

All current projects will need to be diligently administered with close scrutiny to all expenses to avoid cost overages. Before the budget Committee approves new projects for the 2005-2006 fiscal year, the Committee should review and determine their economic feasibility.

This budget is presented with some risks and challenges. The budget committee will need to make adjustments that will enable the City to continue to improve its financial position and still meet the needs and expectations of our citizens. The proposed budget maintains current staffing levels.

The premise of this budget is base on a projection of costs coupled with loss or, shortfall in city revenues for Fiscal Years 2001-2002, 2002-2003 and 2003-2004 necessitating a combination of reducing expenses next fiscal year, increasing rates and researching new revenue sources.

Local budget law requires all receipts and expenditures to be itemized in the budget document. The 2005-2006 receipts and expenditures comply with this ruling.

I wish you all well and thank you for your efforts during this budget process.

Respectfully submitted,

Darla Williams
Budget Officer

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