The City of Salem’s Finance Committee met again June 23 in an attempt to pass a budget recommendation to the Board of Aldermen. Previous meetings attempted to pass the budget through the committee, but failed due to lack of quorum.
Committee Chairwoman and Alderwoman Kala Sisco was held up at work, she said upon her arrival later in the meeting. Alderman Shawn Bolerjack, who is a non-voting member of the committee, led the proceedings until Sisco arrived. City officials present included Mayor Greg Parker, City Administrator Sally Burbridge, Treasurer Stacey Houston, Public Works Director Mark Nash and City Clerk Tammy Koller. Alderman Kyle Williams was also present. Committee members Bernie Sirois, Nathan Kinsey, Sherry Lea, and David Weiss were present, finally securing a quorum. Committee members Mark Manjarrez and Deanna Nash were absent.
As the meeting opened, Bolerjack addressed members of the public. According to city officials, there has been difficulty maintaining order and decorum in utility and finance committee meetings due to interruptions and outbursts from members of the public. Alderwoman Sisco also addressed the issue at the previous finance committee meeting.
“(Burbridge and Houston) will be going over the proposed budget for the next fiscal year. We’re going to open it up for the committee to ask questions, and then after that, we’re going to open it up to the public to ask questions for clarification on what’s being discussed here tonight. Just like last time, we’re going to try to focus on this here, so if there’s any interruptions from out on the floor, there’ll be a warning, and then the second time, we will ask for you to be removed,” said Bolerjack.
City administrator Burbridge and treasurer Houston led the presentation of the draft budget, focusing on changes that had been made since the last finance committee meeting June 15.
The fiscal year 2024 draft budget is a balanced $17 million budget, a 17% increase from the FY 2023 budget. Grant funded projects account for 28% of the increase in expenditures between the current estimated year end and the new budget. Grant funded projects also account for 20% of FY ’24 expenditures. City staff noted that increases in revenues are largely accounted for by the increase in grant revenues, and the addition of roughly half a year’s worth of revenue from the additional 1% sales tax passed by Salem voters back in April.
Staff also noted that there is only one transfer between funds to be included in the budget, with the exception of transfers adding to reserve balances per the city’s reserve funds policy. City officials told voters back in March that if passed, the increased general revenue income from the additional 1% sales tax would allow the city to reduce transfers from other funds to the General Fund. During the meeting, Burbridge said that utility transfers were unlikely to be phased out completely, because it is common practice for cities that run their own utilities to make transfers in lieu of franchise fees that a normal utility would pay. The transfer included in the draft budget is reduced from the previous year’s amount.
“As promised during the Additional 1% Sales Tax presentations to the public earlier this year, the transfer from the Electric Fund to the General Fund is included as a reduction from the previous budget year (FY ’23 - $900k to FY ’24 - $600k),” reads the presentation.
Included within the budget are two instances of using the previous year’s balances for specific purchases or improvements. The two funds in question, the Parks and Recreation fund and the Airport fund, do not have specific, separate reserve funds to draw from for unexpected expenditures. In May, the Parks and Recreation Board recommended the purchase of a new work truck, using prior year’s balances. In early June, the Airport Board recommended approval to use prior year’s balances for local grant matching funds for the T-Hangar construction project, as well as upgrades to the pilot’s lounge.
Budget-wide increases include a 10% increase in fuel and utilities, supplies and materials cost increases, and a 4% Cost of Living Adjustment (COLA) for all city employees.
The total beginning balance of all funds is estimated at $7,263,929, with a projected end balance of $7,760,653. Total revenues are estimated at $17,711,536, with estimated expenditures of $17,214,813. City staff reports, as of the presentation of the draft budget, that the FY 2024 budget is currently in surplus of $496,723.
Committee member Lea discussed the lack of inclusion of funds earmarked for next year’s Independence Day fireworks. In October of 2022, the committee began discussing cutting the cost of fireworks from the budget, around $18,000. In January of 2023, the committee recommended cutting the fireworks. During discussion, Alderwoman Sisco talked about her tentative plans to use the Community Service Committee to organize events and raise funds for a fireworks event. Sisco said she envisions an event that charges admission and would include vendors and sponsors to generate funds. The committee discussed different possible arrangements for funding, perhaps including partial city funds, county assistance, and/or donations. Committee members discussed the use of tourism tax funds toward the event, but Burbridge noted that those funds could only be used for marketing tourism events, and not to fund the event itself.
“We could market the heck out of it,” remarked Burbridge.
Lea said she felt it would be a good idea to include at least some funding in the FY ’24 budget to put toward the community event. Some suggested a budget adjustment be made closer to time, but Lea and some others felt that it would be better to budget the amount in ahead of time.
The committee voted to recommend the inclusion of $10,000 in the draft budget to be put toward the event by a 3-1 vote. Committee member Sirois voted no.
After the budget presentation, Burbridge asked committee members to consider several key questions about the budget:
“Are there areas of the budget that seem out of line with board and city goals of reducing dependency on utility transfers? What is appropriate compensation for employees? Are there other ideas about how we address lingering infrastructure and vehicle/equipment replacement issues with fund pressures we see?” Burbridge read from the presentation slide.
After some more discussion, Lea made a motion to recommend the passage of the FY 2024 budget with the addition of the $10,000 earmarked for fireworks. Sirois seconded, and the motion passed by a 4-0 vote. The draft budget will now be deliberated by the Board of Aldermen for final approval and adoption at their meeting, which will begin at 6 p.m. on Tuesday, June 26, at the Old City Hall council chambers.
