City set to weather tough times

While the City of Bend slashes budgets, lays off planning staff and searches for ways to cope with a budget shortfall growing into millions of dollars, the City of Sisters is looking pretty comfortable.

No layoffs are planned, according to City Manager Eileen Stein, and rather than facing a shortfall, the city has a more-than-healthy contingency fund of approximately $1.5 million.

Permit fees and systems development charges (SDCs) are down significantly in Sisters, as elsewhere. Planning fees are coming in under targets, as are SDCs for sewer and water. Transportation SDCs are down overall, but for a major SDC contribution for the new shopping center being developed around the new Ray's Food Place at the west end of town.

But despite the loss of revenue associated with a sharp decline in building activity, the city isn't facing a giant budget hole. That, according to Stein and Finance Director Lisa Young, is because Sisters has a completely different structure from Bend or Redmond or Deschutes County.

"Their staff positions are tied to their development fees," Stein explained.

Young elaborated. "They have a stand-alone community development fund."

In flush times, that means development pays for itself, in terms of municipal staffing. In tough times, it means that when fees drop significantly, positions go with them.

"In Sisters, our staff positions are part of the general fund ($3.4 million)," Stein said. "When you have these ups and downs and swings in our economy, we have money in our general fund to support our planning staff when those (SDC) revenues are down."

Residential building permits have declined to literally nothing in a couple of months this year (and there was one permit issued per month for three months in a row). That's picked up recently, with three filed in September.

The planning staff, which includes Porter, an associate planner, a contract planner and administrative staff, has not been idle while building permits fell off a cliff.

In fact, according to Porter, commercial applications are keeping the department fairly busy.

"We're getting a fair amount of inquiries on commercial development; residential, not so much," Porter said.

There's not as much small stuff as there once was, but there are a couple of big projects in the offing: a 98-room hotel (see related story, page 26) and the proposed Black Butte Crossing development on Larch Street. The department has also handled the plans for the new post office on Larch.

Planning staff has worked on proposals for banks of mailboxes to be placed in neighborhoods and has been working to complete a Transportation System Plan and an update and revision of the city's Development Code.

"At one point, I counted 34 long-range projects being undertaken by our department," Porter said.

These include the Whychus Creek Restoration Plan, an emergency resources plan and a comprehensive plan update covering the Forest Service property at the west end of Main Avenue.

Cuts have been made due to the drop-off in revenue, but "that's just going to show up here in projects that are delayed," Stein said.

Public Works Director Brad Grimm said the city has delayed upsizing water lines because funds are not coming in - and with no growth, there is no need for the upsizing.

Stein and Grimm also noted that while transmission lines have been designed for sending effluent out onto the city's disposal site on the Lazy Z, "we don't necessarily need to build those transmission lines yet."

Grimm noted however, that with the bidding climate 30 percent off the highs of just a year ago, it may behoove the city to finance some projects to get the work done more cheaply than it might be when things pick up again. That is a possibility just now being kicked around city hall.

Grimm cited the East Cascade intersection construction now underway as an example of how far bids have come down.

The project originally bid at $600,000 in 2007, with only one bid coming in. The city value-engineered the project down in size and put it out again, this time receiving no bids at all - contractors were busy.

This year, the project came in at $233,000.

Another consideration for the city, which must be the envy of other municipalities, is that its contingency fund may be too rich. The fund stands at $1.5 million. Stein said her conversations with other city managers indicates that $700,000 would be an appropriate standard for a city of Sisters' size.

That leaves some $800,000 in "underutilized funds." Those funds could be dipped into to fund delayed projects, could be rebated to taxpayers, or the city could keep the contingency high anticipating a lengthy downturn.

"Those are decisions the council will make," Stein said. "That's a nice problem to have. We're fortunate to be in this position."

Author Bio

Jim Cornelius, Editor in Chief

Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.

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