City of Sisters faces budget crunch

If there are not major changes in expenditures, the City of Sisters could be perilously close to a significant budget crisis.

A summary spreadsheet developed by councilor David Asson and budget committee member Andrew Gorayeb offers a "fresh look" at the city budget. If the analysis bears out, the budget as proposed for the 2011-2012 year is running at a deficit of over $500,000. The $28-million reserve built up during the housing boom through 2009 is down to under $4 million today. At the projected "burn rate," the contingency fund would be depleted in two years unless major budgetary changes are made. That is, increasing revenue (taxes and fees) and/or decreasing expenditures.

This proposed budget already includes the revenue from the temporary four-percent water rate increase passed earlier this month, and it does not include any of the capital expense outlay requested for the highly contested water system improvement projects.

The budget committee ran out of time last Thursday to review and comment on this new analysis, so the review was moved to the committee's final meeting on June 2 at 5:30 p.m. The meeting is open to the public.

The trigger for this different snapshot of the city budget grew out of the frequently expressed frustration of both council and community budget committee members. Using the traditional detailed "bottoms up" presentation of the proposed budget, the committee members found it very difficult to see the big picture in the city's finances, both looking back and going forward.

Both Asson, a retired CPA, and Gorayeb, a major commercial real estate developer, have extensive private industry experience in the preparation and review of complex budgets.

In a note to the budget committee, Mayor Lon Kellstrom cites increasing downward pressure on all city funds and recommended "a more austere budget than we have so far." Kellstrom recommends several steps, including raising sewer rates $3.50, to $39 per month, and that commercial/industrial accounts pay according to their water consumption; eliminating a three-percent merit increase for staff to save $20,000; and foregoing improvements on Fir Street to save $42,000.

The Sisters budget committee is made up each year of the five sitting city council members and five private citizens chosen from the larger Sisters community. The budget committee's charter is to review, comment, and make recommendations to the city council on the budget prepared by City Manager Eileen Stein and her staff.

Key city staff sit with the committee to present their department budgets and answer questions. Along with Asson and Gorayeb, the community members also include committee chair Gwen Chapman, Cris Converse, Shawna Bell and McKibben Womack.