Jun. 7—Ashland City Council approved the city's 2021-23 biennial budget June 1, crossing the finish line on a six-month budget development process and paving the way for discussion on long-term financial stability.
The budget passed 4-2, with Councilors Shaun Moran and Gina DuQuenne casting nay votes.
A total of $2.9 million in reductions were made after city department submissions and revisions by the Citizens' Budget Committee, according to Finance Director Melanie Purcell. The city budget totals $263,949,218, including transfers between funds.
Purcell said the budget was composed recognizing obstacles and possibilities for the city, such as funding stability for Ashland Parks and Recreation, plans for the ambulance service, maintaining and replacing infrastructure, wildfire prevention, emergency management and regional public safety operations, and reinvestment in the Ashland Fiber Network.
The first budget phase shifts funding for Ashland Parks and Recreation from general fund property tax revenue to a 98% allocation of food and beverage tax revenue beginning in fiscal year 2022. Reductions in franchise fee rates for water, wastewater and electric utilities, and reinvestment of franchise fee revenues into Street Fund capital projects round out phase one recommendations, which are subject to further review by the council.
The second phase focuses on "eliminating structural imbalance and looking at the direction of the various assets that the city has," Purcell said.
Phase three prioritizes resiliency and regionalization — identifying what Ashland contributes to emergency management, securing adequate reserve funds and implementing a comprehensive, long-term financial strategy, she said.
"We wanted to look at what changes came about as a result of COVID that we could adopt and keep," Purcell said. "Through that, we ended up purchasing the kiosk that will be available this summer for citizens to make automated payments rather than having to come into city hall."
Nearly $6 million in savings can be attributed to pandemic-related reductions, she said.
About $4.3 million in federal stimulus cannot be used for tax cuts, rate cuts or reserve funding, but may replace lost revenue from general municipal operations, hence a recommendation to direct the stimulus package toward the general fund, Purcell said.
On May 14, the Citizens' Budget Committee approved moving $100,000 in marijuana tax revenue from the general fund to the housing fund each fiscal year, and recommended the council identify reductions or revenue streams to cover $1 million in the general fund over two years.
With the budget, the council approved minor rate increases for electric, stormwater and wastewater, adding up to about $3.52 per month for the average Ashland residence.
"It had come to light that they were not in line and some customers were paying less than their fair share, other customers were paying more — this is part of a gradual stabilization of that," Purcell said regarding electric rate increases.
Staff recommendations included a series of City Council study sessions bimonthly from August through March 2022 to consider each cog in the financial prioritization system. The study sessions add onto sessions scheduled for other topics.
City Manager Pro Tem Adam Hanks said the additional study sessions represent the necessary price of moving toward sustainable and resilient fiscal management.
"I have not seen anyone in these conversations say that we are not facing a structural issue with our budget," said Councilor Tonya Graham, who moved to approve the biennial budget. "This budget allows us to take some concrete early steps and it also buys us the time that we need to make those bigger decisions about what this community expects from its city government, what the city government can provide and how we go about providing those services in the longer term."
Councilor Shaun Moran said he did not support budget approval because councilors were not asked about their priorities, goals and values during its composition. Moran rejected implications that the budget had been "cut to the bone" and said no "serious attention" was given to cost cutting.
The budget only balanced because federal stimulus money came through, and rate increases fly in the face of the city's affordability goals, he said.
"The proposal to implement the Budget Committee's recommendation to cut general fund expenses or add revenues of $1 million as the first step in dealing with the structural deficit will be looked at over the next two years just reinforces to me the same kick-the-can-down-the-road-and-let's-hope-for-the-best approach that has gotten the city into this financial mess," Moran said.
Councilor Gina DuQuenne, echoing Moran's comments, said she would not support the budget because it did not represent "good fiscal stewardship" and places an unnecessary burden on Ashland residents.
Councilor Paula Hyatt encouraged the council to consider how projected versus actual figures might differ, with several city staff positions remaining open or frozen. The proposed study sessions will allow the council to continue the Budget Committee's work and make hard decisions about spending, she said.
Councilor Stefani Seffinger said elements of the budget, such as relocation of marijuana tax revenue in support of affordable housing, reflect a commitment to acting upon community values.
Contact Ashland Tidings reporter Allayana Darrow at email@example.com or 541-776-4497.