We need your help
Join members of the City Council, Revenue Task Force and Budget Committee in April and May as we work together to bring the organization's services and programs and community needs and expectations of service in line with available resources within our community.
We are spending more than we are taking in
This year (Jul. 1, 2018 to Jun. 30, 2019), expenses are estimated to be $5.4 million more than the revenues we take into the General Fund to support Police, Fire and emergency medical services, the Library, operating Salem's parks, and supporting Salem's neighborhoods.
Other sources of funding are limited to specific kinds of services and projects. For example, a portion of State-collected gas taxes helps to pay for streets and bridges. Water fees paid by residents, businesses and other local customers help to pay for new drinking water treatment, equipment, and pipes to get the water to your home and business. And, funds from recent voter-approved bonds for a new police station and upgrades to the Salem Public Library are dedicated only to those projects.
The City's financial health is at risk
How much we have left after we pay the bills for the year in the City's General Fund, the working capital or rainy day fund, is one way to measure the City's financial health. Without changes to the services we provide our community or to our revenue sources, the City's General Fund working capital will be gone by June 30, 2022 and we will not have enough resources to fund these services. We will not be able to continue doing all we do. There are big decisions ahead for our community.
How did we get here?
We have stepped in where our community has asked the City to fill gaps. In the 2017 Strategic Plan, residents looked to the City to do more to provide affordable housing and serve the homeless in our community. Traditionally, this valuable work has been outside the City's core service areas. This continuing commitment, in addition to ongoing services, outpaces our available funding.
We've restored services. We made big changes in 2009 to align services with the drop in revenues from the recession, and made further changes again in 2013. We closed two fire stations, reduced library hours, reduced recreation services and support to neighborhoods. Since that time, we've re-opened the two fire stations and have continued to make improvements to services the community expects and values.
Costs of services are increasing. Expenses for our services, which rely on our people, have increased as Salem remains a competitive employer in a robust job market and as the cost of public sector retirement escalates.
Revenues are not keeping pace. Property taxes are the largest source of revenue for the City’s general fund. Measures approved over 20 years ago caused current valuation inequities, caps, permanent rates, and growth limits. To balance budgets cities relied on user fees, deferred maintenance, used reserves, and cut services because cost increases and service demands outpace property tax revenues.
Improving community services along the way
We have also continued to fine-tune and improve services to our community and reduced costs, moving some resources to new needs along the way. To be good stewards of the resources entrusted to us, we've been using technology in new ways and changing the ways we provide services, using more energy efficient products, charging for services that make sense, and engaging volunteers and foundations to support community services.
our commitment to you is to:
To continue to improve, looking at our operations and across the organization for opportunities to do things more efficiently and continue to provide high quality services our community has come to expect.
Keep the conversation going and share how decisions could be made so that we can be more responsive collectively to the changing financial climate.
Plan and fine tune what changes in services best meet the needs of our continually growing and changing community.
What's happening next?
April – May 2019: Working to align budget with available revenue. Through this year's budget conversations, beginning April 24, the 18-member Budget Committee will make choices to bring our spending back in-line with available funding. These changes will help in the near-term. Comments are welcome at these open, public meetings which begin at 6 pm at City Council Chambers, 555 Liberty Street SE. You can send them in advance to
[email protected] or follow the discussion online through Salem's Facebook page, YouTube, or cable channel 21.
2019-2020: Considering choices for raising revenues. Last year, a task force looked closely at ways we could fill funding gaps with ideas for new revenue. If moved forward, revenue options help fund community services and programs. City Council will talk through the options with the Revenue Task Force at an April 15 Work Session. More conversation is likely after the budget is approved in June 2019.
2021: Updating Salem's Strategic Plan. After we've been able to bring spending in-line with available resources and have conversations about what funding levels are right for our community, we can begin considering a new three to five year vision for Salem to guide how we grow and change within our means.