Building Our Operations/Maintenance Center
City Council can potentially fund the Operations/Maintenance Facility within existing resources. Funding the Operations/Maintenance Facility is one the highest 2014 Council goals. There is nuance and trade-offs, but there is a way forward.
How to fund the project? Value engineering, phasing and a variety of resources provide a path forward for this needed, core earthquake resistant city service. Subject to caveats, replacement of the facility can be done in two phases over 3 – 5 years.
The capital improvement plan estimates replacement at $13 million, down from an initial estimate of $17 million. Funding to replace the facility must be split about 38% / 62% between the general fund and public works (street, wastewater, surface water, water), although general fund contributions can be higher.
1) Unassigned General Fund Balances – There are about $5.1 million in unassigned reserves (above policy requirements) after completing fire truck and regional computer automated dispatch system funding. Dollars can be assigned/reserved to the operations/maintenance center. Certainty – high.
2) Wastewater Fund Existing Resources – The wastewater fund has sufficient existing resources to fund its estimated $1.9 million share for the operations/maintenance facility. Certainty – high.
3) PERS – Reserving the PERS differential between budgeted and actual paid. In 2013/2014 the city budgeted as if 2013 state legislative PERS actions will not survive judicial appeals. The difference is $1.2 million. This is prudent, and legal analysis provided to the legislature supports PERS legislative actions passing judicial muster. A court decision on the legislation is possible in 2015. Future years could bring more dollars. Certainty – medium
4) West End Building (WEB) Payments – Another source of dollars is the $1.2 to $1.5 million the city will not be spending on yearly WEB debt and operating expenses if the WEB is sold. Within 3 – 5 years that could be as much as $3 – $5 million. Certainty – medium.
5) Water Fund Existing Resources – The water fund could, depending on final expenditures for the Lake Oswego/Tigard water project or by deferring existing funded projects, fund some of its share of the maintenance/operations center. Over 3 – 5 years, dollars could range from $0.5 to $1.0 million. Increasing water rates above current projections is not necessary at this time. Certainty – low to medium.
6) Future General Fund Dollars – For 2013/2014 and likely for 2014/2015 the city will budget a breakeven (revenues = expenses) budget. Likely the city will be somewhat positive each year going forward. Over 3 – 5 years, dollars could range from $3.0 to $4.0 million. Going forward, “sweeping” those funds from department contingencies would have consequences for maintenance and small capital projects. Certainty – low to medium.
7) Street and Surface Water Funds Existing Resources – The street and surface water funds could by deferring existing funded projects, fund some of its share of the maintenance/operations center. Over 3 – 5 years, these dollars could range from $1 to $2 million. Doing so will require deferring needed street and surface water projects or increasing rates more than planned – not a good outcome. Certainty – very low.
These seven sources total $15.7 to $20.2 million, which is more than the estimated $13 million needed.
Completing the operations/maintenance project without requesting a tax increase is a powerful message: we are good stewards of our limited dollars. It just requires the will.