Oakdale City Manager Bryan Whitemyer painted a bleak picture of the city without the continuance of the city’s half-cent sales tax assessment at the Measure O Committee meeting on Monday, March 10.
Measure O, the sales tax measure from the November 2011 ballot, is scheduled to sunset in March 2015. Revenues from the initiative have brought over $1.5 million to city coffers annually since its passage.
The committee was set up by the Oakdale City Council last month to explore extending the half-cent sales tax in the city. If the city does pursue another initiative, it’s likely to be named with a different letter.
Whitemyer presented three scenarios of the predicted city financial status to committee members showing what happens after Measure O sunsets, if it’s continued and the same funding is obtained, and the cuts that happen without the revenue from a half-cent sales tax assessment.
“We will lose a significant number of our revenue stream, about 17 percent,” said Whitemyer.
With the spreadsheets, Whitemyer predicted that, with the fiscal year starting in July, the city will have a cash flow problem in 2015 due to state money not being received until December.
“Three-quarters through 2015, we’ll be out of money,” Whitemyer said. “We won’t be able to write any checks.”
With the windfalls from Measure O, the city receives over $1.5 million toward its general fund that goes to police, fire, street lighting and sweeping, and the senior center. Of that money, over $1.1 million went toward police and fire budgets.
Other portions brought back street lighting and street sweeping.
“I consider lighted streets to also be a part of public safety,” Whitemyer said.
Whitemyer estimated that Measure O money was able to currently fund 5.9 police officer positions and 3.6 firefighter positions for the city.
Without it, Whitemyer predicted there would be closure of the senior center, community center, no street lighting or sweeping along with police and fire cuts.
“Whatever revenue stream I get, I will build a (balanced) budget,” Whitemyer said. “But remember, there are consequences to the cuts.”
The scenario with the extension of the sales tax measure showed a “comfortable” level of reserve to start the year as well as predicted police and fire personnel increases. Whitemyer said he would be able to add a police officer position in July 2014 and 2015 and a firefighter increase in July 2015 and 2016.
Other benefits also included funding employee liability and PERS liability funding to give the city financial stability in the future.
Whitemyer avoided the B-word – bankruptcy, stating rather that that city would be at a “service level insolvency.”
“We won’t be able to provide services,” Whitemyer said. “We’re at critically low levels now. We’d have to respond to calls differently – especially for the police.”
“Without additional sources of funds, it’s evident the city will be in deep trouble without that revenue,” said councilman and liaison to the committee Don Petersen.
Resident Richard Jorgensen spoke to the committee stating he felt there had been “runaway inflation” by the city, attributing it to mismanagement by past administrations.
“It’s time to bite the bullet,” Jorgensen said. “Incorporate business here, yes, taxes, no.”
Jorgensen said the city would be throwing good money on top of bad, reminding the committee that voters were told the city was expected to be in a good position after the three-year measure during its campaign.
Jorgensen added that if there was going to be a new sales tax measure proposed, it should be police-fire specific.
The next meeting for the committee is Monday, March 17 at Medlen’s House of Beef at 8 a.m.
The committee is expected to finalize its recommendation to the city council and asks anyone interested to attend with input.