City of Salem Page 1 FY 2019 Budget in Brief Preparing for the Future Published September 2018 What’s Inside Message from the City Manager How It All Works Together Vision, Mission and Values Service / Result Areas Funding City Operations General Fund Highlights Understanding Property Tax Supporting Community Outcomes City of Salem, Oregon Budget in Brief FY 2019
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City of Salem Page 1 FY 2019 Budget in Brief
Preparing for the
Future
Published September 2018
What’s Inside
Message from the City Manager
How It All Works Together
Vision, Mission and Values
Service / Result Areas
Funding City Operations
General Fund Highlights
Understanding Property Tax
Supporting Community Outcomes
City of Salem, Oregon
Budget in Brief FY 2019
City of Salem Page 2 FY 2019 Budget in Brief
I am pleased to present this summary of the City Council-adopted FY 2019 budget.
A well-developed budget is a financial plan toward the achievement of identified goals. The FY 2019 budget
is guided by the Salem Strategic Plan and the City Council Policy Agenda for 2018. The strategic plan and
policy agenda focus on issues of top concern for Salem residents and set the City’s policy foundation and
provide direction for the allocation of resources. This budget delivers resources to identified priorities and is
responsive to current needs. It supports ongoing services, provides for a significant restoration of service
through the reopening of Fire Station 11, and includes increases to fees to augment revenues.
Salem is “At Your Service.” Over two-thirds of Salem residents believe the City is on the right track and 90
percent of residents are satisfied or very satisfied with the services provided. City Council policy direction and
oversight and competent implementation and management of City resources have allowed the organization
to deliver services despite challenging fiscal constraints.
Salem benefits from steady economic growth. Growth can increase property tax receipts and activity-related
revenues to support services. Despite the economic growth, the City’s financial stability and ability to sustain
services are at risk. Costs of services are escalating faster than the revenue growth realized by the City from
property taxes and fees. Of greatest concern are services within the General Fund, such as police, fire, and
community services. The expense escalation will continue because of projected PERS increases and other cost
drivers.
There is much to accomplish in the coming months to formulate a plan for dealing with the imbalance of
revenues and expenditures that intensifies in future years. Good financial management has provided us with
some time to determine how to continue programs and services, address operational capacity needs, and
continue work on deferred infrastructure. A comprehensive review of current and potentially new revenue
sources, in conjunction with Priority Based Budgeting, will be essential for the City to achieve its Sustainable
Service Delivery goal and accomplish our mission of providing fiscally sustainable and quality services.
Sincerely,
Steve Power
City Manager
Message from the City Manager
Budget in Brief—FY 2019 edition
This document provides an overview of the City’s
budget, which was adopted by the City Council on
June 25, 2018. To view the entire budget (including
the Salem Urban Renewal Agency budget) and
other financial reports, please visit our website at:
www.cityofsalem.net/budget
City of Salem Page 3 FY 2019 Budget in Brief
Coffee with a Cop Make Music Day
How It All
Works
Together
The budget is one component in an annual cycle of collaboration
among the community, City Council, and City staff. The City Council
looks to the community for advice and feedback through survey
responses, board or commission service, and neighborhood association
participation to inform its policy agenda. The City Council’s policy
agenda reflects spending priorities for the upcoming fiscal year, which
transition into the budget. The results achieved through resource
allocation in the budget benefit the community and are featured in an
annual community report.
City of Salem Page 4 FY 2019 Budget in Brief
Defining the City of Salem’s Result Areas through our Vision, Mission, and Values
Vision A safe and livable capital city with a sustainable economy and environment
that is open to all.
Mission The City of Salem provides fiscally sustainable and quality services to enrich the lives
of present and future residents, the quality of our environment and neighborhoods,
and the vitality of our economy.
Values Opportunity: Salem is proactive and forward-thinking.
Compassion: Salem is fair, equitable, and safe.
Responsiveness: Salem is at your service, with capacity and partnerships to
prepare for the future.
Accessibility: Salem is open and inclusive.
What is a Result Area?
Great question!
It’s all about delivering services
benefitting the community.
City of Salem Page 5 FY 2019 Budget in Brief
Good Governance The enterprise is managed to be fiscally sustainable, provide quality services,
proactively engage residents, be forward thinking, and build capacity and
partnerships to prepare for the future.
Natural Environment Stewardship Protect natural resources including healthy streams and the Willamette River,
and reduce the impact from the built environment and City operations on the
environment.
Safe Community Providing an emergency response while proactively reducing the risk of crime,
fire, natural disasters, and health emergencies to residents, businesses, and
property owners.
Safe, Reliable, and Efficient Infrastructure An integrated municipal asset system of streets, bridges and sidewalks, civic
buildings, technology and utility systems.
Strong and Diverse Economy A diverse economic base, robust job growth, business retention and
recruitment, and a thriving downtown.
Welcome and Livable Community Neighborhoods are safe and clean, with a mix of quality housing with access to
parks, recreation, historic and cultural resources, and the arts.
A Result Area represents a
broadly-defined outcome
derived from City services.
We all want to live in a
safe community—right?
I really care about
Salem’s economy.
I want my
community to
be welcoming
and livable.
City of Salem Page 6 FY 2019 Budget in Brief
The City has engaged the services of
ResourceX to implement a National
League of Cities and International City /
County Management Association best
practice for budgeting. Priority Based
Budgeting will assist the Budget
Committee and City Council with
allocating available resources through an
approach that identifies the
organization’s desired outcomes and
examines the influence of each program
and service in achieving those results.
Result Areas and Priority Based Budgeting
The City’s FY 2019 operating budget viewed
through the lens of the six result areas. The result—or service—areas were used to build
the budget and will be used as the City fully
implements Priority Based Budgeting.
In millions, excludes
Capital Construction
We’re Here!
Why Priority Based Budgeting?
The purpose of Priority Based Budgeting (PBB) is to identify what the City is in the business of doing and ensuring resources are allocated to the highest and best use.
The City’s implementation of PBB follows direction from the City Council to define the desired level of City services and the associated costs, and to explore new, additional revenue sources for the General Fund and alternative methods of service delivery.
At publication of this document, the implementation timeline (below) reflects the City is in the midst of performing peer review of each department’s program scoring. PBB will be one of many tools employed by the City Council and City staff to help deliver results for the community.
City of Salem Page 7 FY 2019 Budget in Brief
Where Does the Money
Come From? Total FY 2019
City Resources Budget
$678,663,990
The category of Taxes includes property taxes that support General Fund operations; transient occupancy taxes paid by visitors to Salem, who stay overnight; and marijuana sales tax.
Taxes also include voter-supported levies for infrastructure improvements. In FY 2019, taxes levied to support debt service on infrastructure projects include two recently approved bond measures—$61.8 million for a new police station and $18.6 million for seismic and other improvements to the Salem Public Library.
Working
Capital is
funding leftover
from the prior
year to begin
the new fiscal
year.
Some of the money in the Internal / Intergovernmental category comes from employee insurance premiums paid by City departments and the benefiting employees to the Self Insurance Fund; revenues shared by the State of Oregon from liquor, gas, cigarette, and 911 taxes; grants anticipated to be received; reimbursements from other agencies, cities, and counties; and transfers from one City fund to another.
All Other revenues include “rent” from parking meters and meeting rooms at the library, court and parking fines, interest earnings, and bond proceeds.
Internal and Intergov. 20%
Sales, Fees, Licenses, and Permits
20%
Taxes
13%
Working Capital
41%
All Other
6%
Sales, Fees, Licenses, and Permits encompass 70 different charges for everything from franchise fees paid by utilities (electric, cable, natural gas, telecom) for use of the City’s rights-of-way—to library overdue book charges—to building permits.
City of Salem Page 8 FY 2019 Budget in Brief
And How is
the Money Spent?
Supplies and Services are the purchases required to deliver City programs
and services—construction contracts, training courses, firefighter safety gear,