Springtime is the season for budget setting, and as such the City of Bend is engaged in budget setting processes for the next cycle. The city runs a biennial budget and adjusts annually based on projected revenue and community expenses. Citizen engagement is key as a citizen-led budget committee advises and reviews budget proposals.
Key Highlights of Bend’s FY 2023-2025 Budget*
The biennial budget for the City of Bend reflects the City’s commitment to providing essential services to the community within the City Council’s guiding principles of Equity, Inclusive Leadership, Fiscal Stewardship, Governance and Partnership. The $1.29 billion biennial budget includes $480.1 million operating revenue with $136.1 million in the City’s General Fund.
The 2023-2025 budget reflects revenue pressures associated with modest revenue growth forecasts and a looming economic slowdown. Given existing pressures on expenses, there is an imbalance of money coming in versus money going out across most funds. Many of the budget challenges relate to the City’s low property tax rate as defined by Measures 5 and 50 approved by Oregon voters in the 1990’s. These restrictions, along with limitations on the City’s ability to quickly increase other General Fund revenues have created a structural funding challenge in the General Fund.
Key revenue drivers include:
Anticipated increases in tax assessed property value of 5% for each year of the biennium to fund police, fire, and street maintenance services. Voter approved $0.76 per $1000 of assessed property value for local option fire levy passed in May 2023.
Flat transient room tax (TRT) revenue in 2023-2024, and a 5% increase in tourism activity in the second year of the biennium.
Rate increases for water utilities (2.5% for sewer, 3.8% for water and 7% for stormwater), to keep pace with existing infrastructure deficiencies and future needs.
Proposed development fee increases ranging from 10-30%, as well as an increase of the long-range planning surcharge. However, current discussions are taking place with a group of stakeholders to phase in the increases over time and eliminate the increase of the long-range planning fee.
Projected increase in the Commercial & Industrial Construction Tax (also referred to as the Commercial Excise Tax) from 0.33% of building permit valuation for qualified projects, to 1.2% of valuation.
The Streets & Operations budget reflects revenues from a new transportation fee or other revenue source which is needed to maintain current levels of service.
One of the key areas of focus for the upcoming 2023-2025 biennium is securing permanent, long-term funding for shelter operations. There are no General Fund revenues available to support shelter operations; service continuity is reliant on state and federal revenues.
The budget committee approved a final budget proposal in mid-May, and the full Council is expected to deliberate and vote on the budget in June. For more information and details on the FY 2023-2025 budget, please visit the City’s finance website.
*Excerpts from City Manager’s budget letter, 5/3/23