Thursday’s Corvallis City Council work session at 4 p.m. in the Madison Avenue room, 500 SW Madison Ave., is likely to play a huge role in the city’s revenue and budget future.
Councilors are scheduled to look at how much revenue to try to raise to improve city services as well as the best way to raise it.
“I expect a pretty in-depth conversation Thursday,” said City Manager Mark Shepard who, along with Mayor Biff Traber and Public Information Officer Patrick Rollens, met Tuesday with Gazette-Times reporters and editors.
“We’re hoping to get council to provide pretty clear direction on how much revenue, whether to do a levy or a sales tax and when to go out to the voters.”
The staff report from Finance Director Nancy Brewer features a scenario in which the city might look to raise $6.7 million per year. A total of $4 million of that figure will come from services that currently are being paid for by the city’s local option property tax levy. Those funds pay for social services, library services, the Osborn Aquatic Center and the Senior Center plus police, fire, code enforcement and planning staffers.
Also in the mix is about $2.5 million that would pay for Fire Department upgrades that would improve response time and Police Department staffing that allows for more community policing and eliminates 12-hour shifts. The final piece would be about $250,000 per year in park maintenance.
It was not clear from Brewer’s report how many additional hires would have to be made to achieve the goals.
The current five-year property tax levy, which expires June 30, 2019, charges property owners approximately 82 cents for every $1,000 of assessed value. That translates to about $240 per year for owners of property assessed at $300,000. To raise the $6.7 million, a new levy would require an assessment of approximately $1.50 per $1,000, or $450 per year for property assessed at $300,000.
Raising the $6.7 million via a sales tax is more complicated. Brewer’s memo notes that by using U.S. Census data on city retail sales, a 1 percent sales tax would produce more than $14 million per year.
But the city is only looking to raise half that, and sales taxes generally include exemptions. Possible products to exclude would be groceries, infant-related products such as formula or diapers, prescription drugs and automobile sales.
Either a levy or a sales tax would go to city voters for approval. When to go to the voters is a tactical challenge because too many money measures on the same ballot can lead to all revenue ships sinking.
“Timing does become a tough issue,” Traber said. Brewer’s memo notes that the Corvallis School District is planning a school construction bond measure for the May 2018 ballot, with November 2018 a likely target for a city revenue measure.
The mayor and Shepard both said they were surprised that it took so long for the revenue package to get to this point. The process began with 22 meetings by a task force, but the work competed for council and staff time with ambitious vision, climate and housing goals.
“Yes, we bit off a lot, but I don’t think we bit off too much,” Traber said. “One of the differences is that these goals involved councilors. Maybe we wore out some councilors.”
Traber and Shepard also said that they were watching closely to see how Benton County’s levy, Measure 2-110, fared on Tuesday’s ballot.
“If it fails I’m sure that will give the council pause,” Shepard said.
No worries. Measure 2-110 was leading 69.1 percent to 30.9 percent in early returns.