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City 101: Budget Perspective Part 2

prop_tax_chart_washcocitiesThis is the second of a 3-part series on the City’s budget and planning for the future. In part 1 we provided an overview of the current challenges. In this part 2 we will share more details about short and medium-term solutions, and in Part 3 coming next month we’ll share longer-term vision for fiscal sustainability.

North Plains has operated on a conservative, small city budget for many years. With service demand, expectations, and costs for city services rising with our expanding community, this has presented challenges.

Short-term, North Plains has focused on operating with as frugal a budget as possible, including continuing to operate from a city hall and library which we have outgrown and are no longer sufficient to support staff and community needs. We also incorporated an “Expenditure Control Budgeting” management approach in 2020 that breaks from traditional local government budgeting, enabling the carry-over of unspent funds by General Fund departments to improve budget management and discourage waste. In 2021, we moved from a typical annual budgeting process to a more effective and efficient biennial budget that helps with longer-term projections.

Looking forward and in order to best serve the needs of North Plains, the City needs to be on a fiscally sustainable footing. This requires looking at other sources of revenue so that we can at least be on par with the service levels of other cities in our area.

One medium-term option that many local governments have in place is a local option levy. All cities have a permanent City property tax rate that is a portion of the total tax rate that property owners pay (the solid bar in the graph above - click to enlarge). North Plains’ challenge is that our City permanent rate is currently the second-lowest among all cities in Washington County, and is the only local levy charged to our taxpayers. When service levels require more funding than possible with the fixed permanent levy alone, Cities usually elect to add a local option levy in five-year increments. As shown in the striped bars in the chart, most nearby cities have a local option levy approved by voters to raise additional taxes that fund important services such as police, parks, and library operations. The City Council is currently working on a proposal to place a local option levy on a 2023 ballot for residents to vote on.

The City of North Plains continues to plan for sustainable and responsible fiscal stability in order to meet our commitment to delivering efficient and quality city services to our community. Next month (July 2022), we will share longer-term solutions that are in progress in City 101: Budget Perspective, Part 3.