April 30, 2002 11:00 pm

By Ray Linker

Observer Staff Writer

With property taxes going up only 3 percent and some revenues from other sources shrinking, the La Grande city budget will also decrease.

But there are a variety of reasons the fiscal year 2003 proposed $34.6 million budget is 18 percent less than the $42.3 million of the present year, said City Manager Wes Hare.

The 2002 budget included money to help pay for a majority of the city's construction projects, including a new fire hall and a sewer plant upgrade. Money had been set aside over a number of years for those projects.

The city's budget committee will begin to review the proposed budget during hearings that start Monday.

With some reduction in staff by attrition and with other savings, "there are few dramatic differences between the budget proposed this year and the one adopted last year," Hare said.

"Overall, I think the budget is a transitional one. We've gone from a time of having good resources to one of looking at a time of not having a lot of resources. We've tried to strike a balance and present a budget that can sustain us for the next couple of years.

"Our financial condition is basically good; we've made some good decisions in the past that have kept it that way," Hare said.

The manager said the city could continue to provide effective services to meet the demands of the public in spite of increasing costs for such things as labor and energy.

Hare said residents could be facing a new 5 percent fee tacked onto sewer and water bills that could bring in $156,000. Basic rates for sewer service won't go up in the near future but water rates could, he said.

Building permit fees and other fees in the building division are expected to be increased, too, Hare said.

Money the city receives from the state for gasoline taxes are declining, but Finance Director Eldon Slippy is projecting cigarette and liquor receipts to be up, if only by a total of $3,000 for the two sources.

Property taxes collected will still pay for half the city's general fund needs, but the proposed budget projects that the city will see no increase in collections.

State law allows assessed values on individual properties to increase by up to 3 percent, but under present laws, some assessed values could decrease from one year to another due to declining market values.

Hare said that over the past two fiscal years, the city's total assessed value has increased by less than 1 percent (.7 percent). It is now $400.1 million, generating a total levy of $3.3 million for 2002.

Creating an urban renewal district in the city has reduced the city's net assessed value by almost $10.5 million, he said. Any increase in assessed values due to improvements or market values within that district only increased the district's assessed value, not the city's, Hare said. For example, the construction of a $5 million Safeway store last year did not add to the city's assessed value since it is in the urban renewal area.

Labor costs represent more than 70 percent of the city's operating costs of $7 million for fiscal year 2003. Some departments have had positions reduced, but the city has added four employees to help man the new ambulance service. That service has added $276,000 to the total labor costs, but the service is projected to bring in an estimated $865,000 during the fiscal year. Hare admits there is not much of a fiscal history to go on but hopes expenses will be offset by income.

There are 145 city employees, including 105 full-time. Most of them likely will get a 3 percent cost of living wage increase, but neither the Employees Association — which represents those in the library, city hall and public works — nor the police union has begun negotiations for contracts which expire June 30. The firefighters' contract has another two years to run.

Total salaries, counting benefits, pension plan and health and life insurance, by departments (with number of employee in parenthesis):

Council and manager $229,276 (10)

Finance and municipal court $274,272 (5)

Police $1,927,011 (34)

Fire and emergency medical services $1,316,300 (18)

Community Development $398,252 (7)

Personnel and recreation services $519,768 (6.6 plus 10.2 part-time)

Library $250,795 (5.4)

Public works $1,611,323 (30)

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