Ashland’s $264 Million Budget— Where Does All the Money Go?

by Dean Silver

The City of Ashland is operating with a budget of $263,949,218 during the current biennium.  That budget projects a deficit of $10,773,036 (expenditures exceed revenues).  Obviously, budgets running deficits are not sustainable over the long run.  The City government is aware of that, and is attempting to rectify the imbalance.

The City Council will be sending a survey out to every utility user in the city later this year.  The purpose of the survey will be to inform the Council of the taxpayer’s opinions and preferences regarding city services.  Given that input, the Council will attempt to better understand how to prioritize the next budget, and reduce the deficit.

Every two years, the City of Ashland prepares a budget, as required by law. During the current biennium, fiscal years 2022-2023 (officially referred to as BN 2021-23), $303,529,740 was budgeted (see below for an explanation of that number).  It is important for taxpayers to understand how and where that money is being spent.

The finance department and City Manager prepare the budget and present it to the Citizens’ Budget Committee, consisting of the mayor, the six city councilors, and seven citizens appointed by the council.  The CBC’s job is to review the “City Manager’s Proposed Budget”, approve it with or without modifications, and send it to the City Council for approval.  Once it has been approved by the Council by resolution, it becomes the “Adopted Budget”. After the CBC approves a budget, the finance department prepares another document closely related to the budget: the “Resolution To Appropriate Such Amounts As Necessary To Implement The BN2021-2023 Budget”.  It is that document that we will examine here.

The budget is the plan, the roadmap.  The allocation resolution is the actual assignment of money from the city coffers to the funds and departments.  Many of the revenues are derived from taxes and fees, others from charges for services, others from intergovernmental transfers, and still others from grants.

The source documents, the budget and the allocation resolution, as well as the finance director’s presentation of the budget to the Council with the other resolutions necessary to implement the city’s finances can be found here https://www.ashland.or.us/SIB/files/060121_BN2021%2D2023_Budget_Approval_CCFinal_A(1).pdf   
You can find the final budget document here https://www.ashland.or.us/SIB/files/Administrative%20Services/2021-23%20Budget/City_of_Ashland_2021-2023_Adopted_Biennium_Budget.pdf

I have prepared four pie charts to visually represent how the money is allocated.  Each chart has an accompanying table showing the dollar amounts. I have broken it down several ways, in hopes that it will be more useful than simply listing all of the different funds to which the money is allocated.

Appropriations by Fund

This chart and table show all of the money and all of the destination funds.

Appropriations by Function

For this chart, I have broken down the allocations into four arbitrary categories.  These categories best represent the myriad activities of the city government.

Definitions:

Essential Services:  Water, Electric, Waste and Storm Water, Telecommunications, Streets, Public Works, Equipment, Capital Improvements
Public Safety:  Police and Fire
Government Functions:  Admin, Finance, Community Development, all other governmental activities not included in the other categories
Parks and Recreation

Appropriations of Essential Services

This chart breaks out all of the essential services.

Appropriations of Government Functions

Finally, I broke out all of the government functions.
I included our general aviation airport here because it didn’t seem appropriate for any other category.

This final chart may raise some questions to a person unfamiliar with the municipal budget.

  • What is “Health Benefits”?  From the budget document: “The City operated a self-funded health insurance plan before changing to a fully insured plan on July 1, 2019. The City made the decision to keep the fund open and build a reserve to help mitigate future rate increases.”
  • What is “GF Transfers Out”?  These are funds that are assigned to the General Fund, but then transferred to other funds/departments.  The largest transfer from the general fund this biennium is $9,099,936 to the Parks General Fund.

There are many transfers between funds in Ashland.  The city utilizes a system it now refers to as “Internal Service Funds”, wherein the individual funds contribute to other funds for the use of their services/resources.  Some transfers are also purposed to add revenue to other funds.  These transfers have often been a source of controversy.  The city had utilized a “Central Services Fund” previously, but that fund was closed at the start of this biennium, and the transfers were all incorporated into the General Fund, wherein the transfers continue.  That subject is beyond the scope of this discussion.

For the best understanding of the city’s budget, I recommend reading the Adopted Budget.  Unlike some jurisdictions, Ashland presents a “narrative budget”.  It avoids presenting much detail, but it does, however, present many charts and summary tables.  There is a description/discussion of all of the funds and departments—thus the “narrative” budget.  I recommend reading that document for a greater understanding, but it would be understandable if one were to forego that pastime.  It’s just over 400 pages.

Sharp eyed readers may notice that the Adopted Budget is $263,949,218, whereas the Allocation Resolution shows $263,949,219.  That is a “rounding error”, a very common occurrence when large conglomerations of numbers are manipulated in different ways, and when some figures include cents, while others are presented as whole dollar amounts.

If you look at it, you may also notice that the Allocation Resolution has a subtotal of $303,529,740. That reflects the “total budget”, but subtracts the total Ending Fund Balances.  Those are the amounts budgeted to remain at the end of the biennium to be carried forward to the next biennium.  The budget likewise does not include the Beginning Fund Balances, and thus reflects only revenues and expenditures.  Which of those two numbers most accurately represents the “true” budget is another topic of controversy in some circles, but it is beyond the scope of this discussion.

If you are confused by the relationships between the budget and allocation numbers, you are not alone.  Municipal budgets are extremely complex; analysis of them is not for the faint of heart.  Much of it may not seem to “add up”, but the City of Ashland apparently conforms to the way it must be done according to the State of Oregon.

If you are also confused about the distinction between “funds” and “departments”, again, you are not alone.  It requires a real in depth study of the budget to understand why things are organized as they are.  Reading the budget helps.

Finally, I want to thank Councilor Gina DuQuenne for suggesting this analysis.  She wanted a pie chart to be included in the survey, but that survey will be limited to both sides of an 8 ½ by 14 inch paper.  Since that would leave inadequate space to present the data, I am presenting this detailed study here for your edification.