By Chronicle Staff
In an effort to balance the City of Ashland’s two year budget, residents can expect rate increases starting in the new biennium which begins in July.
The council voted to raise three separate fees at their regular business meeting on Tuesday, June 1.
The budget as recommended by interim City Manager Adam Hanks called for increases of electric rates by just over 4% on average, increases to the stormwater utility fee by 9% and a 2.07% hike in the transportation utility fee.
Each of the increases were passed separately as resolutions. “It brings me no joy to increase these fees but it is a necessary cost to maintain infrastructure” said Councilor Tonya Graham in approving each of the rate hikes. Her statements were echoed by Councilor Paula Hyatt who also moved to pass the fee increases, “It’s important to maintain these city assets” stated Hyatt.
Councilors Stefani Seffinger and Steve Jenson also voted in favor with Councilors Gina DuQuenne and Shaun Moran voting against.
“The budget had room in it to keep infrastructure maintained. I’m not clear why that argument was used and I remain concerned about lack of affordability in Ashland. If I had a vote on this it would have been no” said Mayor Julie Akins of the budget.
However, the staff recommendation refers to the increased fees as minor:
“Minor rate increases are recommended for electric, stormwater, and transportation charges to sustain those operations. Water, Wastewater, and Ashland Fiber Network budgets do not include recommended rate changes for FY2021-2022. No rates were increased for FY2020-2021 for any of the City’s utility services,” according to documents presented at the meeting.
Councilors Moran and Duquenne voted no. “I don’t think we should be raising any utility fees on the people of Ashland. It’s wrong and I can’t vote for this. No” said Duquenne.
“Citizens didn’t elect us to take the easy road of increasing costs while not doing the work of prioritizing how we spend their money” said Moran, reading from a prepared statement. “We can’t as elected officials say that we understand that it is increasingly hard for people to live here, that we sympathize with those who struggle financially with ever increasing living costs but at every opportunity make excuses and then vote to make affordability and livability a real challenge for so many. I can’t support that and I won’t” Moran went on to say.
With the use of ending fund balances the budget is reported by staff at $263,949,218 and includes transfers between funds. The full two year budget is reported at $348,000,000 prior to transfers, according to the document provided by city staff to the Citizens Budget Committee.
The City of Ashland Budget is reported to have a “structural deficit,” a phrase used by both the City Finance Director, Melanie Purcell and Interim City Manager Adam Hanks. Both have explained that it means there are more expenditures than revenue. At the end of the two year budget that deficit is predicted to be at between 3.5 and 5 million dollars, according to Purcell, which the next budget committee will have to wrestle with along side the city council and staff.
The deficit would have been a larger problem this budget cycle, according to Purcell, had there not been a roughly four million dollar federal aid package to make up for losses during the Covid-19 pandemic. The aid package had few restrictions and was used to fill the deficit hole, Hanks stated.
“This budget is an illusion of good budgeting,” proclaimed Moran. “Yes it is legal as expenditures are offset by revenues, but thank goodness for the $4.4ml from the federal government in the American Recovery Plan Act, without it, to paraphrase what Finance Director Purcell suggested, the wheels would have fallen off.”
Staff also recommended a shift from General Fund property taxes to Food & Beverage tax revenues to support the Ashland Parks & Recreation Commission beginning in Fiscal Year 2022-2023. The council discussed future meetings to decide whether to adopt the recommendation or to take it to voters. That conversation is expected to occur in August in order to place the measure on the November ballot if council opts in favor. It was not decided at the council meeting of June 1.
The budget as a whole was passed by four to two with Councilors Moran and Duquenne voting against. The mayor does not vote at council meetings except in the case of a tie, so was not a voter in this budget.
Next steps include a series of future meetings between staff and council to begin tackling budget priorities in the second year of the budget.