Smoke and Mirrors: Deconstructing the APRC Budget Proposal

I’ve got to hand it to Ashland Parks and Recreation Director Michael Black: he is one skillful double talker.  Why do I say that?  Let’s take a look at the last hour of the last Ashland Parks and Recreation Commission meeting (7/28/21), and I’ll show you why.  I’ll only cover the part of the meeting that deals with APRC’s approach to dealing with their city budget concerns.

You can find the video at https://tinyurl.com/c2cduedx The funding dissertation begins at 1:01:21.
I suggest you watch it, if you’ve got the time.  It’s enlightening.

Before we begin, let me remind you that the City of Ashland is in the midst of a financial crisis. From the 2021-23 budget document (https://tinyurl.com/37x9bcpr  p.16):
the City of Ashland has an approximately $2 million structural imbalance, net of contingency, that has been addressed through measures that have managed to keep the imbalance from growing significantly but have not addressed the underlying structure sufficiently. This imbalance or gap grows to over $3.5 million by the end of this biennium and triggers a deficit position by FY2024-2025 if the inherent disconnect between revenues and expenditures is not fixed.”  And remember: the city, by law, may not run a deficit.  It MUST have a balanced budget.

First, it must be noted that despite the “structural imbalance” for the city budget as a whole,  the budget for APR has INCREASED every year for the past five years.  Here is a screenshot from the adopted 2021-23 biennial budget.  It shows the total revenues dedicated to APR:

[source: https://tinyurl.com/37x9bcpr   p.45]

Note that the total increases every year.  Here’s the math:

2018 vs 2017: +3.99%
2019 vs 2018: +3.09%
2020 vs 2019: +2.84%
2021 vs 2020: +2.12%
2022 vs 2021: +1.35%

The annual rate of increase slowed due to the pandemic, and the responses of the finance department due to changes in the allocation of the F&B taxes, but the actual budget increases remained positive.

Listen as Dir. Black tries to make a case for a “dedicated funding source”.  The fact is, APR currently HAS a dedicated funding source:  $1.89/$1000 of assessed value from property taxes each year.  It is stable, it is predictable, and it is dedicated.  The dollar amount also INCREASES by at least 3% every year, due to Oregon’s tax laws.  But that’s not good enough for him.  Instead he additionally wants 98% of the Food & Beverage taxes.  What’s really ironic is that this is an extremely unstable funding source.  As we have seen for the past two years, tourism income can be highly volatile.  What’s clear is that he’s not looking for a more stable funding source, but rather an additional source, his protestations notwithstanding.

Here is a graph of the F&B taxes from the budget doc on p. 26.  It doesn’t show the actual for 2020-21, but that is reported as $1,820,452 on OpenGov.  [source:  https://tinyurl.com/4b5xxf2j ]

[source:   https://tinyurl.com/37x9bcpr    p.26]

For the sake of argument, let’s stipulate that F&B revenue will return to the $3M level when the pandemic has receded.  If it follows the historical pattern, it would be expected to increase inconsistently in years to come, and is susceptible to decreases when tourism is down due to pandemics, smoky skies, natural disasters, political instability… the factors that influence F&B revenue are myriad.  It is not a stable funding source by any means.

What Dir. Black is additionally proposing is to fund APR with a dedicated portion of the property taxes ($1.89/$1000), as it is currently. The total property tax assessment for the City is $4.286/$1000. That means that APR would receive 44.1% of the total property taxes collected.  Here is a table of property taxes:

[Source:  https://tinyurl.com/5nywwes5  p.157]

Notice the approximately 3% annual increase every year.  I can’t find the number for 20-21 actual, so let’s assume 2020 +3% = $13,036,568, and another 3% increase in 2022 = $13,427,665. Again, I’ll do the math for you.  If APR is budgeted 44.1% of that amount, it will yield $5,921,600.  Add that to the $3M from F&B, and you have a total of $8,921,600.

That’s $1,854,680 more than is currently budgeted for APR in 2022-23.  Is this helping solve our “structural imbalance”?  In fact, it’s a 26% increase over the currently budgeted amount.  And yet, Dir. Black stated repeatedly that APR is NOT looking to increase its funding.

There is no question that there are many variables here that can change.  But the trend and general results are undeniable.

How will APR’s budget proposal contribute to our fiscal crisis?  It will make it worse, far worse.  Instead of decreasing its share of the total available city revenues,  it will increase it.  Throughout the meeting, there was NO MENTION of decreasing expenses.  The dissertation was ENTIRELY focused on “maintaining” APR’s funding.  He never said anything about increasing the budget.  In fact, he often protested that he was simply trying to “maintain” the budget that APR needs to operate.  At one point he even said, “we are in an imminent situation where we will not have funding come July 1 of 2022 unless we do something”– a total falsehood.  How could that thought even occur to him if he’s not disingenuous? 
[source: https://tinyurl.com/c2cduedx    1:12:07]

It’s almost like going to a carnival side show.  Smoke and mirrors.  A shell game.

Are APRC and Director Black doing their part to help solve the budget deficit?  Are they making cuts as all city departments should?  Or are they instead simply attempting to increase their funding, at the expense of the other essential city departments and every taxpayer of the City of Ashland?

Is Director Black deliberately trying to mislead the Council and the taxpayers?  Or is this just sloppy work and thinking? Or is he incapable of understanding the ramifications of his proposals?  Is this the kind of work we are willing to accept from the Ashland Parks and Recreation department? Can we afford it?

His proposal is unacceptable, and must be rejected by the Council.

Dean Silver
Ashland

//inserted by Sharon