Salem Budget Committee Considers Five-Year Financial Forecast January 11

Posted on January 9, 2023

City of Salem – 01/06/23 11:00 AM

Salem, Ore. – The City of Salem will present the five-year financial forecasts to the Budget Committee on Wednesday, January 11, 2023, at 6 p.m., in Salem City Council Chambers. A demonstration of the new online community performance portal will also take place, which provides public access to performance measure results and enhances data-driven decision-making.

The five-year forecast is an annual process that helps City leaders determine how the decisions they are making now will financially impact the City over the long term.

“This forecast gives the Budget Committee and City Council context around the City’s financial picture prior to bringing the budget to them for consideration,” said Josh Eggleston, Salem’s Chief Financial Officer.

This spring, beginning Wednesday, April 19, Salem’s Budget Committee meets to consider the City Manager’s proposed budget and receive public comment on the budget.  Salem’s Budget Committee includes the Mayor, City Council, and eight resident members. The Budget Committee is set to recommend a budget to City Council at its last scheduled meeting, May 10, 2023. The City Council will hold a public hearing on the budget in June, then consider its approval at a meeting before the end of the fiscal year on June 30, 2023.

Most of the City’s funds are fiscally sound.  In public sector accounting, funds are accounts in which specific revenue types are deposited and expenses associated with specific programs and activities are withdrawn. Several funds, including the General Fund, are experiencing less financial certainty in the long-term.

The City’s General Fund includes revenues that are not restricted in their use, or that are not designated or legally limited to a specific purpose.  Services and programs in the City’s General Fund include:

  • police,
  • fire,
  • library,
  • parking,
  • Center 50+,
  • planning,
  • parks,
  • recreation,
  • code enforcement,
  • economic development, and
  • administration and support.

Emergency and public safety services account for 59 percent of General Fund expenses.  With current service levels, the General Fund forecast shows a financial shortfall between revenues and expenditures that is projected to increase over the forecast period to as much as $15 million during the last year of the forecast.

Over the past few years, an infusion of funding from the American Rescue Plan Act (ARPA) replaced revenue lost due to the pandemic, which has helped stabilize the General Fund budget. Another portion of this one-time ARPA funding was used to begin new programs for unsheltered residents, like the micro-shelters Salem has added over the past couple of years. Federal and State funding will help support these new programs through June 30, 2024. Each forecast is the result of many reasonable estimates based on prior activity and projected financial trends. While it is not meant be an exact prediction, the forecast does provide an accurate overall financial trend.

Transparent Reporting Portal

At the Budget Committee’s forecast meeting, staff will also feature the introduction of the new Transparent Reporting and Analytics for Residents portal.

The portal allows the viewer to consider each of these factors with varying degrees of detail and in the context of their performance result areas of the City Council Policy Agenda and Strategic Plan. The portal provides three ways to evaluate the City’s performance:

  • An annual scorecard
  • Current performance
  • Budget

In addition to offering increased transparency for the public, City leaders and staff can use the portal to help assure they are making data-driven decisions.

While the portal will have usable information at its introduction, it will continue to develop as additional data and analysis are available. Over the coming year, as we build additional performance measures and data collection into our daily practices, we expect to improve in these areas:

  • Diversity, equity and inclusion
  • Climate impact
  • Community-engaged policy
  • Reach of our unsheltered services program
  • Reach of communications and engagement

Balancing Act 

On January 11, at the Budget Committee’s meeting, the City will also debut a new on-line simulation tool that allows community members to adjust – in real time — budgets for City programs and services.  The Balancing Act software lets community members consider changes to the City’s programs and services within existing budgeted revenues or add revenues for more services.  Each community member entry is like a response to a survey.  A summary of the responses we receive will be shared with the Budget Committee as they begin their work in April 2023.  Help us improve this new resource by sharing your feedback.

For more information email media@cityofsalem.net.

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