DEPOE BAY — Without further review of the budget, the Depoe Bay Budget Committee voted Thursday, May 7, to recommend city council approve the 27-page document as submitted, with the proviso that only essential expenditures be funded until the city’s finances stabilize.
Councilor Kathy Short, who chairs the budget committee, opened the meeting with an assurance that, despite the city’s current precarious financial circumstance, “we are going to make it through this.” The loss of transient room tax revenues has effectively cut off one of Depoe Bay’s main source of income, threatening its financial future and making the creation of a budget — which is based on projected income — a daunting challenge.
Short said she’d asked City Recorder Barbara Chestler to present the committee with a ledger of the city’s essential monthly payments — the minimum it needs to keep operating — with the idea in mind that the committee recommend the city council only authorize expenditures on that list of essentials until reliable income resumes.
Mayor Robert Gambino said he thought the pace set by the committee during its April 30 meeting, in which it closely parsed just the first few pages of the budget, was unproductive and “frankly embarrassing.” He said the proposed budget had been meticulously prepared by Chestler and “represents a heck of a lot of knowledge. I’ve been on the budget committee eight or nine years, and this is the best-prepared budget I’ve ever seen.” At the rate of progress kept last meeting, the mayor said, the committee would still be working through the document months after it was due.
Committee member Rick Beasley said he disagreed with the mayor’s characterization. “I think it’s essential we talk through this budget line item by line item in order to point out problems. These are long-existing problems,” Beasley said. He said he agreed Chestler had done an impressive job in preparing the budget. “But we are in terrible trouble, and this goes back further than COVID,” he said. Beasley said he saw a budget full of “sacred cows,” as well as opportunities to increase revenue that he felt should be part of the committee’s discussion.
Councilor Barbara Neff commended Beasley’s drive for an in-depth examination of the city’s finances but said she didn’t think the budget committee was the proper venue for the task. “You’re right, a lot of that should be happening, but you can’t make the kind of change you’re talking about in one budget session when you’re looking at the kind of emergency we’re facing right now,” Neff said. She recommended the council form a committee to address those issues after approving the budget.
Neff made a motion to recommend approval of the budget as prepared by Chestler, with the additional recommendation the city council only authorize essential monthly expenditures — about $150,000 a month, or $1.8 million for the year plus about $800,000 committed to projects in motion and bond and interest payments — until the city has the income to pay for line items in the greater $10 million budget, which it would approve individually as they arise.
The motion carried, with Beasley and Councilor Jerome Grant, as well as Councilor Debbie Callender, who participated remotely and said she had trouble following the discussion, voting no. The committee also voted, this time unanimously, to direct Chestler to inform council if the city goes into deficit spending during any given month, and they voted in favor of Beasley’s motion that the committee recommend creation of a finance committee to explore alternative sources of revenue.
Depoe Bay will go into the fiscal year with about $5 million in its bank accounts, and though loss of the transient room tax takings has severely depleted its coffers, it does have other sources of income in place, including a base fee for water and sewer service, franchise fees, other revenues. In response to a query from Grant, Chestler confirmed the city could operate for another year on its reserves.