By Randy Kugler
City budgets in Oregon include what is called an unappropriated ending fund balance (UEFB) for the General Fund. Budgeting money in the UEFB ensures that a City has enough General Fund revenue to fund services from July 1 when the annual budget is adopted until November when property taxes are collected by the County and distributed to the City.
Best practices recommended by the Government Finance Officers Association (GFOA) as to the appropriate amount of UEFB to meet this interim funding need is 5 to 15% of operating revenue or 1 to 2 months of actual General Fund expenditures.
As City officials regularly remind us, Manzanita collects far less property taxes than most cities and is therefore less dependent on them to pay for General Fund services. This fact when aligned with GFOA best practices would generously justify a General Fund UEFB of approximately $500,000.
The UEFB in the proposed City Budget for the General Fund is $3,963,927.
This budgeting of an excessive UEFB has been taking place for the past 4 years and this Council has approved and never questioned why the City Manager has been doing this.
The consequences of this Budgetary malpractice is that millions of dollars each year are not appropriated and sit unused in the General Fund.
Perhaps the Council could explain why:
Some of these funds couldn’t be transferred to the Water Fund to help fund operation and maintenance costs while simultaneously providing residents a reasonable amount of water at lower rates?
Given this surplus of General Fund revenue, what is the justification to transfer hundreds of thousands of dollars OUT of the Water Fund to the General Fund to pay expenses of City Hall staff?
This Council consistently advances policies to ensure Manzanita is a year round tourist destination. At the same time, Councilors are contemplating charging residents a monthly fee for increased street maintenance that is needed for maintenance in large part as the result of thousands of visitor vehicles contributing to the wear on our streets. Why aren’t some of the millions of Short Term Rental funds now locked up in the UEFB being transferred to the Road Fund to address the deterioration of streets caused by visitors?
To those who complain about my sharing my observations on Manzanita City government through social media and criticize my lack of participation on a City committee, be aware that each of the three times my application to serve on the City Budget Committee has been rejected, the reason given was due to me not having the qualifications that the City was looking for. Translation: We can’t risk having someone with more experience and knowledge of municipal Budgeting than the City Manager on the Committee when we can appoint someone with no municipal Budgeting experience and who is less likely to ask questions we prefer not to answer.
The UEFB was never intended to be used by cities as a rainy day reserve account to stash away General Fund revenue collections. This unfortunate circumstance in our City is compounded by the fact that City officials continue to enact policy decisions based on the false representations to citizens of the need to continue to both increase existing charges and create new fees for services because revenue is not keeping up with expenses.
Our Budget Committee is currently meeting to prepare the FY 2026 – 27 Budget. Ask some questions.