Cutchen’s budget report for fiscal year ending June 30, 2021

This is a reprint of the city administrator’s budget report to the Oakridge City Council.

The costs of providing public safety services continues to be a major financial issue for the city.

This budget has been prepared on the basis of operating as in past years, basically continuing 24/7 service from the police and EMS departments with the capability by EMS to respond to multiple calls at once. In this scenario net costs are over $1.1 million for the Police Department, and the EMS fund has a projected net deficit of $490,000.

This current model is not sustainable for another year. EMS cannot generate sufficient revenues to cover its costs in its current mode and will likely never be able to.

There are two reasons for this 1) reimbursement rates from Medicare, Medicaid and insurers who provide insurance coverage for ambulance services are too low – approximately 30% of the amount billed 2) the volume of transports ( 451 last year) is too low to cover the costs of maintaining personnel 24/7 and resources to answer calls.

If recovery rates or the volume of transports were twice current levels, EMS operations would be viable. However, we have little to no control over these factors. The EMS projected deficit of nearly $500,000 by year end FY 2021 cannot be covered by the general fund and will require substantial additional support from the other funds.

In this budget we have assumed this support will come in the form of loans from the Water and Wastewater Funds and OIP to the General Fund, which will be

the only funds with sufficient unrestricted cash for such purposes. Requirements to set aside these funds for such purposes restricts their use for needed improvements and equipment in the Water and Wastewater funds or in other public works areas.

However, we must look further ahead than next year end as the General Fund operates at a significant deficit from July until property tax receipts are received in late November. This will require additional support from other funds, which may be beyond their capacity to provide during this period or will require the General Fund to exhaust property tax funds to repay loans from other funds in late 2021.

Possible solutions being considered: 1) Proposing a Public Safety Levy to fund or partially fund EMS & Police operations. 2) Abandonment of EMS operations and conversion of Fire to a primarily volunteer basis. 3) Significant curtailment of EMS operations.