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Lebanon projects modest surplus; liquor-tax decline and franchise fees shift outlook
Summary
City finance director reported higher-than-expected utility and interest revenues but warned of declining state liquor tax shares; council discussed interfund loan to cover a general obligation bond shortfall and noted GO bond ends in fiscal 2027.
Lebanon Finance Director presented the city's third-quarter financial update on revenue and expenditures through April, saying the city had received $34.6 million in revenue and spent about $31.1 million through that date.
The report said utility charges are performing above budget across water, wastewater and storm drainage, with water consumption up and an expected modest increase in sewer revenue after winter-averages were recalculated. Property-tax revenue is roughly $45,000 above budget overall; however, the general obligation (GO) bond fund is short on property-tax receipts and the city plans an interfund loan to make bond payments this year that the GO bond fund will repay next fiscal year. The finance director noted the GO bond obligation ends in fiscal year 2027.
The update highlighted a notable decline in several state-shared intergovernmental revenue streams. "Liquor taxes are down and the state is projecting further declines next year," the finance director said, adding that liquor revenue to the city fell from $381,000 in 2023 to a projected $357,000 for the current year and is forecast by the state at about $317,000 next year.
Offsets included unexpectedly strong franchise fees (Pacific Power and Northwest Natural) and robust interest revenue driven by higher rates; the city now expects roughly $3 million more interest income than budgeted across funds. "Franchise fees are up about $300,000 over budget," the finance director said. Other revenue sources, including motel taxes, court fines and miscellaneous receipts, are also above budget this year but were described as volatile.
Councilors asked about property-tax delinquencies and the finance director said delinquencies remain steady and that some taxpayers are spreading payments later in the year; her estimate was only a modest additional recovery in delinquent revenue. Council members discussed the possible fiscal window created when the GO bond obligation ends in 2027 and the finance director said projections assume roughly $2 million in one-time resources available through 2030.
The report was informational; no formal action was taken. Council directed staff to continue monitoring revenue-sharing trends and return with budget adjustments if needed.
