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Keizer task force warns of multi‑year budget shortfall as PERS costs loom
Summary
Keizer staff told the Long Range Planning Task Force the city faces a roughly $4.5 million shortfall this year and growing multi‑year deficits driven by rising personnel costs and an upcoming PERS payment; staff urged fee reviews, possible property sales and use of a PERS side account before the Feb–Mar budget decisions.
Keizer city officials told the Long Range Planning Task Force on Dec. 8 that the city is facing a multi‑year budget shortfall driven by lower intergovernmental revenues, higher personnel costs and an upcoming state retirement liability.
"We're sitting on a $4,500,000 loss right now," Tim Wood, Keizer's budget officer, told the task force as he reviewed a consolidated, midyear view of the city's funds. Wood said that compared with the prior year the city is down roughly $1.8 million in net position because a significant one‑time grant tied to a turf field did not recur and expenses have risen, in particular staffing costs for police services and a recent property purchase at Keizer Station.
Wood and City Manager Adam Brown said shortfalls would deepen in coming years unless the city adopts revenue or cost measures. Wood projected a near‑term general fund loss of about $2 million for the current year under a status‑quo scenario and warned that, if unaddressed, the deficit could rise toward $2.7 million by 2029–30. He identified PERS-related changes as a major driver: "It's actually settled at about 1,300,000.0," Wood said of the immediately payable portion of a long‑running PERS adjustment that will add to Keizer's unfunded liability.
Staff outlined several tools under consideration for the February–March budget work: (1) conservative treatment of one‑time or unpredictable revenues (such as the opioid settlement receipts), (2) delaying or scaling capital projects, (3) targeted fee adjustments including police and parks service fees, (4) possible debt financing for large capital needs and (5) selling city property to fund a PERS 'side account' that would offset future employer rates. Wood cautioned that municipalities often cannot directly prepay PERS liabilities and that timing for side‑account matching can be sensitive.
Councilors and task force members pressed staff for details about the assumptions behind revenue and expense projections, including the county's assessed value increase (Wood said Marion County's assessment came in at 3.67%, a roughly $43,800 pickup) and municipal court revenue trends. Several members urged conservative budgeting for unstable revenue streams and asked staff to return with a range of specific options and estimated fiscal impact in February or March, ahead of the budget adoption in early June.
The task force did not take formal action Wednesday beyond approving the meeting minutes. Staff said they would return with a menu of recommended revenue and cost approaches and the likely fiscal outcomes of each next winter.
The next procedural step is a task force follow‑up meeting in February–March 2026 when staff will present more detailed options for council consideration.
