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Eugene budget committee reviews updated six‑year forecast, rolls forward $10.8M and proposes $8M PERS payment
Summary
City staff told the Eugene Budget Committee that updated revenue assumptions cut projected property‑tax receipts and that the December supplemental budget would roll forward $10.8 million, fund housing and shelter priorities, and include an $8 million PERS Employer Incentive Fund contribution that staff say will lower future PERS rates with a $2 million state match.
City of Eugene finance staff on Dec. 3 presented an updated six‑year general‑fund forecast and a December supplemental budget that rolls forward $10.8 million in resources and recommends several one‑time investments, city officials said.
Maurizio Badalico, senior financial analyst, said the forecast reflects lower property‑tax growth, a reduced EWEB contribution in lieu of taxes (SILT) forecast, declining local marijuana tax receipts and lower expected investment income because of smaller reserve balances. "We've actually lowered the property tax revenue forecast," he said, adding the net effect is a $4,300,000 reduction in property‑tax revenue over the six‑year forecast compared with the adopted budget.
The supplemental budget recognizes $5.5 million flowing into the general fund from the close of the prior biennium, $2.4 million in actual encumbrances carried forward and $1.7 million in grants, CFO Twyla Miller said. Staff recommended allocations that include $1.4 million in reappropriations for unhoused response (shelter costs, navigation and transitional housing support), nearly $700,000 for affordable‑housing fee assistance and $300,000 for system development charge (SDC) gap funding for qualifying affordable projects.
A central one‑time proposal is an $8 million lump‑sum contribution to the PERS Employer Incentive Fund (EIF). Badalico said the city would receive a $2 million state match, creating a $10 million side account that allows the city to choose a shorter amortization period and reduce actuarial rates. Staff estimated the full‑period savings at $12.4 million and said the EIF would lower general‑fund PERS costs by about $1 million per year across the forecast period.
Staff also showed reserve trajectories. The city has moved toward its target since the pandemic, but under current assumptions it still faces a structural imbalance. Badalico said a roughly $2.2 million per year ongoing reduction strategy starting in the next biennium would be needed to reach the 4% biennial reserve target (about $17 million).
Officials flagged risks that could alter the forecast: the six‑year stormwater fee that funds parks will expire beyond the forecast horizon (potentially returning about $5 million per year to the general fund unless replaced), a 2024 Oregon legislative change creating a new PERS hazardous‑position classification with unknown future costs, federal and state funding uncertainty, and sensitivity to inflation.
Miller said the supplemental budget and detailed agenda item materials will go to City Council for a public hearing and action on Monday, Dec. 8; staff will post materials on Friday, Dec. 5. "This investment will bring our reserve to $17,000,000, and it's a prudent action to shore up our reserves given all the uncertainties," she said.
Committee members asked detailed questions during a round‑robin Q&A. Councilor Zelenka raised the steep drop in Valley River Center's assessed value; Badalico said an appeal process and central assessment volatility can drive large year‑to‑year changes. Members also pressed staff on the timing of FTE additions, the scope of the alternative‑response pilot and expectations for state shelter funding in fiscal 2027.
The supplemental budget presentation was informational; the committee did not take a binding vote on the proposed allocations. The City Council will hold the public hearing Dec. 8 and consider the supplemental budget then.
