Eugene staff lay out long-range financial planning, warn of persistent general-fund gap

City staff presented a long-range financial planning framework and an update on Eugene’s general-fund condition at a May 11 council work session, warning that revenue growth has not kept pace with rising expenses and identifying pension costs and property-tax limits as major drivers of the structural gap.

Twila Miller, the city’s chief financial officer, told council the session begins a series of informational meetings that will feed into a two-day workshop June 30–July 1 and a broader, multi-phase planning effort to tie the strategic plan to budget decisions. "Long range financial planning is really a process used to focus the organization on long-term objectives," Miller said, describing staff work to develop a service-prioritization framework and recommended updates to financial policies.

Maurizio Badalico, who led the general-fund condition presentation, said the city is confronting a long-running imbalance "caused by revenue growth not keeping pace with expenditure growth." He showed the adopted 2025–27 biennial budget across city funds, noting public safety (police and fire/EMS) accounts for the largest share of operating costs and that the adopted budget includes roughly $94,000,000 in adjustments through the end of the biennium.

Badalico highlighted three structural pressures: limits created by Oregon’s Measure 5 and Measure 50 that cap assessed-value growth, rising PERS (public employee retirement system) employer contributions, and timing changes such as a stormwater fee that will expire in six years. "This classification would receive higher benefits and earlier retirement eligibility," he said of a 2024 Oregon legislative change that adds a PERS hazardous-position classification and will raise contribution rates, and staff noted no cost estimate is yet available.

On revenues, staff showed property taxes supply the dominant share of general-fund receipts and that about $4.6 billion of assessed value in Eugene is currently tax-exempt, including roughly $1 billion of exemption for the University of Oregon. Badalico said that if the university’s exempt assessed value were taxable it would generate about $11 million per year for the city’s general fund.

Councilors pressed staff for practical tools and clarifications. Councilor Clark asked how meeting the Oregon Housing Needs Assessment — which staff and councilors discussed as roughly 1,600 new housing units per year — would change the tax base. Badalico provided a rough scaling: "a $150,000,000 [increase in assessed value] gives you $1,000,000 of general-fund revenue," and councilors discussed the implications of that rule-of-thumb for policy trade-offs.

Councilor Keating asked whether forecasts assume revenue from voluntary annexation; staff said current forecasts do not include additional annexation revenue and described that source as negligible based on recent trends. Councilor Kaczynski asked about coordination with other jurisdictions on statewide pressures such as pension and property-tax reform, and staff said cities share information and that groups such as the League of Oregon Cities are exploring revenue issues.

Twila Miller said next steps include more-detailed financial-condition updates at the June workshop, review of recommended financial-policy updates in the fall, and work to develop a service-prioritization framework to inform the 2027–29 biennial budget. "The key outcomes here would include a service prioritization framework and strategic plan alignment to help inform the budget process," she said.

The work session was informational; council did not take formal votes. Staff will return with updated forecasts and materials at upcoming work sessions and the June workshop.