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Council hears treasurers budget warning, considers replacing lost grocery tax and renews several CDs
Summary
Treasurer Jessica reported tight cash flow until summer tax receipts, proposed rekeying the citys safety-deposit box, and the council approved rolling matured meter-deposit CDs and renewing several CDs; staff flagged the state's elimination of a grocery tax and asked whether to enact a local replacement to avoid a 1% revenue loss.
The Lebanon City treasurer told council on May 12 that the state has eliminated a grocery tax the city previously received and staff are evaluating whether to pass a city-level replacement tax to avoid a 1% decrease in city revenue. The administration hopes to present recommended ordinance language before August so any local replacement would take effect Jan. 1.
Treasurer Jessica said city accounts are low until routine tax and revenue receipts arrive in June and asked departments to limit discretionary spending. She recommended rekeying the citys safety-deposit box at the bank because records show no access since April 2022 and a key may be missing; she suggested a controlled check-out process and an inventory of contents.
On investments, council voted to roll two matured CDs into new 12-month terms and to renew three meter-deposit CDs for 24 months to lock in current yields; dollar amounts for the matured CDs were presented in the meeting record and council approved the renewals by roll call. Staff said meter-deposit CDs hold customer deposits and are managed to preserve liquidity while earning interest.
Why it matters: The elimination of the state grocery tax reduces a revenue stream; a city decision to replace it would affect local taxpayers and city finances. The treasurer recommended cautious spending and small administrative fixes (rekeying the box) to control risk.
What happens next: Staff will return with ordinance language if they recommend a local grocery-tax replacement and will proceed with the CD investments and safety-deposit-box rekeying as authorized by council.
