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Rockaway Beach budget: five-year runway but little margin, city manager says
Summary
City Manager Luke Shepherd presented a proposed 2026–27 budget that aligns spending with a five-year strategic plan and relies heavily on beginning fund balances, transient room tax revenue and grants. Staff warned the plan leaves little margin for unexpected costs and called for public engagement on revenue options.
City Manager Luke Shepherd presented the Rockaway Beach proposed 2026–27 budget on April 22, saying the plan is grounded in fiscal responsibility, guided by the city's five-year strategic plan and intended to preserve current service levels while avoiding overextension.
Shepherd told the budget committee the city's beginning fund balances account for a large share of resources in some funds and that the proposed spending pattern provides a five-year runway but "leaves little margin for unforeseen costs, service growth, or economic disruption." He highlighted that the city expects to bring in roughly a 4% increase in transient room tax revenue year-over-year and pointed to more than $7,800,000 in capital grants and loan proceeds the city is counting on in the proposed plan. "This proposed budget is grounded in fiscal responsibility, transparency, and long term sustainability," Shepherd said during his presentation.
The manager noted the budget prioritizes five goal areas: public safety, economy, transportation and infrastructure, community engagement, and good governance. He described planned investments including accessible restrooms at Lake Lytle, transportation-system planning, watershed acquisition planning, and continued capital projects. "While projections technically balance over that period, they leave little margin for unforeseen costs," he told the committee.
Committee members and staff discussed the composition of revenues and constraints on restricted funds. Shepherd and Finance Director Marnie Johnston said Rockaway relies heavily on transient room tax receipts, grants and interest earnings and that many funds are restricted for specific uses. Johnston highlighted strong interest income as a contributor to the city's financial position and identified nearly $17.5 million currently held in locally managed funds as of March 31, 2026.
The committee did not take final action on the budget at the meeting; staff noted additional review and amendments can be made in future sessions and that formal approval will follow the budget process required by Oregon budget law.
