City Finances Remain Sound Heading into New Fiscal Year

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Increasing property tax revenues in Tualatin positively affect not only urban renewal areas including Leveton Drive, shown here, but the entire City financial picture. Because of this, City officials are cautiously optimistic about the state of City finances heading into fiscal year 2021-22. (JOSH KULLA/TUALATIN LIFE)

The City of Tualatin is doing better than expected financially, given the economic challenges posed over the past year by the COVID-19 pandemic.

A combination of federal assistance, increasing property tax revenues and a reduction in some costs over the past 12 months have combined to keep the City in healthy financial shape as it prepares for the upcoming 2021-22 fiscal year in July. Some revenues have predictably fallen due to the pandemic, including lodging tax and gasoline tax revenue, not to mention income from recreation and corporate sponsorship of live events. But a corresponding increase in other areas, including water revenue and alcohol tax revenue, have worked to partly cancel out those losses.  

“I’m not really sure yet at this point where we’re going to net out with the bottom line,” City Finance Director and Assistant City Manager Don Hudson said at a March 8 City Council workshop meeting. “But we do have strong reserves, so I’m confident no matter how we end up, we will still end the year in a sound financial position.” 

One of the main drivers of the City budget is property tax revenue. This is actually increasing, thanks to a continued rise in assessed values as people continue to move to Oregon and increase the demand for housing. 

“I can say with property tax revenues, we are looking like what we expected,” Hudson said. “We are seeing a little bit of a trend where people are not paying everything up front in November. But collections are still strong.” 

At the same time, revenue from building and development has fallen over the past year. However, Hudson noted this is not entirely unexpected. 

“Last year development was happening, and some was put on hold by the pandemic,” he said. “So, our budget was a little high based on where we sit today, but not where we sat a year ago.”  

City department heads were set to finalize their budget numbers by the end of March. The first Budget Committee meeting is scheduled for May 10. A second meeting is scheduled for May 25 and a third for May 26, if needed. 

The City Council, meanwhile, is scheduled to hold its annual budget hearing on June 28, where it will formally adopt a budget for the new fiscal year, which starts July 1.