The La Grande Budget Committee at meetings May 13 and 14, 2025, recommended the 2025-26 urban renewal and city budgets to the appropriate governing body. (The Observer, File)

Committee recommends 2025-26 budget to La Grande City Council

LA GRANDE — The city of La Grande is one step from having a 2025-26 general fund budget in place that would allow all of its programs and staffing levels to be retained, but not without cuts.

After much back-and-forth, the city’s budget committee voted Tuesday, May 13, to recommend the city council adopt a general fund budget of $19.3 million for 2025-26.

“Yes, we are a little bit over,” Mayor Justin Rock said. “But we also are putting money in the reserves. We’re preparing ourselves in case something is bad.”

The proposed general fund budget for fiscal year 2025-26 includes more than $13 million in estimated revenues but more than $19 million in estimated expenditures for a net deficit of $5 million.

City Manager Robert Strope said the council expressed a desire to maintain staffing levels, programs and functions throughout the city.

During the last few years, La Grande has budgeted to operate in a deficit and draw from its cash-on-hand reserve to keep staff and programs. Historically, Strope said, the ending revenues and expenditures tend to be much closer than budgeted.

“Last year when we sat here, we projected a $2.9 million budget shortfall for the current year and sitting here today, our estimate is it will be a $520,000 shortfall,” Strope said. “My point is — we don’t know where we’re really going to be.”

Concern about the deficit

La Grande city councilors serve on the budget committee. Councilor David Glabe said the budget shocked him.

“I think it is a fool’s errand to suggest that the history of not spending all of the budget dollars is how we should base our calculations,” he said. “Once we approve that budget, it is approved. The money is intended to be spent and we have to act as if 100% of what we have approved will be spent.”

He pointed to the fact the 2024-25 deficit would have been closer to $1 million had the council not opted to reduce the transfer to the city’s general reserve from the general fund by $400,000 when adopting the budget.

Glabe said he did not feel comfortable passing a budget that would significantly draw down La Grande’s cash-on-hand, in part because the city will be facing the “single most disruptive event” in the coming year — Strope’s retirement.

“You have been tremendous in managing this city fiscally,” Glabe said. “That is a strength that you have had that I think few city managers do.”

While the goal is to hire an incoming city manager with the same fiscal acumen, Glabe pointed out that it is not a guarantee.

Councilors Denise Wheeler and Mary Ann Miesner, along with committee member Josh Bachman, agreed with Glabe.

“We have to reduce that deficit,” Miesner said. “Otherwise we only have three or four years before we’re going to be totally in the red.”

Not the only opinion

Rock said if councilors want the proposed budget to be closer to balanced, they need to be “very vocal” and “right to the point.”

“If we are more worried about being closer to being balanced then we won’t be getting to full services that we’ve gotten in the past,” Rock said.

Committee members Steve Clements and Gary Lillard said as non-council members of the committee they were not privy to discussions about the budget at the retreat or work sessions.

As such, Clements said he did not feel comfortable telling Strope to cut a certain amount of money from the budget. He said any cuts needed to come from councilors.

Clements also pointed out a majority of the projected $5 million deficit for 2025-26 is made up by one time expenditures.

“All but about $1.2 million,” Strope said. “Keep in mind that the $2.2 million of (American Rescue Plan Act) money is part of that deficit, but that’s really carried over money. So, it’s a little misleading when you look at the deficit.”

Given the overall budget history and considering the one-time funds, Councilor Corrine Dutto said she was “fairly comfortable” with the proposed 2025-26 budget.

Glabe agreed the one time expenditures should be viewed as an aside. He suggested repeating the same reduction in the transfer from the general fund to the general reserve fund, which would reduce total expenditures by $400,000.

This reduction is a direct contradiction to a previous council resolution, which identifies that if there is an unanticipated increase in cash that 25% goes to streets, 25% to the current year capital projects and 50% to the general reserve.

The budget committee voted to amend the budget to include the reduction in the transfer to the general reserve fund and recommend the amended budget to the La Grande City Council. Neither vote was unanimous, but both passed.

Members of the council will vote on adoption of the proposed 2025-26 budget on June 4.