City Services Fee

Like many other cities in Oregon, Philomath is experiencing a structural gap between revenues and expenses. Key factors include:

• Property tax limitations under statewide measures, which artificially restrict annual revenue growth (Measures 5 & 50)
• Rising costs for labor, building materials, and services driven by inflation
• Increased demand for police officers and other employees providing core services

The City’s financial data shows a significant decline in available general fund reserves in recent years, creating challenges in maintaining cash flow throughout the fiscal year and placing the City in a poor financial position for unforeseen emergencies.

A City Services Fee is one tool used by municipalities to help fund services such as police, parks, and other services that do not have direct user fees without reducing the current levels of service. 

If adopted, revenue from the proposed fee would help:

• Support public safety staffing and recruitment
• Stabilize the General Fund’s reserves
• Maintain current staffing and service levels
• Ensure continued delivery of essential City services

The proposed $14 monthly fee is estimated to generate approximately $400,000 annually. 

• The fee would be a flat monthly charge
• It would appear on City utility bills
• It would not be based on property value or water usage
• The City Council could adjust the fee over time as needed 

Some cities also offer reduced rates or assistance programs for qualifying low-income households, which may be considered as part of the implementation.

Philomath has previously used a similar funding mechanism:

• 2017 – City implemented a $10 monthly General Fund Fee to support essential services
• 2019–2020 – Fee was reduced (eventually to approximately $5 or less per month)
• 2021 (approx.) – Fee was sunset and discontinued ahead of its planned 2022 expiration 

The prior fee generated revenue for the General Fund and was collected through utility billing, similar to the currently proposed structure.

While the previous fee was discontinued, current financial conditions differ due to:

• Sustained high inflation over recent years
• Increasing operational costs (utilities, materials, and labor)
• Ongoing constraints on property tax revenue growth

City leadership has indicated that the current proposal is intended as a more sustainable, long-term funding solution rather than a temporary measure.

The proposed fee will be reviewed as part of the Budget Review Committee process:

• Community members will have opportunities to provide input on Wednesday, May 13, and Wednesday May 27, 2026 at 5:30 pm.
• The City Council will make a final decision after budget adoption by way of ordinance

If adopted, implementation details including billing, timing, and any assistance programs will be communicated to the public. 

Community input is essential. Residents are encouraged to:

• Attend Budget Review Committee meetings
• Provide public comment person, through the City's website, or via email
• Stay informed through City communications