Yamhill County, relatively sanguine in June about its 2003-04 budget, received a colossal whack on the first day of its new fiscal year. The Public Employees Retirement System delivered a blockbuster July 1, shattering the calm.
The new rate, still hedged with uncertainty, bumped up the budgeted rate by 2.4 percent. That means $500,000 must be whittled from the budget that had to be adopted by June 30. Great timing.
The county is in contract negotiations with the Yamhill County Employees Association, which, according to the word, is responsive to these difficult fiscal times. In the sheriff's office, whose union members are affiliated with the Teamsters, more layoffs loom.
Sheriff Jack Crabtree already has had to scrub $200,000, largely from personnel, to cope with reduced revenue because Sheridan, Lafayette and Willamina trimmed their law enforcement contracts. Now he must chop another $122,000 due to PERS hikes for the jail ($53,000) and for patrol ($69,000).
Early plans call for reducing the county's $448,000 reserve fund enough to cover 1 percent of salary for each department, a total of about $170,000. With no firm commitment out of Salem for much of anything, reducing it further would be reckless.
Cities also received their PERS rates July 1. For all in the county except Willamina, Lafayette and Yamhill, the rates came in under budgeted figures. McMinnville, for one, will wisely shelter its savings in view of uncertainties ahead.
The McMinnville School District also received a rate slightly under the one budgeted. Its status is largely due to paying off much of its share of the PERS shortfall. After making the bond payment, the district will save as much as $100,000, which will go straight into reserves to help cover school funding reductions already scheduled for 2004-05.
Legislators finally have passed three essential elements on reforming PERS, but they continue to arm wrestle about a replacement plan. Let's cut the quibbling and finish the job; current PERS rates cannot be justified or sustained.
