TO: Mayor and City Council
THROUGH: Krishna Namburi, Acting City Manager
FROM: Dan Atchison, City Attorney
SUBJECT:
title
Referring a five-year Community Services and Livability local option levy to Salem voters and approval of the explanatory statement.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Natural Environment Stewardship; Safe and Healthy Community; Safe, Reliable and Efficient Infrastructure; Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
Adoption of Resolution No. 2025-6 (Attachment 1) will refer a five-year Community Services and Livability local option levy to Salem voters at the May 20, 2025 election, and approve the explanatory statement (Attachment 2). The proposed local option levy, if approved by voters, would levy a property tax at a rate of $0.98 per $1,000 of assessed value on real property within the city to be used to fund operations and programs for the Salem Public Library (including restoration of library hours), Parks, Recreation, Center 50+ and parks maintenance. Revenue from the levy would be placed in a special account, and an oversight committee would be formed to ensure the revenue from the levy will only be used for purposes set forth in the measure as approved by voters. The levy, if approved, is anticipated to generate $14 million in the first year. The General Fund would no longer pay for these services, better ensuring stable funding for other General Fund services such as Police, Fire, and Emergency response.
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ISSUE:
Shall City Council adopt Resolution No. 2025-6 referring a five-year Community Services and Livability local option levy to Salem voters and approve the explanatory statement?
RECOMMENDATION:
recommendation
Adopt Resolution No. 2025-6 referring a five-year Community Services and Livability local option levy to Salem voters and approve the explanatory statement.
body
FACTS AND FINDINGS:
At the February 10, 2025 City Council meeting, Council directed staff to return a resolution to refer a five-year local option levy for Community and Livability Services to Salem voters with a proposed rate of $0.98 per $1,000 of assessed value. Council also directed that the proposed levy require that the funds generated by the levy be placed in a special fund and that an oversight committee be formed to ensure that the levy funds only be used for purposes set forth in the measure approved by voters.
A $.98 levy is projected to fund the following services:
• Library - maintain current staffing level (37.5 Full Time Equivalent [FTE]).
• Library - restoration of service hours - includes an additional three FTE Library Assistant positions. This service adjustment prioritizes additional Library hours and is projected to increase the main branch Library hours from 38 to 48 hours and the West Salem Branch from 10 hours to 20 hours per week.
• Parks Maintenance - maintain current staffing (45 FTE).
• Recreation Services - maintain current staffing (5 FTE).
• Center 50+ - Maintain current staffing (9 FTE).
Table 1 displays the estimated revenue generated at a levy rate of $.98 per thousand of assessed value and the estimated net costs for services funded at that rate. These net costs have been adjusted from the information provided on January 21, 2025 to recognize the estimated expense savings for the five-year forecast presented to the Budget Committee.
Table 1
Accountability Measures
With a local option levy, the City is bound by the ballot language for the use of the funds. In addition to the regular annual financial audit that the City is required to complete, other accountability measures will be required:
• Segregation of the revenue in a separate fund.
• Specific audit of levy funds for compliance with ballot language.
• Forming an oversight committee (review compliance with ballot language).
Measure and Explanatory Statement Language
The proposed measure (question) language is set forth in Resolution No. 2025-6 (Attachment 1). The Explanatory Statement, which accompanies the measure and complete ballot title in the voter’s pamphlet is included in this report at Attachment 2. The draft ballot title is included as Attachment 3. The complete ballot title, including the caption, question, and summary have strict word limits set forth in Oregon law, and are required to be fair and impartial explanations of the major effects of the measure.
Council provided feedback on the Ballot Title and Explanatory Statement that will be drafted by the City Attorney upon Council’s adoption of Resolution No. 2025-6. The draft ballot title and explanatory statement Council previously reviewed on February 10, 2025 have been modified to capture Council’s feedback and additional edits to improve readability and to stay within the word count limitations. Upon Council’s adoption of the resolution, the ballot title and explanatory statement will be completed by the City Attorney and then published in a newspaper of general circulation within Salem. Registered voters of the City may file an appeal with the Salem Municipal Court within five business days.
Election Timing - May 2025 Key Dates
February 24, 2025 - Last City Council meeting to approve a resolution authorizing ballot submission.
February 28, 2025 - Last day for governing body to file referral text or prepared ballot title.
March 20, 2025 - Last day to file or withdraw notice of measure election and explanatory statement with the County elections official.
May 20, 2025 - District Election Date.
Election Costs
$35,000 - Estimated district election cost paid to the counties (Marion and Polk), as estimated by the Marion and Polk County elections officials. This estimated cost assumes that the Counties total election costs will be shared with other jurisdictions who are expected to have measures on the May ballot. If the City is the only jurisdiction to have a measure on the May ballot, the City’s costs may be up to four times higher.
In 2023, the City Council held multiple work sessions on continuing General Fund services and forming a Revenue Task Force. On January 22, 2024, Salem City Council 25 members and two alternates for the Revenue Task Force. The Task Force met seven times; considered feedback from eight focus groups, three town halls, and a statistically valid survey; and advanced recommendations to the City Council concerning revenue options to support City services funded by the General Fund. The Task Force recommendations to sustain vital City services were presented at the City Council Work Session on, July 15, 2024. A local option levy was one of the Task Force Recommendations. On November 13, 2024 the Budget Committee further recommended that additional information regarding a local option levy be provided to the City Council.
At the February 10, 2025 City Council meeting, Council directed staff to return to Council on February 24, 2025 with a resolution to refer to Salem voters at the May 20, 2025 election a five-year local option levy at a rate of $0.98 per $1,000 of assessed value for Community and Livability Services.
BACKGROUND:
Local Option Levies (Operating Levies) Generally
A local option levy, also called an operating levy, is a special type of property tax that local governments in Oregon, like cities, counties, or school districts, can ask voters to approve. Local option levies are a methodology for jurisdictions to gain revenue from property taxes over the thresholds set by Measure 5. The levy is only temporary, usually lasting up to five years, and the City must refer the renewal of the levy to voters every five years.
Property Tax Compression
In Oregon, Measure 5 and Measure 50 are laws that limit how much property tax people can be charged through the assessed value of a property and tax rates. These rules can create a problem called compression, which happens when those limits are reached.
Here’s how it works:
• Measure 5 caps property taxes in two categories: one for schools and another for local services like police, fire, and libraries.
• Measure 50 controls how a property's taxable value grows at 3%, which is usually slower than its real market value.
When local governments ask voters to approve extra operating taxes, like local option levies for things like parks or schools, these taxes are added on top of what’s already being charged for operations. If the total taxes go over the Measure 5 limit, which is $10/$1000 of assessed value, optional taxes like local option levies are reduced or "compressed" resulting in the levy collected less revenue.
This means even if voters approve a local option levy, not all the money may be collected, which can cause funding shortfalls for important community services.
Dan Atchison
City Attorney
Attachments:
1. Resolution No. 2025-6.
2. Explanatory Statement
3. Draft Ballot Title