Several factors have pushed the city of Bandon's 2002-2003 budget up 8.7 percent over last year, to a proposed $18.6 million.

Unlike most cities whose general fund budgets are based heavily on property taxes, Bandon is financially structured as a utility company, City Manager Matt Winkel explained in his budget message, given at the first budget meeting last month.

"At 46 cents per $1,000 of assessed valuation, the city's permanent property tax rate is extremely low compared to other full-service cities, whose rates range from $6.10 to $7.99," Winkel said.

No additional employees are proposed in the budget and no layoffs are planned.

Winkel said the city's ability to provide its public services relies primarily on the overall health of its utility systems. Of last year's $1.5 million total general fund operating revenues, six percent came from property taxes, while 65 percent came from the water, sewer and electric utilities.

When utility revenues do not keep pace with cost increases and particularly when the general fund has to transfer money back into the utilities to keep them operating, the impacts can be devastating to police, fire protection, planning and parks and recreation, all services financed from the general fund, Winkel said.

He said voter-approved local option levies might be an option considered to provide operating funds, especially since the city's property tax rate is fixed and cannot be increased. And due to a charter amendment passed by voters several years ago, the city is prohibited from raising utility rates without voter approval.

Those restrictions, along with decreasing revenues, has forced the city to use reserves to keep utilities running, according to Winkel, and maintenance on those utilities has been kept to a minimum.

"Unfortunately, this will ultimately result in significantly higher future costs and the necessity of even larger future rate increases," Winkel said.

The City Council has committed itself to educate the public regarding financial issues facing the city and its utility system.

"This will hopefully be a significant step in the process to illustrate to Bandon's citizens and utility customers the savings which can be realized by giving rate-setting authority back to the City Council," Winkel said.

That authority would allow the council to increase utility rates a small amount and undertake maintenance projects each year, instead of waiting until the utility systems have completely deteriorated and all financial reserves have been depleted, he said.

The budget committee comprises Mayor Joe Whitsett, City Counselors Colleen Cardas, Lou Franyi, Zita Ingham, David Kimes, Geri Procetto, Blythe Tiffany and committee members Stephen Beauton, Martha Crittendon, Barbara Dodrill, Donny Goddard, Diane Kimes, Christopher Powell and Carolyn Sorenson and Winkel.

The next budget meeting will be held at 7 p.m. on Monday in City Council chambers. Public input is welcome. If needed, a third budget meeting will be held at 7 p.m. on Monday, April 28. A budget hearing is tentatively scheduled before the City Council at 7 p.m. on Monday, June 2.