Newberg City Council Approves City’s First Biennial Budget

NEWBERG, Ore. — Newberg is preparing to adopt its first biennial budget—a two-year financial cycle—after spending more than 7,000 staff hours planning and reviewing departmental needs. City Manager Will Worthey said the effort is expected to save time and improve efficiency in the long run.

“We recognize that it’s a huge staff burden,” Worthey said. “We don’t want to spend that time every year, so that’s one of the reasons why biennial budgeting makes sense.”

City Council approved the switch to a two-year budget cycle last year. The change is now being implemented with the 2025–27 cycle, which was unanimously adopted during the June 2 City Council meeting. The new budget goes into effect July 1.

Worthey described the city’s approach as “almost zero-based budgeting.” While the budget is not rebuilt from scratch, staff must justify any line-item increases or changes using a Budget Change Request (BCR) form—an internal system Worthey introduced in 2022.

Each BCR must include documentation, such as vendor cost increases, inflation data or contract changes. These requests undergo a months-long review process and may be approved, modified, or denied.

That up-front rigor, Worthey said, makes the budget leaner and more precise—but also time-consuming. Switching to a biennial cycle helps alleviate the annual workload.

“On the off year, our staff can focus on other projects,” Worthey said. “For example, in 2026, we’re going to rebuild the city’s rates model from scratch. That’s a big lift, and we’ll have the bandwidth to do it.”

The “rates model” includes charges that appear on a resident’s municipal bill, such as water and wastewater fees. A more efficient model, Worthey said, could lead to better long-term cost management.

Biennial budgeting also better aligns Newberg’s cycle with other forecasting entities, including the Public Employees Retirement System (PERS), which operates on a two-year cycle, and collective bargaining agreements, which often span two years.

“There’s more stability in our forecasts now,” Worthey said. “When I and [Finance Director Katie Strode] arrived, there was no future-year forecasting. Now, we’re predicting ending fund balances out four years.”

Worthey added that large capital improvement projects rarely finish within 12 months, and extending the budget cycle reduces the need for complex mid-project adjustments.

“If a project fits within one financial planning period, it’s much easier to control costs,” he said. “It avoids artificial stumbling blocks.”

Midpoint check-ins will still occur during the off-year to allow for formal supplemental adjustments if needed.

“If, God forbid, another pandemic happens, we can adjust without starting over,” Worthey said.

The city’s budget documents have also been redesigned to be more accessible to the public. Worthey credited Strode and her team for their work in building the new system.

While some other Oregon cities are exploring biennial budgeting, Worthey said the shift requires a level of reform not all municipalities are willing to take on.

“We’re not afraid of work,” he said. “We think this just makes sense.”

FY 2025–27 Budget Overview

During the Nov. 2, 2024, City Council meeting, councilors unanimously approved Resolution No. 2024-3947, which established the biennial budget cycle and updated city code accordingly.

City staff released the 164-page FY 2025–27 budget on April 25. The document begins with fund overviews and details each department’s requests, including staffing, materials, fees, and other needs.

With the two-year budget cycle, proposed figures are generally doubled unless departments expect a change in operational needs.

The budget committee includes city staff, councilors, and appointed members. Staff members include Finance Director Kady Strode, Accounting Manager Daniel Keuler, Management Analyst Jennifer Elkins, and Senior Payroll Specialist Dawn Nelson. Appointed members are Raquel Peregrino de Brito, Judy Brown, Theodore Ebora, Alex Nichols, Ned Knight, Austin Cracraft, and student member Elias Semenyuk.

Revenue sources for the $224.8 million budget:

• $76.4 million in beginning balances, including reserves for seasonal fluctuations, capital projects, and emergencies.
• $47.5 million from civic services such as water, wastewater, permit fees, and business licenses
• $48.4 million from internal service charges for items like vehicle services and technology. 
• $27 million from miscellaneous sources such as franchise fees. 
• $17.3 million from property taxes. 
• $8.2 million from intergovernmental payments, such as police service contracts with Dundee.

Expenses outlined in the budget include:

• $60 million for contingencies and reserves for future projects and emergencies.
• $51.9 million for personnel services, including wages, benefits, and recruitment costs.
• $45.4 million for materials, services, and insurance, including consultant contracts.
• $32.7 million for capital outlay, including vehicles, equipment, and city facility maintenance.
• $26.8 million for internal payments between departments, such as utility and administrative costs.
• $6.5 million for debt services, including principal and interest payments.
• $1.29 million for special payments, such as grants and incentive programs like the Yamhill County Housing Authority grants.

The revenue and expenses are balanced—something Worthey noted is increasingly rare in today’s civic economic climate. McMinnville, for example, is facing a $3 million deficit, prompting staff and program cuts.

While much of the budget reflects the biennial shift, a few notable changes may affect Newberg residents.

The city is proposing to eliminate the $2.78 per month Communication Officer Fee, moving two fee-funded dispatchers back into the general fund in line with council goals.

The budget also reflects the closure of the Economic Development Fund, following the disbursement of all Construction Excise Tax and Affordable Housing payments.

A South River Street improvement is also written into the budget. The Newberg Urban Renewal Agency Citizens Advisory Committee voted to support improvements from 11th to 3rd streets. Up to $6 million, plus $6.6 million in NURA-backed debt funds, can be allocated to the project.

Additional capital projects include:

• $1.05 million for the West Franklin Storm Improvement Project (0% SDC eligible)
  A multi-biennia oxidation ditch and wastewater plant upgrade is expected to exceed $17 million, pending October flow testing.
• $500,000 for water line improvements on Main Street, from Sheridan to Franklin

The City Council adopted the FY 2025–27 budget during its June 2 meeting. The full budget is available at the City of Newberg website.