Joseph City Council faces “Financial Sandwich”; appoints new members and battles budget deficits
By Tracy Christopher on Friday, April 10th, 2026 in More Top Stories Northeastern Oregon News
JOSEPH — In a marathon session characterized by raw transparency and difficult choices, the Joseph City Council reconvened to navigate a series of critical appointments and a mounting fiscal crisis that one councilor described as an “inherited complete sandwich”. The meeting saw the appointment of a new councilor, the rejection of a business tax, and the passage of substantial utility rate hikes intended to prevent the city from defaulting on its legal obligations.
New Faces at City Hall
The council successfully filled several key vacancies. Calvin Halladay, a 35-year-old electrical engineer and 13-year military veteran, was appointed to the City Council. During his interview, Halladay identified the budget as the city’s “number one need” and advocated for a multi-tiered forecasting approach.
Other appointments included:
- Kecia Wells to the Budget Committee, bringing 30 years of global finance and auditing experience.
- Kodi McCleary to the Planning Commission, who expressed a desire to bring a younger voice to community leadership.
- Main Street Task Force Members: Councilor Smith, Councilor Parmenter, Cheryl Coughlin, and Craig Pesti-Strobel.
Revenue Strategies: Business Licenses vs. Vacancy Fees
As the city scours for new revenue streams, the council reached a consensus on several proposed taxes:
- Business Licenses Scrapped: The council voted unanimously not to pursue a new business license fee. Councilors Dundas and Halladay stated that the administrative effort and the insult to local owners outweighed the possible $15,000 in revenue.
- Vacancy Fee Under Investigation: The council showed interest in exploring a “vacancy fee” for second or third homes that sit empty for most of the year. Councilor Halladay volunteered to research similar ordinances in other states to determine if a flat fee could assist the budget.
A “Treacherous Path”: Utility Rates and Legal Compliance
The most contentious portion of the meeting involved a presentation by Interim Administrator Lacey McQuead regarding the city’s water and sewer funds. McQuead revealed that Joseph is currently out of compliance with loan agreements, failing to meet the required 105% to 120% debt service coverage.
“We have assumed more loans on top of what we already have and made no adjustments to be able to pay them,” McQuead warned, noting the city’s total current loan balance is nearly $10.5 million.
To address a net deficit and avoid default, the council approved Resolution 2026-11, which implements:
- A $20 monthly increase for water base rates inside city limits.
- A $10 monthly increase for sewer starting January 2027.
- The re-introduction of a $5 Water Project Fee and a $5 Street Fee.
(The old residential rate was: $53 water, $43.24 Sewer, $10 Street user project fee, $5 Wastewater project fee -Old total: $111.24 The new residential rate is: $73 water, $53.24 Sewer, $5 Street user project fee, $5 Wastewater project fee +$5 Water Project Fee + $5 Street Fee – New total: $146.24)
Councilors removed proposed $1 fees for the library and parks from the final resolution to soften the blow to residents. However, the move was met with a formal objection during public comment by resident Erica Polmar, who claimed the vote violated state laws regarding public notice for fee increases and warned of potential legal challenges.
Future Outlook
The council also moved to un-restrict $90,000 in Transient Lodging Tax (TLT) funds previously locked for Main Street use, though they ultimately tabled the final decision for one month to refine the language and ensure the downtown area remains protected.
Mayor Barlow closed by scheduling a Town Hall work session for April 20 at 6:00 PM to discuss land use and invite further public input on the city’s direction.
