Transcript
Automatically generated transcript. It may contain errors and includes testimony in languages other than English that is not individually marked up for assistive technology.
Jamie Dunphy
Good afternoon, friends.
We are back in this same place for a different conversation.
I'm calling to order the afternoon work session on the spring TAO on this—.
Dan Ryan
What is it—.
Jamie Dunphy
Thursday, May 5th.
March 5th.
Candace Avalos
Why do I always do that?
Jamie Dunphy
Gavel, we're here.
Welcome our friends from— our CFO Biery and Budget Director, uh, Levine is your last name?
There it is, I found it.
Uh, turning it over to you.
Jonas Biery
Uh, great, Council President and Council, thank you.
Uh, good afternoon.
For the record, Jonas Biery, the city's Chief Financial Officer.
Everybody's fed, hydrated, happy, ready to go.
So I think Ruth's gonna pull up, if you don't mind pulling up the slide deck while I get going, kind of quickly walk through the agenda for our next few hours together.
As this is coming up, I'll do a brief introduction, kind of start with a recap of our prior discussions and actions describing kind of how we got to here today to this work session, share the primary goals of the work session, provide a little context on the why of the— why do we do a Spring TAO technical adjustment ordinance, and preview what that is intended to achieve.
Thank you.
City Budget Office Director Levine will walk through the numbers, including an update on the remaining fiscal '25-'26 deficit and some technical details.
Reminder, we're here to talk about '25-'26, the current year.
And then I'll jump back in and review some recommendations and potential solutions to fill that deficit.
We'll close with a heads up on a few more technical things that you can expect to see in the ordinance itself.
Council President, I assume we'll kind of naturally take a pause at some point around the 90-minute mark and have a little— absolutely.
Jamie Dunphy
It's my intention to get us to, Have a bio break around 3:30.
Jonas Biery
Great, perfect.
Yeah, and I think we'll get through our prepared material in probably 30 minutes-ish, and so we'll have plenty of time to navigate that.
Quick preview that while a deficit, I don't wanna bury the lead here, while a deficit is never great news, there actually is a little bit of good news, at least in context.
First, that the $18 million gap that was mentioned this morning that we're gonna talk about today is on the lower end of what we previously communicated as an expectation.
Olivia Clark
We previously said $15 to $25 million.
Jonas Biery
Was the range we thought we were in.
We are at the lower end of that range, so that's at least a mild positive.
Second quick preview of good news is that we believe there are viable solutions that avoid any reductions to staff or service levels in this fiscal year.
So that was another primary objective as we thought about this work.
I think we'll close also then with a slide.
We got kind of discuss council recommendations, sort of wanna make sure we have space to obviously receive that feedback and then talk a little bit about some of those details that we will then draft into the actual ordinance that will come back to Council in April.
So really goal today is to get some of that feedback from you.
Next slide, please.
So want to make sure and set the context of kind of how did we get here.
Council passed the '25-'26 budget, and then we previously discussed fall technical adjustment ordinance in November 2025.
At that time in November, we talked about a variety of potential potential solutions to try to bridge what we foresaw as a gap for the fiscal year.
We talked about things like competition set-aside, which ultimately we used a portion of.
And we talked about other options including uses of fund balance and reserves, et cetera.
Following that November fall TAO conversation, the city administrator, DCAs, myself, bureau leadership citywide began implementing, directing and implementing cost-saving strategies for the remainder of this fiscal year.
Those things included a hiring freeze with some exceptions that were allowable, but that was really to increase vacancy savings to help fill some of that gap.
A variety of spending constraints and enhanced expense monitoring to make sure that we're keeping eyes on and making sure that those cost savings are being— are materializing.
And I think we'll see that we had some success here.
We also reviewed various reserves to identify if there were any kind of no-risk or low-risk scenarios where we could pull a little bit of those reserves forward and use them to help bridge the gap.
And then additionally began some review of contracts and works in progress that could potentially be paused or delayed.
And so again, I think while particularly the hiring freeze and some of the spending limitations have presented challenges in management of workload and in kind of rethinking how folks maybe prioritize their day-to-day work, those strategies have been effective in creating meaningful current year cost savings.
That have reduced and contributed significantly to keeping us on the lower end of that gap.
So that was November.
Subsequent to passage of the fall TAO in November, at the very end of the calendar year, the very last few days of the calendar year, we, myself, City Budget Office Ruth, identified an additional gap for this fiscal year, which was communicated in an email from City Administrator Lee to City Council on January 7th, 2026.
At that early stage, we had communicated a preliminary okay.
At that time, we identified a potential gap of up to $26 million.
We subsequently had a work session with Council on January 22nd.
Thank you for making time for that so rapidly.
And at that time, that gap was updated to the range of $15 to $25 million, which I mentioned previously.
That work session also, if you recall, there was sort of a series of potential solutions that were identified, many of which required additional due diligence.
And so we've now completed most of that due diligence and are coming back with some suggestions.
So today we'll put a little finer tip on some of those.
All right, next slide, please.
So again, just kind of want to reiterate the goals for this work session today.
To be clear, this is not a decision-making moment.
This is a conversation moment.
The goals are to update you on the status, to discuss the options and recommendations or potential solutions that we've identified, and ultimately to support council's discussion to inform what will ultimately be in the actual ordinance for council adoption and consideration.
Thank you, Deputy City Attorney.
I also want to note that we believe— while we believe these numbers that we're going to present today are reasonably close to final, but they are really point-in-time kind of grabs as of today, yesterday technically.
And so they will continue to evolve around the edges as they always do.
And so just know if you see a number for a line item here, the number that's actually in the ordinance may be somewhat different.
There's some rounding that we're doing here.
And so just want to flag that for awareness.
And additionally, some of the numbers that we're going to talk about are in fact subject to change based upon input we get from Council today or prior to the ordinance.
So the goal today is to share information, to get general guidance about priorities in the context of what we want to see in the TAO, and to address questions and not so much to conduct laser surgery.
All right, I think the last slide before I hand to Ruth.
Don't intend to go into the weeds here, but we wanted to do kind of a quick visual sort of simulating how we're continuing to evolve the city's budget process in prior years.
Oh, that's great.
The spring TAO was used for some purposes like addressing carryover, allocating general fund contingency, returning general fund and underspending to bureaus.
Partially, we don't have that this year to do, but also this is reflective of kind of our further aim to simplify the actions that we do under the evolving budget process.
So I wanted to just wave that concept in front of folks.
And I think just to keep things moving, I'll go ahead and pass to Ruth.
And if there's questions, happy to come back to those once we're finished here.
Elana Pirtle-Guiney
Great.
Unidentified speaker
And for the record, Ruth Levine, I'm the budget director.
So just, I'm going to talk quickly about kind of where we are with the forecast information here.
So on the revenue side, the number that we discussed in January was identified in the December 2025 general fund forecast.
And again, that was primarily a forecast for '26-'27, but it included a current year deficit of $13.6 million.
Angelita Morillo
Thank you.
Unidentified speaker
And that was kind of the moment where we started to have the conversation and look at the situation for the current fiscal year.
But on the revenue side, it was $13.6 million.
So we've got our total revenues budgeted, we have expense budgeted against that, and we— and Peter forecasted that it was going to come in low.
A little bad news on the revenue side.
We're tracking about $3.5 million below the December forecast for the current year.
Primarily driven by lower ULF revenues.
And I think, you know, this is obviously bad news, but I want to put this in context of something we talked about, I think, last week in terms of the timing of the forecast.
We regularly— so historically, we've put out the December forecast and updated it in February.
This year we're doing one and then again in April.
This year we're doing a March update and a May update.
Candace Avalos
Okay.
Unidentified speaker
So this isn't entirely unusual as we get, you know, actual revenue data in throughout the fiscal year.
It informs our current year revenues.
It's just that normally we have enough cushion to be able to absorb that without having to balance to that marginal number.
So that's kind of where we are.
So it takes that, that—.
Candace Avalos
Councilor Smith.
Unidentified speaker
Revenue gap number a little bit higher.
Another thing to note is that these estimates are preliminary.
As I just mentioned, we'll be updating the March forecast in a few weeks, and that will set the baseline for the mayor's proposed.
One other thing to call out is that BLT is still roughly on track for the current fiscal year.
That, that was kind of the source of our shortfall in '24-'25, but we are basically on track for this fiscal year.
Okay, so that was the revenue side.
This is the expense side, and I want to put these numbers in context.
First of all, these are just projections.
We're going to talk in a couple of slides about what kind of— what we would recommend pulling into the spring TAO, but these are these are just like the actual projection numbers of revised current year revised budget to actual forecast.
And so a couple of things to note about sort of what's assumed in here.
This is based on accounting period 7 data.
So it's our best estimate at this point, but obviously every accounting period you get a little bit more information.
Angelita Morillo
Okay.
Unidentified speaker
It assumes no programmatic carryover, which going back to that slide Jonas just talked about in the spring, in the past we have done programmatic carryover for things where we haven't started a one-time funded project and we want to do it in the next year.
This doesn't assume that bureaus are kind of holding on to that money, right?
It assumes it's— if they're not spending it in the current fiscal year, it's in this forecast.
Candace Avalos
Okay.
Unidentified speaker
It's only general fund discretionary, and it includes the savings due to the hiring freeze and other spending reductions that Jonas talked about that were directed earlier in the fiscal year.
So it's sort of all in.
And of course, the other thing to note is that we did not allocate compensation set aside to bureaus' budgets in the fall.
That's standard practice is that we don't do that, which means that's a big part of the reason between if you were just looking at revised to forecast, a big part of that gap would be expected because they don't have that compensation set-aside resource in there yet.
So all of that is combined here and it's just looking at the delta of the forecast.
I know there's a few questions.
I'm gonna keep going unless there's sort of immediate clarification, I guess.
Elana Pirtle-Guiney
I have 2 clarifications on this slide, Council President, if you don't mind.
Olivia Clark
Go ahead.
Elana Pirtle-Guiney
I wanna make sure that I'm reading this correctly.
The black is underspend, the red is where we have overspend.
Presumably that overspend is overtime that they have not yet gotten money from the compensation set aside for?
Unidentified speaker
Yeah, a personnel expense, basically.
I mean, it's all, it's everything.
So this is a net number, net of like non-general fund revenue.
There's a lot that goes into this number.
So I would hesitate to say that it's just overtime.
Dan Ryan
Okay.
Unidentified speaker
It's a big portion of it is compensation set aside.
In public safety, there's about $11 million of compensation set aside that would have that was sort of estimated for those bureaus, but there's other stuff that goes into here as well.
Elana Pirtle-Guiney
I'll have more questions about that later, but just wanted to clarify.
And then you said that this does include things like the savings from the 20% reductions and the hiring freezes.
Is it fair to take the net of these numbers and say that that is money that could decrease the gap that we're seeing, or are we also counting those reductions in determining how big the gap is or isn't, and that would be double counting positive dollars?
Unidentified speaker
Yeah, great question.
So we're, we're gonna get there in a couple of slides, but basically what we did is took the net overspending and counted that towards our total gap.
So the— you'll see it in a couple of slides.
I think it should be clear, but the $18.1 includes a net overspending number, and we've pulled out— let me just go to this slide.
Elana Pirtle-Guiney
I can wait until you get there if I know it's coming.
I just wanted to understand if we could do the math simply or if that would be a double count.
Unidentified speaker
So I'll wait.
Elana Pirtle-Guiney
Thank you.
Unidentified speaker
Yeah, sure.
Mitch Green
Okay.
Unidentified speaker
Okay, so yeah, this transitions just from like pure forecast information to like now how do we take that and balance the current year for the general fund.
And so this is kind of how we did that.
Essentially, we more or less just took out the council office and auditor's office underspending, and you'll see that on the next thank you.
And I'll talk about that in the next slides, but for now, we did it this way to show that sort of those net things like savings from vacancies are just rolled up into this number.
So they're not a separate decision point because it's basically— we already have a vacancy freeze in effect.
It's just kind of recognizing the underspending from as a result of that and rolling it into this forecasted expenditure number.
And I talked about some of those bullet points on the right-hand side, compensation set aside and the enterprise efficiencies.
Again, it's all kind of rolled into just the revised budget minus the projection.
Great.
Jamie Dunphy
Councilor Green.
Mitch Green
Thank you.
Just to clarify on the slide, how much exactly Is compensation set-aside contributing to this projected deficit?
Unidentified speaker
So we drew— I'm looking at staff— we drew about $10 million from compensation set-aside in the fall to balance the fall TAO.
So you could say like this deficit would be that much lower if we hadn't done that, but it's a little hard to pull out exactly because we typically don't allocate the compensation set aside until spring for this reason, right?
For the reason that most of the bureaus wouldn't have needed it.
Mitch Green
I understand that.
I guess, and I know that there's a historical norm here.
I don't want to get mired in the detail, but just in terms of what we need to distribute now in the spring, do we have a number for that?
Unidentified speaker
So essentially, The way this would work, and I'll show it on the next slide, is we're in that number.
If we say, you know, we were going with the net number of $1.2 million, and there's some decisions for council to make in there, but if we were, it's— somebody described it as like you're pushing the pile of sand into the holes.
You're just moving the money around to backfill the places that need them.
And then compensation set aside becomes like a citywide offset at that point, which is kind of how it's budgeted in contingency.
It's not budgeted in the individual bureaus, right?
So it just kind of helps balance the general fund at that point.
So I think the way to think about this number is this is, you know, sort of all else equal, right?
Just like continuing business as usual, we would end and so that includes things like continuing to hold vacancies, continuing to reduce—.
Mitch Green
I understand all that.
I think, you know, when we approved the fall TAO last year, there's just a schedule that says this much money moves from this contingency to that.
That's the number I'm looking for in the aggregate.
We don't have to have that answer right now, but— Yeah, I mean, I think that's a fair question.
I'm not looking for the total effect.
Jonas Biery
And Councilor, it may be helpful if we get through this sort of solution slide.
That may help also illuminate.
I mean, Anthony can give us an answer, but I want— that may help illuminate kind of all the pieces here too.
Colleagues, and we can wait till the end and we will come—.
Jamie Dunphy
We will move to robust conversation.
Unidentified speaker
Okay, I'm going to turn it back to Jonas.
Jonas Biery
All right, so, um, great.
The conversation is naturally leading us to where I think this is here.
So we wanted to walk through the options that we think I think should be in the conversation to solve for that $18 million gap.
As a kind of lead-in reminder, there's trade-offs to any option, but we've aimed to prioritize proposed solutions that avoid staffing or service impacts, that don't force future replenishment requirements, i.e., kind of kick-the-can solutions, and solutions that don't materially increase financial or program risks.
So that's sort of the key that we've kind of tried to drive here.
In the presentation today, we've divided these into 2 buckets.
There are different ways we could do that, but the way we've chosen is kind of using a first bucket here that's shown that includes options that we believe can be accommodated most easily without— with zero or limited impact.
And so I'll quickly walk through each of these, and then there's just a preview.
There's a second slide where there's kind of some more, maybe more questions and decisions.
But of course, these are all subject to council intent.
Candace Avalos
Thank you.
Unidentified speaker
Thank you.
Jamie Dunphy
Thank you.
Jonas Biery
So the first line item, we keep $3 million in unrestricted general fund contingency.
Suggestion would be to go ahead and utilize $2 million of that now, keeping $1 million kind of in pocket.
There's still a few months left in the fiscal year, so that would be readjusted in the OEO, but that at least gives us a little bit of cushion to continue managing through the rest of the fiscal year here, but use $2 million of that.
In the prior number, I think it was a $3.3, if I remember correctly, number of that was a council our elected underspending includes council operations budget.
So we went ahead and pulled that out, like we're pulling back all of the general fund underspending from citywide, grabbing that 0.8 in underspending out of council ops.
There is remaining compensation set aside that will not be used, will not be necessary to balance.
And so we can reallocate that at this time towards filling the gap.
I think we mentioned this last time as an area we were going to do due diligence, but we did look at the technology reserve.
Yes.
And identified there's an amount that was kind of— amounts are contributed in by bureaus.
And so there's an amount contributed in over a couple of years that we've identified was actually probably in excess of what should have been charged to those general fund bureaus.
So that gets returned back in this line item.
There's a fund, I think we maybe mentioned this in the past too, called the Bancroft Bond Sinking Fund.
A little bit complicated the way that works, but it has a balance of around $14 million.
That reserve is really important because it protects us against— we have to make debt service payments that rely on LID assessments being paid.
And so that reserve ensures that if those LID assessments don't generate, we can continue to pay off the bonds.
There's a unique piece in there of around $13 million that would become due in, I believe it's fiscal '29.
And so this would actually drop the reserve a little bit lower than that $13 million.
Okay.
But we expect that it would pick up over a couple years and be back to fill that risk.
So we feel like $2 million is the appropriate number to pull from that fund right now without materially increasing risk.
And then we've had conversations with PPB about the asset forfeiture fund and identified that approximately $1.4 million could be pulled from that.
So those were kind of the first bucket of things we felt like were—.
Elana Pirtle-Guiney
Okay.
Jonas Biery
You know, as I said, kind of low or no impact that are connected to the general fund, can be done without other legal, you know, considerations.
And so that takes that $18 million, if we accepted that full bucket, it takes the $18 million down to $6.6 remaining.
And we can talk about that on the next slide maybe if it's okay.
I'll just do the next slide and then we can come back in.
Unidentified speaker
Great.
Jonas Biery
All right, so then the second bucket were things where there's a lot more discretion.
I mean, it's all questions.
Steve Novick
Questions.
Jonas Biery
Mm-hmm.
Malleability around.
So these are also things that have potentially more impactful trade-offs relative to no or minimal.
And so certainly appreciate council's input as we think through these.
The first item here is, again, these are options.
There have been suggestions over the past few weeks, couple months in the context of the Housing Investment Fund discussion to allocate between, I think, the $3-something million and $5-something million back to the general fund.
Obviously, there was robust discussion about that at the work session this morning.
Our understanding is that the 0 to 60 TLT is the most flexible bucket to return back to the general fund.
And so this line item reflects that concept.
We put a number of $4 million, but this number's obviously scalable to whatever we chose, whatever council might choose.
Candace Avalos
Thank you.
Jonas Biery
I would note that this does, I think as we've talked in other forums related to the housing fund, that this does come with the trade-off of reducing those dollars being available for future housing-related priorities.
So that's certainly a trade-off here, but we know it's been discussed in prior forums and so we included that here as an option to balance that remaining $6 million.
Second item, wanted to make sure we flagged, this reflects the $2.2 million here reflects the aggregate total amount among all council offices, excluding council operations.
I believe the auditor as well, or including the auditor, not excluding the auditor's office.
And that's sort of the number pulled as currently projected in the city's expense monitoring system.
In line what we believe has been the preference of council and certainly direction of the city administrator, bureaus, general fund bureaus citywide are not having an option to keep their underspending.
Dan Ryan
Thank you.
Jonas Biery
And so, but we didn't feel like it was appropriate for us to make that call for you, for your offices.
And so we left that on here as an option for consideration by council and feedback about how you would like us to proceed.
We defer to your direction about how to direct those underspending dollars.
Third item is one we talked about in the fall.
This is the citywide obligation reserve.
Yes.
The City Reserve Fund has a portion in there, if you recall, that's related to cost— city's potential future costs related to Portland Harbor cleanup and mitigation.
We can pull from this resource now, but there would be an expectation that these dollars get replenished at some point in the near future.
And so we'd have to think about that now or think about in the forecast how we reflect that replenishment expectation.
Olivia Clark
Thank you.
Jonas Biery
So kind of a little bit of a kick-the-can solution here.
And I'd also just note that using this solution today to solve the current year also takes a— pushes a button that potentially takes that off as an option for next fiscal year if we wanted to try to hold this in pocket and use it to help solve next year's deep budget challenge.
So a couple of trade-offs with that one that are of relevance.
And then the last line item is just kind of reflecting that in doing that work of looking at that work that we could stop doing, and again, recognizing this is just within the general fund, there were sort of some packages of things or specific things that bureaus identified as possibilities.
We haven't recommended it because again, we've tried to sort of avoid recommendations that actually stop doing things, that stop delivering services.
But that's certainly something we could come back to.
Mitch Green
Thank you.
Jonas Biery
And provide a little more detail about the specifics under there if council was interested in that.
I know we have a couple more slides about a little bit what's next, but this might be a good natural pause 'cause that's a lot to digest.
Jamie Dunphy
Councilor Kanal.
Sameer Kanal
Thank you.
I have 3 questions.
One is the $2.2 on this slide and the $0.8 on that slide add up to $3 million even, but before it talks about $3.39 in underspending.
Is the 0.39 on the auditor side, or is it just around—.
Unidentified speaker
Yeah, sorry, I, I couldn't remember if the auditor was in there or not.
It must be not there.
Candace Avalos
So yeah.
Sameer Kanal
Secondly, um, I would love more information about the targeted bureau reductions, the— that last line.
What are the quote-unquote public safety programs that we're talking about?
Unidentified speaker
Um, yeah, and we can pull something up.
I mean, we, we asked bureaus basically to identify general fund contracts and encumbrances that they could at at least pause for the current fiscal year.
And so we are just— we kind of rolled those up, the ones that they said that they could potentially pause without, you know, having an issue with their contract or the like.
So the biggest buckets in there are $500,000 roughly for graffiti reduction.
And then do you want to speak to the ones that are in, uh, the— in PX?
Candace Avalos
Sure.
Unidentified speaker
Uh, Anthony City Budget Office analyst, supplemental budget coordinator.
So we did an exercise in January for bureaus highlighting encumbrances over $100,000 and asked bureaus to see like what could possibly be paused or stopped.
And so the 2 packages in PX, um, one is in— and I know Public Safety is here if they want to further comment on that— one's in the Special Programs— Special Projects Bureau, and it's for the Portland Opportunities Industrial Center Incorporated, and there's $334,000 of possible savings there.
And then there are video production services connected to PSEP that could be paused.
They weren't recommending that necessarily, but they were— they just proposed that as a possible Ginger Dameron, Public Safety Department.
I saw your eyebrows.
And so the POIC one is like in the process of an amendment, and so it sort of fell in the criteria of this could pause and move into next year.
And then PSUP had some underspend that was going to be used for video production that hasn't yet been encumbered.
And so both of them kind of fell in that criteria of they're not encumbered yet.
Thank you.
Candace Avalos
Okay.
Sameer Kanal
And is the— who holds the POIC contract that we're talking about?
Is it OVP or is it a different part of the public safety?
Unidentified speaker
It's now under Ceasefire.
Sameer Kanal
Ceasefire.
Candace Avalos
Okay.
Sameer Kanal
Yeah.
Unidentified speaker
I mean, and I think there were also a couple of encumbrances within police that we identified that there was some underspend.
So it wasn't just community safety.
Sameer Kanal
Are those included in the $1.8 million?
Unidentified speaker
They are, yes.
I think one of them is the wellness program.
Yeah, police has had some one-time dollars for a wellness program that is a multi-year project, and so there's amounts that are encumbered that they don't— they're not going to spend this year.
And so those were under the category.
Um, and then there's also— we had some encumbrance carryover for the photo radar enforcement, and those bills have come in a little bit lower, so there was some underspend there that was identified.
Sameer Kanal
Okay, so it's underspending.
Candace Avalos
It's not—.
Sameer Kanal
Okay, uh, can you just clarify what the percentage is or the dollar amount that's graffiti of the $1.8 million?
About $500,000, I think you said?
Jonas Biery
$500,000, Yep.
Sameer Kanal
And is that on the PBOT side, on the PMO side?
Unidentified speaker
Uh, as council discussed recently, most of the graffiti abatements are now in BPS, so it would be contracts that those folks are managing.
Sameer Kanal
Great, thank you.
Jamie Dunphy
Any other questions, colleagues?
Unidentified speaker
I will say, yeah, the, the $500,000 for graffiti abatement would potentially represent a, like, a service level impact, but it was signaled that that work could be paused if, if directed so.
Jamie Dunphy
Okay, no more questions it seems right now.
Unidentified speaker
All right, we'll have more time for questions.
Um, so in addition to rebalancing the general fund in the spring TAO, um, there will be these— a number of other adjustments.
So we wanted to run through some of what to expect there.
As was discussed this morning, we did ask explicitly to have bureaus true up their beginning fund balance for '25-'26 to the '24-'25 ending fund balance in the ACVFR.
That's normally standard practice.
And because the ACVFR this year came out later than the fall TAO, some of those didn't get fully incorporated.
Jamie Dunphy
Okay.
Unidentified speaker
Sometimes folks need to have the— need to ensure that the numbers align.
And so we're expecting that to happen in multiple funds, not just in housing.
And then we're also expecting some technical adjustments.
I would say some of that is related to the rebalancing of the general fund is how It's like literally how we will do that work.
And some of it might just be in other areas, in non-general fund bureaus and the like, where they're moving things either between kind of major object, between spending categories, or across funds.
Like the water and sewer funds often make adjustments based on their construction costs and the like in the spring.
Candace Avalos
Okay.
Unidentified speaker
Recognizing and adjusting revenues that have been received since the fall that haven't been budgeted, such as grants, interagencies, or intergovernmental revenue.
And then the general fund contingency bullet is really about rebalancing the general fund.
And then the other thing we wanted to highlight, we talked to you about this yes.
Back in the fall, Tao, is the health fund.
So you might recall we did briefings with every office, I think, on the status of the health fund.
The health fund is essentially where we pay out all of our claims that all of our benefit dollars go into, and then we pay out directly out of the health fund because we're self-insured.
And we've been steadily drawing down the reserve in the health fund over time, as you can see on this slide, and we have more than exhausted it at this point.
And so we already knew we would have to make an interfund loan for the current year to ensure that that fund ends in balance.
The situation is a little bit worse than we anticipated, and so we had originally said we would be looking at a $10 million interfund loan.
Angelita Morillo
Yes.
Unidentified speaker
We're now looking at a $15 million interfund loan.
The costs of repaying that loan are basically already included in the numbers we have been assuming since the fall for our health benefit increases for next year.
So it doesn't cause a material change, but it— I'm sorry, I'm sorry.
You know, is obviously problematic from the standpoint of rebuilding the reserves.
So that's the main thing is it would take longer than we would've anticipated to rebuild those reserves, but it doesn't necessarily make our problem worse for '26-'27.
But there will be an ordinance specifically to authorize this interfund loan that will be just traveling with the spring TAO, and then the budget will be adjusted to recognize that interfund loan revenue.
Candace Avalos
Thank you.
Unidentified speaker
Any questions about that?
Okay.
All right.
And then here's the calendar for the rest of this ordinance.
So, you know, hoping to get all of your feedback here today, as Jonas mentioned, so that we can take that and reflect it in an ordinance.
Angelita Morillo
Thank you.
Olivia Clark
Thank you.
Unidentified speaker
So we have an emergency ordinance that comes to you all, and a pair of ordinances that come to you all to discuss and then vote on on April 8th and 15th.
And there was a question out about whether we would come back to a Committee of the Whole meeting at the end of March after spring break or not.
And I think it depends on where you all land today.
So I think we can pause there and turn it over for questions.
Jamie Dunphy
Okay, colleagues, feel free to jump in the queue.
Councilor Kanal.
Sameer Kanal
I'll start with a comment.
I might circle back on some questions.
The comment is, just for transparency, I have at least 6 hours of requested items, maybe more, for the first Committee of the Whole meeting.
I love the enthusiasm, but I just want to point that out.
I'm not making any statements about what it's going to be at this moment, but I just want to— I want everybody to be aware of that as they discuss the as-needs for several items, and I'm looking forward to talking to everybody about them.
And I'll circle back on questions later.
Jamie Dunphy
Okay, thank you, Councilor Kanal.
Councilor Morillo.
Angelita Morillo
Thank you.
Appreciate all the folks running meetings and trying to schedule things.
I know it's not an easy feat.
I had a question regarding the police asset forfeiture funds.
In the fall TAO, I recommended that PPB or I suggested that PBB could use about $165,000 of asset forfeiture funds for capital purchases in order to save some of our money from the general fund.
Certain political actors said that I was trying to attack the police bureau's budget.
But now I see that there's— not you guys, other people.
But now I see that there's a proposal to use police asset forfeiture funds to cover $1.4 million of event overtime.
So I was just curious what changed there that allows us to use that funding now.
Unidentified speaker
I'm going to look to the public safety folks if they want to come up.
Angelita Morillo
I have questions.
Unidentified speaker
Ginger Dameron.
I'm not sure I can answer the first part, but I can explain how we came to the $1.4 million.
In looking at the overall need for resources, $1.4 million is close to what has come in this year.
That wasn't yet obligated and planned for.
And those dollars have specific things that they can't already be budgeted and specific things that are eligible.
So one thing that's eligible is overtime and overtime that's directly charged to it.
And so what the $1.4 million is, is we are anticipating $400,000 for Rose Festival, maybe a little bit less with one less parade happening this year.
And so we're just saying we're going to charge the Rose Festival directly to asset forfeiture.
We also have been putting $1 million sort of holding in case something large happens in kind of a contingency, and police has reduced their other types of overtime.
So we had that million in sort of their overall budget by their overtime reductions, and so that money may not actually have to get spent.
It kind of depends on what happens in the next 4 months, but it just allows us to take that piece out of okay.
Angelita Morillo
And I will say for the public that's listening, asset forfeiture, I think, is kind of a gross practice, but this is a state law that allows us to access these funds.
So while we have them, we might as well use them.
Across all the police revenue subfunds and accounting for an updated beginning balancing fund, PBB is going to have roughly $10 million in special revenues.
So can we use more of that?
Unidentified speaker
Yes.
Angelita Morillo
More of that funding this year, just given the crisis that we're in?
Or are those allocated based on what you just said?
Unidentified speaker
I was asking Nathan if he— I didn't bring the paper in.
I meant to.
They are planned for and like in different stages of procurement.
So the $1.4 million is what we went through that this is not planned for, and it can cover overtime.
So there's one bucket of money that's specifically for Regen, which is a technology.
It can only go for that bill, and that one is about $1 million.
And so there's different— There's 8 different subfunds, and each of them have restrictions on what they can and can't be used for.
And we, we went through and identified what would— what there was balance in and what could cover over time.
There's some limitations, and I think police doesn't have other expenditures that it was easily identified of like, that can cover it, because we can't supplant the dollars.
And Nathan may correct me if I—.
Uh, Nathan, I manage the team that does budget, strategic planning, and performance management for public safety.
Yes, agreed.
I think the sort of key thing there is for the asset forfeiture dollars, they can't be used to supplant existing budget.
So if there's something that the Bureau's already planned for, and, you know, at this point being 2/3 of the way through the fiscal year, there is a lot of planning the Bureau has already done.
We couldn't reduce those dollars that have been budgeted for to instead use asset forfeiture dollars.
So it has to be a bit more opportunistic yeah.
So we're not being opportunistic when it's the asset forfeiture dollars.
For region, Ginger mentioned some of the other special revenue funds the Police Bureau has are a collection of about a dozen smaller projects.
You know, some of these are dollars related to members of the public who have sent in resources for police dogs.
So we have money that can go towards expenses around the canine unit.
Those are being spent down.
It's a small bucket around, I think, $30,000.
Each of those have their own restrictions tied to them.
Those restrictions don't have the same sort of legal prohibitions around supplanting, but they do just require making sure that we're following through with the intent from whoever gave those dollars.
Angelita Morillo
Thank you, that's helpful.
And I would love to see later if you could email to us a breakdown of how those dollars are planning to be allocated.
And I'm familiar with the I don't know how you pronounce this word, supplantation issue regarding these funds.
So given that we know that we can't supplant the Bureau's budget, how do you plan to proactively incorporate these dollars in order to help address the deficit that the general fund is facing?
Like, can we proactively do that so that there's— so that we can use more of that fund?
I mean, maybe that's a legal question.
I'm not sure.
Unidentified speaker
Well, I think there's a couple of things.
There's the projects that are already underway that we've maybe already put in an order.
There's things that are sort of essential to operations, deferred capital projects.
And so whether or not we would want to pause those, I think if you're asking about next year, we are kind of asking that question of could we use and where does it fit in with the Police Bureau's overall budget?
And which it has been, but just really looking at that strategically on how can we incorporate it in.
One of the challenges with the funds is it's not predictable how much we're going to get in.
So some years we get $600,000, another year we get $1.5 million, and it just— and we don't fully know when it's going to come.
And so that makes it hard to, like, make it an operational part of their budget.
I think the challenge is that but we are looking at sort of using those dollars to bridge a gap.
Yeah, I will say from a sort of longer-term planning, the bureau has a fair number of capital assets around equipment or vehicles that do need to be replaced over time.
One strategy for replacing those would be setting aside dollars in an equipment replacement reserve fund and replacing those, or using general fund discretionary dollars.
And historically, it hasn't done that for a lot of that equipment because they've known they've had the Asset Forfeiture Fund as a backstop.
So it has over time been a relief on the Bureau's general fund requests, or in this case, the amount of overspend the Bureau has because they're able to use those resources instead.
Angelita Morillo
Okay, thank you.
That's very helpful.
Very interested to see how that plays out, just given the reception that it had during the fall.
But perhaps seeing the new numbers for our budget is giving people a reality check this time around.
I had another question not regarding the special revenue fund.
Thank you for coming up here and answering my questions.
Unidentified speaker
Regarding the technology replacement reserve for laptops, will the use of any of the BTS tech reserves put any bureaus in a position to be I don't believe so, and I'm not sure if somebody can speak to it more specifically, but I think my understanding was that this was truly excess, that they did kind of a retrospective look at the laptop replacements and determined that there was an amount that just wasn't needed for those replacements.
And so I think the non-general fund amounts have always been based on the actual need.
Already gone back to those non-general fund bureaus, and this is just kind of recognizing the general fund portion of that.
Angelita Morillo
Gotcha.
Okay, thank you so much.
Um, I think that's all of my questions for now.
Appreciate you.
Jamie Dunphy
Thank you, Councilor Murillo.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President, and thank you all for the update today.
Um, it looks to me like a lot of the funds that you are recommending, or that you have on that not recommended but other options list are funds that while we aren't allowing bureaus to carry over, we might have used as what I'll call beginning fund balance, for lack of a better term, in a different budget year.
And so I'm concerned that what we're doing by not looking at program changes, and I understand the recommendation not to look at program changes, but by not looking at program changes, I'm concerned that what we're doing is creating an even more difficult situation for ourselves next fiscal year because the release valves that we might have had, however small they are, won't be there at all.
Is that an accurate reading of what I'm looking at?
Jonas Biery
Yeah, Councilor, it's a good question.
In some cases, I think that's true, right?
So like using a reserve now as opposed to holding it, finding a different solution, and keeping that reserve in pocket to use later, yes.
You know, there are some of these buckets that would, you know, there's sort of decisions being made around that, right?
So the other reality about service reductions is the implementation timeline to have those cost savings materialize this fiscal year are really challenging.
So if we're talking about something that's like a contract that we just say, you know, we were going to execute that contract on May 15th, we're not going to do that.
A little easier to grok that.
I think those were the types of things that are reflected in the $1.8 million, whatever that number was, versus we now have to unwind a thing that we do.
And so that takes a little bit of time.
You're right fundamentally in the math, but the implementation of those kinds of reductions is much more challenging.
Dan Ryan
Thank you.
Jonas Biery
You know, in a late-stage fiscal year.
Elana Pirtle-Guiney
Even in the targeted bureau reductions though, it sounds like those are not let's end this contract and not do it.
It sounds like those are all let's delay this, we're still going to do it next year.
So I'm not seeing anything before us that reduces services at all.
And I want to be clear, I don't want to see in a perfect world a reduction in services.
But when we know that we're going to have $169— is that the number that we're at right now?— million dollars in deficit next budget year, I am a little bit concerned that everything before me gets rid of $5, $6, $10 million in what might be beginning fund balance yeah.
And doesn't start us having some of those hard conversations.
I absolutely understand that recommendation, but I think we need to say out loud, we're making the problem harder, not easier, for a few months from now.
And I am wondering if there's anything— 2 questions.
One, just to hold, not to answer now, but I'm wondering if there's anything else we should be looking at that is that that, hey, Mr. Mayor may not be recommending this in his budget anyway.
It's a contract.
Should we just stop it now?
And should we be taking a hard look at that before we take any action on the Spring Tow?
The other thing that I am wondering about is on the compensation set-aside piece, and this would be great to get an answer now if possible.
Sameer Kanal
Yes.
Elana Pirtle-Guiney
It looks like there's $3.3 million in compensation set-aside that you're recommending to use to help fill the gap.
Is that what you project to be in excess of what will be needed for compensation set-aside, or do these numbers include what bureaus need out of compensation set-aside and that's what's left?
Help me understand how compensation set-aside is being used here.
Candace Avalos
Yeah.
Elana Pirtle-Guiney
And if we're going to have a later conversation about not having enough there or if this is accounting for that.
Unidentified speaker
I think the short answer is this is accounting for that.
So I mean, the way to think about it is we drew, in answer to Councilor Green's earlier question, $14.4 million from the overall $17 million pot that was compensation set aside.
It's now down to $3.3 million.
But in a normal year, we would have had enough for whatever the and if, you know, this were what it looked like, we might have only given them $3.62 million out of that total pot, and the rest would have become beginning fund balance, to your other question, for the subsequent budget year.
So, but the narrow question is just essentially, this is what's left.
It's essentially we would have given it anyways.
It is the compensation set-aside need.
So it's not a new request.
It's just that it's not enough to cover the total need, which is why we're putting all these other things on the list.
Elana Pirtle-Guiney
So the $3.62 million, I think you said, I'm not looking at the slide right now, is the projected compensation set-aside need through the end of the fiscal year.
It's not a point in time where we are at right now need.
Unidentified speaker
Correct.
So that's the—.
Angelita Morillo
This—.
Unidentified speaker
And again, that aligns with what we've been talking about roughly with like the normal practice we would do for the spring TAO is we would do projections sometimes a little bit later with like 1 or 2 more accounting periods in them.
But we would do projections through the end of the fiscal year.
Bureaus would say, this is what we project to need.
Here's our request for compensation set aside.
And yeah, I mean, we pushed them extra hard this year to give a closer accounting than they normally would have.
And so I'm fairly certain we would've had a bigger number if we hadn't done that.
Um, but, but yeah, this is the projection through the end of the fiscal year of what they will need.
Elana Pirtle-Guiney
Okay, thank you for clarifying.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Councilor Green.
Mitch Green
Thank you, Mr. President.
Thanks for getting that exact number.
Appreciate that.
Um, on the slide, let's see, where is it?
Slide oh geez, there's no number, but it's the, um, it's the last table before other spring tow actions.
Thank you.
That one.
Um, so in the narrative it says service areas identified roughly $2 million of EMS reductions that could be implemented, um, but it would carry forward service impacts and I think, I guess my question is, are those reductions to areas that were previously approved in the fall too as encumbrance carryovers?
Loretta Smith
Some of them.
Unidentified speaker
We haven't done the analysis.
There was some carryover for graffiti in the fall, I couldn't tell you right now if these are expenses that were carried over, but we can get that to you.
Mitch Green
That would be helpful.
And I guess what I would ask for before we're asked to take a vote on this ordinance is that spreadsheet that shows the current state of play of those EMS contracts, because it was very helpful for me last time in the fall, Tao, to know that even though we appropriated but did not execute EMS contracts in a prior fiscal year.
They were— we were being presented with the case that if we don't approve this, it's going to have service impacts to the current year budget, which for me is really problematic because we approved a budget for '25-'26 to do certain things.
And I didn't think when I was approving that budget I was approving a budget to do those things, but only if I've— I'm going to later approve encumbrance carryovers from previous budgets.
And so some of us tried to call that out in the fall TAO and offered— I mean, Councilor Murillo offered an amendment.
I co-sponsored that amendment that reduced that amount of policy carryover, or I'm sorry, encumbrance carryover, which would've left more money here, which we said would happen.
Councilor Dan Ryan.
And so I just really think that needs to be the focus.
And I'm going to need to see that, like, what are the actuals versus what we said we would need?
If they've been executed, fine.
Like, you know, I'm not a denier of the facts, but I look at $1.8 million here and then previously $2 million, and I just know that there was a lot more there.
And so if there's only $3.8 million of unexecuted contract slack, then that's what it is.
But just, you know, just a little frustrating.
And I'll just leave it with this, and I hate to I try not to take this tone, but when we were pushing that amendment last fall, there, there was some stuff in there that had policy implications that people didn't like, and reasonable people can disagree over that.
But there was one half of it which was very much about fiscal stewardship, which was we really should not spend our kitty down right now and hope that we get the savings through, uh, through the materialization of these, because what we've seen is that didn't and now we have a spring TAO that is being driven in large part by the fact that we don't have as much encumbrance carry— I'm sorry, compensation set aside there to allocate to these bureaus.
I think on average historically we've had about $14 million or so, $12 to $14 million that we need to do to make those bureaus whole.
We're squarely in that zone.
And I'll just leave it at that.
Jamie Dunphy
Thank you, Councilor Green.
Councilor Knoll.
Sameer Kanal
Thank you, Council President.
Thanks everybody for being here.
Um, again, I have a ton of different questions here, but I wanted to, um, kind of just stick to one clarifying question, um, which is, I guess, is the, is the, the public safety overspending, is that the amount, is that comparable to what what we've— the numbers we've seen for previous years, not the amount of it, but are we comparing apples to apples if we compare that $3.62 million to the $7 to $10 million we've seen taken out of compensation set aside in the spring town preceding years?
Unidentified speaker
Yeah, I would say it's not exactly apples to apples.
I'm happy to have them come up and speak to it, but I think part of this overlaps a bit with Councilor Green's comment.
Yes.
I think it's important to note, and I think this ties into Councilor Smith's comments a moment ago, which is that we've really had a practice of, to some extent, assuming carryover in our year-end projections.
And that's both a combination of kind of policy carryover programs that haven't started or are only partway through, and also the encumbrance carryover pieces.
And so rather— so what we're— what we did here is we said don't assume that.
We're essentially taking it back, and any amount that would have been carried over in a prior year needs to appear as funded in the adopted, essentially, in the proposed and approved and adopted.
So it is not apples to apples in that I would say they have probably drawn more in prior years, in part because they weren't kind of returning amounts that they expected to carry over.
And so that's to some extent a change that we're making this year in response to some of the frustration that Councilor Green was just speaking to in the fall and the feeling that we sort of kept, assumed too much carryover in our previous practice.
And so the combination of that with the fact that we don't have any money to carry over anyways means that we essentially would be taking back more from those bureaus, which equates to giving them less in compensation set-aside.
Does that make some sense?
Sameer Kanal
So you're assuming that the money we take— we would be taking back in other parts of the budget is effectively given to cover, and then we separately are covering the rest with the compensation set-aside?
Unidentified speaker
Correct.
Not necessarily that overtime that may also be true, and I can speak to that.
Sameer Kanal
It looks like that overtime is reduced at the moment.
I'm trying to— that's my underlying question here.
Unidentified speaker
It is in police.
It is not this year in fire.
And I'll— there's a combination of things.
So the $3.6 million has a lot of things rolled up into it, and I'm just going to kind of go through specifically.
Fire delayed a boat purchase.
Because we knew that there was going to be— this was a tighter year.
And so they had some underspend in that area that then helps with their overall budget.
Their overtime is up, but that is because staffing targets haven't quite met.
And so their salary and benefits portion that's not overtime is a little bit— the overspend is not as much as you would anticipate without comp set aside.
So that's kind of looking at fire.
Loretta Smith
Okay.
Unidentified speaker
In police, Police, their overtime is down, and they have implemented some reductions in overtime.
And then they've also had some reductions in external materials and services to help with their overall— and just like for it, I think police's compensation set-aside was $6.7 million, but we only have them overspent by $3 million.
So they've already done some things, and it's all of public safety.
So while we had a hiring freeze in other areas of public safety, there's some underspent in vacancy savings and other external materials and services underspend throughout public safety.
So I think—.
Sameer Kanal
Fraying that number.
Unidentified speaker
Yeah, yeah.
So things have been done to kind of make it not as big as it, it could have been at this point.
Sameer Kanal
Okay, that's— sorry, Nathan, I want to let you jump in if you want.
Unidentified speaker
We talked about fire and police.
In addition, BOEC has been substantially down in their overtime.
We had forecast for them to be down, but they're down even further than we had forecast.
Sameer Kanal
Yeah, and I know, I know BOEC is a little bit significantly further along the curve in terms of the way staffing up will diminish overtime usage relative to fire.
So I think the answer on both fire and actually all 3, each one fits the correct answer in my opinion of what I'm looking for.
So thank you for that.
And thanks to the mayor, because I know that's a high priority for you as well.
I wanted to just kind I agree with Councilor Pirtle-Guiney's comments about contracts.
This is why I've been asking in the administrator's reports for the list of big contracts going forward across the fiscal year.
I think this list is what the bureau has offered up in the EMS reductions, but I know that there are some contracts that are bigger than this entire line item.
And I'll also just note that we've been told that every city contract effectively has an opt-out if we don't budget for it the following year.
Which means we're not obligated to keep existing contracts on the books if we're willing to give up the service.
There will be a service impact, you know, obviously in those cases, but just it offers a decision point for council in the future.
On Councilor Green's point, I wanted to say I agree on the assessment that our budgets should not be based on carryover assumptions, particularly programmatic carryovers.
But I'll note that some of the encumbrance carryovers serve a similar— last year served, and I think I think this is true in the past as well, served a similar purpose to programmatic carryovers.
And so I think there are times where an encumbrance carryover is meaningful and good.
But this is— I disagreed about the best way to deal with that at the time of the fall TAO, but I do want to just note I agree that at this stage of the cycle, it makes sense to get to that point, at minimum to say we're going to assess the impact Councilor Smith.
Thank you, Mr. Mayor.
I just want to say that I think it's important that we talk about the impacts of a budget request based off of the budget request, not based off of the budget request and an assumption that hasn't yet been voted on and won't be voted on until November in the fall TAO.
And I agree, I wrote this before Councilor Green said it, but Councilors Green and Murillo were right about the problem we're facing with compensation set-aside being diminished.
They predicted it back then, and that's worth noting thank you, Mayor.
Candace Avalos
Thank you.
Sameer Kanal
I did want to ask a clarifier and comment on it with relation to the 0.8 slide.
Candace Avalos
It's—.
Sameer Kanal
I want to say 9, but I may be completely off.
Unidentified speaker
10.
Sameer Kanal
It's about the council ops underspending.
I wanted to understand, does that presume that we are filling the vacant positions we have?
Like, does the idea that there is $0.8 million to potentially use in this way.
Does that presume that we're leaving the vacant positions vacant for the rest of the year, or does it presume that we are filling them going forward?
Unidentified speaker
I don't know.
Well, I don't— I will have to get an answer back to you about what the assumptions are on that one in particular.
Jamie Dunphy
Okay.
Unidentified speaker
Just know underspending here does not preclude EMS or underspending in other places.
It's not exclusively personnel.
Sameer Kanal
Sure, but there are vacant positions in Council Ops right now, and I know you're extrapolating from the 7th accounting period, right?
And I wanted to know if that extrapolation presumed status quo where one position was partially filled for the year and one has not been filled the whole year so far, or if it presumed that we are keeping the status quo but filling the 2 positions.
Jonas Biery
Councilor, we can follow up with you because it would essentially assume, in conjunction with working with the Council Ops manager, their expectations around that hiring.
And so we don't know at this table what that is, but we can follow up with you on what the expectation is.
Sameer Kanal
Yeah, I mean, I think my broader point is that if council approved a budget for particular roles in council operations, we should be assuming that those are going to be filled because that's something we already voted on.
And I agree with Councilor Green.
I know Councilor Smith has brought this up in the past.
We don't want to vote on something that's— and then say that's contingent upon voting on the same thing again later.
And then potentially a portion of it is on a third part later.
So, uh, with the exception of that caveat, your— this slide seems like a good place to start, um, and I, I appreciate you bringing that forward.
Um, I, I did want to note, uh, you— given that I'm about to talk about the Harbor Reserve, that there was a little bit of a red flag there on Fire not getting a boat, because I imagine that's all in my district, uh, the, the most of the boats, I think, are— there's some in D4 as well and D1, but most of the fire boats relate to D2.
So a little bit of an alarm there.
I want to get that boat repaired up in Hayden Island, so, or replaced.
But that's my pivot, my segue.
Can you tell us more about the Harbor Reserve Fund?
Jonas Biery
Yeah, so we talked a little bit about this in the fall as well.
And I'll, as I think I said then, every time this conversation comes up, attorneys start like banging the hammers in the back of my head to be mindful of what I say.
But because that is still a legal negotiation that's underway.
But essentially, you know, this city anticipates some type of obligation related to harbor cleanup activities, cleanup and mitigation activities.
Olivia Clark
Okay.
Jonas Biery
That may be borne by different areas within the city, right?
To the extent it's stormwater-related or has other connectivity.
A number of years ago, I don't remember exactly what year it was, but the city started putting some dollars kind of in that reserve to anticipate a nest egg to help pay for some of those ultimate liability when those costs payouts, whatever form that takes, do start to materialize.
And so that's what's sitting in that fund is some of those general fund contributions that have been put in.
Dan Ryan
Okay.
Sameer Kanal
So I wouldn't be— I don't say this in a negative way, but effectively draining this would require the future year replenishment and we'd be, without saying it in a negative way, we would be kicking the can over the road.
Jonas Biery
Yeah, Councilor, that's correct.
I mean, it's a little, you know, we've sort of put it on as a possibility because it's not the type of thing where we anticipate we will have to replenish it next year when we know we have a problem.
We might have some different flexibility about when that replenishes.
But yeah, you're absolutely right.
It definitely just kicks that expectation that at some point that bill is going to become due, so to speak.
And we either have money sitting in reserve to cover that or we don't and we have to find it.
And frankly, that's true of most reserves have that sort of same dynamic in it.
But because this is one where we don't anticipate that use potentially for another couple years, couple, 3 years, And we have probably some ability to build it back up.
It's more feasible than other options.
Does that answer your question?
Sameer Kanal
That does.
It looks like Ruth wants to say something.
Unidentified speaker
Just one other quick thing to add to that is there still is an ongoing contribution going into the reserve.
So this would be like a one-time drawdown, but it would still, it would maintain that ongoing general fund contribution.
Olivia Clark
So that's helpful.
Sameer Kanal
It's super helpful to know.
Yeah, I appreciate that a lot.
And I think that's the first place I wanna look, although I will take the chance again and to note that the, um, the general fund conversation we were having in the morning work session is basically the $4 million up here at the top of, of slide, uh, 11, and I think highlights the importance of what has been said here.
Um, the only thing that I think is maybe not on here that I'm aware of— there may be more that I'm not aware of as places to look— is really those other contracts.
And I still would like to have that conversation, but I really appreciate the, the starting point that you've given us here.
Um, I will just note that there are some lines on here that are by design backloaded, and so I think the projections presume a higher level of potential savings than actually exist.
I know, for example, in my office, um, we know that our workload is significantly higher at the end of the fiscal year because of the budget.
And so I think taking past projections, like, there, there will need to be conversations about how much of that is actually real, how much is not.
I imagine that's the case for at least 4 other lines on here, as 3 other lines on here, uh, as well.
So I just wanted to flag that.
But thank you, Council President.
Jonas Biery
Yeah, and thank you, Councilor.
That's a great note.
Uh, no, you know, recognized, noted.
I mean, that's often the— that's the case for many, um, bureaus.
I mean, that's another reason why we didn't want to make the decision, put it as a sort of formal recognition, because we need Council's input on that specifically.
Um, that is reality.
Um, otherwise places too where there's that nuanced spending throughout the fiscal year and sometimes escalation at the end of the year.
So I wanna make sure we make space for that conversation with regards to this line item as well.
Unidentified speaker
And just one other thing to note on that.
I think these numbers that we got from the finance leads have been vetted and we attempted to ensure that they accounted for those end-of-year costs.
So it's not just like a straight-line projection.
We have a straight-line projection.
You'd get a very and so we worked— this isn't like just CBO doing this by ourselves.
We worked directly with the finance managers and they provided all of the projections through the end of the year on all of these, and in many cases doing that kind of position-level analysis.
I, you know, obviously the, you know, we pulled out the council one because that's obviously a slightly different conversation, but for other bureaus outside of council, I don't want you to think that we were just like, oh, okay, all the vacant positions done, like, here's your number.
We did actually, like, do a pretty thorough job working with all of them to try to do those projections as best we can, given that it's AP-7.
Angelita Morillo
Yeah.
Sameer Kanal
This is going to sound like a negative.
I actually mean it as a positive.
It's never that— I know it's never that simple with the city budget, but also I know that you do a lot to take that modeling, and I appreciate the clarity because obviously ours is different.
In terms of, we haven't weighed in on that yet.
Thank you, Council President.
Jamie Dunphy
Thank you.
Unidentified speaker
Just real quick, as an example of that, we got information about the council ops underspending, and that does include— that number includes projected hiring of 2 positions starting in mid-April.
So like, that's an example of we're assuming that 2 positions are going to start in April.
Sameer Kanal
We'll have 0.8.
Unidentified speaker
And still have 0.8.
Exactly.
So like, so that's the same for the council numbers.
The council numbers is based off of what your offices have communicated with, um, staff about projected spending through the end of the year.
Sameer Kanal
Okay, I, I know we haven't given that information, so I, I think that's separate.
But for Council Ops, council has voted on the, the list, so I think that's fair.
And I'm— that's very good news because that means that theoretically this entire $11.4 million on slide 10 is available, and I think a good place to start the conversation.
Jamie Dunphy
Thank you, Councilor thank you, Mr.
Steve Novick
President.
This frankly might be just my bad memory, but this morning I thought that when the pot of housing money that was easier to shift to the general fund was the, quote, short-term rental 2%, $8.6 million.
And I forgot my notes on my desk.
I might just be wrong.
But because I thought that, I was surprised to see the short-term rental 0 to 6% 0 to 60 pot as being the pot referred to for this $4 million.
Unidentified speaker
I'm— I will triple check, but I'm pretty sure it's the 0 to 60 subfund.
I have a hard time because the names are the same, but, uh, we will triple check and confirm with you, but I'm pretty sure that's the one.
Jonas Biery
Yeah, and I'll acknowledge, Councilor, I heard the same thing this morning and had a question about it because that was not the way I understood it.
The way I understood it is it's the 0 to 60 as described here.
Steve Novick
Okay, so and again, does that mean that theoretically we could take $11 million and put it into the general fund, the whole zero to 60 thing?
Jonas Biery
I think technically I'd wanna be— and then my caution, Councilor, is I wanna make sure that as the Housing Bureau's looking at those spending plans, that there aren't pieces of that that might have some firmer expectations around it.
I think legally that's probably true, but I wanna make sure before I say that definitively that there's not bits of that that might have some other intended commitments that would have real trade-offs outside future thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Clark, Vice President Clark.
Olivia Clark
Thank you, President Dunphy.
Just to follow up on that same vein, on page 11, the housing investment shortfall, how did you come to $4 million as opposed to the full $6.6 million?
Jonas Biery
Yeah, Councilor, great question.
I knew that there was a 3-point-something number that had been spoken and a 5-point-something number that had been spoken.
And 4 was right in the middle.
Angelita Morillo
Okay, it's very scientific.
Jonas Biery
Okay, and, and to be clear, um, I mean, I'm joking a little bit, but, um, that's why we picked that number, but recognizing it is somewhat, somewhat scalable, um, you know, to, to fill however we choose.
Olivia Clark
Okay, it just seemed like it'd be a lot easier here as an exercise to just do the full 6.6.
But in any event, and I, um, also, um, echo, uh, Councilor Kanal's comment about council underspending.
I don't remember being asked about this, but I think this is an overestimation, definitely.
Let's see, I think I have one other question.
Oh, on the Harbor Reserve, does that completely empty it?
Unidentified speaker
No, we can get the total number, but there's more than that in there.
That was just the estimated amount of general fund excess but the Harbor Reserve combines multiple different sort of colors of money into the reserve pot.
So there's significantly more than that.
Jonas Biery
And yeah, and it's a good observation that, yeah, this is just the general fund portion.
And there's, you know, a couple ways to think about this too, because on this slide, the $15.2 is more than needed to fill the gap that, you know, a couple of these, whether it's the Housing Investment Fund or CORF, could be used as sort of balancers.
Right, to say, well, we're just going to take whatever amount, we're going to set these other amounts, and then use one of these line items, for example, to say, well, whatever is needed to continue getting to zero balance, net zero balance.
And so I know there was an iteration where we did this where we thought of the CORF in that way, but we could certainly, you know, there's some of these are scalable in different ways.
Olivia Clark
Just curious about it.
And, but I appreciate that you gave us options or you didn't just do one 6.6.
And I had actually a question for Councilor Kanal, if you don't mind.
When you're talking about the other contracts, which contracts are you talking about?
Sameer Kanal
I think I'm going to hold off on naming specific ones until the list comes out.
Loretta Smith
Oh, okay.
Sameer Kanal
But I know that there are— I've referred to it.
I'll give you the sort of descriptive term, which is there's contracts we have for people who think us, uh, who write reports that frankly historically have not been read by anybody in this chamber, but only by operational staff in the bureaus.
Um, that kind of contracting I think is, is worth looking at unless we're committing to actually read the reports and act on them.
I don't think that we should necessarily go pay somebody to write it for us.
Um, I think that's the first place I'd talk about, and we talk about this in budget savings quite a bit.
Loretta Smith
Okay.
Sameer Kanal
My D2 colleagues heard me talk about this okay, great.
Olivia Clark
I was just curious.
Thank you.
Thank you for today's presentation.
Appreciate it.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Morillo.
Angelita Morillo
Thank you, Council President.
I appreciate this presentation and the work that's been put into it, but I do want to express some frustration, and I just regarding the feasibility and the service reductions that we're going to have.
Dan Ryan
Thank you.
Angelita Morillo
Councilor Smith.
I'm very disappointed in the budget that we have before us because I think choices that were made before are going to make it a lot harder for the FY 2026-27 budget.
In the fall, I offered an amendment that would've required a real look at service reductions and given us time to actually enact them.
And the amendment would've put us in a very different position today.
Instead of an $18 million shortfall, we would have a $7 million shortfall.
And make no mistake, We would've still had that $7 million to find, but it would've positioned us a lot better to meet the needs that we have next year.
And so I don't look forward to service reductions.
I don't think any of us up here or out there do.
And we have structural deficits that need to be addressed ongoing.
And I worry that we could find ourselves in a similar situation next fall.
So I guess this is just my—.
Elana Pirtle-Guiney
Thank you.
Angelita Morillo
At this point, firm ask that we really have a more proactive approach and that we work on it together as the legislative and administrative arm so that we can be less reactive moving forward.
Because I think these cuts are going to be very painful, and had my amendment passed, it would have been less painful than it is right now.
And I just had to state my piece on that.
So thank you.
Jamie Dunphy
Thank you, Councilor Morillo.
Councilor Green.
Mitch Green
Thank you, Mr. President.
So I have a question about— I'm just trying to think ahead to the next step.
Like, we're going to be in the budget, we're going to get through this, we're going to adopt something, it'll be fine.
Well, maybe it won't be fine, but we will solve this very specific legislative action.
And then we're going to go into this budget and we will have to consider an over-expenditure probably very near to the end of the fiscal year, if I recall correctly.
If a bureau wants to carry something forward, is that OEO the place to do it if we want to be very explicit about what it is we're going to adopt in the '26-'27?
Unidentified speaker
So, yeah, I mean, I'm sort of generally cautioning against carrying over as a practice because basically what we do when we carry something over is we deappropriate the funding in the current fiscal year, we add it to the adopted budget, and we recognize the revenue as beginning fund balance to back that expense in the adopted budget.
I would say, you know, it's probably more prudent to just allow those funds to fall to balance rather than deappropriating them in the given— in the current fiscal year and recognizing them as beginning fund balance.
Given how tight we are.
Normally there's enough sort of things coming out in the wash that it's not a concern to deappropriate the money and put it in as beginning fund balance.
We're fairly confident that it's going to show up.
But I just, I worry even in June, you know, there's still, there's actually 16 accounting periods, right?
That like, I worry in given this fiscal year about about having that practice available at all.
Sameer Kanal
Yeah.
Unidentified speaker
So that's my kind of advice.
Obviously, council can choose to do it if there are discrete things where there's like truly underspending, we're confident it's there.
And then yeah, all we're doing in the OEO at that point is sort of cleaning up the current fiscal year and deappropriating it just to show this is where, this is kind of what happened to clean up the record.
Mitch Green
Yeah.
Unidentified speaker
But, you know, from a balancing standpoint, it makes me a little uncomfortable this fiscal year given the situation that we're in.
Mitch Green
I appreciate that answer.
And colleagues, Mr. Mayor, the City Manager, the reason I'm asking that is because I would like this budget to be the one where we never again assume that we are going to do these encumbrance carryovers that we will sort of just pay for with beginning fund balance in the next fall 2024.
I think at some point you got to rip the Band-Aid off.
This is the year.
I recognize, however, we had some conversations, Councilor Kanal, specifically related to public safety, that there were really crucial reasons why that contract maybe had been paid for in '24-'25.
It's still in the phase of being executed.
I get that.
But it seems that should be the exception.
I think that's a good point.
Rather than the rule.
And I think if we— if we met— it's March 5th.
If we start thinking that way on March 5th, I think we can enable our bureaus to say, give me the very short list of things that absolutely are critical.
They're going to set us up for this 5-year get-well plan.
Let's think about appropriating them in the OEO ahead of it.
And then that way, when we adopt the budget, council knows what we're that's just a suggestion.
I know of no other way other than saying everything falls to balance to control for that, and I think that might be too much of a blunt instrument.
So I'm just offering in the spirit of, as we got into this cycle, I said I would try to lay as much on the table as possible so we're not reacting to the mayor's budget on a very short timeline.
I'm messaging now colleagues to see if they have any questions.
Candace Avalos
Thank you.
Mitch Green
That's the direction I think I'd like to go, and I would like your thought partnership in getting, in getting there.
Unidentified speaker
Thanks.
Jamie Dunphy
Thank you, Councilor Green.
Looking to the queue, seeing no one else.
Jonas Biery
Council President, uh, appreciate that.
I just wanted to correct one thing real quick, that I did look back, uh, and have some dialogue that it is Councilor Novick, the 2%, uh, is the flexible bucket.
So that's the $8.6 million, I think, is the, uh, is the amount there.
So just wanted to correct that while I had a quick minute, that it's It's not the 0 to 60 shown here.
It is in fact a 2%.
Unidentified speaker
Sorry.
Steve Novick
Damn, you just cost the general fund $3.5 million.
Olivia Clark
My bad.
Jamie Dunphy
Councilor Kanal.
Sameer Kanal
Thanks.
I agree with the broad thrust of everything Councilor Green said.
I'm not sure about the OEO specifically, but I do understand that that is the thing you do before the fiscal year starts.
I agree also that we should retain some flexibility.
I think there are good carryovers.
There's not maybe as many, um, as have historically been used.
But I think the broader— the, the broader idea is that when people are assessing a budget, that we are looking at the dollar amount in the eventual adopted budget as the thing that will guide your service provision.
Olivia Clark
Right.
Sameer Kanal
And without adding in an assumption.
And if there is an assumption, um, then that's a separate service that comes with a separate pot of money through a carryover.
I think as long as that communication The mechanism is whatever it needs to be, but I think that's meeting the underlying need there.
I did have one question that is not on here, but I need to bring up as someone who was— we talked a lot about the 9.5% reduction, the first year of the 20% reduction, those 7 streams of businesses.
And we heard a little while ago, a few months now, 2 months now, Now, that the projected savings associated with that had not fully manifested.
And my questions relate to, A, if that's already built in here, how much we're talking about, and B, how that's going to affect what happens next in terms of— is this part of the 1.2?
Is that what you're talking about?
Jamie Dunphy
Yes.
Sameer Kanal
Yeah, I'll let you finish.
Candace Avalos
It's okay.
Olivia Clark
No, it's fine.
Unidentified speaker
Finish.
Candace Avalos
You can finish.
Sameer Kanal
So yeah, I think the— it's disappointing.
As someone who did not support the reduction in this way, I nonetheless believe that if council voted to do it, we should have seen it.
And I'm a little bit disappointed to not see that conversation.
I think it was a bit of a blunt instrument, but I think that was part of its intent.
And so I'm trying to just understand that.
I know it's not in your hands.
You're not the bureau directors, you're not the DCA, so I don't mean to imply that, but if you could just get a little more, give us a little more information on that.
Unidentified speaker
Sure.
Yeah.
So the placeholder reduction that was implemented in the budget of the 10% was about, I think, $3.7 million of general fund in fiscal year '25-'26.
That reduction is there, right?
Olivia Clark
Right.
Unidentified speaker
It's out of the budget side of the equation.
And so to the extent that those positions are still filled and they're generating costs, it is in the forecast already.
I don't have a breakout of exactly which of those positions that are potentially in those buckets are still filled versus vacant right now, but it is already I assumed any kind of overspending compared to what the plan was is already in the 1.2.
The ones, it is still the case that the only function that's really been effectively fully implemented is communications.
And so the rest of them are not there.
Now, has there been attrition related to it?
Probably.
But the like actual realignment and decisions have only been, and implemented, have only been done for communications so far.
Sameer Kanal
So if that's, I don't know if this is one-to-one.
So if we're looking at it was supposed to generate $3.7 million of savings, we're seeing a $1.2 overspend.
That means that it resulted in a $2.5 million roughly reduction in spending when it was projected to do $3.7 million.
Is that—.
Unidentified speaker
I would not draw that conclusion.
Again, there's— the hard thing is that there's just a lot going on in these numbers because they're just a net overspend or underspend number.
And so it's the 10%, it's the not having compensation set aside, it's police and fire overtime and revenues coming in high or low.
So we can get you certainly more details on that.
Elana Pirtle-Guiney
Thank you.
Unidentified speaker
That specifically, we'd have to do a little bit of analysis to try to get at it.
But I wouldn't— I don't think we can draw that conclusion from the numbers we have here.
Sameer Kanal
That's fair.
And I don't need it right now, so I appreciate that.
But it is helpful to understand because I— and I'll be honest, I put up an amendment that had a similar— it didn't pass, but it had a similar approach to it of achieve a reduction in this way.
And I think there may be something to learn In terms of being more granular instead of a blunter instrument, to use a colleague's words on a different item.
And that's for us up here.
But I think also as part of the decision-making process, it might be helpful to have for this year's budget an understanding of what last— the current fiscal year's budget that we adopted last June, how successful that could have been versus what ended up happening.
So so thank you, Council President.
Jamie Dunphy
Thank you, Councilor Kanal.
Councilor Ryan.
Unidentified speaker
Thank you.
Dan Ryan
Thank you, Council President.
I came in 15 minutes late and I— it felt like I came in an hour late.
Um, so I hope that you were able to finish your presentation.
Um, I think from listening to this, which has been a little bit challenging to track, um, 2 things I want to ask.
One is I suddenly have a lot of concerns about our bond that's something that I try to pay attention to in such conversations.
Do you have any concerns about it at this point with these numbers?
Jonas Biery
Thank you, Councilor.
From the seat I sit in, I always have concern about our bond rating, but I think I'm comfortable with this approach.
I mean, we've communicated to the rating agencies at the the last conversation we had with them in 2025, the end of 2025, the reality.
And so that was recognized in that rating.
We're currently having a new 2026 iteration of that conversation, and we'll have those rating results here actually hopefully tomorrow or beginning of next week.
And so I can't speak to that, but I think among the things they care deeply about are strong financial management and fund balances.
And we score pretty well on the former.
We're putting some of the latter at risk.
I think that's a natural circumstance of where we are.
And so we have to be really, really mindful of that.
You know, they've certainly flagged that as a risk in their rating reports that they've provided us.
So I think it's a long answer to your question.
Short answer is yes.
You know, it is something we have to be mindful of.
Dan Ryan
Thank you.
Jonas Biery
I think their understanding of the— the rating agencies are understanding of the financial environment and appreciative of the actions that we're taking to correct that without, you know, really doing ill-advised strategies.
Dan Ryan
That's fair.
Thank you, Jonas.
I also know that we—.
Unidentified speaker
Do we vote on this before we get the last revenue forecast so we'll know what the business tax We'll have an updated revenue forecast in a few weeks before you vote on this, and then the last revenue forecast this year will be the first week of May.
And so that will reflect any additional data that comes in during the kind of last 2 weeks of April when we get a lot of their return data.
So we can expect that we will have Yes, uh, the, the numbers on this slide are more or less what, what we would expect.
I don't know if you have specific questions, Peter can come up.
Jonas Biery
Yeah, and maybe, Councilor, just flag, I think we'll have an updated forecast.
Our indications are it won't probably be on net materially different than what we're seeing today.
Is that fair?
Unidentified speaker
Yeah, the— yeah, for, for the general fund for the current fiscal year, Okay, that's all, that's all I need at the moment.
Dan Ryan
I, I couldn't track all of the amendments we should have passed.
If that would have happened, then everything would have been better.
Because that didn't happen, this is where we are.
I just need to say it was difficult to track that as the conversation was going on.
Um, and so I look forward to more dialogue with a couple of my colleagues.
Thank you.
Jonas Biery
Thanks.
Jamie Dunphy
Thank you, Councilor Ryan.
Seeing no one else in the queue, I'll ask my question.
What more do you need from us at this stage?
Jonas Biery
Yeah, great question.
I was, uh, um, thank you, Council President.
Um, this is a great conversation.
I think we're, you know, we're mostly there.
I guess the way I might frame the bodies of questions that would be helpful to identify One is, I think, at least kind of a nod of the head that the options that are up on the screen are generally acceptable and things that we can think about implementing into the actual ordinance document.
I think we need— it'd be helpful to have a little bit of clarity, whatever that looks like, on the next body.
How do we fill the remaining 6.6?
And we don't have to have that necessarily today, but we'll need to know that certainly before we prepare the document.
And then the third question I have is just around that timing, right?
I mean, I hear Councilor Kanal, Chair of the Committee of the Whole, feedback about the challenge on that agenda.
We do have some, I think, collective shared motivation to keep the technical adjustment ordinance on this schedule so it can be completed prior to the mayor's proposed.
And there's only one meeting of the Committee of the Whole that fits that schedule.
So that's the third piece I'd love feedback about.
Is that something, a date we should be targeting, in which case we need to get documents really completed here in the next couple of weeks, or are we moving to that first council date?
So I don't know if you want to take a pause, but those are the kind of 3, I think, pieces of feedback that would be really helpful to get from you all today.
Jamie Dunphy
Okay, great.
Colleagues, we have some additional things to weigh in on, so folks want to jump into the queue?
Loretta Smith
Thank you, Council President.
Thank you for the presentation.
I think I sent you and Ruth, City Administrator, an email.
I do not support your suggested cuts specifically for the council, for the council, and specifically I can say for me, um, we're going to spend our budget.
And I appreciate if you take mine out of your calculation.
Jonas Biery
Yeah, thank you, Councilor.
We'll look at that email.
And I would just say, I think to Ruth's point earlier, I know that there's work done to look at each individual budget.
And so if that's the expectation, then that should be what you expected in that proposal.
Loretta Smith
We should expect that we're gonna spend our entire budget.
Olivia Clark
I also gave you a suggestion.
Loretta Smith
To look into the materials and services budget in the city administrator's budget.
I think you all had a $55 million, uh, beginning balance.
Unidentified speaker
Uh, we'll look into it.
The beg— the, um, I'm not, I'm not sure what the beginning fund balance is that you're talking about.
And reminder that we're just looking at the general fund right now and anything that would be, you know, it was due I think they had a—.
Loretta Smith
At July 1st, they had a carryover of $55 million.
Unidentified speaker
I'll look into that.
Yeah, I don't know it off the top of my head, but yeah, we can certainly put that on the list.
And I'm hearing a lot of interest in looking generally at the encumbrance carryovers from the fall.
So we will certainly pull up that detailed list and get information from folks on where those stand.
And we will check on that.
Specifically on City Administrator with that.
Thank you.
Candace Avalos
Thank you.
Loretta Smith
Because I noticed you didn't take anything out of the mayor's budget either, but you took council's out.
So you need to be really fair.
But the other issue is I think you just need to do a constraint across the board.
Just do a 1% constraint and then you'll get your money.
Olivia Clark
This—.
Loretta Smith
I've never seen this nitpicking of a way to get money and picking individual offices and departments to take money from in the, in the current fiscal year.
Not for next year, but for the current fiscal year.
We have either been getting bad advice from you, and we should not be getting it anymore, because for you to ask us to take budget money out of this year, and we're in March already, I would say we've been given bad advice.
Councilor and generally people do just the constraint, period, to, to figure out the whole.
This— you're making this so much harder than you really need to, in my opinion.
I don't know what kind of direction you've been getting.
I don't know where this direction came from, but it is not the direction that I would have given you.
Unidentified speaker
Sorry, just one point of clarification.
The mayor's projected underspending is counted in here.
I just didn't pull it out.
So we, we pulled out, uh, council offices and the auditor's office, but we didn't pull out the mayor's office.
We're just assuming it gets returned.
Loretta Smith
So put it down like you do everybody else's.
Don't make any disc— don't do this.
Don't malign us while you protect the mayor's office and his budget.
Don't do that.
That is not fair at all.
Just do a constraint.
Could you go back for, for me?
I don't know if you work for me or you work for the mayor, but if you could go back and just do a 1% constraint or a 0.05% constraint and see what that looks like across the board.
Unidentified speaker
So, I mean, I think that's a question for you all, is, you know, is it sound—.
Loretta Smith
I can't ask you anything.
You say you are.
I'm, I'm asking you, can you please do that for me?
Unidentified speaker
And tell you the amount?
Loretta Smith
Yes, certainly.
Unidentified speaker
Please do that.
Yes, please.
Loretta Smith
Thank you.
Put that up as the option.
Jamie Dunphy
Thank you, Councilor Smith.
Councilor Green.
Mitch Green
I, I got in the queue because I was just going to ask my colleagues if they would tolerate considering a $2.2 million cut to council offices because I don't want to waste any time.
I think I know the answer.
I know personally I don't really got the bandwidth, so just trying to be helpful here.
I guess I don't need to— yeah, I'm done.
I just wanted to know what you guys thought.
I think I've got my answer.
Jamie Dunphy
Okay, colleagues, I did promise we were going to take a bio break.
It being 3:40, I'm actually 10 minutes past, but I also note it kind of feels like we are starting to see the end.
Would folks rather we barrel through and maybe end early?
Okay, great.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
In answer to the questions that you asked, I am prepared to need to support everything on your first slide.
There are things there where I, I think there might be other options that I would like more, but I am prepared Councilor Smith.
I am not prepared to support all of these.
I am not prepared to support a loan from our funds for the— out of the CORF, given what I see as our fiscal realities for the next few years.
If we were looking at a one-time need and then a flush year 2 years from now where I had assurances that— I guess not assurances, but belief that there was a good chance that we could repay it quickly, I may have a different answer there.
But in our current fiscal situation, that is not something that I am comfortable doing.
If we get really stuck and we're talking about $500,000, something like that, I'm willing to reconsider that.
But I'm certainly not willing to vote for that at the $7 million level or anything close to it.
I would be interested in seeing if there are things that the mayor will be cutting next year anyway that we could cut now, even if it's not significant savings.
2 Months starts and helps to replace some of the funds that you're hearing from us on that second slide we're not interested in.
And I think it would be good for us to look at that.
I believe that my team has updated our numbers recently with our, with our support staff who are looking at our budget, and my I don't know how much you've pulled from each office in that $2.2 million.
I am happy to work with the internal teams to make sure that the numbers from my office are accurate though, so that you have an accurate read there.
Thank you.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Councilor Kanal.
Sameer Kanal
Thanks, I appreciate that.
And it's your question that led to this, Councilor Dunphy.
Steve Novick
No, it's, uh, I think it's really good that we're having I this think conversation.
Sameer Kanal
It's really good that we're having this conversation.
When, when you asked, um, when you verbally asked what— whether or not we were prepared to support what's on the slide, the slide was changing.
So I'm going to be super clear here.
I am also prepared to support what's on the first slide, the one that starts with the unrestricted general fund contingency.
I think the second slide has clearly at least one councilor on 2 different things that are non-starters for them, and I, I think that's good.
I, I also would like to see I'm interested in Councilor Dan Ryan's request to see for the remaining unspent money what a constraint across the board would look like just from a percentage perspective.
I'm also interested in Councilor Pirtle-Guiney's request of trying to see if we can scale down something that's going to get cut anyway, theoretically, a little earlier.
I am more open, I think, on the loan from the CORF, given the piece that you, Ruth, said earlier about how it is an ongoing replenishment that's already built in, um, and, and that's already projected, that helps put my mind at ease.
I wouldn't want to do the whole 7, um, either.
So, um, but I'm a little more open to, to that particular piece of the conversation.
And then, um, finally, I can't find—.
Dan Ryan
Here we go.
Sameer Kanal
Um, I am— I'm also still pretty interested in looking at the, the targeted bureau reductions beyond beyond what's in this particular list, just because there's some things that can be potentially cut next year that maybe the mayor would know as he develops his budget.
There's some things that the bureaus can put up, but there's also some things that maybe are outside of that universe that are worth exploring too.
It's hard to say, I don't know what I, you know, we don't know what we don't know, but— I think that's fair.
I think more options are helpful in that, and I just wanted to offer 2.
So thank you.
Jamie Dunphy
Thank you, Councilor Knoll.
Vice President Clark.
Olivia Clark
Thank you, Councilor President.
Ditto on the first $11.4 million, all good.
I'm good with that.
On making up the next $6.6 million, I'd be fine to take it all from housing.
If not, if that's not possible, take, you know, some portion of the Harbor Reserve, although we're going to have to make that up someday, so we're just kicking the can.
But I definitely don't want the targeted bureau reductions or the council underspending.
And I am curious about, uh, Councilor Smith's 1% constraint, just to see what that would look like.
But that's all I have to offer, but thank you.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Novick.
Steve Novick
Um, I agree with Councilor Pirtle-Guiney.
I'm very worried about dipping into the, the core and I also agree with Councilor Bertolucci that if we're— since we know we're going to have to be making some cuts next year, real cuts, then if we can identify some that we know we're going to be making, we might as well start making them now.
And here, actually, I would ask the mayor, um, I assume that at this point in your budget development process, you've already identified some cuts for next year.
And if you're willing to put some of them on the table, say look, here are things I know I definitely am going to cut, then we could start cutting them now instead of waiting for a couple of months.
And finally, on the targeted reductions, I think I missed how were those arrived at.
Was each bureau given some sort of rubric to work, to run through and require to come up with something?
Or is it more, hey, bureaus, are there things, EMS stuff you could cut?
Let us know.
And just curious how that $1.8 million was arrived at.
Unidentified speaker
You want to speak to that?
Jonas Biery
The $1.2 million?
Unidentified speaker
The $1.8— the, um, the purchase order closing POS?
Oh sure, yeah.
So, um, we got to the $1.8 million number by pulling all city encumbrances over $100,000 that's currently in our system, and we asked bureaus to review We reviewed each purchase order based on a series of questions similar to what you all saw in the fall TAO.
So questions like, what's the justification for this work?
What is— what could be stopped?
What could be— like, what could be canceled?
What could be paused and maybe delayed to next year?
And then we asked for possible— like, what the net savings would be if again, we looked at purchase orders over $100,000 just to make sure the juice was worth the squeeze for the exercise.
Steve Novick
So does the $1.8 million represent all of the— I mean, how did you pick which ones to go with?
Was it based on the bureau's recommendation, yes, this is what we can live with, or was it based on just your analysis saying, all right, based on what they've told us, this is what we think they can live with?
Unidentified speaker
I think it was all of the ones where they said they said could live with it.
That, that it could be stopped or paused.
Steve Novick
Okay, thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Ryan.
Unidentified speaker
Thank you.
Dan Ryan
Thank you, Council President.
Um, I just wanted to say that I'm uncomfortable with any, uh, cuts to any, uh, dipping further into any reserves.
Um, our rainy day is here.
Sadly, and there's no economic report that I've seen that says we're going to get out of this in the next 6 months to a year.
So I just wanted to underscore the points I've been hearing from a couple of my colleagues.
Olivia Clark
Thank you.
Jamie Dunphy
Thank you, Councilor Ryan.
Colleagues, seeing no one else in the queue— oh, I see, you just have to say that and then they get back in the queue.
That's how we do it.
Steve Novick
Mr. President, I probably—.
Jonas Biery
Yeah.
Candace Avalos
I—.
Steve Novick
Maybe this goes without saying, but of course I'm always up for cutting council office budgets.
Jamie Dunphy
And Councilor Green?
Dan Ryan
I'm in the same page with that.
I didn't want Mitch or Councilor Novick to think they're alone.
Thanks.
Jamie Dunphy
Councilor Green.
Mitch Green
Thanks.
For the record, I'm not trying to cut council offices.
No, I just want to note that the general reserve fund The general fund reserve fund is for triggering in a rainy day.
So you trigger it when you're in a recession.
I don't think we should do that.
I want to be very clear.
But I just want to note that that's what that is for.
It's not for flush times.
Jamie Dunphy
Thank you, Councilor Green.
Councilor Avalos.
Candace Avalos
Just because it keeps coming up, I also do not support cutting the council budget, our council budgets.
And I mean that very seriously.
I work really hard to use all of my budget.
I've been putting it in community.
We put on a lot of events.
We provide childcare and food at those events.
That costs a lot of money.
I also have 5 staff, and I have those staff because they have to execute all of my programs.
And we've got our District 1 office opening up soon.
So on a serious note, I know it's been mentioned in a joking way, but I talked with the budget office about this, like the— like not this budget office, But when they were talking about my budget and they were like, your budget is one of the ones that you're using almost every single penny.
And so if y'all's budgets get cut, you're going to have to cut staff.
So I'm telling you that seriously, please do not do that.
I need my staff and I need my programs.
And I also will just say, as it relates to doing, you know, across-the-board cuts, I know that sounds easier, but it's not.
I don't think that that's the right option.
I think that providing targeted cuts to things that, you know, need to be cut, for example, or overspends.
Like, that is a more equitable way to go about it, because once you start doing across-the-board cuts, then budgets that are already running on thin margins have to go under, while budgets that are, uh, in surplus, um, they get off easy.
And, um, these are hard decisions, and so making a 1% cut is the easy route, and I don't want to take that route.
Elana Pirtle-Guiney
Thanks.
Jamie Dunphy
Thank you all so much for being here today.
Thank you, colleagues, for a good discussion.
Did you get enough what you need at this moment?
Unidentified speaker
Yeah, I think the only other question I just want to circle back on is process.
I mean, I think we have certainly have enough to go on to bring forward a proposal, and we can follow up with, with you and Councilor Kanal on whether we should come back, try to come back that last week of March, first week of April.
Jamie Dunphy
Yeah, we will treat this with as much urgency as it deserves, and we will figure it out with our really stupid schedule.
So, colleagues, with that, we are adjourned.