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
Woo!
All right, and we are back.
Welcome, friends, to the afternoon work session of the Wednesday the 11th afternoon work session of the Portland City Council.
We're here to convene— oh, everybody got quiet.
Jonas Biery
I appreciate that.
Jamie Dunphy
We're here to have a conversation about the budget, and we're working down, uh, through a couple of specific service areas today.
So I'd like to invite our folks up.
I don't know who's kicking this off.
City Administrator, welcome.
Raymond C. Lee
Good afternoon.
Good afternoon, councilors.
Uh, just thank you for having me today.
Raymond Lee, City Administrator.
I have our Chief Financial Officer, uh, Jonas Biery, as well with me, as well as DCA Tracy Warren.
And we have bureau and program directors and other finance leads to help answer questions as we go through this presentation.
We'll start with the City Administrator's Office today with the CFO and Portland Solutions.
Then we'll shift into the City Operations service area, which will include an update on the larger realignment projects, and we'll be at a high level as we talk through some of the realignment projects.
Then we'll pass it off to DCA Priory and, and her team to talk through the public works service area.
As a reminder, today's work session is about setting a common baseline understanding of how bureaus and programs operate across funds and revenue streams.
Also, a fairly high-level overview of budgets challenges and opportunities and trade-offs for bureaus and funds as well.
Then our high-level options that the bureaus are bringing forward in response to Mayor Wilson's guidance as it was trying to bring up budget reduction conversations.
But before I start, I want to pass it to Jonas for a quick reminder about next steps and where we're going from here.
Jonas Biery
Great.
Thank you, City Manager Lee.
Council President, Council, for the record, Jonas Biery, the city's Chief Financial Officer.
Wanted to first acknowledge that last week we had a work session, the first of these on public safety service area and community economic development.
There was a great conversation, daylighted a lot of great questions.
The City Budget Office has assembled answers to those questions.
And so I think those were just published today.
And so we'll be doing the same thing with the work session today, collecting those questions, providing responses in writing to all of you as soon as possible next week.
Also wanted to acknowledge we're working on a similar body of we do have responses related to the Thursday work session on Spring Tao.
So that is still coming to you hopefully by the end of this week.
Also wanted to note that after today, there's another budget work session of kind of this initial series scheduled next Thursday on Thursday the 19th.
Our intent based upon the last work session is that we'll have a little bit of a focused time on public safety.
There were a number of questions around public safety service area.
So have some focused time to come back to some of that.
Raymond C. Lee
And then probably another—.
Elana Pirtle-Guiney
I think we should have a public comment session.
Jonas Biery
Major topic TBD, probably a little bit pending today's discussion.
I may be able to populate something there.
Also wanna make a little space next week to have a few minutes to discuss and agree on what the next iteration of work sessions look like as we do that work.
I think a couple more work sessions scheduled in April, Mayor's proposed on April 21st, and then space held for some work sessions after that.
And so I wanna have a little conversation to make sure we're on the same page about those next steps.
In April and May.
And with that, I'll hand back to City Administrator Lee.
Thank you.
Raymond C. Lee
Thank you, Jonas.
Can we go to the agenda slide, please?
This is what we're going to cover today in the City Administrative Service area.
We're going to review the current service level budgets.
We'll talk through some high-level cut options and trade-offs.
You'll note that we have a significant focus on Portland Solutions in these slides as well.
This is the most complex piece of the service area budget.
Next slide.
Jamie Dunphy
And but before you start, City Administrator, uh, colleagues, I would like to allow them to get through the presentation.
If there are technical or clarifying questions about the information that is directly in front of you, please feel free to ask, but otherwise let's hold our conversations for the end.
Raymond C. Lee
Okay, thank you, Council President.
As you can see, we range from the office to the CFO to Portland Solutions, the bureaus and programs in this service area all have citywide impact and application and are charged with coordinating citywide policies and programming and developing— delivering citywide approaches to things that Portlanders are seeking.
You'll note that the CFO fund is so large because it includes a number of other funds such as the Arts Education and Access Fund, also bond interest and sinking fund as well.
Next slide.
Tracy Warren
Come up.
Dan Ryan
And that's it.
Raymond C. Lee
All right, that was it.
Tracy Warren
Thank you.
Elana Pirtle-Guiney
Council President, does that mean that the city administrator is giving all of his funds back?
Jonas Biery
I think so.
Raymond C. Lee
I wish it was that simple.
Tracy Warren
I apologize, the slides disappeared from the deck.
Working on it.
Jamie Dunphy
We love technology.
Sameer Kanal
This is why we shouldn't realign BTS.
Dan Ryan
Oh, we shouldn't realign our TIF zone.
Tracy Warren
Apologies, it's coming.
Raymond C. Lee
I think we're back up and running again.
What you're looking at right now is a zoom in on the portion of the previous slide that represented Portland Solutions.
Portland Solutions is a young department office as it was launched in July of 2024.
This is the most complex and volatile piece of the city administrator's budget.
Due to high interest in that office, throughout the presentation we'll drill down on some items for this budget.
Next slide.
In developing the concepts, we've had similar challenges and approaches to other service areas.
Challenges are listed on this slide.
Specific to Portland Solutions, many programs have been funded largely by one-time dollars.
Those programs include the City Outreach Team, shelter programming, and the PMO Services.
PMO Services.
That model has required a year-to-year hustle to find and secure funding for continued programming as demand and the need for those services increase.
But I will say we've seen a tremendous amount of impact on our streets today.
As part of the exercise, every program participated.
We are focused on supporting the continued implementation of the new form of government and helping to address some of our most pressing community challenges.
We are limited by our— we are limited by our budgets being largely personnel and are trying to minimize some operational cuts, as is the case across the city.
Cuts have added up year over year to impact some of our service delivery and some of our capacity needs.
Next slide, please.
Performance management.
Our bureaus and programs work on a wide variety of things, united mostly in that they all have citywide impact and implications.
We collect a variety of metrics, Across the service areas.
Our work is also often measured on long— on long timelines for equity, sustainability, legislative goals.
We are often needing to look over many years to see progress.
For example, OGR consistently has a rating of 75 to 95% on their yearly customer service survey with regard to progress made on legislative priorities.
Thank you.
PMO has cleaned 921 blocks representing 44 miles, having disposed of 25 tons of trash on a quarterly basis.
Moving forward, the Performance Office will help the city leaders and staff use data to make better informed decisions, improve service and operations, and build a culture where continuous improvement as part of the everyday work.
And you've heard me talk about this previously, and the mayor previously as well, about us becoming a high-performing organization.
Next slide, please.
Program expenses by fund.
This slide really focuses on most of our large funds outside the general fund are collected and housed in the CFO divisions.
And have very specific allocations and purposes.
The largest components of the general fund are Portland Solutions and the City Attorney's Office.
Generally, this is where the programmatic expenses in this service area hit the most.
In the next slide, I'll discuss a little about why the general fund visualization is a little misleading.
Next slide, please.
I note that Civic Life's general fund budget has decreased, uh, by $7.1 million since 2022 and 2023 because of both the realignment of resources to other city bureaus and service areas and ongoing budget reductions.
In addition, we begin first reports of actuals for the city administrator in 2024 and 2025 due to the new form of government.
You'll see here that the CFO's general fund discretionary budget has remained relatively consistent over the past 5 years.
The general fund discretionary overall is noted here as really large due to what is mostly a categorization problem rather than a general fund issue.
This significant increase you see can best be described as unknown funding.
Similar to last spring when Mayor Wilson was knocking on doors to invest in emergency overnight shelter— shelters, which he's doing a lot of fundraising now that I know as well.
For our purposes today, this is what we require to maintain current service levels.
Administrative leaders are having multiple conversations to secure funding prior to the mayor's proposed budget.
In reality, we are asking for fewer general fund discretionary dollars for Portland Solutions.
This reduced ask is strategic to decrease the impact Portland Solutions may have on the general fund.
Looking at FTEs, the slight changes between '25 and '26 adopted budget and the '26-'27 CSL budget reflects positions shifting into the performance office from city operations and BPS.
Staffing levels within the city administrator service area declined between 2022-2023 and FY '26 and '27 due to charter transition, reorganization, and moving positions out of this service area.
Next slide.
Dan Ryan
Real quick, um, technical question.
Is neighborhood associations under what?
Raymond C. Lee
It's under civic life.
Dan Ryan
Okay, that's what I thought.
Thank you.
Okay.
Tracy Warren
Wow.
Raymond C. Lee
On slide 10, uh, you'll note that a majority of the program expenses in this area are 3 programs: alternative shelter, Revenue collection and liability.
The jump in program expenses from FY25 and 26 is due to the development of emergency overnight shelter that was paid for almost exclusively through state and Metro SHS dollars.
The liability program anticipates a reduction in expenses in FY26-27 compared to the fiscal year due to projected lower claim payments.
Next slide.
On Portland Solutions program expenses, we just showed the overall service area, but this will drill down a little deeper into Portland Solutions.
As Portland Solutions was implemented in FY24-25, our lookback begins there.
A few notes to program expenses.
Emergency overnight shelter utilization has seen seasonal EBBs inflow, which has allowed for more accurate expense targets in estimating.
In July of 2025, we pulled our alternative 24/7 shelter contracting back to the city from the county.
That move has realized a significant cost savings.
Thank you.
That we are now able to apply to future budgeting.
Next slide, please.
Core program revenues are not significantly changing over time, with the exception of Portland Solutions.
Revenue generation has involved very different models for Portland Solutions year over year.
That group and the mayor have hustled to find program money each and every year, which has resulted in various revenue models.
I want to call out that the budget gap in this graph is the difference between the current service level and known funding with Portland Solutions.
As I previously mentioned, there are unknown funds that are still in the process of being secured due to diverse funding strategies, other revenue, is a catch-all that includes money such as ARPA funding, state pass-through money, county swaps, interest earnings, and et cetera.
Next slide, please.
There is a current service level gap of $200,000 for the executive programs, including my office, and $600,000 for the Office of the CFO.
Thank you.
The factors at play are the same: rising costs, enterprise inefficiencies, inflation, and compound cuts year over year.
The gap includes echoes from last year's cuts as well, in internal and external materials and services, software, temporary staffing as well.
If you have more questions about this, I'm happy to answer more questions about this in the question and answer portion of our presentation.
On slide 14, keeping in mind the revenues we discussed a few slides back, I want to highlight for current service level gaps for Portland Solutions specifically.
In alternative shelters, we have a $35.3 million gap with the end of one-time money for alternative shelter coming from the state, county, and federal government.
In overnight shelter, there is an estimated $19.8 million gap for emergency overnight shelter.
This includes anticipated underspending from this year given to us by the state.
There is a total of $4.2 million gap for the Street Service Coordination Center.
Thank you.
Which is a split between a gap for current service level city staff on the city's outreach team and a $1.3 million for contracted outreach services.
Finally, there is a $5.8 million shortfall from the end of one-time funding to maintain current PMO programming.
Sameer Kanal
Next slide.
Raymond C. Lee
We have explored options for filling the CSL gaps and participated in the 3 to 10% cut exercise as directed by the mayor's office.
We have a range of strategies outlined on this slide.
From the executive programs, we looked at options that significantly reduce spending for priority-setting exercises and facilitation needed to guide leadership planning and decision-making.
Thank you.
We've reduced ability to participate in collaboration with peer cities, including regional and national travel to key meetings, conferences, and convenings.
Support and other staff cuts, including potential changes in compliance ability— attorney support is an example of this as well— and rent savings and other EMS cuts.
For the CFO, some of the things we've discussed would result in reduced staff capacity across nearly all divisions, increasing operational and compliance risk, diminished risk management, claims oversight, and foreclosure activity, risk to timely completion of the annual, uh, comprehensive financial report, delays in vendor payments, and risk to financial reporting.
Potential cuts to revenue collection has risks, including receipts of matching funds and funds from other jurisdictions as well.
And as we look at Portland solutions, while we have identified funding needs, work is still underway to secure resources outside of the general fund.
We'll know more by the mayor's proposed budget what that may look like.
But as always, we want to provide you options for your priorities.
We are continuing conversations with internal and external sources of revenue to either realign our fund programming for all work areas.
This includes revenue areas such as state, metro, other jurisdictions, the county IGA, and the Portland Clean Energy Fund, among other it's important to reiterate that funding gaps we have identified are a focus of our efforts to find revenue from other non-general fund resources.
Discussions are ongoing about a long-term funding model for the City of Portland priorities supported by Portland Solutions.
It's simply not sustainable to continue funding Portland Solutions and their programming in our current model.
Not only does it decrease stability for those services, but it eats up our leadership time and capacity because we have to act as entrepreneurs during a very tight budget cycle.
We are already in discussions with you about how to resolve the issues long-term.
If we're not successful in identifying funding solutions for the coming year, we are anticipating reductions concepts, including strategically closing shelters, reducing corridor cleaning efforts, and eliminating city outreach contracting.
Further, while we are attempting to preserve the very small team that implement and oversee these programs, options include FTE reductions to staff.
For us, this is the last resort.
Due to sheer volume of work these teams are facing on a day-to-day basis.
And that concludes the presentation.
One thing I will say in this— going to the next slide as we get to the questions— I will take into account that as we've gone through retreat on Saturday, uh, really taking a closer look at what the council's priorities are As we go through more budget deliberations and conversations as a result— as results of the mayor presenting a proposed budget to City Council, we will be incorporating those concepts and ideas that came out of that retreat into it, which will further help shape how we'll be moving forward in the mayor's proposed budget.
Jamie Dunphy
Thank you.
City Administrator.
Colleagues, now we move into discussion.
Vice President Clark, take us along.
Olivia Clark
Thank you, Council President.
Thank you, uh, City Administrator.
Appreciate this.
It is a very, very high level, so it's hard to get your head around exactly what this means.
And I assume that we're going to have another chance at a future date to dig in a little bit deeper on these things, so I'll keep, um, my questions pretty high level.
And just, um, for the record, The color charts, it's hard to distinguish between the blues and figure out which goes to which, but maybe that can be corrected.
I do have a question on page 8, which is about civic life.
Can you— are you at a point where you can share with us what portion of that budget goes to the neighborhood associations?
I don't know if anybody can answer that, but that will be a question for me and a concern for me.
Raymond C. Lee
I would have to go back and look at to see what's the actual component of that actually goes to that service out of Civic Life.
But we can follow up with council with that direct answer.
Angelita Morillo
Great.
Olivia Clark
I would appreciate that.
And then on page 15, page 15 on closing the gap.
Under the CFO column, could you— I don't understand what reduced foreclosure activity and reduced revenue collection mean.
Raymond C. Lee
I'll let Jonas come up and speak to that one, but if we were making reductions to that area, those are actual FTEs, people who are actually going out and collecting those dollars that we would be looking at reducing.
But I'll let Jonas go into further detail.
Jonas Biery
Yeah, thank you.
And I'll be brief and we can come back with more detail if we need it.
Councilor, thank you for the question.
Proposals that exist for those areas would be reducing the staff that do that foreclosure work, kind of the behind-the-scenes processing.
So we recently, a couple years ago, accelerated that effort per prior council direction to trying to get to 3 or 4 foreclosure actions each year, foreclosure moments when we can actually have those sales processed.
And so this would reduce our capacity to do that to probably more like once or twice a year.
And then I think, so I was like, one of your questions, the other was on the revenue side.
So again, very staff-intensive work.
And so reducing that capacity would reduce our ability to pursue collections and respond to payers of the city's various taxes that the revenue division collects.
Olivia Clark
Well, in response to that, I would just say that when we are looking at cuts like this, if there is a, You know, pennywise, pound foolish, that we're cutting things that actually bring in revenue.
I think we ought to consider that in all these areas.
But that, I think that was one that stuck out for me.
I also think it would be helpful, and not for today, but for the future, when we're talking about cutting shelter services, that we understand what the impact would be on the street should that happen.
And I know that that's happening, proposed to happen at the county as well, but what are our streets going to look like if we do those kind of cuts?
So just a couple points there as we think about the future.
You know, let's not be pennywise and let's think about the impacts of what some of these cuts will be when it comes to the quality of life for Portlanders.
Raymond C. Lee
And great question, Councilor, and great comments.
And that's something that we'll be presenting to Council, as we look at making reductions in services that we move forward, one of the columns that you will be looking at is the impact, impact to our citizens or impact internally to the organization.
And some of this is a domino effect for us as well.
As we see other areas hit certain reductions, it's going to have an impact on other areas and their ability to be able to perform the duties that they do on a day-in and day-out basis.
And we'll show those correlations with council when we're talking about overall comprehensive cuts of what that looks like.
Olivia Clark
Thank you.
I think maybe Amanda has an answer to my other question.
Amanda Garcia-Snell
Yes, thank you.
Amanda Garcia-Snell for the record.
So to the money that goes directly to the DCO or to the neighborhood program, to the DCOs, not counting personnel costs, is about $1.8 million, and $1.6 million of that is distributed into nearly even 4 grants based on population.
So there's a slight difference.
And then we also provide an extra— the extra amount for neighborhood small grants.
Tracy Warren
Thank you.
Olivia Clark
Thank you very much.
Jamie Dunphy
Thank you, Vice President Clark.
Further questions?
Elana Pirtle-Guiney
No.
Jamie Dunphy
Okay.
Councilor Koyama Lane.
Elana Pirtle-Guiney
Now I'm wondering if I— if my question makes sense.
In the current services level gap is— so for under executive programs, is that your office?
Okay.
So is the $0.2 million, that gap, what you feel like you need to be fully staffed?
Raymond C. Lee
Correct.
Okay, sorry, I might cut my mic off.
That is correct.
Uh, my office is a very small office, uh, really pertaining to, uh, 3 or 4 employees including myself.
Elana Pirtle-Guiney
Okay, and so you have 3 or 4 employees including yourself, and can you remind me how many direct reports you have?
Raymond C. Lee
Uh, 14.
Elana Pirtle-Guiney
Okay, um, well, we really need you to be successful, and you, you need to be staffed well, and the whole city is I'm just hoping for that.
Angelita Morillo
And there's a lot on your shoulders.
Elana Pirtle-Guiney
And so I support moving things so your office is fully staffed and you're set up for success.
Angelita Morillo
Thank you.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
My question, and Mr.
Administrator, I'm not sure you know this off the top of your head, but the cost of the alternative shelters, how much of the cost is sort of the physical infrastructure, the existence of the pods, the showers, the electricity, et cetera, and how much of it is kind of social service, you know, staff providing services?
If you just said, we're gonna give you a key and make sure that the water running and the electricity works, but there won't be anybody there, how much of a cost savings would that be?
Skyler Bruckner-Knapp
Hi, for the record, Skylar Brackenap, Director of Portland Solutions.
Councilor, we'll get you the precise numbers, but just kind of ballpark, the majority of that number is gonna be the operations for the 24/7 staff.
That are working kind of that site.
I also just wanna give folks a little bit of context.
We've been in kind of development mode basically until right now for a lot of those sites.
So numbers you see for past years include the true development of utilities on that site, placing pods, paying for that infrastructure.
Now we're kind of in maintenance mode, which will look different going forward.
So one thing you'll see in the mayor's proposed budget is gonna be Kind of a decreased level of how much that overall cost is, but I can get you the breakdown.
Steve Novick
And again, of those 24/7 staff, how many of them are doing stuff that's sort of essential to the physical operation of the facility as opposed to people who are more of a social service mode?
Skyler Bruckner-Knapp
Yes, so we have 2 maintenance folks on our shelter services team, so city employees who do basically all of the maintenance, frankly, on all of those sites.
They do an amazing job.
They'll get assistance occasionally from a contractor, but really it's those 2 individuals.
Steve Novick
So the majority of the staff are not in that physical maintenance mode, but in sort of a social service mode?
Skyler Bruckner-Knapp
Correct.
Steve Novick
Thank you.
Tracy Warren
Yeah.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Ryan.
Dan Ryan
Yes, thank you, President Dunphy.
Appreciated the questions earlier from Councilor Clark about neighborhood associations.
Could—.
It's gone from 1.8 is what I heard, and then 1.6 is distributed.
I'd like to see the comparables going back the last decade so I really understand what— how much support we're providing the infrastructure of that practice in the city.
2, Second question is How much money do we receive from the SHS funds that Metro administers?
How much comes directly to the city?
And then you could— if you can't answer these today, that's fine.
And then how many— how much comes to us splintered off from the county deciding that they can share money with the city?
Skyler Bruckner-Knapp
Uh, Councilor, it's a great question.
Again, Skyler Bruckner-Knapp.
Um, so we received $15 million this This current fiscal year, so '25-'26, from the Metro SHS tax measure for overnight shelters specifically.
We also had some carryover funds from the previous year, and I would have to go back and check exactly on, I think around, let's say $5 million, but I can get you the precise number that went to our alternative shelter program.
Dan Ryan
And did the counties also then release money?
'Cause they received the largest, 'cause that's The way the internal government's decided to do this, do they also share money with us since we're doing so much of the first response services?
Skyler Bruckner-Knapp
Yeah, Councilor, the county, so that money had to pass through the county, but the county funds that we received from them specifically were actually general fund this fiscal year.
So not SHS, $10 million in their county general fund.
Dan Ryan
Okay, I'll have more follow-ups on that later.
Thank you.
And with cuts in travel, I just want to make a comment.
I think that it's a really appropriate time to spend more time with those peers in Vancouver, in Beaverton, Hillsboro, Lake Oswego, Gresham.
I think based on some of the trends I'm seeing, at least in my neighborhood out in District 2, that's where people are moving to.
So I'm kind of curious what, what they're doing that we could learn from.
So I think it's a great time to lean local.
Thanks.
Eric Zimmerman
Councilor Dan Ryan.
Jamie Dunphy
Thank you, Councilor Ryan.
I have myself in the queue next.
I have a couple of specific questions.
We started— City Administrator, you sort of mentioned it, but could we get a little bit more granular?
Your—.
The general fund for your current service level is listed at $280 million roughly, which is an increase of about $56 million over the current year spending.
In order to maintain the current service level.
Could you just be a little more explicit about what the significant driver of those increases are?
Raymond C. Lee
I'll have our budget team come up and speak to that question, but a lot of that is increased to just our normal overhead costs that we normally have with the city.
And I believe our budget team can kind of speak to some of the details of that as well.
Tracy Warren
Hi, Elizabeth Hilt, Interim Business Operations Division Manager.
That really big increase in the general fund discretionary is a reclassification of funds that were not general fund.
Jamie Dunphy
They were classified as possibly state funds in last year's budget, but now were put as general fund dollars in this budget showing meaning that these were either like one-time dollars or another source of dollars that had been budgeted to the, to the CA's office area, whatever we're calling it, um, and we do not have those.
Those were one-time.
We don't have that.
And if we want to maintain them, we have to backfill with, uh, federal— with general fund.
Skyler Bruckner-Knapp
I will just caveat.
So a lot of that is Portland Solutions.
So sorry, jumping in.
But a lot of those funds, yes, were previously from like state or county or metro like we were just talking about.
We are in current conversations with those jurisdictions about funding.
So for the mayor's proposed, it will not look like that general big of a general fund gap, at least for our program.
But we can't, we aren't confirmed on some of those yet, so.
Olivia Clark
Got it.
Ruth Levine
And sorry, Ruth Levine, budget director.
Sorry to pile on here.
I just wanted to clarify, we did, when we presented about the current service level at the worksite, session a couple of weeks ago, we flagged this and the city administrator flagged it, but I know it's confusing.
We basically just didn't— there wasn't a clear way to categorize it one way or another because we can't really assume that it's going to be non-general fund at this point because those decisions haven't been finalized.
So we put it in as general fund with the kind of asterisk that it's not— the implication is not that we would have to cut general fund to fund that.
Skyler Bruckner-Knapp
Thank you.
Ruth Levine
So it is confusing, particularly on this chart that looks back at the previous 5 years.
But yeah.
Jamie Dunphy
Gotcha.
But this functionally is a policy choice that we are trying to make at this point of do we continue the services we are providing now with different revenue sources, recognizing that funding one means probably cutting another?
Is that—.
Raymond C. Lee
That is correct.
Jamie Dunphy
Okay, thank you.
That— sorry, I have a lot of in-the-weeds questions and I'm trying to decide if I want to get that deep into the weeds.
Um, um, with regard to the— sorry, I'm interested to know, I mean, like you mentioned, you mentioned on— I don't remember what slide number it was, but, uh, the proposed as right now for the CFO office would result in a reduced— a reduction in revenue collection, which I imagine is primarily just because we have staff and we just simply have to do that.
But is that one of the problems that Councilor Clark was sort of previewing, that we're gonna cut off our nose to spite our face and that we're cutting the people who collect our money, that we are gonna have less money?
Raymond C. Lee
And that is an option.
That is not something that we're saying we're moving forward with.
This was an exercise as we went through looking at 3 to 10% reductions, as we've asked all bureaus and programs to do, to go through that exercise and pull forth these type of recommendations of what could be potential options.
Does not mean that we would move in this direction, as we're still going through our own deliberations from the executive and administrative side of it.
To see what will be going forward in the mayor's proposed budget.
These are just all things that we will be taking under consideration in the preparation of producing a balanced budget.
Jamie Dunphy
Well, to that same end though, um, I— this is maybe not apples and oranges, but I've heard that for every million dollars the IRS spends on tax collectors, they collect $10 million.
Is there something— I mean, honestly, like, if we were to increase If the only budget we increased was yours, specifically towards revenue collection, would that see a net result in collections above and beyond the amount of money we would put into your office?
Jonas Biery
Yeah, Councilor, it's a great question.
There is analysis, I don't have it at my fingertips, that sort of estimates at least by at the reduction level for each sort of staff we reduce in that function.
What's the trade-off in reduced revenue collection?
It's net negative.
We do get, Councilor Clark, as you said, penny smart, pound foolish.
We get that budgetary savings and probably get that revenue reduction as well.
It's a little trickier going up because there's sort of diminishing returns.
And so I don't know that we have that analysis, but we'll get back to you on what that analysis is of the sort of reduction scenario.
You know, and again, as the city administrator said, I can speak for the CFO office.
We don't have anything that we provide that isn't bare-bones essential services.
And so there is no reduction scenario that won't have negative impacts.
And so I'll just state that explicitly and transparently.
Jamie Dunphy
To the CA's point, that'll be part of the calculus in deciding what goes forward for council and appreciate council's input on those you know, I think that one thing that I have seen with this transition to the new form of government is that we are finally getting a sane budgeting process that is starting to come away from the siloed bureaus and sanctioned dollars.
I think that your office in particular needs more staff.
I just think that if we are going to be able to run this city, we need to be making that a kind of investment.
And I know that that comes with tradeoffs, and I don't understand how to balance those and understand how those things work.
But that is a top priority for me because, as we all acknowledge, we have a revenue problem.
And sometimes it's not just that our revenue-generating sources aren't generating the same amount, it's that it's harder to collect it.
Like, we know how expensive it is to collect the arts tax.
So thank you.
I think that I'll put— I will take myself out of the queue for now and I'll turn it over to some colleagues.
Ruth Levine
Thank you.
Jamie Dunphy
I'll turn it over to Councilor Green.
Mitch Green
Thank you, Mr. President.
Thank you, City Administrator Lee, for the presentation today.
I just have a few questions.
Some are small, some are big.
I'll start with the small ones.
So earlier, I can't remember which slide you said, but you'd made the argument that by pulling back the 24/7 sheltering program inside the City of Portland, we're realizing some savings from that.
Can you say a little bit more about what's driving those savings?
Skyler Bruckner-Knapp
Yeah, I can speak to that, Councilor.
So some of those were just different contracts that the county held.
So for example, food service or trying to get a little more competitive on kind of what contracts we have for services at those sites.
Some of them are operations contracts as well.
So just kind of the way everything was being run, we got to— we got the opportunity to drill down kind of on line item budgets for each and every site.
Mitch Green
Okay, so it's not a sort of like seams problem between the city and the county.
It's more the city in control, maybe making better, um, or I would say it differently, making decisions that have a lower cost.
Skyler Bruckner-Knapp
That is correct.
Okay, thank you.
Mitch Green
That's helpful.
Um, so I guess these are bigger questions.
Um, I guess I'm just broadly concerned about like where the cuts will come from to validate this inclusion of the Portland Solutions budget, particularly into the general fund.
I know, I think we're hearing a conflicting message today, which is that on the one hand, um, we, we need to get to a more stable funding choice if this is a program we want to keep, we want to sustain, uh, so we can stop being entrepreneurs and, you know, With a side hustle.
And I, you know, I think that, that makes sense.
But then we're also being said, well, don't worry about it, it won't be that big because we're going to go get the money.
So that's what I'm hearing.
Um, so that's a— that seems to be a bit in conflict here.
And so I don't really want to budget, um, based upon we might get the money because I think we— that takes on a lot of risk.
Takes on a lot of risk.
And I think everyone understands that.
Um, and so the prudent I think the most fiscally responsible thing to do in a budget is assume the worst-case scenario, which has a large cost driver.
And so as we get into this exercise, we're going to be having to make decisions between whether we want to sustain this level of CSL and Portland Solutions in particular.
I mean, there are other areas that are identified for cuts, but that's the meat of it.
Mm-hmm.
And are we trading that between Public safety, because that's the other big cost driver that has a big gap right now.
And those are 2 areas that people say don't touch a dime.
So then what gives?
I'm worried about, I'm worried about our insurance and the products that we— I mean, the neighborhood associations are only existing because they can get money from the city for insurance.
And it's going to be all those little areas in the budget, in the general fund, That are outside those 2 big broad buckets that are going to be identified for cuts.
That's the thing I'm really worried about right now.
I'm sure everyone else is too.
So I just needed to name that.
So I have some other questions that might help us answer those kind of questions as you develop this.
I'd be curious to know what the average capacity utilization rate is for our overnight shelters, as well as our alternative shelters.
I would like to know if all of those alternative shelter contracts are Urban Alchemy contracts, and if so, what are we spending per person per year to run those?
Getting that kind of information, and maybe you have it right now, would be, I think, really helpful for this council as we head into our reaction to the mayor's proposed.
I think that's probably all I have.
For questions, so.
Skyler Bruckner-Knapp
I can give you at least just a few of those pieces, Councilor, but also happy to talk to you separately.
So the capacity, just quickly, we hover between around 60%, 60 to 70% for overnight shelter depending on weather, what's going on kind of outside.
So colder, rainier, we tend to see an uptick kind of in overnight shelters, and that's an average.
So some shelters are quite full every night and some are not as full.
So that's what we've seen.
We track that religiously basically to see kind of What the need is in the community.
For alternative, it's over 100%, which is crazy to say, but that means that we have, okay, this is how many pods we have and we have some couples in those pods and we frankly have more couples than we anticipated when we kind of set the capacity numbers at those sites.
So those are always full is kind of the easiest way to think about that.
Not all of those sites are run by Urban Alchemy.
We have 3 main contractors for our alternative shelter sites, Cultivate Initiatives, Sunstone Way and Urban Alchemy.
That's right now.
We went through an RFP process recently for folks to apply for those sites as well.
And so we can also walk you through that competitive process.
I can get you the per-person cost or the average.
It will depend how quickly folks are moving through those shelters.
So if that pod turns over 3 or 4 times in a year, it's going to be cheaper, obviously.
But I can get you the average.
Mitch Green
That would be helpful.
And I just as we go into a decision where we're going to have to say yes or no to renewing this in situ, um, I need to name that I think one of the primary complaints I've heard with, um, the alternative shelters in particular is that we're not seeing the wraparound services from Urban Alchemy as promised, and that we've got a lot of clients who are suffering because of it.
And so getting me comfortable on that's going to be really important.
Thank you.
I'm sure there's a lot of information I don't know, so I'm just asking it here.
Skyler Bruckner-Knapp
Absolutely, Councilor.
I'm happy to get that for you.
I'm really proud of the care coordination, the case management that's done there, but we can get you the precise information or we can take you on a tour or have you meet the staff as well.
And the larger kind of question that you're asking, thank you for bringing that forward.
I think it's something that we wrestle with, as the City Administrator said, every single year.
I feel like a huge part of my job is being a fundraiser, which is not what I signed up for.
Yeah.
And so I think the mayor and I have done our very best every single year, but there needs to be a more sustainable approach if these functions are still gonna proceed.
I think that's not sustainable.
And the city administrator has been very clear that he sees that immediately when he saw kind of how hard we're working to try to make sure this isn't a question for the general fund.
We don't want you to have to deal with it that way, but we're gonna have to figure out what it looks like going forward.
I think I would say, I know it sounds like I'm sorry.
I don't mean to give conflicting information or direction, but we're going to need time to figure out what that looks like.
And I don't think 3 or 4 months are going to be sufficient to figure out what the programs look like going forward.
It takes us 3 to 4 months to decommission an alternative shelter site.
So I need some runway to be able to have those really important conversations of what happens with all the humans, what happens with the staff, where do we want this to sit within the city of Portland if we want it to continue.
Please give us, that's my plea, a little time to be really thoughtful about it.
And that is just one more budget cycle to really figure out what we're doing here and what you want to see going forward.
Mitch Green
Thank you, Skyler.
Skyler Bruckner-Knapp
Thanks.
Jamie Dunphy
Thank you, Councilor.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
Jonas, I just wanted to return to the Council President's questions about revenue-generating positions.
It seems to me that the bang for the buck depends on what they're collecting.
Like if they're collecting the arts tax at $35 a pop, they're probably not very efficient.
But if you put more people on collecting the business license tax, then maybe it's a fair amount of bang for your buck.
I had an experience when I was asking Thomas Lanham to like recalculate what a different level of CEO pay ratio surcharge tax would collect.
And in the course of answering that question, he went through and found out that there are a bunch of companies that weren't paying that should and picked up several hundred thousand dollars that way.
Skyler Bruckner-Knapp
So I'm just curious.
Eric Zimmerman
Yeah.
Steve Novick
Not to answer it now, but I think it might be interesting for us to learn what you think the bang for the buck would be, particularly if you had more staff looking at the business license tax in particular.
Jonas Biery
Yeah, Councilor, great question, and happy to look at that.
Yeah, it is different for different, I'd say, both flavors of revenues that are collected and different points in the cycle, which might be both throughout the year or throughout the economic cycle more broadly.
So, um, but, but we'll work.
I think that we have data that sort of breaks out a little bit of where the staff time relative to collections lie.
And yeah, certainly there's efficiencies in some areas that don't exist in others.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Ryan.
Dan Ryan
Thanks, Council President.
I'll look where you started with your questions about revenue.
So I just want to get some technical questions we serve Metro in collections of SHS, and we serve the county.
We provide them— we're a vendor for them for pre-K-4.
Can you tell me, are we getting the right rate of fee, if you will, from Metro and the county to provide those services?
Jonas Biery
Yeah, Councilor, good question.
That's correct, we do collect those taxes on behalf our regional partners, there's an intergovernment agreement that exists with those entities that identify what the cost recovery is.
And my understanding is that it is based upon kind of actuals.
So short answer is yes, I believe we are probably collecting the fair amount, but happy to provide more information about those IGAs.
Dan Ryan
I know that some of our performance, like collecting the arts tax, went down once we started taking on new work.
So there was a— there was some, I think, some collateral loss in terms of taking it on because it's a big lift.
And shout out to Tom and his team for taking that on.
Um, I think what I care about when it looks at the alternative shelters is the provider-comparable results from each village, um, because we named 3.
And so before we speculate, it'd be just good to see that raw objective data, like how many are, in my opinion, how many are saying yes to addiction services?
I know Urban Alchemy has a much, much higher rate than the other 2.
Um, how many are going into workforce?
Again, Urban Alchemy has a much higher rate.
So I want to see the results that we're getting from those vendor relationships, uh, for our unhoused participants who are trying to help become stable and be on their own someday.
Thanks.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Kanal.
Sameer Kanal
Thank you.
I appreciate a lot of this conversation and I appreciate the focus on Portland Solutions, but I want to start with something outside of Portland Solutions briefly, which is there's a slide in which the City Attorney line disappears in the rightmost column, and I had some questions about that.
I'd like to keep one.
I'm sure that the goal is not to get rid of the office or anything, and obviously it's charter required, but I'm guessing it's just a different way we're going to start counting it and wanted to get a little clarity on that briefly before I get into the Portland Solutions IBEX.
Slide 8.
Jonas Biery
Yeah, well, loosely looking, Councilor, my assumption is that that's either just a gap in the labeling or a cutoff of the chart, but we'll look into that.
There's certainly not a reduction to elimination of the City Attorney's Office.
Sameer Kanal
Yeah, it's OGR.
Jonas Biery
Just a gap in the presentation.
Sameer Kanal
Yeah, OGR and maybe equity, although, um, the line is so thin on equity, um, that maybe it's hard to tell, which is itself a problem we should be solving.
Um, so I hope we can solve that issue, uh, as well.
Um, getting to Portland Solutions, part of the challenge in assessing your budget is that there are bundles that don't always, um, make a lot of sense from a legislative perspective.
I imagine they make much more sense operationally, but we dealt with this in the fall technical adjustment ordinance where impact reduction program combines the clearances of trash and the clearances of people.
And those are 2 very different conversations.
I imagine if you asked this council who supports clearing trash, it'd be a 12-0 vote.
I don't think it's a 12-0 vote on the other side.
And so I want to make sure that when we get to the proposed budget, that the bucketing allows for legislative decisions to be made in a way that makes sense to this side, to that side, and to the public.
And just wanted to daylight that ahead of time because I have an interest in renewing that conversation because I want to make sure you have the money to clean trash and that that's protected from cuts.
You look like you want to say something, so I'll pause here if you want to.
Tracy Warren
Sorry.
Skyler Bruckner-Knapp
No, thank you, Councilor.
That's helpful and we can provide that.
I think one thing that will continue to be be a difficulty with IRP's budget is they're all internal agreements.
So all of those processes are things we're doing on behalf of other bureaus and they're bucketed together.
So I can try to pull apart how much we spend on it, but it's gonna be difficult from a budgeting process to kind of pull that, piece that apart.
But we can work with the CBO to figure it out.
Sameer Kanal
Can you clarify?
I can see how that would make sense for the trash pickup.
So—.
You have internal agreements Is this for sweeping campsites with other bureaus too?
Skyler Bruckner-Knapp
Yes, so it's all of it together.
So it's bucketed as we provide the assessment, we provide the trash pickup, we provide the removal, we provide the posting, we provide the storage of belongings.
That's all together for—.
Sameer Kanal
For interagency?
Skyler Bruckner-Knapp
Exactly.
Sameer Kanal
Okay, that's a little surprising, but I would like to see that.
I think part of what, one of the challenges that we have with the overall budget, this has nothing to do with the service area, is that we, We pay each other a lot.
We have an $8.5 billion budget with $6.5 billion.
Mm-hmm.
And that's because of the money moving around.
And it creates some weird situations when we're trying to assess it.
And I know everybody who's involved in that is trying to move away from that in the long term.
So I'm not trying to fault anyone, but just wanted to illustrate that.
Another conversation is around the decreasing gap in the cost per person in the 2 types of shelter that we bucketed out here.
My understanding is that historically there was maybe a $50, $60 a night difference in how much it cost to shelter a person in overnight shelter versus alternative shelter.
And now we're looking at maybe a $30, maybe $25 difference.
And so looking at maybe that helps justify given that the alternative shelter both has— the last update we got was that it had a higher placement rate out of it into permanent housing, and the fact that it minimizes some of the concerns we have with night-only shelter, namely the where do people go during the day part of it, that that's a conversation we need to have.
That not necessarily to eliminate overnight shelter, I'm not arguing for that at all, but in terms of making sure we maintain and potentially as we expand shelter, that that focus goes more towards the alternative side, either in the expansions that were referenced or to existing sites, or if we talk about a new location.
I understand finding a parking lot and finding a building as your sort of starting points are different and the setup costs are different, but in terms of ongoing, that might be worth considering.
I just wanted to mention that there's not really, I don't know if there's a question in that, but if you wanted to—.
Skyler Bruckner-Knapp
We can provide that so that you have that information, yes.
Sameer Kanal
Okay, great.
Thanks.
And then I guess off of the bigger picture things, not specific to Portland Solutions, I'm really excited to see the conversation around performance management.
I'm really excited to see, and I want to support you having the staffing you need, Administrator Lee, to do the job that we've asked you to do.
And I want to make sure we talk about span of control so often in the opposite sense, you know, people who have A vertical kind of thing.
14 Is a lot as a number of direct reports, and that should be much smaller.
I think our goal is 4 to 7 right now.
I think that's the mayor's guidance, and I agree with that range.
So that seems good.
I would love, as a part of that, to understand the lines of authority and conversation around who manages because you have DCAs and you also have chief officers and you also have Skyler and Portland Solutions, which is its own thing, and then evidently 4 more that I haven't even accounted for somewhere.
But as we— I think that understanding and not siloing off those for disciplines and practices, I should say, so that they are able to have the authority necessary to not only do their job with their verticals, but to ensure that the rest of the enterprise is doing— is behaving equitably, communicating, engaging, and being sustainable.
That piece of it, I don't know that the org chart alone can help answer that, but it's the best time to talk about it.
So I wanted to mention that.
Raymond C. Lee
I think you raise an excellent point.
And I think as we've gone through different iterations of our organizational structure and how do we infuse some of these, what I would consider pillars of our organization— equity, sustainability, engagement— into the fabric of our organization and what we do day in and day out is something that I've, you know, throughout my career I've seen different organizations do it differently.
And we're gonna have to figure out what works uniquely for our organization as we move forward to really have that a part of the culture of the organization where we're just not talking about 'em in terms of positions, but we're talking about 'em in terms of the value and what we stand for, what goes without mention for our organization.
So I think that's gonna be some of the debate that we have as we look at how do we structure this long-term?
I think some of this may have been too just a direct report to me and the time that is allocated to those direct reports to make sure that they have that thought partner as it relates to how do they infuse their operations throughout the organization.
And that's something that we are going to get better at as we evolve as an organization and mature as an organization.
Sameer Kanal
Great, thanks.
And I think the, the one of the things that is left to get figured out is the diagonal line for those 4 practices in the org chart, how they engage with the people they don't directly manage in the bureaus, and whether or not that those are staff for them embedded versus staff they influence.
I tend to lean towards the former as someone who's been on the administrative side because, and I think this is particularly notable in equity and engagement, but I imagine it's the same in the other 2 practices, Thank you.
I think that's a great question.
And I think that's a question that we have to ask of our practices as well.
If we're trying to move towards measuring the actual outcome and not just the output, meaning not measuring how many meetings did an equity or engagement officer have— not officer, a staffer— have, but did we have more equitable outcomes that reflected the engagement we heard?
The authority has to be a part of that conversation in a way that it hasn't yet.
And I want to set up not only the 3 we already have, but I know we're about to hire Chief Equity Officer.
I want to make sure that they're set up for success and have the authority to do that, both so that the practices do well and so that we're able to track their performance in the new performance office.
I have 2 other quick notes.
One is, speaking of equity, the cuts in the Office of Equity and Human Rights last year are a high priority for me to reverse some of, and I want to just daylight that on day one.
That was one of the things I thought was the worst part of last year's budget.
And the other piece relates to the revenue side that's been discussed here.
I think if there is a revenue source which costs more or costs close to as much to implement as it does to do, As it raises back, then we should discuss whether or not cost recovery is a goal we can achieve.
I know I'm speaking the mayor's language right now.
He's talked about this before, but I think that list would be really helpful to frame.
And I would love to work with Councilor Novick, as I'm sure many other people have volunteered to over the course of this last year, about that one specific source of revenue, the surcharge.
Thank you.
And exploring that in the future, but there's been a bunch of others.
So, um, I think that, that would be really helpful information for us.
Thank you.
Thank you, Council President.
Jamie Dunphy
Thank you, Councilor Kanal.
Councilor Zimmerman.
Eric Zimmerman
Thanks.
Um, I'm looking at slide 9.
It talks about FTE.
They're in the city administrator's budget.
And, uh, just, just first off, just to the— this now I think our second one of these— I really appreciate just the, um, consistency between reports, right?
That's really helpful as we start doing a comparison, and we are also talking about the, the size and relativity of one program to the next.
So, um, I've appreciated this approach.
Um, that being said, I would second, uh, Councilor Clark's comment, and it might seem trivial, but in a world of decision-making 7 shades of blue is not a decision-making color I can decipher.
So I hope that we can address that moving forward because it does look like we're probably standardizing the whole city.
And if I'm about to spend 4 months deciphering blue, I'm going to go crazy.
But, um, going to that slide, I have a question.
It's really in Jonas's shop, and I guess I'm trying to understand.
You've all heard me talk about deep concern about how we are set up with bureaus who have their independent financial and budget staff.
And based upon this, it looks like— and we've always said that like the CFO's office is fairly small.
Can I— help me out here, Jonas, in terms of what am I reading here in terms of FTE who directly work for you?
Are there bureau folks who are represented in this 375 and you have a good half of that?
What, what is this?
Help me decipher this a bit.
Jonas Biery
Yeah, yeah, good question, Councilor.
And we can certainly get the detailed data.
I'm sure folks here might have it handy.
But, um, so most of those staff, to be clear, while they're within the, the bureau called the Office of the CFO, most of those are in the Revenue Division.
Um, the vast majority of those.
Um, the one thing that I'd note that I think is a little wonky that you see going on here in that line is that in '24 prior— well, '24-'25, and for a couple years prior, um, that was the budget and finance service area, which included some folks that later moved to City Ops.
And so that decline that you see happening in '25-'26, I believe, is just functionally moving those people to other parts of the organization out of that bureau.
Eric Zimmerman
Okay, thanks for the reminder on the revenue.
It's making more sense.
So, so this is also then this $375,000, which is the CSL as it's described here, is representative of time now It's unrelated to, or what could be proposed as part of the central core realignment issues and services, right?
This is, if nothing changed, this is what it is.
Raymond C. Lee
Okay.
That's correct.
That's correct.
Eric Zimmerman
Thank you.
You know, I'm a very big proponent of either articulating a dotted line relationship from finances to bureaus in terms of either CFO so, serves bureaus as a customer service agency, or bureau financial and budget staff very clearly understand that the Chief Financial Officer does dictate your work at the bureau level.
Whatever that is, whether it's solid or dotted line, is very important, and it's not part of our culture.
Mm-mm.
The idea that there are some finance teams who think they work for their bureau director and not for the City of Portland is my most concerning thing as as we go into the budget, because I hope that we have self-corrected after last year.
So if that was the case, if in the central core realignment we were to see perhaps a line— and this may not be your proposal, but if you were to say, I want, you know, 50% of the current people who do that job to actually work for the CFO now, and then I divvy them up as customer service agents out to the bureau to take care of their stuff, would I then see the FTE count in the CFO in this slide?
It would presumably jump significantly because you would take on that as an FTE count at your level.
Raymond C. Lee
That is correct.
And what I would say too—.
Eric Zimmerman
I'm not proposing it yet.
I'm gonna wait for your proposal, but I'm just trying to make sure I'm reading your data the right way here.
Raymond C. Lee
Correct.
Eric Zimmerman
Okay, sorry I cut you off.
Raymond C. Lee
No, I would say one thing I would say in this, I've seen it in multiple organizations that I've worked in, Me too.
As it relates to, you know, the departments or bureaus, for our instance, having some core staff.
I started out my career in departments as the budget person in Dallas.
Those large organizations where pieces are moving every day from a financial standpoint, having some staff there that understands the inner workings of what happens from a budgetary standpoint, a financial standpoint, are critical.
I think what has broken for us in our organization over time is that reporting structure back to the central hub, budget office and CFO of our organization, and not let it stay siloed from the standpoint of ultimately what is the financial decision for the city.
And I think with the new structure of government that we have, having one direct person at the lead of that organization from an administrative standpoint and having those centralized functions from HR, IT, purchasing, budget.
It's going to take a little time for us, but I have no question that we will get there as an organization.
We won't be having these same conversations, you know, 2 years from now or 3 years from now about what's happening.
Dan Ryan
Right.
Eric Zimmerman
Yeah, thanks.
I appreciate it.
As we go into this, it's just helpful to Um, uh, well, just to have an understanding, make sure I understand the baseline of what we're talking about.
And so, uh, I've appreciated that.
And, um, I, I will just say the— I think if my, my, uh, constituents were here, they would be making me circle the $5.8 shortfall in PIMO.
Noted.
Okay, so that is a, a deep concern in terms of of that and what they're delivering.
Thanks for the presentation.
Jamie Dunphy
Thank you, Councilor Zimmerman.
Colleagues, unfortunately we are about 25 minutes over already.
I have one last, it's not even a question, I'm just gonna put it out there.
This body seems continually interested in understanding the difference between money from your area that goes out to FTE versus money that goes out to contracts.
If we could get further clarification about that, always helpful.
And with that, I'd like to— oh, Councilor Kanal.
Sameer Kanal
I'll be very quick.
I had a thought triggered by a colleague's comment.
I would love to have some information on the long-term planning of how Portland Solutions becomes part of the permanent structure of the city.
If it becomes a service area, that's an answer.
If it becomes in other existing service areas, that's an answer.
But just something that isn't this structure built on our old form of government would be great.
PMO in particular is a good place to start on that.
It's a little— it's related to but a little different from the other 3, and I want to make sure that it's stable given what we're hearing from the same type of comments that Councilor Zimmerman referenced.
Dan Ryan
Thanks.
Jamie Dunphy
Thank you, Councilor.
Councilor Green.
Mitch Green
Just briefly, as we go through these work sessions, and it's not specific to the material today, I just want to level set for the public following along and my colleagues that yes, we're considering an $8.6 billion budget, but I think we need to be thinking about what is the operating expenses of the budget.
That's much less than $8 billion.
It's, I think it's $4.3, somewhere around there.
And so when we think about whether we're spending too much and ignoring the revenue side completely, we need to compare it to our peer cities, and we're right in the middle of the pack.
So I hope we all keep that in mind, that there's only so far you can cut to the bone before you have to have real conversations about revenue strategy.
Ruth Levine
Thank you.
Jamie Dunphy
Thank you, Councilor Green.
Uh, with that, I'd like to move to our next part of our presentation.
Thank you all so much.
Tracy Warren
Thank you.
We're just getting our slides up.
Jamie Dunphy
And as we are pulling these up, colleagues, again, I will note we are, we are over time already, um, and we have 2 more, uh, presentations ahead of us.
Uh, the big one, the first being city, the core realignment, and then the second being, uh, public works.
So let's keep it tight.
Thank you.
Tracy Warren
Thank you, Council.
For the record, my name is Tracy Warren.
I'm the Deputy City Administrator for City Operations.
My understanding was that we had about 10 minutes for this portion, which is a basic overview of city operations, budget, and current service levels.
I'll do my best to move us through that really quickly so that we can get to the meat of the presentation, which will talk about the core service realignment as the second phase.
We'll start by reviewing the agenda.
I appreciate the opportunity to share with you an overview of city operations, our current service level budget by bureau, and then a review of options and trade-offs related to reductions for any service level gaps.
Next slide.
City Operations brings together the city's internal service functions, including human resources, technology, fleet and facilities, budgeting, procurement, grants, security, community customer service with our 311 program, and accountability offices with our IPR, Independent Police Review Board— or Bureau, excuse me— and our Office of Police Accountability.
These teams provide the operational backbone that allow the rest of the city to deliver services to Portlanders.
They are a mix of different fund types managed by these programs, from general fund to grants to other funds that are based on cost recovery models.
And they are responsible for helping to support and manage approximately $1 billion of the city's dollars.
Next slide, please.
This will be a common theme that you heard from other presentations and just earlier from the city administrator.
City Operations provides many of the internal services that every bureau relies on to accomplish their mission-critical work.
Because of that, reductions in these service areas require careful balancing to maintain core internal functions.
Our approach prioritizes essential services while being transparent about the trade-offs, including potential impacts to service hours and administrative capacity to support the rest of the city.
Next slide, please.
This slide goes over program expenses by fund.
This slide shows the city operations fund types and what's driving the cost increases.
Much of the growth is tied to core operational needs, including fleet and facilities investments, higher health insurance claims, and technology vendor costs increasing.
A large portion of spending, particularly in fire and police disability and retirement, is also non-discretionary under the city charter and has limited flexibility for reduction.
Thank you.
Which has limited where you'll see an opportunity for us to capture additional savings within the general fund and then our internal service funds as well as other fund sources.
Next slide, please.
This slide goes over the general fund.
The overall change you see between physical years is largely driven by a shift in how general fund overhead was allocated in the first year between 2025, and then what we are anticipating in 2026.
It was allocated— if you look, I think you'll see the biggest difference is in the human resources area.
One of the things that was done is it was allocated as discretionary revenue, so it reflects differently structurally in accounting.
Additionally, there was one-time investments that were made for class comp and also carryover is not included in the future year.
Finally, prior to the Community-Based Police Accountability Board being seated, the Office of Police Accountability preemptively budgeted for an increase in personnel to help stand up that office.
In the coming weeks, we hope to work with the board to understand how they'd like us to proceed with their budget development for the next fiscal year.
Thank you, Deputy City Attorney Nancy Thorington.
Next slide, please.
This slide is related to the full-time equivalents.
I'll start by saying there's a similar pattern in what you heard the city administrator talk about, which is that there's been a lot of shifting within our organization related to the new form of government, and there's been some moving around of what would be considered city operations with staff going from different parts of the organization into city operations to create the service area.
This does not include any anticipated increases that we might see as a result of core realignment.
Those decisions, as you know, have not been made yet.
We are just in the process of developing concepts and sharing those with you all.
Next slide, please.
So we've moved into our new form of government, and we've worked to realign to the one-city model approach.
City operation has been shifting a lot.
I just went over that.
This slide includes the 10 of the largest programs within city operations from a funding standpoint that's not related to the FTE alone.
Overall, City Operations has roughly 50 programs.
2 of the largest programs, Fire and Police Disability and Retirement and the Health Fund, are pass-through programs.
So the money is collected and then it's distributed out.
Additionally, there are several major projects underway.
The transition of garage operations from Kirby to Cutter.
This project will include improved workflows, more efficient maintenance operations, and customer service.
Over the next few budget cycles, the city will need to make decisions to modernize our technology systems related to human resources and financial management as our systems continue to be outdated.
Next slide.
City Operations has a wide mix of revenue sources because it provides services across many areas of city government.
I think this gets back to a comment that was made earlier from Councilor Kanal.
Many of our programs operate on a cost recovery model, which means that as services are provided, they are then billed out to the bureaus who are receiving those services across the city.
Additionally, we have a number of IAs for those services, which is interagency agreements where we are collecting money back for the services that are being provided.
We also have service fees, taxes, and other funds such as transfers and reimbursements.
Overall revenues are generally growing at about the rate of inflation, with tax revenue primarily coming from the dedicated FPD&R property tax levy.
Next slide.
This slide talks about the current service level gap.
Highlighting the gap that we have in security in our PDX 311.
You'll notice off to the side we also have BHR Communications, the City Budget Office, Grants Management, and Procurement.
We're not solving for those gaps or providing potential solutions in this portion of the presentation because we are looking to reduce our overall current service level as part of the core service realignment.
And so we will cover those gaps as part of that process.
This slide highlights the demand for security, which as you all know, has increased significantly over the last fiscal year, which has driven up costs associated with that because we primarily use contracted services for security.
We will need to close that gap or we will need to reduce the demand, right?
So security is one of those things that when you need it, we need to be able to call upon it and make sure that they're available.
And here's to support us, but that does come at a cost that we will have to figure out how to solve for as we move through the— this fiscal year and next fiscal year.
PDX 311 is facing cost pressures from personnel increases and inflation, which could lead to reduced capacity and longer wait times for community who utilizes their services to help them navigate the city processes.
Thank you.
Overall, these gaps are largely driven by rising costs, with some addressed through operational adjustments and others through the realignment effort.
Next slide, please.
This slide offers some solutions that we have been evaluating.
This is showing the 3 10% concepts.
It also has a 5% concept.
I apologize, it's not in the title there, but this includes, you know, $2.5 million for security, $1.5 million for PDX 311, $0.7 million for special appropriations, and then $1.9 million for the Bureau of Fleet and Facilities.
Security.
Yes.
This is related to the demand in services, and so a need to increase either finances to support that or to decrease our needs related to that team.
The PDX 311 is a reduction in customer service hours.
What that would look like is that we would have reduced availability for folks to answer the phone for customers depending on the level of reduction that would be taken from that particular group.
Or 10 would determine the level of reduced hours.
Special appropriations would mean cuts to many of our grants that are not legally required or restricted for something in particular, which would mean less money for specific groups in the community.
And then for Bureau of Fleet and Facilities, it would be reducing our footprint within the Portland building.
We're currently renting the bulk of it, would be reducing our footprint within the Portland building.
We currently rent space from the Water Bureau, which we pay at a different level for renting that space.
And so this would be us moving out of that space into other space that is empty within the building and reducing our costs.
And then some other ad hoc savings related to EMS Contracting dollars as well as reduced security for improved environment at a particular facility.
Next slide.
And so I moved through that pretty quickly.
Questions related to this?
Jamie Dunphy
Thank you.
Councilor Kanal, start us off.
Sameer Kanal
Go back to— I have questions on slides 7 and 11.
Can you go back to slide 7, please?
Thank you for this, by the way.
It's super helpful.
Um, while you're scrolling, I just want to say express support for continuing the levels of security we have on both sides of that, as well as, uh, 311, uh, who does really great work.
Um, on this slide, you, you brought up the, the increase, uh, in OCPA staffing, but I'll notice that the much larger increase is actually from last year to this current year, and it appears that most of that is in City Operations itself.
Can you speak to that specifically?
Jamie Dunphy
Yeah, it's—.
Tracy Warren
It is similar to the conversation that Chief Financial Officer Jonas Biery just had with you all, in that when we shifted folks out of the Budget and Finance service area, many of them landed between City Operations and the City Administrator's Office, which created an increase in staff.
Sameer Kanal
Okay, thanks.
And then switching to slide 11, and I imagine I saw Councilor Clark's reaction at the same place mine was.
Can you walk through, I don't think the public necessarily knows how we have to rent space, that you rent space from the Water Bureau, now you're moving somewhere else as opposed to just the city has a building.
And it's one thing to say we're renting from a third party, Who owns a building.
I think we have the 1900 building we don't own, but we rent space there, right?
That's fine.
I would love to see that be reduced over time and the city either transition to owning buildings and land or just consolidating the space.
We don't necessarily need to spread out so much.
But within the Portland Building, which somebody in the city owns, the city owns it, but I imagine if I looked it up, it would say some specific bureau.
Yeah.
How can you walk through how that's carved up?
Just, I think this is an important transparency piece for the public to understand that you might pay double if you rent from the Water Bureau here and you go over there, and that's because we're really helping shore up another bureau's budget.
And this is also why Councilor Dunphy, Council President Dunphy's desk might cost $25,000 to move, like 20 feet.
Tracy Warren
Yeah, happy to.
Provide a very general response and then follow up with more specifics.
The general response is that the Portland Building is managed and ran by the Bureau of Fleet and Facilities.
And the Water Bureau, at the time that they did the remodel of the Portland Building, bought a floor, a floor or 2.
2 floors.
And they incurred debt services associated with purchasing those specific floors for their bureau.
And so what that means is that when someone else occupies that space, they need to be able to recover their costs, which also include the debt services.
And so yes, it's complicated.
I acknowledge that we have a very complicated system of cost recovery across the city.
And I have a much more detailed memo on my desk that I plan to send to council that will provide you with more information around the internal service funds.
And then I would leave you with just a general acknowledgement that I recognize that we need to do something about it.
Sameer Kanal
Yeah, and I want to be clear for anyone listening.
I imagine that there's nobody who still works at the city that was involved in setting up this process and the way we do things.
But if they are, I don't think they're in this room.
So I appreciate the explanation.
But that also leads to 2 other questions.
Does that mean that before that floor was rented, that part of your water bill would go to paying debt service on a floor of the Portland Building that the Water Bureau bought from Fleet and Facilities after the renovation?
Tracy Warren
I would not garner to answer that.
I would need to get that to you at a later time and confer with our Public Works service area to make sure that that's answered appropriately.
Sameer Kanal
Okay.
While you're doing that, just to add one more kind of related question, I would love to know, and I imagine this is I know it's split up among thousands of actual humans that, that work at the city, but I'd love to know the rough estimate of FTE associated with processing the payments between bureaus, because that's an investment we make.
You know, 15 minutes to, to pay the invoice between a bureau to another bureau, 15 minutes to, to receive the payment.
And I'm, I'm guessing that adds up to some number that's— if it's 5 FTE, that's not a big deal.
Uh, but if it's more, then there may be a better use for those folks' time still within the city.
I'm not talking about laying anybody off, but you know, I don't think anybody signed up to work at many of these bureaus to do something that different from the mission of the bureau.
Um, I'll leave it there.
Dan Ryan
Thanks.
Jamie Dunphy
Thank you, Councilor.
Vice President Clark.
Olivia Clark
Thank you, Councilor President.
Just to riff a little bit off of these comments, and thank you very much, I, um, It is a very confusing web of intergovernmental agreements and transfers and reimbursements.
It's just a very strange web of very creative budgeting.
And it's almost like a— Portland building sounds like a condominium.
But I understand that over time we're going to simplify this, that this is really a vestige of the old form of government and that we're moving forward and we will simplify with CA's help, we will simplify this and get to the bottom of the interconnecting web.
You mentioned that you're going to give us a memo on the ISF, the intergovernmental whatever it's called.
I had questions about that, but I'm very guilty of assuming that it's ballooning and then, you know, beyond inflation and so forth.
So I'm really interested in getting your memo to to, to better understand that.
I, you know, I worked at the state level.
I saw this, that kind of administrative cost spread out across all the different state agencies.
I know this is a parallel to that, but I, I'm looking forward to getting your memo and wrapping my head around that.
But thank you.
Tracy Warren
Absolutely, Council President— or excuse me, Vice President.
And it will be detailed with data related to the inflationary costs and how it has been over the last, I believe, 5 years.
Olivia Clark
15.
Angelita Morillo
15.
Tracy Warren
15 years.
Olivia Clark
15 years.
But I am looking forward to how you're going to untangle this web too.
Thank you.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
I have 3 questions, 2 of which I don't need answers for today, but would appreciate in follow-up.
I am wondering, looking at these options for closing gaps and the current service level gap that exist.
On the security side, I'm wondering if that is being driven by the building security here or by security in other buildings across the city or by the security team who specifically work with the mayor and councilors and where those costs are coming from so that we can better understand, is this being driven by the need to have more Security at council meetings or other, other city buildings or events that we're having and how we might be able to control that moving forward.
I am also wondering if we can see a breakdown of the types of calls that come into 311.
Is this at this point calls for service because people have concerns with service that they're getting from some of our, our Public-facing bureaus?
Are these calls for referrals for shelter services?
Are these something completely different?
Are these calls coming in that are then diverted to counselor offices?
What is it that we're talking about cutting if we cut hours there?
I don't need answers to either of those today.
What you might be able to answer today, and perhaps I actually need an answer from somebody else in the room at another time, is if you move forward with the fleet and facilities cut into the space that we are renting from the Water Bureau, does that mean that the Water Bureau is going to have a budget hole greater than what they are currently anticipating?
And at some point, I would like to understand how the Water Bureau is budgeting or not budgeting for that reality in your budget.
Tracy Warren
Absolutely happy to answer that last component and then get back to you on the other 2.
My understanding is that we've been working with the Water Bureau's finance folks to make sure that they're aware of the concept that we're floating so that they can include it as part of their planning.
Elana Pirtle-Guiney
Thank you for taking that step.
Jamie Dunphy
Yeah, thank you, Councilor Pirtle-Guiney.
I have myself in the queue.
I had 2 quick questions.
One is broadly to the service realignment efforts that are undergoing.
It's not— my understanding is that the service realignment efforts that we're doing are not cost savings, but rather enterprise efficiencies and getting past the operational silos that we've had, but obviously will involve some changes in budget and things like that.
But from the presentation, I'm not really clear how we're envisioning these, those efficiencies, or how service— how it will be guiding service delivery.
Um, is there anything you can clarify about— oh, did I— am I jumping ahead?
Oh Jesus, never mind.
Olivia Clark
It's okay, you're on top of it.
Tracy Warren
I got lots of slides.
Sameer Kanal
You got lots of slides.
Jamie Dunphy
All right, never mind.
Raymond C. Lee
Um, great.
Skyler Bruckner-Knapp
I'm—.
Jamie Dunphy
I thought I was ahead.
All right, never mind.
I'm taking myself out of the queue.
Dan Ryan
Councilor Novick.
Olivia Clark
Sorry.
Jamie Dunphy
Oh, thank you.
Steve Novick
Thank you, Mr. President.
I just have to say that one of my earliest victories as a lawyer involved justifying the rent the federal government charges itself for its own buildings.
So it might sound like a silly idea, but I'm very emotionally attached to that concept, and I will fight any attempt to get rid of it.
Jamie Dunphy
Thank you, Councilor Novick.
Here's the problem.
Um, seeing nobody else in the queue, we can move to the next part of our presentation.
Tracy Warren
All right, let's do it.
I'm going to invite, uh, Chief Engagement Officer Amanda Garcia-Snell up.
So now we're going to jump into the presentation related to core service realignment.
I will kick us off by quickly reviewing some project background, walk through budget proposal options for human resources, procurement, and technology.
And then I'll hand it over to Chief Engagement Officer Amanda Garcia-Snell, who will walk through initial options under consideration for engagement and equity.
And then we'll do an overview and next steps.
As you know, the realignment project was launched a little over a year ago with the goal of reorganizing our internal services to better align with our new form of government and live into the one-city model.
The leaders of these areas were directed to create a new centralized model, work to improve systems and delivery, and to create a proposal that would generate a 20% reduction within the service area across the enterprise.
Next slide.
These 7 core services equate to around 1,000 staff across the city, which is more than 10% Because of the more internal nature of the work, this service can often feel invisible, but are critical to the success of the organization.
I think of these services as the skeleton and nervous system of all the work the city performs.
Every part of the enterprise relies on these teams for everything from hiring an employee to contracting for services to managing the city's finances.
Fixing a laptop, issuing a press release, or engaging our community.
Next slide.
Our current structure was designed to support our old form of government.
Walking into this project, it was no surprise that the staffing within the central bureaus was not proportionate to the level of service needed by the organization.
Over the years, our internal services were often not factored into funding proposals for new programs and initiatives, despite being critical to the completion of the work.
As a result, our customer bureaus were left to figure out how to get their unmet needs met to ensure that they were able to deliver on mission-critical work for the city.
That resulted in them building their own teams within their bureaus to support their needs.
Amanda Garcia-Snell
Thank you.
Tracy Warren
Next slide, please.
The realignment process for each core service has been a little different, but they've all had some similar commonalities in the way that they approach the work.
They started with some initial subgroups and surveying of the people who lead the work, the people who are responsible for delivering the work, and the people who receive the outcomes of the services that are provided.
And they heard a lot of the similar things related to the services and a drive for demand.
We took that information and we started to plan what a new model might look like.
And how we might incorporate ourselves into the new form of government and create a one-city model replicated within our internal services.
We started to develop proposals.
We talked about those proposals with city leadership, with— in briefings with council, and with presentations to some of our bureau directors.
And now here we are.
We're at council talking about the next steps of the process and giving you all some options as we move into budget development for consideration.
Next slide.
What we learned.
It's complicated.
You're talking about moving around a large portion of our workforce, which requires a large amount of planning and thought to ensure that we are not breaking materially critical systems that people rely on to carry out their day-to-day jobs.
What that meant is that it took a little bit more time than I think was expected.
It also means that we've discovered areas within the core services that still need more time.
Or likely a reduced expectation around what's accomplishable.
One of those, an example, is budget and finance.
You will not see a proposal in here today related to budget and finance.
And the reason for that is because they've been incredibly busy with helping to support the budget development process.
And we need to make sure that they are able to deliver services during this critical time.
That does not mean that no work is happening related to the core realignment.
Yes.
It's just not ready to move forward in this forum yet.
I'm going to start with talking about human resources, but I want to give a little bit of a framework for how we're going to approach all of the slides today so that you know what to expect.
We're going to start with an overview of the structure for each of the services.
We're going to talk about impacts of a 20% reduction.
We're going to talk about the risks associated with a 20% reduction that we heard from folks, and then we're going to provide you with an alternative reduction plan that mitigates some of the risks but not all of the risks.
The goal is to keep us moving forward to a realigned stage while also helping to support the cost-saving measures thank you.
Elana Pirtle-Guiney
Thank you, Mayor.
I appreciate the opportunity to be here today and to share with council members the information that was requested of us.
Tracy Warren
Additionally, I'd like to make it clear that this presentation is very high level.
It does not get into the specifics of individual, individual positions or personnel.
We still have decisions that need to be made related to that, and once those decisions are made, we want to have the opportunity to talk directly with any persons who are impacted by those changes before broadcasting now I'll start on the Bureau of Human Resources.
Through this project, we identified approximately 190 staff who perform human resources work across the enterprise, and that we would have roughly a $6.4 million cut target to achieve a 20% reduction.
Councilmember Herbold.
Here is a future structure outline.
You will see this as a common theme throughout all of the different service functions that we have designed in a way that there is a core service function that is mostly driven by governance, compliance, and other activities that have citywide impact.
We are in fact pushing information out to embedded services in Teams.
The embedded services in Teams are designed to leverage bureau-specific expertise to meet service area needs in alignment with standards, practices, and processes.
The activities are housed here, require frequent collaboration with the customer.
And then lastly, we, we have in different areas, you'll see like a yellow bucket that slightly different between each of the different functions that house something that's unique to that central function.
One of the things that is common is that even though there are embedded services who will be close to the customers providing them support, they will have central reporting relationships and central accountability for the outcomes and the processes that they engage in.
Next slide, please.
What you see in front of you is the 20% reduction plan scenario.
This takes the total footprint from 190 staff today to 153.
That results in a net 37 FTE reduction.
When you see the core, that is referring to what is currently the central bureau providing that service.
City operations are people who are doing those services within the city operations service area, and then so on and so forth by the other service areas.
What you'll see as a note is that there's technically 63 cuts, but we are reclassing 26 of the positions in this proposal so that we can continue to utilize them in the new model.
Thank you.
But doing slightly different work and classified in a consistent way.
This reduction scenario would net a $6.4 million savings per year.
Risk to address.
So as we introduce the 20% reduction plan to city leadership DCAs, and bureau directors, they highlighted for us areas that they saw could be critical points of failure as we move forward in the process.
And so we spent a lot of time with them helping to understand ways in which we could mitigate that.
Were there things that we could do with training, with shifting where we took the cuts, with providing additional tools or support to help make sure that we're moving forward in a way that we could still deliver the services that folks depend on.
Next slide, please.
We took all of that feedback and we came up with a revised reduction plan that mitigated that risk.
Some of the key areas specific to human resources that were identified as risks was safety training for bureau-specific work that is performed.
In our 20% reduction plan, we were down to one trainer who would have to support all citywide trainings related to safety.
And we would also have a need to figure out a way to track all of that specialized safety training and certification.
In a system.
Our current learning management system is not able to track that information, and we are exploring ways that we might be able to improve that in the future.
But for now, we need to rely on the people who are doing that work to make sure that the folks are trained on the best safety protocols and also are able to track the information.
Additionally, we also received feedback related to timekeeping and payroll.
Yes.
Many of the positions are responsible for doing manual entry for folks who are in the field into the time system.
Part of, you know, part of the work that the Bureau of Human Resources has been doing is looking at ways that they could improve the timekeeping and payroll system.
But that takes an investment and more time to map that out and plan.
Thank you.
And in the interim, we need to have the people who are doing that work to ensure that we are able to pay people appropriately.
If we have errors in timekeeping and payroll, that increases costs, which is the opposite of what we are trying to achieve here.
So this reduced plan would go from 190 today to 164 FTE in the future.
It would be a 26% reduction, and you would see about a $4.4 million per year savings.
This gives a high-level view of the 14% reduction for workforce impacts.
This talks about managers currently to future.
You'll see that we will be going from 27 managers to 20 managers.
Creating a 1 to 8 span of control for the human resources function.
You will also note that there is a large portion of reductions with the City of Portland Professional Workers Group.
That is the largest representation for folks who do this work at the city.
And so because this is the largest group, that's where you're seeing the most reductions.
Next slide, please.
Now I'll talk about procurement.
Procurement follows a similar flow.
Procurement today shows 79 staff across the enterprise and a $2.7 million cut to reach 20%.
Next slide.
Thank you, Deputy City Attorney.
It's organized in a similar way.
One thing I would point out is that you'll notice grants listed as a bucket within procurement.
As part of the realignment process, we are looking to combine grants management with the procurement office.
They already work very closely together on a lot of items, and it makes sense to have them combined so that there's better flow and efficiency between those 2 groups.
Thank you.
Next slide, please.
This represents a 20% reduction plan scenario.
You'll see the staffing from 79 today to a future of 67.
That represents 12 FTE reductions with a $2.7 million savings per year.
One thing that I will note that I didn't note the first time around, but what you will see for human resources and procurement and then later on in engagement and equity is that most of these groups do not have funding sources outside of FTE.
So when you're talking about making reductions within those programs, it comes at personnel.
Next slide, please.
We heard a lot of concern about cuts to procurement.
In a 20% reduction, there would be impacts to support for capital project contracts and administration, which carries hefty liability from a cost and service delivery standpoint, most notably in our public works thank you.
So the City of Portland's capital projects are a large service area that makes up the majority of our capital project contracts.
They were concerned with continued delays and the ability for them to be able to move their capital projects through the contracting process quickly, which they felt would result in increased costs on the back end.
We did our best to mitigate some of that risk, but we're not able to fully mitigate that risk without next slide, please.
This 12% reduction plan is a reduced reduction plan that takes into consideration the risks that I just spoke about with Public Works and the capital projects contracting.
So this would take 6 FTE net reduction.
It would go from 79 today to 73 in the future, and it would allow for a $1.9 million per year savings.
One of the other things that it would allow for us to do is be able to phase in moving particular areas within the procurement space to ensure that we have the framework set and ready so that we don't delay services to our customers.
Next slide.
This shows the 12% reduction impacts.
You will have from 15 managers today to 12 managers in the future, which would give you a 1 to 6 span of control.
The majority of the cuts next slide.
Now we'll talk about technology services.
With approximately 470— 407 staff across the enterprise performing related work, what is unique about technology scenarios is that they have been able to approach this reduction exercise from both a technology perspective and a cost perspective.
Thank you.
Reduction in personnel as well as a reduction in non-personnel savings through efficiencies in the way that we utilize technology and our technology footprint.
Next slide, please.
One element of technology services org chart that I would flag for you is that they are keeping some of the groups within customer bureaus.
And spending more time to figure out and plan for movement of those groups.
And the reason why is because those folks are responsible for highly sensitive systems and programs, and moving them too quickly without making sure that we have a thoughtful plan in place could lead to system failures.
An example of that is SCADA, and I had to look this up.
What is SCADA?
But it's supervisory control and data acquisition.
And so what it does is it allows for folks to manage things like the water treatment plant from technology.
If we move people who are highly specialized in that area too quickly, there is a risk that there might be a failure in that system, and we don't want that, right?
So we want to take our time there and part of this plan is to ensure that we take a phased approach so that we can take our time and reduce any type of critical error.
Next slide.
The 20% reduction plan scenario for the Bureau of Technology Services goes from 407 staff today to 355 in the future.
You will see a large portion of those cuts being taken from public works.
Thank you.
This has been a common theme throughout the presentation.
I think it will continue to be a common theme.
The reason for that is that they do have the largest group, the Public Works service area does have the largest group of city employees.
They also have had the ability to build up their functions to help support where their unmet needs have been.
There's a 52 FTE net reduction.
Overall, with a 20% reduction plan, there would be $16.2 million savings.
53% Of that would be in personnel, and then 47% would be outside of personnel.
Next slide.
I'll talk a little bit about the risks that were identified, and then I'll talk to you a little bit more about the non-personnel reductions.
So this level of reduction would force technology services to limit its focus to maintenance, security, and critical systems with reduced capacity for advancing new technology to support the city in advancing its work.
We would anticipate more downtime for critical patches and upgrades and less capacity for documentation and cross-training.
Next slide.
Thank you.
This is a 17% reduction plan scenario.
This eliminates less personnel and also takes some of the cost savings that we were anticipating and allows— that is non-personnel— and allows us to space that out over more time.
It also allows us to make some reinvestments in technology that will help drive support for the other areas that are realigning, as well as support within technology that's happening within the bureaus.
So that would result in 45 FTE net, a $13.6 million per year savings, 47% coming from personnel and 53% coming from other.
Next slide, please.
Now we have an extremely wordy chart that gives you all the details.
I'm going to keep it high level to keep us moving so that you all have time to ask questions.
But this chart really outlines the different components of the technology non-personnel reductions that we were looking to achieve.
And then We highlighted low, medium, high, and very high risk areas.
We have already mitigated some of the areas of risk and have removed them from this chart, from the 20% reduction.
Some of those include taking our time with some of the technology rationalization projects, which is a project that is moving from, I believe, 6,000-ish applications and softwares that are managed by our technology services group and reducing them so that we are using more common applications and software and tools across the city so that we're not paying for a bunch of different things and we're not maintaining and helping to support a bunch of different things.
Additionally, I would draw your attention to the first item, which is low, and that's the savings from technology rationalization achieved today.
I'd like to call out that we have already achieved $2.7 million in this fiscal year related to that project.
So the team has been working diligently to make sure that they are trying to reach savings as quickly as possible within those areas.
Next slide, please.
This goes into a little bit more description related to the 17% reduction in the mitigation and reinvestment.
This really talks about adding back FTE that would be cut in the 20% reduction to help support the change efforts that will be needed across these different areas that we're looking to achieve savings.
It would increase information security.
It would provide for a citywide Microsoft product owner who would help us to transition to more Microsoft products and help folks be ready for that change.
And then we would also add someone who would be supporting citywide ServiceNow, which is a ticketing system.
And the goal would be to help us utilize that ticketing system more effectively across next slide.
This slide provides an overview of the workforce impacts, again showing a similar view.
It's going from 59 managers today to 45 in the future.
You would see a net reduction of 10 supervisors, with some of those positions being converted to non-represented or non-supervisory and represented by a union.
It would make the span of control for technology services 1 to 8, and it includes 26 vacancies.
Now I'm going to turn it over to Amanda Garcia-Snell to walk us through engagement and equity.
Amanda Garcia-Snell
Thanks.
So, uh, for the record, Amanda Garcia-Snell.
The engagement and equity realignments are under the same directive and are following similar processes as the previous alignments that were just mentioned.
But there are some distinct differences that have created very dynamic elements in the process, and I'll speak to some of those as I move through the slides.
So we believe that there are about 64 staff conducting engagement, community engagement across the organization today, costing about $9.3 million which would make the 20% cut target $1.8 million.
Next slide, please.
So one of the first— in the beginning, one of the first challenges we discovered is that there is no shared definition of community engagement.
And so we have that now.
And in the future state structure, when we say conduct community engagement, it would really be with this connection to pathways to participation that is laid out here in the core services the central team would be Civic Life, and that's where Civic Life would really morph into a strategic engagement team.
And then the embedded services would be staff that are still in the service area level, and in some instances in bureaus, to really focus on some of that subject matter expertise related to engagement in those areas.
As with the other alignments, they would still be incorporated into a larger organizational structure.
Next slide, please.
So in the 20% reduction plan scenario, we would likely— that would likely result in a net reduction of 10 FTE, bringing the total staff down to 54.
This distribution of staff across service areas, it really showcases where there are more existing vacancies as well as areas where we believe we can combine some functions.
And eliminate or minimize some— it would mean that we would have to eliminate some comprehensive practices.
One of the challenges, and I'll mention this in the risks as well, but we— because there is no community engagement job family, it was very challenging and time-consuming to determine who actually works in engagement across the city.
That was, of course, aggravated by the lack of a definition and common understanding of what that work does.
And let's see, just want to make sure that I'm capturing here.
Okay, next slide, please.
So some of those risks, um, in addition to this job family and just, um, wanting to really make sure that we have, uh, the full, uh, universe of engagement professionals and really, um, wanting to take the time to make sure we understand that additional, uh, risks of that 20% that really came around later as we had many of those conversations is that that would not allow for any capacity to have any employee engagement.
And as we continue to go through these ongoing transitions and change management needs, not having anyone to really support employee engagement has created a burden on other areas of staffing, in particular communications.
As they move to address that.
Additionally, the 20%, while we would still be able to maintain the legal and regulatory engagement requirements, it doesn't allow for the spaciousness to really look at comprehensive engagement, which impacts equitable engagement.
Next slide, please.
So this proposal of a 14% reduction plan would allow us to have that capacity for internal engagement, but more specifically, meet those minimum requirements as well as continue to grow and strengthen capacity across the organization to provide equitable engagement practices in a shared— with a shared definition and shared understanding of what that means.
Next slide, please.
So, oh, actually, could you go back one?
I forgot to mention one thing.
So the distribution, again, this is really based on vacancies.
We looked at vacancies first across the organization and then looked at places where we might be able to combine some services but still maintain those functions.
Okay, next slide.
So in this distribution, there are very— there are not very many supervisor or manager classifications in this larger universe of community engagement professionals across the organization.
They're primarily in the analyst and coordinator classification series.
And so we would really look at how to structure that so that we would at least have this 1 to 8 span of control.
Next slide, please.
So with equity, equity, similar challenges as I mentioned with engagement in terms of the delay and being able to really get to this full 20% realization.
Thank you.
Additionally, without the— with a vacant Chief Equity Officer, there's really no one to clearly lead and inform this work across the organization.
That's not to minimize the expertise of staff that participated in this process at different points, but that definitely did create some delays in how we look at this.
So we believe there to be 43 staff today, and that would mean the cut target is which costs about $5 million.
And so the cut target would be nearly $1 million.
Next slide.
So this structure is based on a few things, but most recently the city had hired a consultant to really help us determine capacity and core functions and really look at those core foundational services.
And so that's what's laid out here, and it would be similar to engagement, but the central team, of course, would be the Office of Equity and Human Rights.
And then again, there would be that structural organizational reporting structure that all leads up to that Chief Equity Officer.
Next slide.
So really, what I'm going to show today is not a 20% reduction scenario.
It's a 16% reduction scenario.
And that's just based on if we were to eliminate the existing vacancies across the engagement staff in the organization.
Although we could definitely provide that 20% scenario, it would require getting to further down the road in the active process that we have of conversations around what are those true impacts.
We believe that we could still meet the minimum requirements, but we would not be able to, to really advance equity in a comprehensive way, which has significant you know, concern to community.
And it really would perpetuate that generational lack of access that we see.
Next slide.
So just looking at the existing vacancies, which there are 7, this is the proposed organizational structure that could occur.
The 16% savings would be— would look at about $800,000.
Thank you.
And next slide.
And this would be the distribution and still looking at that 1 to 8 span of control.
And back to Tracy.
Tracy Warren
So I'll take us home with just 2 more slides and then we'll open it up for questions.
This gives a total impact of the lower reduction proposal.
So this equates to roughly 98 cuts in FTEs.
Some of those are vacant, some of those are filled, and roughly $23.7 million.
That does include a current savings for this fiscal year of $2.7 million, and then that does include a mix of funding types.
So that is not all a savings to the general fund.
Some of these are savings to other funds and rate-driven funds.
Next slide.
And then I will end us with ongoing risk and challenges.
This project is extremely large.
It involves a lot of people, a lot of moving parts, and it will continue to need a lot of dedicated time and support to move it forward.
Amanda Garcia-Snell
Thank you.
Tracy Warren
I've recently communicated with folks who are part of HR, IT, and procurement on a series of engagement and activities that we plan to engage in over the next several months leading up to decisions that will take place in June with council.
I appreciate your time today and being able to offer you an update related to the realignment project.
And happy to answer any questions.
Jamie Dunphy
Thank you all so much.
So colleagues, we were also originally scheduled to hear Public Works.
It is 4:15.
There's no chance we're going to hear that.
So rather than stopping us for a break, I'm going to have us get our council questions and we will end early today.
Councilor Vice President Clark.
Olivia Clark
Thank you, Council President, and thank you for this presentation.
I recognize how much Thank you, Mayor.
Jamie Dunphy
Councilor Loretta Smith.
Olivia Clark
Thank you, Mayor.
I appreciate how much work has gone into this.
I appreciate the individual briefing that I received.
I really thank you for providing the context for this, that the one-city model— I, I like that because we are in that transition, that culture change, and kind of unwinding 100 years of practice.
So, and we're trying to do it lickety-split.
So I appreciate that.
I do have a couple of concerns I want to express and questions.
Obviously, you know, Public Works is the largest service area and they're taking the brunt of this alignment.
And I want to ask you, they're not general fund.
And I wondered if— I know this is supposed to be phased, I'm worried that it's not phased enough.
I'm worried about the risks, particularly with capital projects and delivery on things.
That's of great concern to me.
Is there some way that these positions could be— I mean, they're in Public Works, they're not general fund funded.
So why are we taking such a hit there?
Tracy Warren
Yeah.
Well, so I think what I would share is that we are continuing to engage in conversations with Public Works Public Works around the risk associated with the cuts and talk through alternatives to making sure that they continue to be supported, including are there different ways for us to fund this work.
Olivia Clark
Okay, so this is a work in progress.
Tracy Warren
It is still a work in progress.
Olivia Clark
All right, I appreciate that.
I mean, you're over your target, your total target, so I see there's flexibility here.
But I'd be really interested in looking at more phases for Public Works.
I'm just, like I said, my primary concern is the delivery on capital projects, and, and we don't want to risk that.
That's my, that's my biggest worry here, and because they're not general fund funded as well.
So I just want to put that stake in the ground that I'm concerned about that.
I don't know if you want to make any comments.
No, I think that's a fair point.
Raymond C. Lee
I would just say briefly, a portion of Public Works is general fund.
We do have some park stuff that fits in there.
Parks.
Some of it goes to levy, as we'll have further conversations regarding PBOT and how some of those funds are used, as well as it relates to the general fund dollars to support these type of services.
But 100%, we're on the same page as you are as it relates to we don't want to sacrifice our responsiveness and our ability to produce We're trying to just meet a magic number for us as an organization.
We want to be an efficient, effective, and economical government, but we also want to be responsive and agile to the change, to the ever-changing environment that we're in as a government entity.
So that is at the forefront of our minds as we look through kind of these reductions, what makes sense and what does not make sense for this organization to move forward with.
'Cause we don't wanna cut something so drastically where it's so hard we can't ever recover from those type of cuts because there'll be other demands and other calls for services in the future.
So we just wanna make sure there's a happy balance there as it relates to the decisions that we're making now and still evaluate it as we go through these other budget years.
As we have more consolidation, we get more of a rhythm about how we function in this new form of government.
Mm-hmm.
That we can kind of look at those type of things to see where can we make additional efficiencies or effective cuts that impact our ability, one, to provide services to the public, but at a better cost to the public as well.
Olivia Clark
Well, I really appreciate that.
We're on the same wavelength.
I appreciate that.
But so I can assume that this core alignment presentation that you've made is really at this point somewhat theoretical, that it's— there's a lot more work to go on this, a little deeper dive, particularly in Public Works.
Amanda Garcia-Snell
Correct.
Raymond C. Lee
And some of the budget conversation is going to help dictate this as well too.
As we go further into some of the budget conversations and trying to make up our gap, some of this information that you see will be weighed into the decision-making process that will be producing the mayor's proposed budget.
And as council goes through its deliberations, some of this information may be called back into consideration as we go through those deliberation conversations to make sure that we're producing an overall budget that meets the needs of all Portlanders.
Olivia Clark
I appreciate that.
Let me just ask one little question here.
I should have asked this early on, but I didn't want to interrupt the flow.
Under each section you have core.
I wasn't sure what core means.
Tracy Warren
Yeah, what, what we did is we were— the core is the central function, so it is primarily focused on governance, compliance, best practice.
And so I'll use human resources as an example.
Currently, the Bureau of Human Resources provides the core service of HR in that it provides benefits, it does the compliance and support for recruitment and training, it does classification, compensation, pay equity, it does employee and labor relations.
So those functions would primarily stay the same.
I don't know that we've all the way figured out our terminology for the new model.
We were really trying to distinguish between great, I appreciate that.
Olivia Clark
Thank you so much.
I think that's the end of my questions.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Morillo.
Angelita Morillo
Thank you, Council President.
Um, thank you guys so much for this presentation.
Uh, I will say, of all of them, I think this one really made my stomach drop just looking at the numbers, and I think we all, uh, feel that way up here right now.
Um, I have a— an easy question to start with.
Um, do you know when council is going to be getting to see the various scenario cuts for different bureaus and if we're going to get to see them before the mayor's budget is put out and give feedback on that?
Raymond C. Lee
You know, that's a great question.
Let me put some thought to that to see kind of a timing mechanism if we could get that, if it's going to— especially if it's going to be incorporated with the mayor's proposed budget.
So let me follow back up with you, Council, as it relates to that particular question of a timing perspective, because I know We're on a tight schedule, but I would like to be able to get you some information if we are going that direction to help you have a better sense of what that means and impacts.
Angelita Morillo
Yeah, that would be really helpful just because then I think we can have more detailed conversations with the mayor during our one-on-ones on, on the budget proposal.
So appreciate that.
Tracy Warren
Most definitely.
Angelita Morillo
Regarding the core realignment work, there was a potential loss of 98 to 125 full-time employees.
And the service risks noted throughout the presentation, this feels a lot more like service reductions to me than a process to streamline efficiency.
So I'm kind of struggling to see the efficiency gains in this.
And I think originally last year we were— when these discussions started, we were told that this was an effort to maximize efficiency.
So can you help me understand what efficiencies you're anticipating in light of all of the risks that we saw outlined absolutely.
Tracy Warren
I think it's, you know, I think what has complicated the conversation is that when we originally started the project to realign, we were really focused on how do we realign our services to better conform to the new form of government, ensuring that we're able to provide services across the enterprise in a consistent and equitable manner.
Then we had some financial challenges which layered on top of it a reduction, which really required us to think really hard around what are the basic services that we could provide within each of these functional areas with a reduced footprint.
And so that is really what those 20% reductions represent.
There will be efficiencies along the way.
Angelita Morillo
Thank you.
Tracy Warren
But it will be— it won't be smooth, right?
Anytime you are moving a large portion of your organization to shift the way that they do business and deliver services, it's going to be a little bumpy, and you're going to have to have patience and work through those processes together as a unified group to go, How do we work together to make sure this is the best service possible?
But you'll see improvements like consistency with the way that we provide leave administration, reduced technology specialized systems, which means that technology over time will have more capacity to be able to support the folks who are using the same system, and they will have more expertise within those systems because they're not thank you.
When you talk about procurement, you will see efficiencies because you will have procurement rolling out standards and having control over the accountability and outcomes of the contracts that are happening within bureaus.
That also helps us at some point get to a place where we're able to provide you all with more consistent data and information because we will have access okay, thank you.
Angelita Morillo
That's really helpful and clarifying.
Did you want to add something?
Amanda Garcia-Snell
I was just going to speak a little bit to like a very concrete example in terms of engagement, and I think a lot of that is around coordination.
There isn't a tremendous amount of coordination between staff doing certain things in community, and so in some instances we are creating an unnecessary burden for community partners because multiple staff from multiple bureaus are developing relationships or have relationships, and we're not necessarily all talking to each other all the time.
And so to me, this is a real opportunity to coordinate around those things, not duplicate that, and then be able to grow and expand relationships, strengthen them in other— with other communities that we don't have relationships with now because we're so focused on connecting with the same partners.
Angelita Morillo
Thanks for clarifying that.
That helps me just get a clearer picture of what was intended there.
I also firmly believe that the people who are closest to the day-to-day work in the bureaus and all of that tend to know the efficiencies and the things that are needed a lot more than those of us who are higher up, high level.
We don't see all those day-to-day intricacies.
How have staff in each of those areas that are potentially going to be affected, how have they been engaged in this decision-making process to ensure that we don't have unintended consequences?
Olivia Clark
Absolutely.
Tracy Warren
You know, for HR, IT, and procurement, there was some initial engagement where we brought folks together who were doing the work or managing or leading the work into work groups and subgroups where they took particular tasks or processes within each of the functional areas, and they really dove into them and talked about what things were working and not working within those areas.
They used that information as part of the model that was developed for the future structure.
They took components of the frustrations and the areas that people wanted to see change and said, okay, let's use that information and create this model.
Now we're on the second, well, I guess maybe like the third phase of the project where We plan to start having more direct engagement with staff based on the new model that was developed in the reductions that have been planned.
There will be a series of monthly town halls related to the realignment overall.
There will also be opportunities for each of the functional areas to have independent conversations on a monthly basis to say, What are some areas we can work through as we're thinking about service level agreements that we can both mold our expectations from the delivery and the receiving customer?
And then we will also be doing a series of customer forums where we plan to get together with the customer leadership and bureaus and talk through where we're seeing challenges with the realignment and talk through the input that we're getting from staff related to the service level agreements and really work together as a unified leadership team to develop and continue to develop the best service model for our employees to work within.
Angelita Morillo
Thanks for that.
And I hope for folks who are watching, listening, they have learned of different new ways to engage thank you.
And hopefully will give us feedback on that moving forward as well.
Last question, because I know we're running out of time.
Using the engagement realignment that we've been discussing, how has that been tailored per each bureau's needs?
Because obviously engagement looks very different for public safety versus transportation, for example.
How has it been tailored to address some of those different needs?
Amanda Garcia-Snell
So, so far this has involved a lot of conversation with front-level staff as well as mid-level managers and then leadership to really try to understand and unpack as this was concurrent with trying to determine who was actually working in engagement.
And so as part of those conversations, we've been talking about, okay, what are those functions?
And that's how we developed the— that's what informed the structure slide is, and that information is really around appreciating that engagement is defined, and we now have this definition for engagement around pathways to participating in government decision-making.
And we have these ideas around these 3 points of that pathway.
Then we started talking about what does that look like for each service area and then bureaus within those to really develop, you know, some, put some I hate this— meat on the bones of a structure.
And now we're at the same point where we'll start going back out and saying, okay, here's what we— here's what we think this looks like, and tell us what you think.
Angelita Morillo
Okay, thank you.
That's very helpful.
Um, I, I think I'll leave it at that.
Appreciate you guys.
Olivia Clark
Thank you.
Jamie Dunphy
Thank you, Councilor Murillo.
Councilor Kanal.
Sameer Kanal
Thank you, Councilor—.
Jamie Dunphy
Council President.
Sameer Kanal
Uh, thanks everybody for being here.
Um, I had a couple I had a couple questions that related to the overarching part of this, and I wanted to start by thanking you.
The what we've learned slide is in strong alignment with what some of us said last year during the budget process, and I'm grateful for that acknowledgement.
And it takes a lot, and I want to make sure that we're helping resolve that because obviously we budgeted expecting these reductions, and now there's going to be some need to fix that.
Thank you.
Yes.
Is there an identification when there will be new money?
We talked about the reductions, but outside of those sort of collecting revenues on mostly Jonas's side, I haven't really seen the conversation around where the revenue increases— sorry, where the revenue increases would come from.
So I don't know if there's a I think there's a big picture answer there that is sort of overarching, but I wanted to maybe flag that for later.
I'm mostly deferential to the details of some of the things that you mentioned, DCA Warren.
I have a lot more questions on your side, Amanda, and part of it's not engagement but equity.
So on the engagement side, I imagine that there are several hundred other positions at the city that have at least a small part of their job be engagement also.
Yes.
Thank you.
And, you know, I've seen that in my work on the other side.
I think that the job family may be helpful for that, some sort of superimposed classification.
I'm sure you have that, and I'm imagining Tracy knows way more than I do, DCA Warren knows way more than I do about how to do that.
But I just wanted to flag that to help with that assessment in the future.
The definition of engagement is something that council has given direction thank you.
Thank you, Mayor.
So I wanted to take a second to mention that it's part of it.
It's in a lot of places, but it's even in the core values and it's in the description for collaboration.
And I just wanted to take a second to read this because I think it really helps center this conversation.
Intentional inclusion, practicing broad outreach and engaging the community to ensure diversity, approaching outreach inclusion from a culture-add growth rather than a culture-fit fixed mindset, create an environment for diverse perspectives, ensure that all voices have value, reach out to bring in with authenticity and kindness, center the voices and experiences of BIPOC staff and staff with disabilities.
Peer support and training is the second part that's more indirect.
The third one is commitment.
Our belief that we are better together promotes collaboration and the co-creation of knowledge.
The nexus of politics and public services connects our workforce and communities.
Civic engagement, receptive collective action empower our employees and residents.
Inclusive outreach and public engagement increase institutional knowledge and awareness.
All behaviors, actions, decisions, and systems reflect a culture of accountability and commitment to the city's core values.
Some of that is cyclical definitions, and I fully acknowledge that, but I think there's some really key principles that undergird that that you see in some other documents that are maybe more dispersed around the city.
And but there's one particular piece in there that I really wanted to highlight, and it's the word co-creation.
And if, if you boil it all down to that, That's when we're doing successful engagement, is when we are a part of it and the community is also a part of it.
So I just wanted to make sure that that was centered.
I don't want to see some redefinition because I, I've seen that already a little bit with the combination of the managers with communication.
Mm-hmm.
One of the really key weaknesses of the city's engagement, in my experience, is the connection of engagement with communication, which is one-way outward-facing.
And very important task, very important role, helps set up some of the engagement feedback loops and things like that, but is fundamentally different.
I just wanted to highlight that.
On the flip side, I also really wanted to appreciate your comment about employee engagement.
And I want to talk about that maybe in a different form of how we can do it, in particular creating a space for anonymous employee feedback.
I cannot tell you the number of times that different people who are employed at the city have raised a piece of feedback with the caveat of, you didn't hear it from me.
Or more specifically, raise a concern about something on a spectrum that starts much smaller and ends at retaliation.
So I really want to figure out a way that we can do that without Um, and create that space because there are things that the ground floor people know that we're not hearing, and I imagine that the, the leadership on the administrative side is not either.
Um, switching gears to equity, um, I'm really concerned that the presentation labels equity primarily as regulatory compliance, um, especially as the state and federal governments both backslide.
And in light of the mayor's executive order.
I also wanted to note we do actually have a leader in equity in the interim, and she's in the room.
We have an interim director of the Office of Equity and Human Rights, and I wanted to make sure that while we don't have someone, which will probably not be a very long time, that the staff in OEHR, whoever's left, and I know we've been decimating that bureau over and over again, but everybody that's still there is great, and I want to make sure that they're consulted too, all the way up to our interim director.
And I wanted to ask, how much money did the consultant cost that was asked what the core functions of equity were?
Amanda Garcia-Snell
I can get the exact figure, but I can tell you what the contract was approved up to.
I don't— we're still receiving invoice, so I don't have the exact figure of what's being spent, but it was up to $25,000.
Ruth Levine
Okay.
Sameer Kanal
Okay.
Thanks.
I think we tend to look for— and this has nothing to do with this contract, but in general— well, it might, I guess, but I don't know that for sure.
We tend to look for a new answer from a new contractor often.
And even if one is $25,000, I find that the overreliance on contractors is a big reason why we're in some of the financial situations we're dealing with.
I think it's a good thing that we're with today anyway.
So I wanted to make sure I highlighted that.
That's a smaller one than I expected.
I'm very glad to hear it's small.
But I'm really looking forward to having this role defined and for the new equity director role, but also to take the opportunity while I have the floor here to mention that if you had to combine managers of engagement with something else, I would've strongly preferred policy.
I know not everybody else has a policy development role like that, but that would've highlighted community, sorry, co-creation as that core function.
But in the absence of that, equity's probably the other closest thing to combine.
I would prefer to have its own vertical for each service area.
But if you, while we're in a budget crisis, if we need to combine, those two seem to make more sense.
Thank you.
To me together than associating engagement with outward one-way functions like communication.
Amanda Garcia-Snell
Thanks.
Jamie Dunphy
Thank you, Councilor Kanal.
Councilor Zimmerman.
Eric Zimmerman
Thanks.
You know, I think that, you know, in theory, this makes a lot of sense to me as you get ready to move us into that direction in terms of, you know, the idea of having 26 versions of how we do a thing is concerning.
And I think there's nuance, but then there's wholly different systems.
And so I think that this is getting to that.
I appreciated the pre-brief that we got.
You know, I guess one question really, either for Tracy or for Raymond, is, you know, we're seeing the numbers here and they're in the 12%, the 14%, the 17%.
I don't think anybody hit the 20%.
What I want to ask is, did anybody bring you what you asked for, which was a 20%?
And is this then the— now that you've dug into it, a back-off of like your recommendation, or was no one able to hit the mark with what the direction was?
Tracy Warren
Everyone brought me— so for human resources, IT, and procurement, everyone brought me 20%.
Okay.
And then we got a lot of feedback about the risk associated with the 20%, and we went back to the table to bring an alternate recommendation, and that's what the lower amount is.
Eric Zimmerman
Thank you.
That, um, that makes this a lot more, um, it gives me more faith in it that there's already been some of that that, uh, additional due diligence.
I'll put it in that category.
There have been— there's a couple areas.
I raised it in the pre-brief that I got, and I'll raise it again because there's a new section that was not part of the pre-brief, but, um, one who highlights the fact that their reductions include 26 vacancies, but a statement that was said today, we looked at vacancies first.
That is that is a red flag for me in a realignment of services because that looks like it was a realignment of where we didn't have to have personnel conversations.
And so it may be that 26 sitting vacancies are the right place, but when that statement is said and when— I mean, that's a large number to just like, that's our group out of, out of, um, You know, the other proposed reductions.
I really hope that this reduction is about what are the right services in each of these buckets that need to be delivered in your estimate in a reduced funding package, but how— what do we do and how do we do that?
That is hard to do if you start with what is not filled today.
Raymond C. Lee
I agree.
Amanda Garcia-Snell
It—.
Eric Zimmerman
And I have been through these, right?
I think that there may be times where we have conversations that certain things that are filled with a current city employee, we say that's, that's not in the package moving forward, but we have this vacancy over here in the same family of them, and that, that transfer over is part of the bumping and part of the looking.
So I just want to think about that because I— this was really programmed to us I think the mention was efficiencies, was about, you know, right-sizing different services for the rest of the city because the core function of the city was fairly muted in the old form of government and it really needs to be bolstered.
So that's bringing them from the bureaus into a centralized piece.
I would just— I give caution to the area where we led with the vacancies already, right?
And I think that you have done some due diligence, but the So those are the things that kind of flagged for me.
And then I always love working with Councilor Clark, but your comments that you've made about maybe being too aggressive in some of the non-general fund bureaus, I would offer another side of that, which is I really hope that the realignment, the core services affects and helps us get the whole city under the correct pyramid and the way we do services.
Amanda Garcia-Snell
Thank you.
Eric Zimmerman
I'd be worried if it was only general fund bureaus have to adhere to our central services model, right?
I think that even our enterprise funds and those who have others, you know, the way we do HR, the way we do procurement and IT, I actually like that we're applying it across the board, even if it's phased, but applying it across the board.
I think that's a good point.
So that the entire organization— one, I think that helps us be better because it sets a cultural tone.
So just a kind of a competing idea with Councilor Clark there, because I'd be— I wouldn't be supportive if the budget package this year only had this type of realignment in general fund-funded bureaus.
That wouldn't have my support.
Olivia Clark
Councilor Zimmerman, can I just say that I don't disagree with you.
I just think we need to go a little bit slower in Public Works when it comes to those big capital projects.
Eric Zimmerman
Yeah, you know, maybe in the procurement piece, but if we're talking about— if we look at what we're talking about here in terms of the types of services, I will also remind folks that the city had 2 years to do this, right?
The city reorganized itself even before we all took office, and largely this was not happening.
And largely in the first year of our time here, a lot of this was not happening.
And I think the ultimate time for this to have occurred would have been last July.
So we are catching up in that.
And then the last piece that I want to share, and I think, Tracy, you and I have had some chats about this, I do see this as a— it's going to be a very, very hard transition.
Yeah.
In the in the short term, and in the long term, I look at this as being a way where you know you are a professional of this of this brand of service, and you for some time you are reporting and providing that service to you know public works, and maybe that means parks for these few years, and then you look and you compete for an opportunity to do the same thing, or your boss thinks hey we need some help over because.
Because maybe PBOT needs your expertise.
That more well-roundedness is actually, for me, the markings of a really, really healthy organization because we have players who can be successful in multiple places.
And so I'm really looking forward to that.
I think you are setting this up.
I see where you're moving.
Thank you for the thorough presentation to the both of you.
None of this will be hard or easy decisions.
All of this is going to be hard.
So Thank you.
Jamie Dunphy
Thank you, Councilor Zimmerman.
Councilor Pirtle-Guiney.
Raymond C. Lee
One quick thing I'd like to share.
I think in the beginning of this process, this was a kind of a target-based process, uh, of hitting a certain mark.
And I think as we move forward, as you said, through your first priority-setting meeting this weekend, we're going to really start moving towards priority-based kind of decision-making, uh, as it relates to target-based decision-making.
And this is going to help us wrap our mind around these type of decisions that we're making and what is the strategy behind why we're making the decisions that we're making instead of just trying to hit a target.
But what are we ultimately trying to achieve as an organization?
And does this help us achieve that as an organization?
And that's where we're flipping the business model towards as an organization.
And that's going to cause us to be more intentional about the decisions that we're making, and it's more transparent to our employee base on why certain decisions are being made as an organization.
Jamie Dunphy
Thank you, sir.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
I feel like I've moved from a budget work session into something very different than a budget work session with this presentation, and I I'm noting that because I appreciated, Tracy, the way that you laid out at the beginning that this is about bringing our core services back into the center, that we had set out probably once upon a time to do that, and then those core services weren't invested in, so other bureaus started to duplicate services.
That's not Councilor Smith.
This is not the creation of anyone in this room, presumably.
It's certainly not the creation of anybody sitting behind you both wearing blue shirts.
But if we want to have a more unified Portland city government, if we want to be more predictable in how we do things both to our own employees and thank you.
And to the public, it's something we have to change.
And it is not lost on me that every single change, every single position we're talking about, is a person who is doing a job presumably very well to have gotten through our hiring process and made it through many rounds of slimming down our city government that we have already gone through.
And it's hard as we talk about this realignment and budget cuts at the same time, where I think we are starting to conflate 2 really important things.
How do we move services back to the core, and how do we figure out what our budget looks like moving forward?
I know it is hard for a lot of people as we conflate those 2 things.
I think that's a great point.
To believe that we up here, and probably some of the leaders on the administrative side, value the work.
And I just, I want to note that because we do value the work and we are trying to do 2 things at once here that are different but are coming to a head because of where we sit in this budget environment.
I think that's important to note.
Councilor Smith, To that end, I actually have a question, a budget question.
As one of my colleagues pointed out, only one of our core service areas is proposing a 20% reduction target, which is what had originally been proposed through this exercise.
Do the numbers that we have looked at around what CSL is, what the cost are for next year and what reductions are necessary given our current projections for revenue.
I guess I should say reductions or raised revenue are necessary.
Do those numbers include the 20% targets, or do they include the proposals that you have brought to us today that range between, I think, 15% and 20%?
I guess 12% and 20%.
Tracy Warren
So I think I understand what you're asking, but you may have to redirect me if I'm off.
So the realignment cuts are separate from the current service level gaps.
However, when we were realigning, we took into consideration the current service level gaps for the areas that are realigning.
And so it's not additive on top of it.
Elana Pirtle-Guiney
Opposite question.
Okay.
In the budget gap that we have seen, did that take into account seeing a 20% reduction in these core services, or did that take into account seeing between a 12% and 20% reduction as we're seeing here, or did that take into account some other number that is different from both of those?
Ruth Levine
Yeah, Ruth Levine, Budget Director.
Sorry to jump in.
I think the answer is 10%.
So the 10% reduction, you'll recall last year in the '25-'26 development process, the then City Administrator Jordan set out the 20% target but said we're going to aim for 10% in the first year.
That 10% was taken ongoing, which would have meant like adding another 10% target starting in '26-'27 to get to the total of 20.
We haven't— we've only assumed that first 10% so far in the current service level.
So the—.
Elana Pirtle-Guiney
Can—.
Ruth Levine
Yeah, so the second 10% sort of becomes irrelevant at this point.
Elana Pirtle-Guiney
So as we think about this as part of a budget conversation, Assuming that realignment actually leads to reductions and to reductions at the levels that you've presented today, and assuming that those phase in over the course of another year, we are— I'm going to use the word safe in terms of what we've built into the budget.
We're not going to have additional cuts that we need to take because we budgeted for 20% at the beginning of the year.
Ruth Levine
That's correct.
And remember, those numbers that were on the slides today are citywide numbers, so they work out a little bit differently at the— there's a lot of complex math we're trying to do at the fund level specific to where positions are moving and where those fund sources are coming from.
So I think at this level that's presented here, we would be pretty close to the 10% assumption in the general fund.
Dan Ryan
Okay.
Elana Pirtle-Guiney
Okay, thank you.
That's really helpful.
Um, I said this felt less like a budget presentation and more like a programmatic conversation, and so I do have 2 questions on that side also, um, or comments, I guess.
Um, the first is that one of my colleagues cautioned us against being, um, penny-wise and pound-foolish looking at the timekeeping thank you.
I also want to make sure that we are not being pennywise and pound foolish by cutting so low that we then need to contract for work that we could have had our employees doing.
I want us to be as efficient as possible, and I want us to be as efficient as possible using city employees who know our book of business and have been doing this work and are well paid.
And if we get to a point where you are saying in order to make these cuts, one of the risks is that we will have to contract for something to make up for it, I want to make sure that we know that before you make those cuts so that we can ask you to do something different.
Um, I also want to note we had a disagreement between 2 of my colleagues, or and if this is really about providing services in a more unified and effective way and not just about finding another place to cut budgets, then we need to be doing this across all of our service areas and all of our fund types.
But we also need to be moving to the core across all of our core service types.
And I noted as we were going through this that we have a lot of work to do.
Councilor Smith.
That in most of the core service areas, most of the cuts were in, um, in the other service areas, not in what you labeled as core.
But in one or two, and I think outreach was one of them, or engagement rather, was one of them, but I think there might have been another as well, proportionally there were very few cuts outside of core.
Okay.
Compared to cuts within core.
And that feels backwards to me if what we really want to do is say we have experts in these services who don't need to be experts in the program areas because they work with the program people.
Let's be moving everything toward the core.
Let's not make exceptions there if that's really what we're trying to do and this is more than just a budget exercise.
So I hope you keep those things in mind as we move forward.
Skyler Bruckner-Knapp
Thank you.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
I'm next.
I have one request and one question.
My question specifically is a very budget-related question with regard to IT.
There was a line item in there that said, and I'm sort of summarizing, that there were about $2.5 million in savings for reducing duplicative technologies and better contract negotiation.
But that it was labeled as high risk.
Could you tell me why that would be a high-risk thing to get rid of duplicative technology or contract negotiation?
Tracy Warren
I think I'll call it— oh, and there she is.
Hello, Council President.
Hello, councilors.
Thank you for the question.
Elise Rosenberg.
Skyler Bruckner-Knapp
I'm the Director of the Bureau of Technology Services.
Tracy Warren
So I think you're referring to the very words Spreadsheet slide.
And so you're correct that we basically made an estimate based on our experience what we could be doing to manage our technology portfolio differently.
So get rid of systems that create— that have duplicative functions.
Skyler Bruckner-Knapp
What we found as we've started working with Bureau partners is that many of these folks have developed very complicated workflows and integrations.
Tracy Warren
Right.
Skyler Bruckner-Knapp
Associated with some of those systems.
And so undoing that without breaking the workflow in the business is gonna take a little bit longer.
Tracy Warren
And so what we've done is backed off a little bit in the 17% scenario so that we can phase that in with some more time and take some more care for those things that have workflows across city bureaus or across systems so that we don't break them.
Angelita Morillo
Okay.
Dan Ryan
Okay.
Jamie Dunphy
That makes some sense to me.
The city historically moves pretty slowly on technology things broadly, and we've built, you know, some heavy systems around antiquated technology.
I hope we move with some urgency to modernize that.
But that makes some sense as to why it would be risky.
More broadly, my next question— just in the effort of being timely, I'll just be a little more broad.
I'm having a hard time tracking when there is a proposal, and maybe this is more broadly for all the presentations, but when we're saying that there are cuts, reclassifications, and vacancies, I'm having a hard time sort of following where the ball is.
Is there a way we could break that out a little bit more, especially if there are, not for the sake of just knowing, but if there are decision-making points where this body has to actually weigh in, can we break that out a little bit more granularly?
Olivia Clark
Absolutely.
Raymond C. Lee
Thank you.
Jamie Dunphy
That will be my only questions for now.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
Thank you so much for this presentation, and thanks for the previous preview that we got.
I will say that to me, this is an example of what to me is kind of a truism, which is that government is rarely as inefficient as we think.
And the old form of government led to some duplication, inefficiencies, et cetera, but it's not like it was so much It means there was $100 million lying around to be picked up, and I think people need to recognize that.
I also just want to take this opportunity to make some big sweeping requests of the city administrator and the mayor.
Administrator Lee, I just want to reiterate what I told you privately a few days ago, and following up on what Councilor Murillo asked about scenarios, the earlier you can get us a variety of different cut scenarios for the bureaus for us to start thinking about, the better.
And I think we're better off with multiple scenarios based on different assumptions and philosophies for each bureau than just like one cut package, because with any one cut package, a lot of people's reaction is going to be, that's a Washington Monument strategy.
And if you see several different versions, people are less likely to have that reaction.
And Mayor, I need to ask you, last year my experience with you was up until pretty much the day you issued your budget, every conversation I had about you with the budget you explained something you weren't going to cut.
At some point, I went to Michael Jordan and said, when is the man going to acknowledge he's actually going to cut some things?
So I'm asking you, at least privately and also publicly, to start laying out the actual cuts you're thinking about early so that we can have, you know, thoughtful, rational responses to them rather than knee-jerk responses when you issue your actual budget.
Jonas Biery
Yeah, happy to do that.
Sameer Kanal
And you and I are going to be meeting in my office on a frequent basis, and I'll be sharing those challenges.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Kanal, take us home.
Sameer Kanal
Yeah, that last piece is really interesting, and I think, not to put Administrator Lee on the spot, but that's one of the reasons why I was really hoping to have some of those cuts not necessarily laid out as formal or final, but the way that it was floated last February was actually very helpful, I think.
For putting some things into the, into the ether and helping, uh, get some feedback on it earlier.
Um, I wanted to start by, uh, saying I, I agree with Councilor Zimmerman's note about vacancies not necessarily aligning with where the, the highest or lowest priority needs are.
I also appreciate Councilor Pirtle-Guiney's point about the filled positions and, and the part about combining, uh, realignment and budget cuts.
And I, I wanted to, uh, note that my experience with realignment was very different, and it was also during a different period of time in terms of the city's overall budget situation.
And I know our city budget office knows about this quite a bit because she's part of it.
But when we, when we realigned into what is now the public safety service area, the— there, it was attrition-based.
We were moving people together, and separately we were looking at budget cycles, and there wasn't a need to cut overall around the city, but it helped with a difficult change management process.
And it aligned as well with some of the concepts that Councilor Pirtle-Guiney brought up with relation to how backwards it feels to be cutting the core part when we're talking about aligning.
And I mean, it doesn't sound like you're moving into the— moving positions into the core and then eliminating them in these scenarios.
It sounds like they're actually positions that are already in the core.
Tracy Warren
So just just for clarity, the structure is to identify that there will be teams embedded and that there will be teams that are within what we've called the core bureau.
But it's just— it's basically the bureau that is providing.
Some of the work is to bring people who are currently doing work in bureaus into the core to continue to deliver services.
Some is to have them embedded, but all will report centrally and be a part of one team within those different bureaus.
Sameer Kanal
Yeah, I guess what I'm trying to say, when we have public safety present here, especially to anybody on the Enterprise Services side, those are all now DCA's office employees, but they are under Enterprise Services.
They all used to be in police or fire or BOEC or PBEM.
And as those changes happen, I mean, there's people who've been in one of those bureaus since before 2000, the year starting in 1.
And there was a, I think, a positive impact on change management, which was still difficult and imperfect, associated with really separating out the function of doing the budget conversation and the realignment.
So I just wanted to flag that.
The other piece that I wanted to bring up, Is there's a slide in here about internal engagement.
It's a 5-step process of what you've been going on, and I think the last step is us right now having this conversation.
It's slide 6.
Skyler Bruckner-Knapp
I know what you're talking about.
Sameer Kanal
Data and analysis, strategic planning, internal engagement, proposal, and council.
And we're obviously number 5.
Can you, I think it would be fair to assume based on who's in the room, but I'm going to guess that— actually, I'm not going to guess.
I'm just going to ask.
What was the nature of the internal engagement?
Did it include the particular labor partners?
Did it include the particular managers?
How did that work?
Tracy Warren
Yeah.
So there was some early-on engagement before we got to the data and analysis phase.
That was where we first started introducing the project.
And basically what it included was work groups and subgroups for HR, IT, procurement.
I'm not sure, I think budget and finance was on a little bit of a separate track.
And what they did is they had folks come together as representatives of that work.
So not every single person who does that work was included, but there was representatives of the work.
Based on the functional tasks that they were considering.
They got together, they worked through a series of workgroup conversations.
That information was taken into consideration as the design was developed.
There was a lot of data analysis.
The design was developed with that.
Now we're getting to, okay, now that we know what it looks like and we actually have something that we can share with employees to get their feedback related to what service level agreements might look like and how we might organize this work into the new model, we're going to start engaging more.
But really, there wasn't a lot in between those initial work groups and getting here that had direct employee feedback who's doing the work.
Jamie Dunphy
And I'm sorry, we are at 5:01 and we are about to lose We're going to recess the quorum because, uh, councilors need to catch a bus.
So we can follow up with additional questions.
Sameer Kanal
Um, council is co-creation.
Amanda Garcia-Snell
Thanks.
Jamie Dunphy
Thank you.
Thank you, colleagues.
We are at time.
We are adjourned.
Thank you everybody for being here today.