Portland City Council Spring TAO Work Session 04/01/26

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 8:23 - 8:40
8:23Welcome back.
8:23We are now calling to order the work session for the afternoon of April 1st.
8:31Welcome back to the, to the dais.
8:32It feels like you all have a full-time job sitting in front of us.
8:36Um, CFO Jonas Biery, Budget Director Ruth Levine, please take it away.
Jonas Biery 8:41 - 14:26
8:41Great, thank you, Council President.
8:44Thank you, Council President.
8:45I will start to kick us off and just note the laptop is choosing right now to restart, so we're gonna get the presentation pulled up one way or another, but I'll go ahead and start teeing up so we can make good use of our time here.
8:57So just quickly wanted to talk a little bit about expectations for today's update and today's conversation about the Spring TAO.
9:04I'll start with a quick reminder of where we're at from a timeline perspective and from a revenue forecast perspective.
9:11And then second kind of piece is we presented info at a work session on March 5th about the proposed solutions for the current fiscal year general fund gap that we are solving for in the spring TAO.
9:25So Ruth will review updates to the current numbers as filed in the technical adjustment ordinance or TAO for council consideration on April 8th.
9:35And then the spring TAO also includes a number of true-up changes to remain in technical balance at year end.
9:41So Ruth will discuss thank you, Councilor Smith.
9:42Thank you, Mayor.
9:42I'm going to describe those and highlight a few other key items that are included in the ordinance as filed.
9:48The full packet of information, including the presentation that we're working on getting up for you, the ordinance itself, and other supporting materials, those were all sent to council inboxes yesterday afternoon.
10:00Recognize that this doesn't allow as much time for review in advance as we would typically prefer.
10:05Appreciate your patience and understanding as numbers were literally still being finalized and worked out right up through yesterday, and that information was provided as soon it became available to us and ergo to you.
10:19There's a lot of technical detail in that full packet.
10:22We certainly don't anticipate that anyone will have read it thoroughly, but never fear, Ruth is going to frame the key content that we think is of greatest relevance and interest here today.
10:34And then lastly, we'll have plenty of space.
10:36We probably only take 20 minutes or so to go through the material, maybe 30 max, And then we can attempt to answer any questions that you have today, help prepare and support for council action next week.
10:46If there's anything we're not able to answer today, we'll come back either next week or in the meantime with follow-up.
10:54And it looks like the presentation's up.
10:56If we can skip forward a couple of slides, please.
11:00Yeah, so agenda.
11:01Yep, perfect.
11:02Thank you.
11:03So just wanted to quick, very quickly, we showed you a slide like this previously, reviewed the summary of prior actions and conversations about the current fiscal year that have led led us to here.
11:13We had the March 5th work session.
11:15We've now added another box to show that we are here today to continue that conversation and have a little more refined detail around what will be in the actual technical adjustment ordinance next week.
11:30Next slide, please.
11:32Very quickly, I think you saw a slide, maybe the same slide or very similar to the prior presentation.
11:40We do have a more robust conversation about the forecast at next week's work session on, which is more related to '26-'27.
11:50But we did wanna highlight the forecast related to '25-'26, current fiscal year.
11:56Previously previewed, we anticipated a revenue shortfall of $17.1 million shortfall relative to prior expectations.
12:04That number was in fact confirmed in the formal interim general fund forecast that was updated last week, published and distributed on March 24th.
12:13As previously previewed, the key takeaways here are business license taxes came in aligned with expectations for the year, and utility license fee revenues were lower than expected due to a milder than expected winter that resulted in reduced energy usage.
12:30Those are kind of the couple of big takeaways.
12:32Next slide.
12:34And again, we'll have more conversation about this, the forecast broadly next week, but relevant to this year, to '25-'26, the fiscal year we're currently in.
12:45This slide sort of zooms in a little bit on the various slices of general fund revenue.
12:50And I'll draw your attention to kind of the 2 highlighted boxes.
12:54The kind of middle highlighted box is the current forecast.
12:59So as of the March 24th updated forecast document, that's where we believe we are today.
13:06And that's the revenues that we're working from.
13:09And then the right-hand box is sort of the comparison of this March forecast relative to the prior forecast, which was kind of April last year, where the kind of starting point for looking at '25-'26.
13:22You can see the change within each of those line item revenue items and the net result at the bottom being that $17.1 million delta.
13:33I will note that the downward revenue that we're experiencing is not unique to the City of Portland.
13:40Many of the same factors that are driving these declines are occurring elsewhere.
13:46Certainly in the region and in some cases other places in the country.
13:50And while that's not exactly comforting information, I think it is important to acknowledge that many of the underlying factors driving these revenue declines are indicative of broader economic realities and not things that are necessarily specific directly to city actions.
14:05So that's just a quick snapshot reminder.
14:08We have Peter Holzman in the room, city economist Peter Holzman, but a reminder that we do have a full full work session, I anticipate.
14:15Well, another work session, a big portion of which we'll be talking about the forecast next week.
14:19With that, I'll hand to Ruth to talk about, I think, what the key information is today, which is what's actually in the spring TAO that'll be before you next week.
Ruth Levine 14:28 - 16:04
14:28Great, thank you.
14:29And for the record, Ruth Levine, Budget Director.
14:31And you can go to the next slide and then one more after that.
14:40So these next few slides should look somewhat familiar based on what we presented to you back in March, but we're going to highlight where there are some differences and then, and also give you the overall picture of what is going to be in the spring TAO.
14:59Just so everyone's clear, we've filed documents for the spring TAO.
15:05They're in eCouncil.
15:07They should appear because it's going to be heard next Wednesday the 8th.
15:13So changes from this will come as amendments.
15:18So the first line, the $17.1 million Jonas just spoke to, and that is aligned with what we presented to you back in March.
15:26The next line is, it's revenue that we already recognized in the fall TAO but is only now reflected in the March forecast, and so that shows up as a negative.
15:40And then the third line is the general fund overspending without compensation set aside.
15:48So it's just the projected general fund expenditures less the revised budget as of the fall, and that does not include compensation set aside, although I will talk on the next slide about the remaining compensation set aside contingency that we're using.
16:04Thank you.
16:05So when you add those together, we're at $21.9 million in terms of gap we have to solve.
16:12That looks a little bit different than the number we showed you back in the beginning of March.
16:19It's actually not as different, and the reason is we've pulled out some of the— we've shown the general fund overspending without the general fund underspending, and that's on the next slide.
16:32Thank you.
16:32So I'll show that to you in a second here.
16:38And just as a reminder, quickly on the right, again, this is unchanged, but some of the drivers of that overspending are not showing and not having compensation set aside in the budgets.
16:49And then also the 10% placeholder for the enterprise efficiencies, the core services realignment reductions.
16:57Thank you.
16:59Okay, you can go to the next slide.
17:04All right, and so here's a little bit more detail on how we're proposing to close the gap.
17:13So this slide and the next slide compare what's in the spring TAO as filed to what we showed you back at the beginning of March, and I'll just kind of go through it.
17:25We projected or we expected we might take about $2 million of the $3 million total unrestricted general fund contingency.
17:33We're proposing now to take $2.5 million of that.
17:39The council operations underspending amount of $800,000 is unchanged.
17:46That's just council operations.
17:50The remaining compensation set-aside contingency is unchanged.
17:54Councilor Smith.
17:55Still $3.3 million.
17:57That was just of the total amount of about $17 million that was there in the fall.
18:02The $3.3 is what was remaining after that.
18:04So we're using that to kind of offset the $3.6 of projected overspending, if that makes sense.
18:15The technology replacement reserve excess amount was a little bit higher than what we originally thought.
18:22It was going to be.
18:24It's now $2.3 million.
18:26The Bancroft Bond Fund available amount is $2 million, and that's unchanged since March.
18:34And then the PPB asset forfeiture being used for event overtime is also unchanged since March at $1.4 million.
18:45You can go to the next slide.
18:49This continues on the same as the previous slide.
18:54The Housing Investment Fund, there's the bucket in short-term rental that comes from transient lodging taxes, which is unrestricted except for by resolution by prior council.
19:08There's, oops, that should say $8.6, not $11, apologies.
19:14$8.6 million available in that fund and—.
Loretta Smith 19:17 - 19:17
19:17$8.6 million.
19:18We're proposing to use $4.3 million.
19:20That is up slightly.
19:22It's actually $4.25 million.
19:24That is up slightly from what we presented back in March.
19:30The next line is council underspending.
19:33This was based on that prior work session that we had.
19:37Staff returned and had conversations with offices that were interested in returning underspending.
19:44Thank you.
19:45And this reflects only those offices that are interested in returning underspending.
19:49It totals to $495,000.
19:55We had discussed using the citywide obligations reserve fund, the Portland Harbor Reserve.
20:01There's about $7 million in there that is discretionary in that reserve.
20:06We're not drawing— we're not proposing to draw that in the spring TAO as filed.
20:10Okay.
20:11Yes.
20:11Because we didn't need it.
20:14And then the bureau general fund returns and some sort of targeted reductions to encumbrances, which we can talk more about, total $4.8 million, which is an increase of $3 million over what we presented back in March.
20:35That's mostly due to the I unnetted a number so that it was clear what was happening.
20:42I, yeah.
20:45So the next slide, you can go to the next slide please, puts all of that together and just shows you at the top is the projected balance of negative $21.9 million, and then it goes through each of the different buckets in the spring TAO as filed that are the different types of sort of gap-closing strategies.
21:08So the first line there, that's returns from bureaus.
21:14That can be thought of more as kind of natural underspending.
21:19I say that with a small asterisk because it also reflects like hiring freeze and other kind of reductions to expenditures.
21:27So it's not sort of business as usual, but it's not making any additional reductions beyond that.
21:33Okay.
21:34The next line is the encumbrance reductions that would be kind of proactively reducing encumbrances by $800,000.
21:44And then the next 2 I spoke to on the previous slide and the others I've just kind of bucketed as contingency and reserve draws or other resource shifts from other funds.
22:06Councilor Green.
Mitch Green 22:08 - 22:13
22:08Thank you, Mr. President.
22:09Thank you, Ruth, for the presentation.
22:11Can you go back to slide 7, please?
22:23One more back.
22:24It's just— it's the— I've got the PDF version.
22:27It's the 7 pages.
22:27It's the, uh, projected overspend.
22:30Yeah, that.
22:31Thank you.
22:31That one.
22:32Okay, so help me understand this a little bit because I'm trying to kind of follow along with the bullet point narratives on the side.
22:40So this is projected overspend.
22:45So this is—.
22:46That's right.
22:46We haven't— we're not like deficit spending right now.
22:49Correct.
22:50We're saying that if we don't change our budget yes.
22:53Then we will be overspending our authority.
22:55Correct.
22:56Okay.
22:57That's right.
22:58And so then I understand the compensation set-aside driver because I talked about that last fall.
23:03So that's— I don't need to understand that anymore.
23:06Um, but I do need to understand, so what is, what is, what is 10% placeholder reduction enterprise efficiencies and offset?
23:15Does that say that So an enterprise efficiency would be a savings, but is it driving the deficit because we didn't realize the savings?
Keith Wilson 23:25 - 23:26
23:25Correct.
23:26Yeah, in the current year.
23:27So this is where we put in a 10% placeholder assumption with the expectation of making those reductions in the fall, Tao.
23:38And we only made the reductions for communications.
23:40We didn't—.
23:41We haven't yet made them for the other functions because It's taken longer to get those decisions in line than was expected.
23:47And so for the current year, that just becomes a liability.
Raymond C. Lee 23:51 - 23:52
23:51Yeah.
23:52Okay.
23:52Thank you.
23:53Thanks for clarifying that.
23:54And then offset by vacancy savings, does that bullet suggest that the projected overspend would be larger if not for the offsets, or is the offset contributing to the deficit?
24:08I don't really understand that piece.
24:09It's working the It's saving us money.
24:12It's working the way you would expect.
24:13So the vacancy savings is basically, yeah, if we didn't— if we hadn't done the vacancy freeze, we would presumably be spending more on personnel, and that would drive the overspending higher.
24:29I mostly put that bullet point on there to show, like, we've included it already.
24:33It's not a separate item somewhere else.
24:35Okay.
24:36Okay, that's helpful.
24:37And so these are deltas relative to some previous forecast or some previous budget, and that's the fall TAO, right?
Angelita Morillo 24:44 - 24:45
24:44That—.
24:45For that 3rd line, yes, it is the fall TAO.
24:47It's a little confusing because we don't typically update our revenue in the fall.
24:52Yeah.
24:52And so the expenditures were updated in the fall per all the decisions made by council in the fall.
24:58The revenue has not been changed since we adopted the budget last spring.
25:05And so that's where it gets a little confusing.
25:07Okay, so there were certain vacancy savings that we didn't like pre-code or pre-assume in the fall TAO that we're realizing now that then mitigates that, that negative $21.9 would be a larger number.
25:20It'd be about $25 million if not for—.
25:23Yes, that's right.
25:24All right, I had just very specific technical questions, so thanks for now.
25:30Yeah.
25:30Thank you, Councilor Green.
25:31Councilor Ryan.
Dan Ryan, Sameer Kanal 25:32 - 25:40
25:32Thank you so much, Council President.
25:34I just have a quick question.
25:35I was kind of surprised to see the council underspending is only 0.5%.
25:40Is that correct?
25:42Yeah.
25:42Have you heard from every office?
25:45I don't know.
25:49I wasn't in those conversations directly, so we'd have to get back to you on, you know, who they spoke with.
25:56Yeah, my understanding, Councilor, is that Biz Ops, the person in Biz Ops who was works with your offices on your council budgets reached out to each individual council office and had that discussion directly with each council office.
Anthony Locke 26:09 - 26:09
26:09Okay.
26:09My chief of staff is out, so I can't verify the number, but I think our office is most of that.
26:14So I'm just kind of surprised.
26:15I thought that'd be a higher number.
26:19And I, you know, that's in line with— I was somebody that thought we were spending too much money in each council office when we—.
Sameer Kanal 26:25 - 26:26
26:25Way back when.
26:27So anyway, I'm just kind of surprised at that number being so low.
26:30Thanks.
26:31Thank you, Councilor Ryan.
26:32Councilor Pirtle-Guiney.
Elana Pirtle-Guiney 26:34 - 27:21
26:37Can we go forward one slide?
26:41I just want to make sure that I'm looking at these new numbers correctly.
26:48So the original proposal on this first-line unrestricted contingency was to take $2 of the $3 million.
26:55And you had a note when we first talked about this that there was a recommendation to leave $1 million.
27:00There's now a recommendation to take $2.5 million of the $3 million.
27:04Is that because your assessment of what we need to keep available for the OEO if needed has decreased, or is that because we are in such hard times that you feel like we need to move past your original recommendation because there just aren't other options?
27:22Yeah, good question, Councilor.
27:24I think it's a little bit of both, frankly.
27:27I mean, I think maybe as we're getting a little clearer vision on what the risks might be for the remainder of the fiscal year, you know, increasingly more comfort that we're able to, you know, manage that with a lower amount of contingency and recognizing the options that were available to solve, that that was a trade-off worth making at that additional $500,000 amount.
27:47Thank you.
27:49Okay.
27:50And then on the next page, can you just give us a little bit more detail about the additional $3 million in the last line there?
27:59Yeah, sorry, this was a little confusing.
28:02It sounded like there were a lot of different things there, and I just wanna make sure that we're hearing on the record what that, those targeted reductions.
28:12Yes.
28:13How we got the targeted reductions up.
28:16Pretty significantly.
28:17Yeah, so it's really the— sorry, if you go forward one slide.
28:23So really it's $4 million of that $4.8 is the general fund returns.
28:29I had previously netted the overspending with that number, so it— the overspending looked smaller in March, but really— but then now I've separated them out to try to make it a little clearer what's going on.
28:44So that number has not changed very much, that $4 million figure of the, like, returns.
28:50And then the $800,000 that's below it is new.
28:53So the $1.8 to $4.8 is not really that we found $3 million additional in targeted reductions.
28:59It's that we're accounting for it differently.
29:01Correct.
29:01The $800,000 is the additional in targeted reductions, and we can speak more to what those are.
29:07They're mostly in the public safety service area.
29:10But okay, great.
29:12Thank you for that clarification.
29:13And thank you also for zeroing out the transfer from the CORF.
29:19That was something that I was really going to struggle to vote for, and I appreciate that you've brought us a proposal that doesn't require it.
29:27Thank you, Councilor Pirtle-Guiney.
29:33Thank you for putting this together.
29:36I just wanted to go back um, to the question that was asked if you all had talked to council about our budgets, um, I sent, um, CBO Director Ruth Levine, uh, Benjamin Smith, Jonas Biery, and Councilor Smith.
30:06I sent City Budget Office Chief Financial Officer Jonas Biery an email, and I sent it to the budget team, and I said, please take my office budget out of your projection to fill the gap to pay for '25-'26.
30:23We will be spending our budget.
30:27You should assume that we will spend all of our budget.
30:32And I suggested that you investigate the materials and services budget in the city administrator's budget to fill the gaps.
30:44And I didn't get a response, but just for the record, you all's office do not have any control over legislative budgets.
30:56That's correct.
30:58Only the executive and the city administrator and those bureaus.
31:02So you should never, ever, ever put our budgets as a part of your way to fill a gap.
31:09Secondly, you need to go line by line and tell me which bureaus are overspending, and you need to go send them a note via the city administrator and say to them, you are out of money.
31:24Thank you.
31:25You cannot spend anymore.
31:27To bring this forward to us in this kind of manner is irresponsible and disrespectful, and it is a relentless pursuit into always telling us that we are in a gap when we're not.
31:41There's lots of money that was rolled over from last year that we were not even told what the exact budget numbers were.
31:51And I suggest that you go back and do that instead of always giving us a blanket, oh, we're in trouble, we're in trouble.
31:58You did that at the last TAO.
32:00And yes, I am so irritated, irritated with this TAO, irritated that we were not given the final number.
32:07You play games with the numbers because you think you can make it back up by the time we get new numbers and tell us we didn't take enough property taxes or we didn't take enough BLT, which is not true.
32:18And I'm getting sick and tired of it.
32:20Go tell those bureaus to stop spending.
32:23Don't come back to me and give me a towel and say I got to pay $32 million, $21 million, and don't desegregate where, where the overspending is coming from.
32:32Because it's irritating to us to look at this.
32:36And make sure that you keep our budgets out of your balancing act, because this is not fair and it's not right.
Cherity Montez 32:43 - 32:43
32:43Thank you.
32:46Thank you, Councilor Smith.
32:47Councilor Kanal.
32:52Thanks for the, uh, the presentation, the information here.
32:55I, um, I want to start by following up on a question that, uh, Councilor Pirtle-Guiney asked in the preceding slide about the $2.5 million out of general fund contingency when previously, uh, the idea was to leave a million in there.
33:10And my question effectively is CFO Biery, you mentioned trade-offs, and I understand that.
33:16Why is it less risky to take an additional half million beyond what was originally the, the max you wanted to take?
33:23Why is that less risky than taking even a single dollar out of the Harbor Fund, the CORF?
33:30Um, Councilor, I think, think it's a different level of risk.
33:34It's the same level of risk that would drive that decision.
33:37The, the delta is that— or the difference in those 2 buckets is that the CORF Ultimately, we'd have to find a way to refill that at some point down the road.
33:46General fund contingency, we do too, but it's already embedded in the forecast.
33:51So the difference is just that the general fund contingency is sort of naturally flowing through the forecast, whereas the CORF is a separate bucket that we would have to come back and have a separate conversation about how do we put that $500,000 back in to make that fund whole.
34:11Okay.
34:12I am disappointed to not see anything coming out of that fund, especially given that we are disinvesting in democracy through taking money out of council budgets in this.
34:23Democracy requires investment.
34:24And I understand that there's optional returns here, but I— and but there's also the operations piece.
34:32So I'd prefer to see that money instead of taking money out of council budgets.
34:34Councilor be kept in the council and council operations budget and instead taken from the Harbor Fund personally?
34:41But my broader question is, if we don't, is the expectation that that's going to get zeroed out in the, in next year's budget?
34:49Will this $7 million be used for other gaps in next year's, next fiscal year's budget?
Raymond C. Lee 34:59 - 35:04
34:59That hasn't been determined yet.
35:01We're still going through that analysis now of what the mayor's proposed budget will be.
35:06Okay, so there's no assumption built in as of right now that that money is going to be used for something else?
35:13As of right now, the penciling in is that it'll remain $7 million, or I mean, it's actually more in there, but, but the— that this $7 million will remain as of this moment?
Raymond C. Lee 35:23 - 35:35
35:23It's hard for me to answer that right now because we still have a gap.
35:26So as we were looking at trade-offs of what the budget would be moving forward from the mayor, it could be but we haven't finalized that yet.
35:36Okay, I guess maybe instead of framing this as a question that I don't want to make it difficult for you all to answer.
35:42By the way, I'm very appreciative that you are here, Mayor, as well.
35:46I think that it's— I'm a little concerned that we might be protecting this money for a different usage that is also non-harbor related by not taking it out here.
36:00And instead taking money out of things that might be harder to take money out of in the full budget, including not only council offices, but I think some of the money in the contingency funds, some of that sort of conversation.
36:17So just wanting to flag that, but in particular the housing dollars, because if we were able to take money from the $7 million in the Harbor Fund today, we might be able to not take $4.3 million out of the currently unbudgeted housing money and use that, or at least a lesser amount of it, and use the delta there to pay to keep people in their homes.
36:44Does that make sense?
36:45There's a supplantation thing for all dollars in some sense.
36:48So I understand that there's—.
36:49Yeah.
36:52Technically speaking, this is kind of everywhere, but, but in the context of this, hypothetically, if instead of being $4.3 million in the Housing Investment Fund short-term rental, the 060, the first line of the next slide here, if that was still $4 million and instead of being zero out of the Harbor Fund, it was $0.3 million, and that would, when we get to the housing dollars conversation, mean that there's $300,000 remaining there to do debt buydowns or whatever else may be in that conversation.
37:18So that's kind of my concern here.
37:19Okay.
37:20Especially if the $7 million is just gonna get zeroed out anyway in the full budget.
37:23So it's a little hard because no matter what, one of these decisions has to happen first and there are 3 of them, right?
37:29Or 2.5 depending on how the housing conversation gets combined.
37:32But I just wanted to daylight that concern to kind of get us started here.
37:40Can I ask a clarification around the $3.6 and $3.3 for the—.
37:47Yes.
37:49The overspending without compensation set aside is the $3.6 million, and then the $3.3 million is the remaining compensation set aside available to draw.
37:56You said those are not— are those the comparable numbers?
38:02Like, so we left $3.3 million in it after the fall TAO?
38:06Correct.
38:06What is the need as of this moment for compensation set aside?
38:12And I imagine most, if not all, of that is fire and police.
38:15Lease overtime, right?
38:16Yeah, I mean, you can think about it as $3.6 million being the need.
38:20Okay, so, and that, that is less than I, uh, think that we had projected.
38:25Is that because we already paid for some of it somewhere else, or is it because less overtime was actually used?
38:31Um, we didn't already pay for it, I don't think.
38:35I'm not sure.
38:36I'm not 100% sure I understand that question, but, um, I think it's a combination.
38:40So but as we said in the fall, we don't anticipate needing 100% of compensation set aside in any normal year.
38:50Right.
38:51So some of it is we just didn't need as much.
38:53Some of it is the vacancy savings are baked in there, and some of it probably is that fire and police overtime are down from what they probably projected.
39:04So I think it's a little bit of all of those things.
39:07Okay, so the, the— I would say that the use of vacancy savings and maybe the additional amount of vacancy savings, uh, caused by the hiring freeze or any other policies is what I meant by, uh, paying for it some other way.
39:19Got it.
39:20Um, and then to the degree that it is a reduction in overtime, uh, commendations to everybody involved in, in doing that, because I know that's been a policy goal for, for many years, uh, to do it, and including by, uh, filling vacancies at both bureaus.
39:32So, uh, commending those, those 2 chiefs as well.
39:36Um, the other question I had can— yeah, I think it can wait.
39:44So yeah, thank you.
39:45Thank you, Councilor Kanal.
39:46Councilor Smith again.
39:48Thank you.
39:49So I have a question, couple questions.
39:56There are some expected rollover money that each bureau has given to the mayor's office, correct?
40:06Like what they expect that they'll have left at the end of '25-'26?
40:13That's all reflected here.
40:15So it's the $4 million of the general fund returns on the next slide.
40:20So all we're expected to have left is $4 million?
40:27Yeah, roughly speaking.
40:28Out of all the, the 4 of the general fund money budgets, that's all we're expected to have left is $4 million?
40:36So the way, so the way to think about this is the total overspending in the general fund is projected to be $3.6 million.
40:50That is mostly driven by, in fact, exclusively driven by public safety bureaus.
40:56Okay.
40:57The other bureaus were told, come up with projections.
41:03How much do you think you'll either overspend or underspend by the end of this fiscal year compared to your revised budget?
41:10Everybody else who wasn't overspending was projected to underspend by a total of $4 million.
41:18That's based off of their personnel projections, where their contracts are and the like, and any external revenues that come into the general fund, like fee revenues and things like that.
41:32That's $4 million.
41:33So they just gave you a verbal and said, we're not— some of these, because we're talking about parks, we're talking about water, we're talking about fire, we're talking about police.
41:43And so out of all of those folks who get hundreds of millions of dollars, they're saying that they are not going to have anything left, and they've told you that, and you believe them?
41:54Well, we collected a spreadsheet.
41:56We have the full projections, and we shared a version of that spreadsheet as of, I think it was like the week after our last work session, so March 12th or so.
42:05We shared that out, and you should all have received that.
42:08That has the full detailed projections.
42:11At the major object level for every general fund bureau.
42:15Water doesn't receive any general fund, just to be clear.
42:18And so all of them made those projections and we did some vetting to try to make sure they made some sense and try to understand what was in them.
42:29So there was quite a bit of work that went into doing that exercise citywide to try to come up with the number that we expected.
42:38And so generally we have a general fund reserve, right?
42:42We do.
42:43So it would seem to me if we're overspending that the city administrator or the mayor would say then we need to get it out of the general fund reserve or we need to stop folks from spending money.
42:56If the money is coming from operations, that's one thing, but if the money— the overspending is coming from bureaus wouldn't it be wise to ask these bureaus to stop spending?
43:09I'm asking you a question.
43:11So, Councilor, it's a good question.
43:15I know we've had this discussion in various forms in this room before, dating back to, I think, around November or December.
43:22There was direction given by the city administrator to do exactly that, to reduce spending.
43:29We've talked a lot about the vacancy.
43:32The hiring freeze was one tool.
43:36That was identified to drive that.
43:39We did ask bureaus and service areas to look at all contracts and whether work could be paused or not, all other material and service spending.
43:47So that work has occurred over the last 6-plus months or 5-plus months and is reflected in the underspending, overspending number reflected here.
44:00So these numbers are minus the construction constraints that the mayor has put on all the bureaus to date.
44:07This is after they have taken the constraint off that the mayor required them to take off.
44:12That's what it appears to be, an overspending.
44:17Um, I, I think— let me say it another way and you tell me if this is what you— if this is what you mean.
44:22Um, that the, the net overspending/underspending number reflects the outcomes of those constraints that the mayor put on it?
Raymond C. Lee 44:30 - 44:31
44:30Correct.
44:31Well, then he needs to take the constraints off, and you, you guys need to pay for the bills that you need to pay for, because it is disingenuous to come here and say that we're overspending if that overspending is happening as a result of the mayor asking to take a 2%, a 5%, or a 10% constraint.
44:51It means that he can't take the constraint right now, and then you come back to us and say that we're overspending.
44:57So we— just to be clear, there was no direction to take money out of bureaus' budgets to fund any of the mayor's priorities this year?
45:07I'm not talking about the mayor's priorities.
45:08The mayor can put a constraint on a budget and then say he puts a 10% constraint on a budget, and then you say to a bureau, okay, with the 10% constraint taken that was asked, how much will you have left over after that 10% constraint is taken?
45:25And then you look at the way that they're spending and you'll say, oh, we're overspending, we don't have enough.
45:31Well, I'm saying take the constraint off and maybe you can pay the bills.
45:36There's no additional constraint on their budget.
45:40The only constraints that were put were operationally to reduce spending.
45:44So there was no— the revised budget, like, I guess another way to put it is If council does nothing, if they change no budgets, right, and we continue to staff all of the fire stations and have police on the streets and keep our parks open for the rest of the fiscal year, at some point before the end of the fiscal year, say in June sometime, there will not be enough money to do that.
46:15So I guess that's what I'm trying to understand.
46:18Help me understand this, Ruth.
46:20Help me understand how is it that we so woefully underestimated how much money was going to be coming into our budgets?
46:29We kind of fixed this in December in the fall TAO, and now we have another unexpected property tax or BLT that came through.
46:47I, I don't understand how you guys forecast it so wrong.
46:51Tell me how you did that.
46:53I don't know how.
46:54I mean, we know exactly how much money is coming in, and we should of course corrected this in the fall TAO.
47:00So now we're coming back to the spring TAO and saying that, okay, we're still under budget.
47:05Is it because we under— we, we underestimated how much revenue was going to come in, or is it because the budgets of the bureaus that they put forward, they're overspending those budgets, or did we underestimate the revenue that we were expecting to come through the door?
47:25Yeah, Councilor, it's the latter.
47:27And I know, I'm not sure who all is in the room, but we did, if you'll recall, have conversation in January and February identifying that there was that that unexpected revenue delta that occurred subsequent to the fall tow and that we wanted to highlight that we were gonna have to take some actions to address that.
47:48That also led into the work session we had a month ago talking about what those solutions might be so we could come back with this bucket of solutions today for additional council consideration in advance of the vote.
48:03Thank you.
48:05On next week.
48:06So I just, we have identified that as soon as we became aware of that revenue shortfall and had dialogue with Council about that.
48:13I remember Peter telling us that we had an extra $15 million that we didn't know that we were gonna have from the BLT that was gonna be used.
48:22And I said, why can't we use that for the fall TAO?
48:25And that was supposed to be turned over for the spring TAO.
48:28So I'm not understanding all this mix-up in, in forecasting.
48:32I mean, who is responsible for this?
48:37I, I thought we only dealt with real numbers once the, once the fall tally is, is in.
48:41We can only deal with real numbers of what is expected to come in for '25-'26, but yet we're still forecasting.
48:50Why are we still forecasting in December?
48:53Well, we're, we're always forecasting the revenue for that fiscal year, right?
48:57Because we won't know what the revenue was for '25-'26 until after '25-'26 yes.
49:03In a normal fiscal year, our revenues for that fiscal year do fluctuate from the forecast.
49:09That's normal because we have to make a forecast based on the best knowledge at the time of the forecast, and they, they usually fluctuate.
49:17We typically come in 1 to 2% off, and we try to forecast conservatively so that that 1 to 2% has us to the good.
49:26This was just an unusual year, and are— and it is principally driven by the, um, less than expected BLT revenue, which is a very volatile revenue source.
49:39No, BLT was more.
49:41We got more BLT than we expected.
49:44That is not true.
49:45Um, so the question that I'm asking you right now, go take the money.
49:49How much money do we have in our general fund reserve?
49:53About $80 million.
49:54Okay, you got it.
49:57Council would have to appropriate that as a council fund.
49:59Didn't put that up there as an option.
50:02So why don't you put that up there as an option?
50:04Because that's what's supposed to happen.
Raymond C. Lee 50:07 - 50:17
50:07My question would be to, uh, the budget team.
50:10What are we required by charter to keep in our reserve?
50:13Because there is a certain percentage.
50:15You just can't empty out reserves.
50:17So we have a general yeah.
50:19Fund reserve.
50:20Do you want to take it?
50:22That is set by policy at 10% of the general fund.
50:26And there are 2 triggers in policy that would allow us to— that will really allow council.
50:32It's a separate fund, so it has to be transferred to access those reserve dollars.
50:38One is for an emergency like a large earthquake.
50:41The other is for a recession-type emergency.
50:44And there's detailed language in the policy.
50:46I think we circulated that policy back in March.
50:50Mm-hmm.
50:51And I think we are on the cusp of whether that would be warranted based on our economic conditions.
51:00Mm-hmm.
51:01There's some quirks of how the policy is written.
51:05So that is a choice for City Council, for you all to make, if you would— if you want to draw a portion of this from the reserve.
51:15That's an option.
51:16Yeah, I would just add to that.
51:18Yeah, thank you, Ruth and Councilor, for the conversation.
51:20I would just add to that that, you know, the City Administrator just noted at Council this morning that our ratings were just affirmed at the highest rating levels.
51:29That existence of that reserve is a critical piece of that assessment.
51:34And so just acknowledge if that's a path that Council chooses to take, fully at your discretion, just recognize there are other risks and trade-offs that come with that kind of a decision.
51:43Well, the trade-off is that we have to deal with staff that are not giving us a proper forecast.
51:51And this has been going on for 3— 3 times we've done a TAO in a budget, and the forecast has been wrong.
51:59It has been woefully wrong.
52:02And so for me, if you want to continue to have this facade that we're doing so well, well, I would say no, because we keep forecasting wrong.
52:11Councilor Loretta Smith.
52:12Point of order.
52:13And we keep having to come back to this.
52:15I don't believe—.
52:16Council President.
52:17I'm talking to Ruth.
52:18Council President, I don't believe these are the staff who do the forecast, and I'm a bit worried that we're veering into, um, some, some impugning of our staff that is not allowed under our rules.
52:31I didn't call a staffer.
52:32I said we're getting our forecast wrong and we're having to fill a gap because we're getting wrong information.
52:39Thank you.
52:40I was talking and you can raise your hand.
52:43So I was asking a question.
52:44Point of order to the council president.
52:45I didn't hear you say point of order.
52:47She did.
52:47She did.
52:48I didn't hear you say it, but I'm sorry that this is getting under your skin, but I'm tired of them coming back here with this every single 3 months with the wrong information.
52:56We tried.
52:56We had a Morillo one.
52:57We had a Smith one said don't take the money from there, and we did.
53:02Oh, uh, Councilor, I will ask that we make sure we don't get I don't want to cross that line, but I do appreciate the point.
53:07I hear what you're saying, but it seems like I'm the only one that is really upset about this.
53:14And to ask the question about the general fund and to try to persuade me not to do the general fund, but yet continue to take your bad advice on a forecast, that is just unconscionable to me.
53:32Thank you, Councilor.
53:34Councilor, uh, Kanal.
53:39Um, so I will say that I, I, I— there are many things that were just said that I agree with, and I, I, I don't put them at the forecasting piece, uh, so I want to be clear about that.
53:51I, I do think that there— a lot of what we discussed might happen in— we, we've talked about the things that were brought up at the fall TAO in the context of those 2 amendments, some of that, not as much as maybe we feared, but maybe more than we hoped, has come to pass in a negative way from the fall TAO to now.
54:08I think that's a fair assessment in terms of our financial situation.
54:13The other thing that I wanted to mention is actually something that came up not in the fall TAO, but in last year's budget.
54:19When it was brought up that the 20% reduction over 2 years in these lines of business would not be easily achievable in a draw sort of a blanket line.
54:30Here's the goal, 9.5% in the first year, 10.5% in the second year.
54:34And that passed.
54:37And, and, um, now we're here.
54:40And part of the reason— the third thing that Councilor Smith didn't, I don't think, got to in the last, uh, round of questioning was around, uh, that I want to go back to that particular reason for the overspending, and it's what Councilor Green brought up, the 10% placeholder reduction for enterprise efficiencies.
54:57I am not suggesting the course of action I'm asking about.
55:00I want to be super clear about that to anybody listening here, media, employees, but I want to understand from a process perspective why it is that if council authorized a 9.5% reduction in these lines of business, And we're not on track to make that reduction, why the answer is not exactly as you said, Councilor, why the answer is not an operational direction to go out and make that happen.
55:26Why is the answer come back and give us and ask for more of an appropriation?
55:31Because we're on a trend line that does not achieve a 10% reduction in enterprise efficiencies in this year.
55:39We—.
55:40Still have 3 full months of this year left.
55:45Ostensibly, we have not overspent now.
55:47We're simply on trend to do so.
55:49Is that accurate?
55:51Yes, that's accurate.
55:52So we are still in a place where that could be met.
55:55It might require some particularly aggressive action to do so.
55:59And again, that— to be clear, that is the thing I'm not suggesting.
56:02My question is, why isn't that the path we're on?
56:06Why isn't it that that you would— and, and this, I, I don't actually think this is anyone on the budgeting side.
56:12I think this is more of a question for the mayor and administrator.
56:15Why is it that right now, given council has previously authorized only the amount of money that was authorized last year, why is it that we are not on track to take more aggressive action to ensure that we achieve that number?
56:28Does that make sense as a question?
56:30I, I want to make sure.
56:31And, and again, this is a process question.
56:32I don't want to lay people off here.
56:33I'm just trying to understand.
Raymond C. Lee 56:34 - 57:37
56:34You know, we can do that.
56:36And some of these questions came up earlier when we came forward with the first TAO— not first TAO, when we first had this conversation back in March.
56:47That would cause some of the cuts that we're talking about now.
56:50And some of the councilors brought it up now.
56:52Do we start making some of the significant cuts now to the budget that we'll be making next year?
56:59And some of those cuts, we were just not at a point yet to start making some of those cuts to our budget as it relates to some of the impacts it will have in the upcoming year.
57:10So as we look through some of these potential cuts now, all this still has carryover to next year as well and the impacts that will be in the proposed budget moving forward.
57:22So it's things that we're constantly looking at and there's always things that we could say we could cut services now.
57:28But some of that will require council's direction as well if we were looking at truly reducing or no longer providing a certain service to the community.
57:38So I understand that in the context of things that we anticipate needing to cut for next year.
57:43Anything— what I'm asking about is the things that are in this fiscal year because the council voted on a budget that was inclusive of a 10% reduction for enterprise efficiency I should note, with the explanation on that, that there would not be a drop in service to achieve those cuts.
58:02And although I am one of the people that was very skeptical about this, I was against this particular piece of it, I'll note, but council did pass it.
58:09And so my question remains, from a process perspective, why is it not the case— why are we not trying to achieve that council direction on the administrative side?
58:20As opposed to coming here and saying we're just going to keep doing what it is and assuming that we're going to find money somewhere.
58:28Um, and again, I understand that at this stage of the year that would involve layoffs, and I get why it's not happening right now.
58:34And again, not advocating for it, but when we brought this up in the fall town hall, it might not have.
58:40Um, because this did come up as a sort of secondary conversation and during the fall town hall, and there was— now there's only 3 months left in the year.
58:46Then there were many more months in the year.
58:48Yeah.
58:48We could have gotten our way.
58:50There were— there are positions that have been, I assume, filled in this time subsequently.
58:55There are other decisions that could have been made that would not be like, let's lay off 20 people altogether today, that could have been made earlier.
59:03And I'm unclear as to why, because it feels like it is not technically by the letter of anything a violation of the council-authorized budget, but it is a path that we are on that will absolutely get there in 3 months.
Raymond C. Lee 59:18 - 59:18
59:19If we don't find a new source of money or another place to cut.
59:24And we already decided where the cut was going to happen.
59:27It was going to happen by achieving the 10% reduction.
59:29So I'm trying to understand the process and I'm still not getting that answer.
Keith Wilson 59:34 - 1:01:46
59:34Council President, may I?
59:36Just from a historical standpoint, Mike Jordan and I put together that target, the enterprise efficiency target of 10% in FY26.
59:46With 20% into FY27.
59:49Those are targets because, and I'm gonna use this word a couple times, because we're in a dynamic situation.
59:54We really needed that efficiencies.
59:56How we reorganized the city was designed to deliver on it.
1:00:00Yes.
1:00:00As we start to see the spending, Jonas and Ruth and CA, for only being a few months, started looking at underspends, hiring freezes, overtime reduction.
1:00:11Looking at contracts.
1:00:13And so those are all the things that we were really looking at hard in January, and we employed those tactics.
1:00:18But in the same regards, working with Tracy Warren at City Operations, she started talking about the effectiveness of our cuts, and if we continue down the path, we would start to degrade service.
1:00:28So that's why we really looked at those challenging changes and cuts.
1:00:32But I also want to go back to Councilor Smith, what you were talking about.
1:00:36Budgets are dynamic, but they're budgets.
1:00:38The only time we true up the fiscal year is in the fall TAO, which looks back at the previous year.
1:00:45We're just truing up the budgets.
1:00:47Anytime Peter— and Peter, you do a great job, and I just want to highlight that right now— he's only bringing a barometer at that moment.
1:00:56It is a prognostication.
1:00:58It is not a diagnosis of the exact dollars that we have at that time to spend, and we only have those numbers.
1:01:05We are, by all rights, Running a dynamic, a dynamic, and then we have revenue challenges as a city, and those revenues have not been going up, which is the tradition.
1:01:17They're going down.
1:01:18Commissioner Ryan can attest to that.
1:01:20There is few circumstances where he sat on this commission where he had to do cut exercises.
1:01:25They're usually called the fall bump because it was going up, not down.
1:01:30We're in a unique situation right now, and I want us to all just focus on the process— Ruth and Jonas and Peter are doing their level best.
1:01:38I promise they're putting the work in to provide the best information they can at the moment they have to try and allow you to make the best decision you can at the moment that you have.
Dan Ryan, Sameer Kanal 1:01:48 - 1:02:11
1:01:48So I appreciate that information.
1:01:51And to be clear, I don't think anything that I'm personally discussing has anything to do with any of the 3 people you just mentioned.
1:01:58I have no concern here.
1:02:00Or about any of the information, including Peter, by the way.
1:02:03I appreciate the shout out there because as any economist I'm sure will tell you, like, it's— you're never going to be 100% accurate.
1:02:11Things are going to change.
Sameer Kanal 1:02:12 - 1:02:12
1:02:12I get it.
1:02:12I'm asking about the expenses side though.
1:02:17And so I get what I'm kind of— if I'm hearing you correctly, Mayor, what I'm hearing you say is it was harder than we thought it would be.
1:02:26And Tracy Warren's work is in part to tell us that.
1:02:30And I, you know, and that's great.
1:02:32I think maybe what might be helpful in the future is outside the context of the budget conversation to have a check-in where we're talking about it from the operational and the policy side.
1:02:43If something like this would happen in the future, if we don't achieve next year's target, for example, early enough that we can adjust course and not be, Not be feeling like we got stuck with the bill in a year or even in the fall.
1:02:58Because I— that is— I'll just speak for myself a little bit of how it's feeling right now.
1:03:03Because in the conversation around not only the budget but the fall TAL, and it was sort of a secondary thing because we actually spent pretty much the entire time discussing the other amendment.
1:03:13But one of the— in the questions period on that, we did talk about We're not currently on track to hit the 10%.
1:03:20And it was— I don't want to say that anybody promised, oh, we're absolutely going to hit it.
1:03:23That's not my intention here.
1:03:24But to say that we needed to maybe have a broader conversation around what is the correction to the course in the fall so that we maybe weren't— we're not looking at it as an overspend now.
1:03:36We're looking at it as we thought one thing a year or 9 months ago.
1:03:40We revised that 6 months ago, and now we're in line with 6 months ago.
1:03:436 months ago, uh, as opposed to we're not in line with either 6 or 9 months ago now.
1:03:48So that, that's, that's the only point I'm trying to make.
1:03:50And I, I think I, I understand that at this moment maybe there isn't any way to do it besides laying off a bunch of people.
1:03:57So I'm not— again, I want to be super clear to the CPBW folks in particular listening, I'm not advocating for that.
1:04:03What I am saying is, is that I, I would like to not have to vote on things twice.
1:04:08Um, Because if it happens, and then we're basically having to recommit to something or adjust course without any ability to affect it in the meantime.
1:04:17So thanks, Council President.
Jamie Dunphy 1:04:18 - 1:04:29
1:04:18Thank you, Councilor.
1:04:20Um, Ruth, I just want to check, do you still have more slides to go through?
1:04:23We have— I think 4 more in the queue right now, folks, and there we still have more to go through.
1:04:27So I just want to make sure we keep that in mind.
1:04:29Councilor Green.
Mitch Green 1:04:30 - 1:05:06
1:04:30Uh, thank you, Councilor Kanal.
1:04:33You got onto a line of questioning that that's a good question.
1:04:36That now I'm very locked in on because you had made this— you connected the dots on the expense side that said, look, if we made a different set of choices in the fall, you have 9 months to solve X dollar problem.
1:04:54And if you punt that decision to the spring, now you have 3 months to solve the same dollar amount problem.
1:05:01That's exactly what I said in this seat in the fall, and I told you so.
Jamie Dunphy 1:05:09 - 1:05:17
1:05:09Thank you, Councilor Green.
1:05:11Uh, Councilor Smith, you have, uh, spoken twice on this.
1:05:14I'm going to move to— I'll come back to you.
1:05:16Uh, Councilor Pirtle-Guiney.
Elana Pirtle-Guiney 1:05:19 - 1:09:00
1:05:19Thank you, Council President.
1:05:21Um, you know, my colleague Councilor Smith said that when this happens, either the projections were off or the cuts weren't made that needed to be made.
1:05:30But I, I want to name, because I think Councilor Kanal alluded to this, but I want to name it.
1:05:36There's a third possibility, which is that the reductions we tried to take didn't work.
1:05:44And Mr. City Administrator, it's our job, all of us, to make hard calls, to do the things that nobody wants to do.
1:05:54Yes.
1:06:00I expect that we have to do that.
1:06:05But either we're on the same team and council makes a hard call and you all stand with us and implement that hard call, or you are, per Councilor Kanal's point, asking us to make that hard call twice.
1:06:21I think that's a fair point.
1:06:22To cut for the same amount twice.
1:06:25Once by looking our employees in the eye who do an amazing job and saying, while we value your work, we need you to do it more efficiently.
1:06:34And we can say we don't want that to mean layoffs, but at the end of the day, that will sometimes mean layoffs.
1:06:43If I'm going to look our city employees whose work I value in the eye and say, I recognize this decision may lead to layoffs.
1:06:53I don't want to have to do that again.
1:06:57And, and I understand we did get the briefing earlier this year saying, hey, we're not gonna hit the reductions, right?
1:07:06We did get that outside of the budget process.
1:07:09Um, and we're now looking at some one-time program cuts.
1:07:14Yes.
1:07:16But I asked about this the last time we had an update, and I need to reiterate it right now.
1:07:23What we're looking at doing as a solution, for the most part, is not ongoing cuts.
1:07:30And what we're doing is moving money in to fill holes that we otherwise would have had at the beginning of the next budget cycle to help start us out not so far in debt next, next year.
1:07:41Budget cycle.
1:07:43So I'm asking you as the city administrator, and I am asking the mayor, to be our partner next year as we go into the budget cycle.
1:07:51And if we say we are making this really hard call and we are saying we are going to take cuts in this area in this way, we expect that to happen because you all are causing us to have to vote to make the same reductions twice.
1:08:13That's not our staff's fault.
1:08:17And I understand that this is a hard budget year, and I appreciate that we did get the heads up about a month ago, but we've got to do better next year.
1:08:29I don't want to have to do this again where we're making the same cuts more than once.
1:08:33Thank you.
1:08:34So as we go into the budget cycle— I know this is TAO, not budget cycle, but we're going to be having these same conversations— if you think something can't happen, please tell us that not in the fall, but in May when we are having the conversations.
1:08:52Tell us honestly.
1:08:53Let's have an honest conversation about it so that we can make good decisions then.
1:08:58Thank you.
Jamie Dunphy 1:09:00 - 1:09:04
1:09:00Thank you, Councilor Pirtle-Guiney.
1:09:01Councilor Morillo.
Angelita Morillo 1:09:05 - 1:11:24
1:09:05Absolutely, completely agree with everything that Councilor Pirtle-Guiney just said.
1:09:10And I really hope that you will take that to heart because she's correct.
1:09:15It's not staff's fault.
1:09:16It's the fact that we are funding things that we cannot fund and that there are not dollars to be found for.
1:09:23In the fall, when my office tried to close the budget gap by reducing appropriations to the general fund income risk encumbrance carryovers utilizing the City Budget Office's own policy for what should or should not be funded through that process, as well as a reduction to sweeps above and beyond their own original targets.
1:09:41We were told absolutely not.
1:09:44We should not complicate or contemplate any service reductions whatsoever.
1:09:48We warned that the compensation set-aside would be needed.
1:09:53We warned that revenue was likely to come in reduced again, and as Councilor Kanal had pointed out, we have no evidence that there has ever been an effort to meaningfully manage spending beyond a hiring freeze.
1:10:06So it gives me a lot of pause about the budget that we are facing.
1:10:11If we cannot manage spending to the tune of $20 million, how are we going to actualize next year's cuts?
1:10:17We are now put in the position, based on timing, Where in order to actualize this level of savings through savings this year through underspending, we would have to lay off dozens of employees, something that is untenable to all of us here and to our constituents who are receiving services from the city.
1:10:35So we very much have our hands forced in this situation, and I am going to bring it up again for my colleagues and for folks listening that I feel like.
1:10:46As an elected official who hired a financial analyst to help me go through all of this, when we have brought up concerns, we have been proven right every single time.
1:10:56And I have now gotten to the point where I actually will be annoying and a little bit petty about it, and I'll bring it up every time.
1:11:02Because if we had made some of these decisions in prior TAO sessions, we wouldn't be in this position today.
1:11:09So there are a lot of things that we need to take a look at moving forward, and I hope that when the elected officials here who manage the power of the purse and the budget, that we're going to be taken with the seriousness that we deserve.
Jamie Dunphy 1:11:27 - 1:11:31
1:11:27Thank you, Councilor Murillo.
1:11:30Ruth, turning back to you.
Ruth Levine 1:11:32 - 1:16:00
1:11:32Great, thanks.
1:11:34Can you go forward a slide, please?
1:11:37So the spring TAO includes— we've just reviewed kind of the general fund and the position we're in.
1:11:44There are also other regular actions that occur occur in the spring TAO.
1:11:48So I'm going to step through those a little bit, and we'll also have time for questions on those.
1:11:54Next slide, please.
1:11:56So this is a summary of some of the other actions in the spring TAO as filed, and these are pretty typical types of things that happen in the spring supplemental budget.
1:12:09The first is to true up ending fund balances to match the—.
1:12:12Oh, sorry.
1:12:13Excuse me, budgeted beginning fund balance to match the prior year's ending fund balance.
1:12:18This often happens in the spring due to the timing of the ACFR.
1:12:22Technical adjustments to align spending.
1:12:26Again, this is pretty typical.
1:12:29Things change throughout the course of the year and the budgets are usually updated to reflect those changes operationally.
1:12:38We typically recognize or adjust revenue, including things related to grants, interagency agreements that change, and intergovernmental revenue, and then make draws on non-general fund contingency accounts based on current year spending.
1:12:56There's quite a bit of that in a normal spring supplemental budget.
1:12:59You can go to the next slide.
1:13:02So just because we've talked a lot about fund balances in recent months, I thought it would be helpful to kind of show the flow of how this works.
1:13:11Okay.
1:13:11So the act for ending fund balance comes out towards the end of a calendar year typically.
1:13:21And in the act for ending fund balance, it calculates the actual ending fund balance from '24-'25 in this case as of June 30th of that year.
1:13:32We then have to update the beginning fund balance for the next year because whatever is left unspent in the previous year translates into beginning fund balance for the next year.
1:13:41Okay.
1:13:42So in the fall TAO, we typically do that for the general fund, and that's done typically before the ACFR is released.
1:13:50But because it's the general fund, we sort of have to true it up then.
1:13:55And we did that this year, and we adjusted to lower than anticipated fund balance in the— in '24-'25 in the general fund.
1:14:05Okay.
1:14:06Then in the In the spring, other funds typically do their beginning fund balance true-ups to the act for ending fund balance, and so you will see that in this spring TAO.
1:14:19And there's true-ups again because fund balance is a projection.
1:14:23You know, you're budgeting the next year's beginning fund balance in, you know, some— for some funds they're doing it as early as February, and so they don't know what their ending fund balance is going to be.
1:14:33So it's pretty normal that there is a difference.
1:14:35Okay.
1:14:35Between what they thought it was going to be and what it in fact was.
1:14:39And some of that is due to like timing things.
1:14:42You know, they might have thought they were gonna issue a bond that year and they issue it the next year.
1:14:46Things like that will really affect the fund balance.
1:14:50And so it's generally a pretty typical and technical exercise relating to timing primarily.
1:15:00Thank you.
1:15:02There are a couple of other relatively small changes to call out that are on this slide, 2 related to arts and the Office of Arts and Culture and one related to PBOT that are here.
1:15:22You've seen this slide several times now.
1:15:24Just a reminder, there is an inter-fund loan ordinance that is traveling with the spring TAO, so separate item, but you will vote on them both next— or well, you'll hear them first both next Wednesday, but they're traveling together.
1:15:38But there's no changes to that from what we have previously presented.
1:15:42Next slide.
1:15:45Okay, and this is just the calendar.
1:15:47And then I sent out in the slides, you should have— there are various appendix slides that walk through more detail of some of those other types of adjustments.
1:15:57And so we're happy to answer questions on those at this point.
Jamie Dunphy 1:16:02 - 1:16:05
1:16:02Thank you very much.
1:16:03Couple more councilors in the queue.
Mitch Green 1:16:06 - 1:16:27
1:16:06Yeah, thank you.
1:16:07I put my hand up there, uh, just on the kind of first slide in this second part of the session, um, where you describe true-ups.
1:16:15Um, does the Spring Tow include the true-ups for the ACFR Portland Housing Bureau money?
1:16:25And where would I find that to verify for my own self?
Ruth Levine 1:16:27 - 1:16:41
1:16:27Yes, um, so it does.
1:16:31And, um, in the exhibits— sorry, um, actually I'm gonna have Anthony— can you come up and speak to which exhibits?
1:16:41Thanks.
Mitch Green 1:16:42 - 1:16:43
1:16:42Exhibit 1.
Anthony Locke 1:16:46 - 1:17:29
1:16:46For the record, Anthony Locke, uh, CBO analyst, Yes.
1:16:49Supplemental budget coordinator.
1:16:50You can find much of that information in Exhibit 2, the fund change memo, and you can see kind of the corresponding adjustments in the contingency line.
1:17:05So for example, if you're in Exhibit 2 and you look at, let's see, which one should we do?
1:17:13Like 213.
1:17:14Which would be the Housing Investment Fund, you'll see that there's an increase there of $37.7 million.
1:17:22So that means that previously unrecognized beginning fund balance is now in the system.
Mitch Green 1:17:30 - 1:17:37
1:17:30Okay, so it is accounted for, it is budgeted for in the fall, the spring TAO action.
Anthony Locke 1:17:37 - 1:17:38
1:17:37That's right.
Ruth Levine 1:17:38 - 1:17:45
1:17:38Okay.
1:17:38Yes, it's budgeted as beginning fund balance, which is a revenue, It's not like fully allocated.
1:17:43There's no proposal about how to allocate those funds.
Loretta Smith 1:17:45 - 1:17:47
1:17:45Yeah.
Jamie Dunphy 1:17:49 - 1:17:51
1:17:51Councilor Kanal.
1:17:53Thanks.
1:17:532 questions.
1:17:54Um, I— the, the slide, the first slide on here, uh, makes sense to me, and I appreciate that clarification.
1:18:00The one that, uh, has the other proposed changes, um, the third of those, uh, it, it was there does the spring TAO realign that $172,000 in line with a previous action, or is the TAO itself the act, the policy choice to allocate general fund under— council general fund underspending to PBOT?
1:18:26Like, that's not something that we've done before, right?
Mitch Green 1:18:30 - 1:18:33
1:18:30I actually have a direct response to this because that comes from my office.
1:18:34Okay, good enough for me.
1:18:35I have one question withdrawn.
Sameer Kanal 1:18:36 - 1:18:37
1:18:36You did.
1:18:38My other question is about the next slide with the graph.
1:18:44My understanding is we have 2 items which are coming up tomorrow which are going to replenish this fund in part, not completely replenish the health fund, because the 11 or 12-ish percent increases in the health the inflation effectively on the health plans, the 2 health plans, is less than the 15% budgeted thanks to Councilor Avalos's budget note last year, and that the difference is going to go into the health funds.
1:19:15Is that reflected on here?
1:19:17Is that not reflected?
1:19:18How does that—.
Ruth Levine 1:19:19 - 1:21:07
1:19:19Yeah.
1:19:20Yeah, good question.
1:19:22So it's all sort of taken into account.
1:19:26Basically the way we're, The way that we're treating the sort of health fund reserve is in a couple of different pieces.
1:19:36This piece right here is for the current— is just to address the current fiscal year, is to ensure that we're able to pay for the health benefits out of that fund through the end of this fiscal year.
1:19:47What we've done is, because we were aware of this earlier in the year, we did briefings, we talked to council about it, we We assumed that would be true going in and in the forecast and expected those expenses for repaying this fund to hit next year.
1:20:07So there's a sort of loan repayment already budgeted in or already planned for in next year's, in the '26-'27 budget.
1:20:18And in addition, there is—.
1:20:21Yes.
1:20:21Is the delta, as you just said, between the renewal amount and the 15% also going towards those reserves.
1:20:33So the total increase year over year in health benefits that we're going to experience in '26-'27 is about $22.5 million.
1:20:47Okay.
1:20:48A little more than 22%.
1:20:50That includes both the loan repayment amount and that reserve rebuilding moving forward so that we don't end up in this situation anymore.
1:20:59What I believe what you're getting tomorrow is just the renewal contracts for the health plans.
1:21:06Does that make sense?
1:21:07Okay, so I think so.
1:21:11Would I be correct in saying that the the, the deltas are replenishing from 4.3 to 5.2, but that we will then need to pay off $15 million to go from 5.2 to negative 9.8 next year to repay this year's loan, which is why it's projected as actual reserves negative 9.8.
Ruth Levine 1:21:33 - 1:21:42
1:21:33So the delta— you're talking about the delta between the renewal cost and the, um, and the 15%?
1:21:40Yes.
1:21:40That's not impacting this year at all.
1:21:42It will hit only in right, but, but there's a, um, if you look from 4— from $4.3 to $5.2, what causes that increase?
Ruth Levine 1:21:57 - 1:21:58
1:21:57The loan, just the loan revenue.
1:21:59Okay, so, so nothing related to that delta is showing up on this graph in any way?
Ruth Levine 1:22:02 - 1:22:03
1:22:02That is correct.
1:22:03Okay, and so at some point, if and when we take legislative action to appropriate the delta to the fund.
Ruth Levine 1:22:16 - 1:22:16
1:22:16Yes.
1:22:17That would increase both the $5.2 and negative $9.8 by that amount.
Ruth Levine 1:22:22 - 1:22:39
1:22:22That is right.
1:22:22Yes.
1:22:23So this doesn't—.
1:22:24This—.
1:22:25Yes, this graph here doesn't show you anything about like those future forecasted, like, reserve rebuilding plan.
1:22:33It just shows you what has happened and then what's the effect of the loan itself.
1:22:38Does that clarify it at all?
1:22:40Yeah, yeah, yeah, yeah.
1:22:41But what I'm getting at with that question is effectively that there will be a— there is room for this to get better, but not room for it to get worse based on that.
Ruth Levine 1:22:50 - 1:23:01
1:22:50Correct.
1:22:51Yes.
1:22:51Yeah.
1:22:52And if you would like a graph kind of showing the projections, including that delta and the other planned reserve rebuilding amounts, we are happy to provide that.
1:23:01Okay.
1:23:02In the ordinances tomorrow, just to close this up, It says in the council finds part, the sort of whereases, it says that there's a recommendation to use the 3.9% in the PPA side and use the 4.2%— those are the deltas— to replenish the self-funded medical plan reserve fund.
1:23:28It's just that that's not actually happening.
1:23:30That's just acknowledging the recommendation.
Cherity Montez 1:23:32 - 1:23:32
1:23:32Okay.
Ruth Levine 1:23:32 - 1:23:35
1:23:32Correct.
1:23:33It would—.
1:23:33The action for that to happen is in the budget.
Sameer Kanal 1:23:35 - 1:23:37
1:23:35Okay, copy.
Ruth Levine 1:23:37 - 1:23:38
1:23:37Thank you.
Jamie Dunphy 1:23:38 - 1:23:40
1:23:38Thank you, Councilor Kanal.
1:23:40Councilor Smith.
Loretta Smith 1:23:42 - 1:27:16
1:23:45I'm looking at the Transportation Operating Fund.
1:23:49Earlier— well, earlier last month, I was trying to get meetings with all the bureau heads So that I could be prepared to come and talk to you, Rosen and Jonas, today, uh, because I wanted to have— I look at this fund and it says there's half a billion dollars in the transportation operating fund that includes the $677,000, but I have no clue as to what that $506 million is scheduled to be used for.
1:24:26There is no database.
1:24:28There is nothing that anyone can go to to show.
1:24:33Some of this money was put in 3 or 4 councils ago for projects that they wanted to do, whoever was over the transportation department.
1:24:39Now we don't know.
1:24:41And, uh, CA Lee asked me to hold off because he wanted to find out as well.
1:24:47So I'm not prepared today to really Um, refute any of the stuff that you're saying because I have no idea what these dollars are expected to be used for in the future.
1:25:01And I wish I could have a better understanding of everybody's fund, all those 70 funds.
1:25:07When are we expected to use those dollars and for which projects?
1:25:12Uh, so I am just assuming, um, Administrator Lee, that you are checking into this.
1:25:18I wanted to give you an opportunity to do this first because I wanted to find out what this is.
1:25:24Because saying that you're $677,000 to the bad in the, in the transportation operating fund, that really doesn't mean a whole lot to me when you already have a half a billion dollars in there that I have no idea where it is expected to be spent.
1:25:41And what year it's expected to be spent.
1:25:44And why is it important for us to put another $677,000 in that particular fund?
1:25:50So that is troublesome to me, and it's perplexing probably to you all too, because you're the budget folks.
1:26:00And so there is an assumption from where I'm sitting is that you should know where every penny is expected to go, and you all don't.
1:26:08Right.
1:26:09You just know when you're down some money or that you loan some money from a fund and you want to put it back.
1:26:17I want to know what's in this money.
1:26:19I've been asking for desegregation of every penny in every fund.
1:26:24I want to know when it's expected to use because we can make some other choices with those funds.
1:26:31And if some of those funds can offset some general fund, That would be all to the better.
1:26:36So I'm, I'm really having a tough time saying that I support this TAO because I don't know where all the other money is expected to go.
1:26:46So for me, putting $677,000 back to a place, it doesn't give me solace in knowing that, that it's going back to something that I know that we need to pay for immediately.
1:27:00So my question, I guess it's for, um, Administrator Lee.
1:27:05When can we expect a breakdown of these funds and when they're expected to be used and what they were originally put in these funds for?
Raymond C. Lee 1:27:18 - 1:27:26
1:27:18As we go through the budget process, we'll have something for related for each of these service areas where we have these different funds where we can have that broken down for you.
Loretta Smith 1:27:27 - 1:27:44
1:27:27So are we— are, are there going to be new uses, or are they going to be the original uses that they were put into the fund for?
1:27:33Because I know we were— you were going to call for an independent audit and an investigation.
1:27:37Is that still going on?
1:27:38That's still going on.
1:27:39Okay, thank you.
Jamie Dunphy 1:27:45 - 1:29:43
1:27:45Thank you, Councilor Smith.
1:27:47Uh, colleagues, I put myself in the queue.
1:27:49Um, can we go to the other true-up slide?
1:27:53Uh, Ruth.
1:27:56Uh, or sorry, the, the next, the one that has my name on it.
1:27:59It's about—.
1:27:59It says art on it.
1:28:00And there we go.
1:28:01I just wanted to explain to my colleagues what this— these 2, uh, top art requests are specifically.
1:28:07Um, number 2, I'm gonna start with number 2.
1:28:09Art request number 2 is related to, uh, reporting that we had about a, uh, a reserve balance for the arts tax.
1:28:18Um, working with the revenue office, my office has asked to reallocate $1.6 million from that pot of dollar— that reserve fund in this budget to backfill the amount of dollars that were cut from grants, current arts grant recipients.
1:28:36Additionally, there will be in the new— or in the next year's budget, an additional $1.6 million from that reserve fund to continue to fill that in the next year.
1:28:47And art request number 1 relates to an amendment thank you.
1:28:51In the emergency ordinance that we all passed last year, again, thank you for that, we had allocated about $300,000 for storefront activation to put artists into some of the vacant storefronts that we have downtown, and then we immediately ran into the hiring freeze.
1:29:06And so we've been unable to hire the person who was going to go ahead and do that.
1:29:10This effort, working with the Arts and Culture Office, redirects the dollars that we would have been using to hire somebody and redirects it so we're going to use it towards our ability to contract those dollars out and get some storefronts activated, especially explicitly.
1:29:25We've been in conversation with the folks over at the Halperin Sequence, which have an amazing opportunity to activate that— the storefronts that are over there, but they've been sitting fallow for a long time.
1:29:35So those are what those 2 are, and I just wanted to give everybody an explanation.
1:29:40And I'm happy to answer any questions if anybody has anything about that.
Loretta Smith 1:29:43 - 1:29:48
1:29:43But otherwise, Councilor I had a question.
Jamie Dunphy 1:29:48 - 1:29:50
1:29:48Oh, Councilor Smith, I'm sorry.
Loretta Smith 1:29:50 - 1:31:19
1:29:50Um, so this is very interesting.
1:29:52This happened the last time with the TOW, and so Councilor Avalos asked the question, and I'm going to ask the same question again.
1:30:01How did you know that you could put something in this TOW instead of waiting for the budget to put earmarks into a TOW that we're supposed to shore up, um, supposedly our bureaus.
1:30:14But yet you got individual earmarks that were put in there specifically, like we did in the fall TAO.
1:30:22And Councilor Avalos asked, how did you know about that?
1:30:25And so no one else had the opportunity to put any of their requested earmarks in there as well.
1:30:30So now here you go, you did the same thing.
1:30:33So how did we know, uh, Ruth, And, and, and, uh, Jonas, that there was an opportunity for us to shoot you some opportunities to put things that we wanted outside of the budget into the TAO.
1:30:49When did that conversation happen?
1:30:51Because I sure didn't see an email of you sending us a note saying if you have anything you want in the TAO, put it in.
1:30:58I thought that these kind of requests would go in to the budget as a budget amendment or something that you wanted the mayor to put in.
1:31:08So this is very, very new stuff to me.
1:31:11Um, did I miss something?
1:31:13Was there an email that went out to the councilors that said that if you had any things that you wanted to go in our TAO, uh, let me know?
Jamie Dunphy 1:31:19 - 1:31:32
1:31:19It was certainly not from the budget.
1:31:21This was— my office has been working both with the revenue office and the arts and culture office for the last year to try and implement Dunphy 2.
1:31:28And also working directly— I've been working since I got into office on the reforms for the arts tax.
Loretta Smith 1:31:32 - 1:31:33
1:31:32Oh, I understand.
Jamie Dunphy 1:31:33 - 1:31:49
1:31:33When we knew about that at the time and heard the reporting specifically to the arts tax, worked with the revenue office to find out whether there is a solution for us to do it in this year.
1:31:43And this was the proposal of moving items from one side of a column to the other in the TAO being the most appropriate thing.
Loretta Smith 1:31:50 - 1:31:54
1:31:50I have been trying to make sure people who are getting ready to lose their housing got rent assistance.
Jamie Dunphy 1:31:54 - 1:31:55
1:31:54Yep.
Loretta Smith 1:31:55 - 1:32:01
1:31:55But yet you somehow got into the towel when people are getting ready to be evicted from their homes.
Jamie Dunphy 1:32:02 - 1:32:14
1:32:02These are, these are simply dollars that had been previously— well, to Dunphy 2 specifically, these were dollars that we had previously allocated.
1:32:09This is about changing it from personnel to EMS.
1:32:12It is a, it's a color of money amendment.
Loretta Smith 1:32:14 - 1:33:16
1:32:14Yeah, I know, I know what it is.
1:32:16I know.
1:32:16And, and there's some things, some other things.
1:32:18So I thought that these things had to be changed in our, in our budget cycle.
1:32:25I did not know that you could do all things under this TAO.
1:32:29That's all I'm saying.
1:32:32That, um, and that's why people feel like some councilors have more information, whether it be the council president or others who are chairs of, of committees.
1:32:44They're getting more access to be able to put things into a TAO than all of us instead of us, I thought I had to amend the TAO to get something put into the TAO.
1:32:53I didn't know I could put something in the TAO.
1:32:56So this is, this is process, and I guess we're all getting used to the rhythm of how we all do this kind of work.
1:33:06And I appreciated the, the budget note conversation that City Attorney Taylor put in on how we do that.
Ruth Levine 1:33:16 - 1:33:17
1:33:16Thank you.
Loretta Smith 1:33:18 - 1:34:23
1:33:18I just didn't see another kind of memo that gives us the range of things that we could do by putting things in the TAO.
1:33:27And I know that it's tough from the budget office to— you got, you got to respond to a lot of people.
1:33:34And I'm going to tell you right now, Mayor, if you do not put no new money for budget office staff In this, I'm not voting for your, um, for your budget because I'm not— I'm not going to deal with this same problem next year.
1:33:51There's not enough people.
1:33:52People don't know what's going on.
1:33:54You better take care of the people who take care of the money, because if you don't, you're always going to have this conversation with this level of intensity, of disapproval, and non-belief of what the budget office says until you shore that up.
1:34:11That's what you need to shore up.
1:34:14I understand that we have a homeless problem, but we have an infrastructure problem right now, and we need to take care of our infrastructure first.
1:34:23Thank you.
Jamie Dunphy 1:34:24 - 1:34:26
1:34:24Thank you, Councilor Smith.
1:34:25Councilor Pirtle-Guiney.
1:34:29I do have a question about the ART request one.
1:34:32Yeah.
1:34:34You said that this was money that was going to go to hiring a person to do the work of finding the right spaces to coordinate to get art in windows, basically.
1:34:45Yes.
1:34:46And now instead, we are contracting for that work.
1:34:51You understand why that made me pause?
1:34:52Absolutely.
1:34:53So I have no problem with a direct appropriation to fund the work, right?
1:35:02We know that this is a good location.
1:35:05This money is going directly to the artists I have no problem with this is a one-time thing.
1:35:13So rather than a limited duration position for 2 months, we're going to contract for somebody for 2 months because it's such a short period of time.
1:35:21I'm trying to understand if what you meant when you said we're contracting for the work is one of those 2 things, or if what you meant is we are actually contracting out for 6 or 10 or 12 months to do this work.
1:35:33I think it's the latter.
1:35:34Somebody to do the work we would have hired somebody for because under a hiring freeze we are allowed to hire contractors and not employees, because that would be something that I would have a fundamental concern about.
Jamie Dunphy 1:35:49 - 1:36:16
1:35:49Yeah, my understanding is that this aligns well with an existing contract that the city's already doing on some of that public space activation through the Office of Arts.
1:35:59But you are right, in an ideal situation, We've been working for the last 9 months to try and get this hired as an employee, and we're essentially told that this was our last opportunity to get these dollars used without them being returned back.
1:36:17So, but you're not wrong.
1:36:18So that I understand though, is the money going— and maybe this is a question for the city administrator— is the money here going to fund somebody on contract Do we have a contract to do work because under our hiring freeze we are allowed to fund somebody under contract and not hire somebody, which I have a fundamental philosophical problem with?
1:36:40If we're in a hiring freeze, we're not doing new work.
1:36:43Or do we have a contract where the money is going to pay for the actual artist's time and we are adding money to that to pay for more artist time?
1:36:54I think that's a great question.
Raymond C. Lee 1:36:57 - 1:37:05
1:36:57I'm not, I'm not 100% sure.
1:37:03I have to follow up on that to see.
1:37:05Could you get the answer for me?
Raymond C. Lee 1:37:06 - 1:37:07
1:37:06Yeah, I can.
1:37:07Thank you.
Jamie Dunphy 1:37:11 - 1:37:15
1:37:11Thank you, Councilor Pirtle-Guiney.
1:37:12Councilor Kanal.
1:37:15Uh, thank you for that line of questioning, Councilor Pirtle-Guiney.
1:37:19I appreciate it, and I'd like that info I think maybe the whole council might be interested.
1:37:24Um, I, I think maybe one of the, the things that's coming up that we haven't really acknowledged is that a lot of what's in this ordinance is an adjustment but isn't technical.
1:37:34Um, you know, there, there are things in here that are, are potentially a little bit more, um, policy conversation adjacent or, or overlapping.
1:37:44And this has come up, um, since the, the, the brand of this yes.
1:37:50It was a bump before, as the mayor pointed out.
1:37:54Budget monitoring process was the acronym.
1:37:57And as it changed to technical adjustment ordinance, I think that has maybe undersold the impact of it a little bit in terms of this is just— a technical adjustment would be moving something from last fiscal year to next fiscal year in the context of the fall bump.
1:38:12Those encumbrance carryovers, those are technical.
1:38:14I get that.
1:38:15But I think there are some things in here that are policy conversations too.
1:38:19I don't think necessarily that the arts piece falls into that.
1:38:23I think because we already discussed it in the context of the budget, Dunphy 2, that what we're just doing is making it happen.
1:38:33And I think that's maybe helpful.
1:38:34We have done supplemental budgets before as their own standalone ordinances.
1:38:39And so I have no— I'm not saying anything about this.
1:38:41I'm just saying that's what I'm saying.
1:38:43Year's spring TAO, but in the future, I think it might be helpful to allow for that separate conversation through a supplemental budget and, and allow for us to, to be more transparent, not only with the public but actually with the folks up on this side of the dais.
1:38:57Thanks.
Jamie Dunphy 1:39:01 - 1:39:04
Loretta Smith 1:39:04 - 1:40:11
1:39:04Yes, Council President, and so I want to go back to the other proposed changes yes.
1:39:08The Springtown realigns $172,000 of council general fund underspending to PBOT for projects located in District 4.
1:39:18There's $100K signage for the new Brooklyn Bridge.
1:39:22There's $2K, and then there's the Sheridan Street safety project.
1:39:25And so it is my understanding it's not just council general fund underspending, that specific councilors have asked to use their specific budgets.
1:39:34To pay for this.
1:39:35And I think that those specific councilors' budgets need to be identified instead of generally saying council general fund underspending.
1:39:44This is— it should be said that XYZ is coming out of Councilor Green's office, XYZ is coming out of Councilor Morillo's office for the New Brooklyn Bridge and the Sheridan Safety Project.
1:39:55It should be the actual councilor's name, not just a general, because that's not the truth.
1:39:59Councilor Loretta Smith.
1:40:00It's not coming out of council general fund underspending.
1:40:04It is coming out of specific councilors' budgets, and that should be identified.
1:40:10Is there a problem with that?
Jonas Biery 1:40:14 - 1:40:30
1:40:14Ruth or Anthony can jump in.
1:40:16I don't think there's a problem with describing it that way, Councilor.
1:40:18I think that's a valid and fair point.
1:40:20I think the nuance here, and just acknowledging that I believe council offices are in one fund, And so that's the reason it's referred to just as a collective.
1:40:29But just—.
Loretta Smith 1:40:30 - 1:40:46
1:40:30If something happens to you all today and somebody else has to take the place, they have to do what's in writing and they'll just take out of whatever the big pot is of underspending.
1:40:42So you need to be very clear on what this is and what this looks like and who it's coming from.
Jonas Biery 1:40:47 - 1:40:47
1:40:47Yeah, that's fair.
Loretta Smith 1:40:47 - 1:40:58
1:40:47Because I'm sure they would probably want to get credit for doing the Brooklyn Bridge and doing the other things out of their district offices instead of just that's totally fair.
Jonas Biery 1:40:58 - 1:41:02
1:40:58And I mean, again, this is sort of focused on the budgetees, not councilors.
Loretta Smith 1:41:03 - 1:41:12
1:41:03I consider that a technical change in how we do this.
1:41:07Not changing it, but it's just giving credit to who's actually giving those resources.
Jonas Biery 1:41:12 - 1:41:17
1:41:12Understood, and happy to make space for councilors to take that credit if they choose to, at their discretion.
Loretta Smith 1:41:17 - 1:41:32
1:41:17I don't think they have a choice in it.
1:41:19I'm just saying that you need to identify so I know thank you, Councilor Smith.
Jamie Dunphy 1:41:33 - 1:41:33
Mitch Green 1:41:36 - 1:42:16
1:41:36I, I just put my hand up to say full disclosure, $100 grand coming from Councilor Green's office for PBOT stuff.
1:41:43Um, $75 of it came from our last OEO from last budget.
1:41:48And then we have some underspend there, so we just— we're trying to roll it.
1:41:52We're just trying to allocate it here.
1:41:53And then we got— we had some conversation with, uh, PBOT about taking another $25,000 and just topping that up to make it an even $100,000.
1:42:00I agree with you 100% on your substantive point, which is like— because don't make it feel like it's coming from your budget or your budget or your budget.
1:42:07It is coming from my budget.
1:42:08And I'm— in the future, I understand you probably are like hesitant to put my name on it without asking and that sort of thing.
1:42:13Yeah.
1:42:14You have my permission in these sorts of things.
1:42:16Thank you.
Keith Wilson 1:42:16 - 1:42:17
1:42:16Great.
Jonas Biery 1:42:17 - 1:42:49
1:42:17And thank you, Councilor.
1:42:17And I do just want to note to both those comments, I mean, this is a unique, you know, Council obviously has a unique role at the city, absolutely.
1:42:24And each convers— there was individual conversations with each Council office.
1:42:29And so really those decisions are absolutely 100% based upon those individual Council office directives, which might include requests for, credit or requests otherwise.
1:42:42So we're merely being responsive to that.
1:42:44If individual councilors want to approach that in a different way in the future, we're certainly happy to accommodate that.
Jamie Dunphy 1:42:51 - 1:42:53
1:42:52Councilor Morillo.
Angelita Morillo 1:42:53 - 1:43:49
1:42:53Yeah, full disclosure, my office paid $2,000 to get the Brooklyn Bridge up late.
1:43:00So, you know, the Brooklyn Bridge is actually mine now, and I would like that reflected in the budget.
1:43:07But yeah, I know, right?
1:43:09$2K for a bridge and it's all yours?
1:43:11Just kidding, it belongs to the city.
1:43:13Oh, Olivia's telling me I have to maintain it now.
1:43:15I don't know how I feel about this.
1:43:18No, I think that's fine.
1:43:20I feel fine having that, if it is helpful to people, having it line itemed whose office it came out of.
1:43:27I think the way I frankly went into a lot of our budgeting for our office was knowing that our bureaus are going to be taking really difficult cuts at this time, and everyone's going to be sort of pitching in and doing their part.
1:43:38So we have some money left over to give back to the general fund, and I'm— I think that's a good thing, or that was our intended way of spending our office funds.
1:43:48So I will leave it at that.
Jamie Dunphy 1:43:50 - 1:44:02
1:43:50Thank you, Councilor Morillo.
1:43:55Councilor Green, are you in the queue again?
1:43:57Okay.
1:44:00Take us home.
1:44:01Anything further from y'all?
Loretta Smith 1:44:02 - 1:44:03
1:44:02Great.
Ruth Levine 1:44:04 - 1:45:52
1:44:04So there are a couple of follow-ups from today and we will get those out to you as soon as possible.
1:44:11And I do wanna note there are the— we'll be circulating the full list of the decision packages in the spring TAO.
1:44:22So there's a little bit more narrative detail in there than what we posted and sent to you already.
1:44:28So you will get that this afternoon.
1:44:34Were there other things?
1:44:35Oh, and the fund, the description of the funds that were updated to reflect the ACVIR, you'll get an exhibit with that.
1:44:45And we also have additional descriptions about the encumbrances that we will also circulate to you.
1:44:54So you will get all of that information and—.
1:44:57Thank you.
1:44:59Feel free to reach out to us with any questions before Wednesday of next week when we have the first reading of this.
1:45:07Additionally, we don't have a formal process set up for amendments for the spring TAO, although we should probably have a conversation about that moving forward for supplemental budgets.
1:45:18But Owen Saitz, who's worked with you all and is working with you for the '26-'27 budget process, is also available for any amendments that you would like to put in for the spring TAO.
1:45:29Thank you.
1:45:30So just go ahead and shoot him or us an email, and he's happy to help you ensure that those amendments, you know, have the correct technical language and information included in them before Wednesday of next week.
1:45:49And if you'd like to post them, you know, we can make sure they get posted ahead of time.
Jamie Dunphy 1:45:53 - 1:45:54
1:45:53Excellent.
1:45:54Councilor Knell.
1:45:55Just a question on that, or 2 questions.
1:45:58One is, will that include the decision packages that are not I'm seeing a couple in— I'm in Exhibit 4, I want to say.
1:46:05Yeah, that are proposed packages that are zeroed out.
1:46:12So it's actually the, you know, these are the things that I'm assuming means that somebody asked for a change and was not— that was not included.
1:46:22Will there be— will that be included in here?
1:46:24I'm looking at the very last line on page 2.
Raymond C. Lee 1:46:26 - 1:46:26
1:46:26Yes.
Anthony Locke 1:46:31 - 1:46:59
1:46:31So some of the dollar amounts that have zero represent like net neutral adjustments made in the general fund.
1:46:42And then there are a couple, and we can provide follow-up, where kind of on a technical basis, we're not— I'm sorry, I'm sorry.
1:46:54Not advance forward.
1:46:55So it just became clear in conversations internal to the Bureau that those should be withdrawn.
1:46:59And so—.
1:46:59Yeah, this one just happens to say proposed package.
1:47:03So I know there was a proposal in that scenario.
1:47:07The other thing is, will these dollar amounts in the immediately preceding sections, this is the bulk of Part 2, the general fund return, will those be disaggregated further?
1:47:16Because I'm seeing, what, you know, the $1.3 million, uh, we've talked about, the $1.4 million we've talked about, but the $2 million from the Office of the Public Safety DCA, I imagine, has a bunch of sub, uh, information there, and I would love to see that, um, particular one.
Anthony Locke 1:47:35 - 1:48:01
1:47:35We, we can provide information that maps what we presented to specific decision packages.
1:47:42I, I do recognize in the general fund return category there there are a couple of things that are just related to general fund underspending, and then there are some related to, like, for example, the special revenue fund adjustment for the PPV.
1:47:55Yeah, for police.
1:47:57So yeah, we can make sure that the information you see here is crosswalked properly.
1:48:02Yeah, I assume— I have faith that it's been crosswalked.
1:48:05I want to be clear on that.
1:48:07I just want to know, $2 million is not one position.
1:48:10It's probably from several of that office.
1:48:13It's a big office.
1:48:14I'd love to have an understanding of, of that.
1:48:16I think if it's, you know, $30,000 from the Office of Equity, that's probably a single source.
1:48:20We can figure that out.
1:48:21But for those larger dollar amounts, having that transparency would be helpful.
Anthony Locke 1:48:24 - 1:48:34
1:48:24Yeah, and that information will be in the decision package, so you can see like what major object money is taken from when you see the— when you see all of the discrete items in, in the TOE.
Ruth Levine 1:48:35 - 1:48:57
1:48:35We can provide it for the Office of Public Safety.
1:48:37Sounds like like that one, and then we'll look if there are any other significant size ones.
1:48:41Sometimes it is just like sort of personnel underspending, and so it's not disaggregated to specific programs.
1:48:50But to the extent there are large ones where there are multiple things happening in the bureau, we can certainly provide that detail.
1:48:58Yeah, and I think a good example is if you go up to the top of that section, the 2nd through 4th line, they're all BPS.
1:49:04But it tells me one is graffiti abatement, you know, that level of understanding.
1:49:09And it's— I understand that's how the, the bureau or the office requests it is probably how you have it.
1:49:14So it's a little bit subjective in terms of your evaluation.
1:49:17I just— that's one that I happen to be—.
Ruth Levine 1:49:19 - 1:49:23
1:49:19Yeah, we'll, we'll do our best to get as much detail in there as possible.
Jamie Dunphy 1:49:26 - 1:49:42
1:49:27Um, colleagues, our, our friends from the Office of Arts and Culture are here to answer some of Councilor Pirtle-Guiney's questions that she'd asked earlier about the, uh, Dunphy 2, uh, TAO carryover or TRUA.
1:49:45Hello, good afternoon.
1:49:50For the record, my name is Cherity Montez.
1:49:52I'm the Director of the Office of Arts and Culture.
1:49:54My understanding is there are questions about the second bullet on the previous slide, or the first bullet, I'm sorry.
1:50:05Council President, is it helpful if I repeat the question?
1:50:08Please.
1:50:09Okay.
1:50:09And Ms. Montez, thank you for rushing over.
1:50:12I know that it's hard when you're in the middle of other projects and we suddenly have questions that weren't anticipated.
1:50:18What's listed as Art Request 1 was described as reallocating funds that were originally meant to hire somebody to connect artists with space.
1:50:29We couldn't hire that person because of a hiring freeze, so we're adding the funding to a contract to contract out the work.
1:50:35What I'm trying to understand is whether we are putting this $190,000 toward, for example, paying for artists through this contract to activate spaces that have been identified as good spaces, or whether we are putting this money toward hiring somebody to do the work that the individual we were going to hire would have done but for the hiring freeze.
1:51:01Got it.
1:51:01Thank you for that question.
1:51:02And just so that you understand the motivation, if it's the latter, if we are essentially hiring somebody but through contract and the hiring freeze is changing how we bring somebody on to do the work but not actually limiting our spending on people doing the work, I have concerns both from a relationship with our labor unions and an effectiveness of our constraints.
1:51:30Thank you for the question.
1:51:31I understand the concern.
1:51:32We would look at, this would be a very short-term fix.
1:51:37We would not spend the full $190,000 on a contract for a person to help us do the work.
1:51:45I do believe that we would probably spend up to $25,000 to contract with with an existing artist/arts administrator to help us do some of the work to put art into vacant storefronts.
1:51:58The original Dunphy II had a collection of things.
1:52:01Some of it is grants, some of it was a space finder, and some of it was storefront activation through art.
1:52:08And we would use the rest of the $190,000 towards more art and paying more artists.
1:52:14Thank you.
1:52:15So this is using $25,000-ish to pay for a person doing the same work we would have paid for a person internally to do, but we're not doing it internally because of the hiring freeze?
1:52:28Not all of the same work, a portion of the work.
1:52:31Okay, um, thank you for the explanation.
1:52:35I really appreciate it.
1:52:36Um, it's not what I was hoping you would say, but I think knowing that is really helpful and and Council President, I think I— it's a small amount of money.
1:52:46I don't want to pick a big issue over something small that is important, but I, I do have some concerns about our policy here.
1:52:55I want to think about what I do with that.
Jamie Dunphy 1:52:57 - 1:53:35
1:52:57Fair enough.
1:52:59Thank you.
1:53:02Colleagues, seeing no one else in the queue— pause for dramatic effect— I believe that concludes our work session on the spring TAO.
1:53:13Thank you all for your thoughtful questions and debate.
1:53:16Thank you, staff, for everybody for, uh, your thoughtful answers.
1:53:20And we will be back in this building, this exact space, 9:00 AM tomorrow.
1:53:259:30?
1:53:269:30.
1:53:299:25, People.
1:53:31With that, I'm adjourning the, uh, work session.
1:53:33Thank you.
1:53:35Thank you.
1:53:35We're adjourned.

The gap and how staff propose to close it

Councilors press on cuts that were authorized but not made

Loretta Smith’s objections and a point of order

Arts money, the Brooklyn Bridge, and a process fight

What’s next

Transcript

Jamie Dunphy 8:23 - 8:40

Jonas Biery 8:41 - 14:26

Ruth Levine 14:28 - 16:04

Jonas Biery 16:04 - 16:04

Ruth Levine 16:05 - 19:16

Loretta Smith 19:17 - 19:17

Ruth Levine 19:18 - 21:59

Jamie Dunphy 22:06 - 22:07

Mitch Green 22:08 - 22:13

Ruth Levine 22:23 - 22:23

Mitch Green 22:24 - 22:46

Ruth Levine 22:46 - 22:46

Mitch Green 22:46 - 22:49

Ruth Levine 22:49 - 22:50

Mitch Green 22:50 - 22:54

Ruth Levine 22:55 - 22:56

Mitch Green 22:56 - 22:56

Ruth Levine 22:57 - 22:57

Mitch Green 22:58 - 23:25

Keith Wilson 23:25 - 23:26

Ruth Levine 23:26 - 23:40

Mitch Green 23:40 - 23:41

Ruth Levine 23:41 - 23:50

Raymond C. Lee 23:51 - 23:52

Mitch Green 23:52 - 24:09

Ruth Levine 24:09 - 24:35

Mitch Green 24:35 - 24:44

Angelita Morillo 24:44 - 24:45

Ruth Levine 24:45 - 24:51

Mitch Green 24:52 - 24:52

Ruth Levine 24:52 - 25:07

Mitch Green 25:07 - 25:23

Ruth Levine 25:23 - 25:24

Mitch Green 25:24 - 25:29

Loretta Smith 25:30 - 25:30

Jamie Dunphy 25:30 - 25:32

Dan Ryan, Sameer Kanal 25:32 - 25:40

Jamie Dunphy 25:40 - 25:41

Ruth Levine 25:42 - 25:42

Jamie Dunphy 25:42 - 25:43

Ruth Levine 25:45 - 25:56

Jonas Biery 25:56 - 26:08

Anthony Locke 26:09 - 26:09

Dan Ryan, Sameer Kanal 26:09 - 26:15

Jamie Dunphy 26:15 - 26:17

Dan Ryan, Sameer Kanal 26:19 - 26:25

Sameer Kanal 26:25 - 26:26

Dan Ryan, Sameer Kanal 26:27 - 26:30

Jamie Dunphy 26:31 - 26:33

Elana Pirtle-Guiney 26:34 - 27:21

Jonas Biery 27:22 - 27:47

Angelita Morillo 27:47 - 27:47

Elana Pirtle-Guiney 27:49 - 27:59

Ruth Levine 27:59 - 28:01

Elana Pirtle-Guiney 28:02 - 28:12

Ruth Levine 28:12 - 28:12

Elana Pirtle-Guiney 28:13 - 28:17

Ruth Levine 28:17 - 28:53

Elana Pirtle-Guiney 28:53 - 29:01

Ruth Levine 29:01 - 29:10

Elana Pirtle-Guiney 29:10 - 29:25

Jamie Dunphy 29:27 - 29:29

Loretta Smith 29:31 - 32:43

Cherity Montez 32:43 - 32:43

Jamie Dunphy 32:46 - 32:48

Dan Ryan, Sameer Kanal 32:51 - 33:29

Jonas Biery 33:30 - 34:07

Angelita Morillo 34:11 - 34:11

Dan Ryan, Sameer Kanal 34:12 - 34:57

Raymond C. Lee 34:59 - 35:04

Dan Ryan, Sameer Kanal 35:06 - 35:23

Raymond C. Lee 35:23 - 35:35

Dan Ryan, Sameer Kanal 35:36 - 36:49

Sameer Kanal 36:49 - 36:50