Transcript
Automatically generated transcript. It may contain errors and includes testimony in languages other than English that is not individually marked up for assistive technology.
Jamie Dunphy
Good morning, folks, colleagues.
This is the first official work session of the fiscal Thank you, Councilor Smith.
Jonas Biery
Thank you, Mayor.
Jamie Dunphy
Welcome to the City of Portland Budget Committee.
This is a work session.
We are here to ask questions, exchange ideas, and develop concepts for potential amendments to the mayor's proposed budget.
As you may recall from my memo on the budget process for the year, if you have budget amendments that you wish to formally move, you should submit it to the budget office for review via the intake form.
Big thanks to Ruth and Owen and the budget team for getting that form out to all council offices.
Today, the focus is on citywide and structural matters to set the table for the bureau-by-bureau work to come.
We'll hear and ask questions about the city administrator's portfolio, the city operations service area, and the core service realignment, the administration's effort to centralize certain basic functions that were distributed throughout the bureaus in the commission form of government.
Tomorrow, we will be discussing the general fund, receiving Public Works bureaus, specifically Parks and PBOT.
But to get us started, I'll now turn it over to City Administrator Lee.
Raymond C. Lee
Good morning, Council President, Vice President, and councilors.
Uh, Raymond Lee, City Administrator.
Today is the first of several work sessions that are scheduled to cover all of the service areas.
The purpose of these work sessions is to cover what is in the mayor's proposed budget for your consideration.
We'll cover the proposed cuts, any adds, and what is being preserved in each of the service areas, as well as tough, important impacts and challenges that we may be potentially changing and that is called out in this proposed budget.
We'll start with an overview from our CFO Biery and our Budget Director Ruth Levine.
Then I will take you through the CA portfolio before passing to the DCA Warren for the city operations service area and the DCA Warren and Chief Engagement Officer Garcia-Snell for the core service realignment project.
We look forward to discussion with this group as you engage in your deliberations in the weeks to come.
As I know, council will have questions and requests for additional information.
Staff will work with you to make sure that you have that information as you go into further budget deliberation conversations and decision points that you'll have to make as you go through an adoption of an adopted budget for the next fiscal year.
At this point in time, I'll turn it over to our CFO to kind of walk us through the presentation, and then I will come back to talk about city administrator's budget.
Jamie Dunphy
And just colleagues, just for some level setting, we have a— we are scheduled to be here until 12:30, which is about— is 3 hours, and we have 3 sections to get to.
So that means we have a little bit less than an hour per section.
So I'm gonna try and keep us on time so we can get outta here in time for some lunch before the rest of our day of sitting in this chamber.
So take it away.
Jonas Biery
Great, thank you, Council President and Council.
Thanks, City for the intro.
And yeah, before we kick off to service area presentations, Ruth and I are gonna give a high-level overview of the proposed budget just to sort of set the stage for those more detailed thank you.
Loretta Smith
Thank you, Council President.
Jonas Biery
Thank you, Councilor Smith, for the detailed presentations.
As we go through this presentation, as we go through all the presentations, you know, we'll take general clarifying questions on the citywide resources allocations.
Would just note if you have questions specific to a service area, you might hold those for this service area presentation so we can keep this moving as Council President suggested.
For all questions, City Budget Office staff are recording from these work sessions, tracking, will compile and send back answers, and aiming to post FAQ documents thank you all for your patience as we pulled the budget work forward 2 weeks to publish the mayor's proposed, as we've talked about before, earlier than previously.
And we've all been undertaking additional effort to prepare for these additional work sessions, which I think will be really valuable conversation points.
I know that the budget has not been perfect.
I appreciate the respectful dialogue and the many emails and questions we've received, including requests for additional information.
Olivia Clark
Councilmember Herbold.
Elana Pirtle-Guiney
Information.
Jonas Biery
We're continuing to work on triaging all of those, and we'll respond as quickly as we're able, though noting in some cases that may still take a few days as we continue to catch up.
I want to again, as we begin these work sessions, acknowledge the efforts of employees in the City Budget Office, budget and finance functions, and leadership positions citywide, as everyone's doing everything that we can to meet the justifiably high expectations of council and the public.
Next slide, please.
So just a quick preview of what Ruth and I'll go through at this first presentation.
I'll give just a very brief overview of the total budget, pass to Ruth to talk about how the proposed budget balanced the general fund, as well as a quick summary of non-general fund changes and positions.
And then I'll come back to cover some examples of fund balances to walk through— walk council through how to find those in the budget and discuss some future improvements related to budgeting and transparency around fund balances.
Next slide.
So this slide shows you kind of the highest level summary of total appropriations in the budget.
So all funds appropriation, net budget, and program expenses.
A couple of things to note about these high-level charts.
You may note that the total budget is accurately cited as $8.5 billion.
The chart, the far left pie chart here shows $8.1 billion.
The difference is due to a category called unappropriated funds.
Unappropriated ending fund balance, which is not counted in appropriations but is allowed under state budget law and captures some types of fund balances, which we'll discuss more later.
We also talk about the total budget size being somewhat misleading because it double counts some amounts of internal transfers between bureaus.
So the net budget in the middle, the pie chart in the middle of this slide, removes those internal transfers, reflecting a net budget of a total of $6.6 billion.
Candace Avalos
Thank you.
Jonas Biery
And then the third kind of lens to look at the budget overall with is just looking at program expenses.
So this only counts personnel, material and services, and capital spending.
Compared to the net budget, this category excludes debt service and contingency reserve line items.
So with that lens, the total citywide program expenses in the mayor's proposed budget are $4.4 billion.
Mitch Green
Thank you.
Jonas Biery
The last note here, it's kind of reflected in the little box at the top right of the screen, and this is, I think, linkable in the presentation online, is information available at the proposed budget dashboard on the City Budget Office website.
This link contains much more information, including lots of detail, summarized detail about the budget, and it's a great resource for councilors and the public to also view.
Next slide, please.
So this slide kind of zooms in looking at the— from the— going from the total budget to just looking at the general fund, which is generally thought of as the city's most flexible dollars.
The total discretionary sources of general fund dollars is shown on the left.
As we've discussed before, the 3 major sources are property taxes, business license taxes, and utility license fees.
As you can see, that makes up over 2/3, almost 75%, or actually more than 75% of the general fund discretionary the donut on the right is a breakout of how general fund dollars are allocated in the mayor's proposed budget.
Over half of that general fund discretionary goes towards public safety— police, fire, BOEC, 911, and PBIM.
And noting that the $67.1 million in public works reflected here is all the general fund in public works goes towards Portland Parks and Recreation.
Also want to flag, and CA Lee will talk more about this, at the next section of this morning, but do want to preview that the city administrator bucket includes Portland Solutions and rolls up things like management of specialty general fund contingency and debt service payments.
So while that's a large amount, the programmatic amount is actually much smaller, as we'll talk about here later this morning.
One other thing to note is that the figure of $798 million here includes both forecasted revenues and fund transfers.
That were used to help balance the general fund, and Ruth will talk more about that in just a moment as I now hand to her to talk about those key strategies and changes to balance the '26-'27 mayor's proposed budget.
Unidentified speaker
Great, thank you.
For the record, Ruth Levine, budget director.
So I'm going to go over briefly how the proposed budget balances the general fund.
So at the top of this bar are the gaps.
They're positive numbers.
Sorry if that's a little confusing.
And then the solutions bring that gap down, and they are negative numbers.
They sum to zero, which is because we have a balanced budget.
On the gap side of the equation, the largest gap is the current services level gap.
That includes about $50 million of forecasted revenue declines from prior forecasts.
So, and then the remainder, about $110 million-ish, is on the expense side.
It's a combination of expenses growing faster than inflation and sort of making up for expiring one-time resources that are in the '25-'26 budget.
Additionally, there's about $8.7 million in the proposed budget on top of that current services level for a total—.
Jamie Dunphy
Yes.
Unidentified speaker
Gap that the budget balanced to of $171 million.
And then on the bottom part of the bar is— are the sort of ways that that was balanced.
Reading from the top to the bottom, the biggest one, about $60 million, is service level reductions.
And that's what you'll hear much more about in the coming presentations from the service areas.
Loretta Smith
Thank you.
Unidentified speaker
The green section is about $44 million of contingency and reserve draws, and I'm going to speak to those on the coming 2 slides.
The $30.5 is the return of the transfer that we've previously sent to the county for homelessness response.
$26.9 Is the transfer of PCF interest.
That's the actual interest that accrued in the PCF fund in '24-'25 that is transferred to the general fund in the proposed and then there's about $10 million of other revenue sources that we're able to offset general fund expenses, including fees and grants.
So that is the really high-level picture of how the general fund is balanced.
So I'm going to go into a little bit more detail on the next slides.
Loretta Smith
All right.
Unidentified speaker
Thank you, Deputy City Administrator.
So the next 2 slides have the complete listing of the $44 million that was in contingencies and reserves on the previous slide.
I'm going to go through it quickly and feel free to ask questions after this section.
Remaining $4.3 million that was sort of left from the transfer of $8.6 in the spring TAO to the general fund.
So half of that was used in '25-'26, half is in '26-'27.
$7 million coming over from the transportation fund contingency that was there for future LED light replacements that were previously funded by general fund, currently are being funded by PSEF.
The next line is the citywide obligations reserve fund for Portland Harbor, amount for Portland Harbor, and this is just the general fund portion of that, which has accumulated over the past 3 years.
Olivia Clark
There's an ongoing—.
Candace Avalos
3 years.
Unidentified speaker
Amount that's maintained towards that same subfund from the general fund.
This is the amount that had built up there from the general fund in prior years.
And then the last row on this slide is part of what was formerly known as compensation set-asides.
So because of the proposed budget transitioned to current service level budgets, Instead of leaving what we used to call compensation set aside in general fund contingency, which was the amount that was previously budgeted for general fund COLA, health benefits, and the like, it is now budgeted— that is budgeted directly into bureaus' budgets now.
And that left the amount that was in contingency available to repurpose essentially.
And so the proposed budget includes a portion of that as a revenue stabilization for business license taxes.
Given the volatility of that revenue source and the risks and the obvious consequences that we saw this fiscal year from that revenue not coming in as forecast, this is proposed to as essentially an operating reserve.
Angelita Morillo
Okay.
Unidentified speaker
To shore up that revenue source and protect us against volatility.
The proposed budget includes that reserve at— funds that reserve at $8.7 million, which is 4% of forecasted business license tax revenue.
I'm sure there'll be questions on this, but I'll keep moving and feel free to come back to it.
The next rows include we sort of balanced that from $1 million of— we actually increased unrestricted contingency, $4 million of interest that has built up in the American Rescue Plan fund within the grants fund.
Because the remainder of those funds have to be spent down by the end of this calendar year, the interest is sort of available at this point.
Jamie Dunphy
Okay.
Unidentified speaker
And was used to swap out general fund in the proposed budget.
There's $700,000 of funding from the fire health and wellness funds.
That fund was created, or it's not its own fund, but that bucket was created per their collective bargaining agreement.
And this is the amount that's projected to be unused at the end of the current fiscal year that was pulled back in the thank you.
And then the last one is more reallocation, but counts in this bucket for these purposes, and that's the sobering services.
This question came up last week.
In the proposed budget, that amount is split between the county— half of it goes to the county for the sobering center in the proposed budget, and half of it is used for sheltering for Portland Solutions.
Tracy Warren
Thank you.
Unidentified speaker
All right.
And then a very brief summary of non-general fund sort of major changes.
Again, we'll come back to these in the work sessions that you'll be getting in the— this weekend, in coming weeks.
So I'm not going to go deep into any of these, but just wanted to highlight them.
Obviously, the transportation utility fee that you all have been considering and the street damage restoration fee played a big part in the PBOT budget.
In permitting and development, there are some fee increases to cover some of their permitting programs and then a $2.9 million reduction in the tree permitting program.
Water and sewer took a total reduction of $6.6 million between them in order to maintain rate increases for '26-'27 that were forecast as of last year.
And then PSEF, the main changes are the interest that I already mentioned and the—.
Candace Avalos
The increase.
Unidentified speaker
A couple of realignments within the CIP to PMO and IRP.
Angelita Morillo
All right.
Unidentified speaker
And then citywide position changes.
This gives you a high-level picture of all of the position changes that are included in the proposed budget.
So there are reductions totaling 203, additions above current service level of 58, although some of those additions are kind of catching up the position authority.
Loretta Smith
Yeah.
Unidentified speaker
For things that were already funded.
And then the net change of those is 145.
But some, depending on the question you're answering, you might need both of those separately.
For the table below that on the left, we just looked at the reductions of 203 and broke them out by filled and vacant.
So you can see about half of them are filled positions and half are vacant.
And then the table on the right cuts the data in 2 ways.
One is by represented/non-represented, and the other is by manager or supervisor and non-supervisory positions.
So you can see those percentages on the right.
They both roughly align proportionally to our current supervisory/non-supervisory and represented/non-represented.
Percentages.
So essentially it wouldn't impact that breakdown between each of those 2 groupings.
And I think that is my portion.
I'm gonna turn it back over to Jonas to talk about fund balances.
Jonas Biery
Great, thanks Ruth.
So on this slide and the next slide, I believe, I'm gonna talk briefly about fund balances as they appear in the budget documents.
We were hoping to have kind of a full detailed inventory of information for each of the hundreds of We don't have that yet.
We obviously have time constraint this morning, but CBO is continuing to work on that and we'll provide a follow-up memo, I believe next week is the goal, that includes those additional details and explains some of the more technical aspects of the different types of fund balances.
But for today, wanted to kind of provide some examples and walk through a few of those different operating funds and reserve funds, contingencies fund balances, and make clear where you can also see that information for each of those funds.
Loretta Smith
Thank you.
Jonas Biery
Of the city's funds.
That location is in the section of the budget called Fund Summary.
It begins on page 1001.
So if you only read the first 1,000 pages, keep going.
There's more.
But there is a breakdown of each of the funds citywide that will include the same type of information.
So the examples we have here, this is a handful of some of the key operating funds comparing the fiscal '25-'26 budgeted revised contingency as updated in the spring TAO.
So that's the kind of left number column, what was in that contingency amount, to 3 key amounts that are in the proposed budget.
The first thing I'll highlight is the first 2 columns, the middle 2 columns, proposed beginning fund balance and proposed contingency, are included in the category called the fund expenses.
So that fund expenses category is beginning fund balance.
Contingency also includes, not shown here, Debt service payments, if any, and fund transfers out, if any.
The budgeted beginning fund balance is the forecasted fund balance that as it appears in the '26-'27 budget.
Because fund balance is determined by kind of whatever's left over in a fund, this projection is generally expected, usually will change during mid-year budget adjustments, but initially it's budgeted conservatively as a resource.
Unidentified speaker
Thank you.
Jonas Biery
Conservatively in alignment with financial policy.
Contingency is an expense category that represents amounts that are not anticipated to be spent in the current year as program expenses or can be reallocated out by City Council during the fiscal year.
Many contingencies, maybe all contingencies, exist for a specific purpose.
Maybe something that isn't known but may materialize, maybe sort of expected as a possibility to materialize in the fiscal year.
Unidentified speaker
Yes.
Jonas Biery
Or be intended for specific uses in future years.
And we'll talk a little bit more about some of that as well.
The far right-hand, kind of the second category, is program expense.
Also, it's called bureau expense.
And this reflects the amounts actually expected to be spent down from each fund, directly from the fund during the fiscal year to do things.
So this is what we generally think about as program expenses.
When we're paying to do things, it comes from that program or bureau expense category.
Again, important to note this chart is only kind of highlighting those 3 categories, beginning fund balance, contingency, and program expense.
Does not include other fund expenses such as debt service payments or transfers out, and importantly doesn't reflect amounts that may be coming into these funds throughout the fiscal year.
This is just the expense side.
So to walk through quickly a few different examples.
First, here's the general fund, which is aligned to the various expenditures that we identified in the general fund donut chart earlier, plus this includes overhead.
Loretta Smith
Okay.
Jonas Biery
The second example is the Transportation Operating Fund, which is a restricted fund, meaning the dollars that go into that fund can only be used for specific transportation-related purposes.
Kind of bucket those together, the General Fund and the Transportation Fund, because in these examples, those 2 funds show very large amounts of program expenses relative to contingency and beginning balance, as the revenues coming into those funds are generally then spent directly out of those funds.
So you can see obviously the general fund being among the largest.
Third example, just for kind of a different flavor of reference, is the golf fund.
Most of the dollars that are budgeted here go back out.
The $18 million goes back out to fund golf system operations with some dollars held in that contingency to protect against revenue shortfalls or to hold to pay for future capital improvements.
The golf fund receives revenues throughout the year from golf system operations.
And in this example, expected expected total revenues of around $18.5 million are essentially equal to the expected bureau program expenditures out of $18.5 million, meaning that the contingency and reserve amount is essentially expected to remain unchanged in '26-'27, of course pending unexpected changes in revenue forecast, et cetera.
And then the final example here on the operating fund slide is the recreational cannabis tax fund, which has similar dynamic to the golf fund with revenues coming in.
Loretta Smith
Thank you.
Jonas Biery
Being aligned to essentially expenses going out and the remainder being held in contingency to protect against unexpected revenue shortfalls.
I know we're going through this super quick, but wanted to kind of just provide some examples here today and maybe daylight as you look through those other funds and questions.
Next slide, and I think almost the last here.
The different kind of category of funds, dedicated reserve funds.
So different from operating funds, dedicated reserve funds are more rare.
Unidentified speaker
Yeah.
Jonas Biery
They each have kind of policy guidelines dictating what the funds are for and how they may be used.
And in these cases, fund balance and contingency are more closely aligned because reserve funds do not have program expenses.
You can see in that zeroed-out column here, we don't pay for doing things directly from these reserve funds, but these funds might get transferred out to then support those program expenditures.
Note also that these reserve funds do often sometimes have dollars that come in.
Those are typically transfers in to meet policy or planning targets or to accommodate future expectations.
On the flip side, may have transfers out to redeploy those dollars or to release those dollars if amounts get above the policy requirement or targets.
So again, a few examples here for reference, general reserve, The general fund reserve fund is a policy-directed reserve, FIN 2.07 for those keeping score.
That amount by policy is funded at least 10% of general fund discretionary and overhead resources less beginning fund balance.
The math that's indicated here reflects that calculation.
Similarly, the transportation reserve, or FIN dictated by FIN 3.10, includes restricted revenues generated by the transportation system.
Transportation thank you.
System and to be used in accordance with that policy.
And then the last example here is the sewer rate— sewer system rate stabilization fund, which can include transfers in from sewer revenues.
This type of reserve, a stabilization fund or stabilization reserve, is a critical tool for managing forecasted rate increases for utilities.
By drawing down the stabilization reserve, future rate increases can be mitigated.
Spikes in rates can be avoided.
The water system maintains a similar reserve, as do all well-managed and highly rated public utility systems.
Final comment about reserves is that strong reserve balances, both restricted balances and general balance, general fund kind of uses, is a critical factor in maintaining high credit ratings.
Those high credit ratings translate into lower out-the-door costs for the city over the long term.
And indeed, the rating agencies have specifically called out that reductions to city reserves would be a negative factor that could lead to a credit rating downgrade.
All right, next slide.
And I think our last one of this first presentation, just to close the conversation on fund balance.
We have discussed multiple times over the last year and a half that we're constantly aiming to continuously improve our budget process, practice, and communication.
We appreciate the importance of accurate and complete accounting, monitoring, and reporting related to fund balances at budget time.
At the fiscal year end and throughout the year.
And in support of that, we anticipate additional improvements related to management and transparent communication of fund balances.
One future improvement we expect is shifting fund language to include the phrase reserved for future expenditures to be more clear about that, and anywhere that funds are held in a contingency or reserve to include narrative that's more descriptive about those future uses.
Loretta Smith
Thank you.
Jonas Biery
And as previously discussed, we're improving our process and practice— practices, including working on an administrative rule to make sure that audited balances in the Annual Comprehensive Financial Report, or ACFR, are accurately and timely aligned to budget balances.
Lastly, achieving all this obviously takes attention and human bandwidth, so we look forward to support from Council to allow us to prioritize these efforts in addition to the many other budget process improvements that have previously been identified and I expect will continue to be identified as we go through this process.
Next slide, which I think is just leaving space for questions, if any, before we move on to talking about City Administrator's budget.
Thank you.
Jamie Dunphy
Thank you.
We actually have 8 councilors in the queue.
Folks, I'll recall that this is— this first part was supposed to be a high-level overview as we're going to dive deeper over the next coming weeks, but there are still some clarifying questions to be had.
Councilor Green.
Mitch Green
Thank you.
It's actually— I'm actually going to offer some praise.
I put my hand up immediately because there was a bar chart early on in the presentation.
I believe it's on slide 5.
And I just think it's a really good way of explaining visually how we got to balance.
And so the table is also good.
That's in the sort of summary piece of the mayor's proposed.
But, you know, I recently did a town hall and I was explaining this, and this is a good chart.
And I just, you know, just wanted to— you don't always get the praise up there, so I'm saying you guys are improving.
And so I appreciate that.
In the later slide, then you anticipate my question of— I was going to ask, like, how do you get the $44 million of drawdown so that the chart does that for me.
I do have a question though about, maybe we'll get into this later, but just explaining a little bit more about the BLT stabilization piece.
I understand the intent.
I think it's good to move away from compensation set-aside and just sort of explicitly budget that in.
And knowing that BLT is a volatile source of revenue, presumably that's why you're moving towards a stabilization fund.
Okay.
Jonas Biery
Yeah, Councilor, that's absolutely right.
And, you know, the county's had that is maybe the only other local government in the country that has a similar type of tax income structure specific to the BLT, BIT as they call it.
And so they've had that reserve specifically to protect against the volatility that we experienced this year in the absence of having that reserve at the city.
So this has been sort of on the radar for a while.
And with the shift in compensation set aside, the way that was managed, it provided an opportunity to start seeding that.
Frankly, I was hoping we'd be able to seed it at a little higher number, maybe half and half of the 15% target, but felt like kind of half of that, roughly 25%, was kind of an appropriate level to at least start that conversation and start that reserve protection given the moment we're in right now.
Mitch Green
Thank you.
So then just so I understand, the $16.1 million that's being drawn from that contingency that's currently called compensation set-aside is being used to seed the stabilization fund, or are we using it to fund gaps, and then we're sort of going to work towards accumulating that.
Can you clarify that?
Unidentified speaker
Yeah, good question.
It's the latter.
So essentially the $8.7 million is what is left as the stabilization reserve.
The $16.1 million, essentially that bucket of funds was set in the forecast based on calculating COLA and health benefits.
And so it was the sum of those 2, about $24 million.
And so the, as Jonas said, we were aiming for something like 7.5% in terms of leaving that amount in the stabilization reserve.
We ended up leaving 4% of forecasted BLT in the stabilization reserve.
But the original number and the number, like the original number that was in that bucket as compensation set aside, No longer has any connection to the purpose of the contingency going forward.
So it was just sort of used in balancing and it supports expenses across the general fund.
Mitch Green
Appreciate that.
Thank you.
So you're basically, you're budgeting that in now to pay for things that are in the budget that are program expenses.
The implication, of course, will be that in the fall TAO and then the spring TAO, there will not be compensation set aside to be drawn for that.
So whatever decision we're making now needs to fund the work that we're going to do over the course of the budget, and we're just doing it up front.
Unidentified speaker
That's right.
Mitch Green
Thank you.
And then the last thing I have, um, my thing went, uh, my little screen went, uh, blank, so I can't pull it up in time, but I think I can remember.
Uh, I want to say that the, um, the presentation for— let's see here.
Gosh, I missed it.
Um, you, you provided a snapshot, some samples of how yeah, I think that's a really good way for me to understand.
I think that's an improvement from kind of what we saw in the previous budget books.
I appreciate that.
It helps my staff kind of crosswalk how we get from a stock of funds to, you know, the use of funds, and then what's the stock at the end of the period.
So this is a basic accounting thing that I've been struggling with, and now I understand it a little bit better.
Loretta Smith
Thank you.
Mitch Green
This gets us much closer, so I appreciate that.
And then finally, I think retitling the sort of contingency broad buckets to say reserved for future use with the sort of recognition that we're going to explicitly say what those uses are is exactly what we need.
I think you guys have been listening, so thank you.
So that's all I have, Council President.
Jamie Dunphy
Thank you, Councilor Green.
Councilor Kanal.
Sameer Kanal
Thank you, Council President.
Thank you for the presentation.
Uh, thanks to Councilor Green for saving me a lot of time because there's a lot in there that I was going to say.
And I think the compensation set-aside piece is helpful to understand, um, because I, I think we're not losing the other advantage that it gives, which is being a checkpoint on potential overtime usage the way you're doing it.
I just want to get that on the record.
My question is about slide 10.
Nope, slide, uh, the one with the position 2 questions.
First, just clarifying, we're talking about the Office of Community-Based Police Accountability, OCPA, right?
There's a B in there, just making sure, on the left.
Olivia Clark
Yes.
Unidentified speaker
Okay.
Angelita Morillo
Yes.
Sameer Kanal
Just making sure we get that acronym right.
My questions are this.
The table on the right includes the additions of those 40 positions, right?
And these are positions that we basically already have.
Either budgeted and not filled on the OCPA side or budgeted and filled on the council side.
Is that correct?
Unidentified speaker
That's correct, yes.
Sameer Kanal
So are the position reductions proportional to the overall proportions of the city staff in terms of manager, supervisor, and non-supervisor when you take out those positions that already exist?
Unidentified speaker
I'll get back to you.
Raymond C. Lee
Okay.
Sameer Kanal
Okay, so I'm going to just say if the answer to that question is no, then what we're doing is once again cutting more of the rank and file than the managers and then adding 40 positions to the budget that already exist in practice makes that look more proportional.
If on the other hand the answer is that it's still proportional after setting those aside, Right.
Then that's better.
But I also still have a concern there about the idea that we're not correcting for the overcuts we've had in years past on the rank and file, where we've gotten our proportions out of whack.
And so if we simply maintain those proportions in the cuts we have now, that's better than making it worse.
And I do appreciate that, but it doesn't actually correct it and make it better.
And I think we need to be talking about how we can bring that, um, those two, uh, the ratio back in line.
Um, so, and, and obviously if the 40 that already exists is—.
Dan Ryan
That, that's—.
Sameer Kanal
And that would actually, I think, be making it slightly worse.
Um, it's not a huge number either way in terms of it.
This isn't like going from 50/50 to 75/25 or something massive like that, but it is, uh, just, I think, something to, to look at.
Candace Avalos
Thank you.
Sameer Kanal
And I'm really appreciating the content being in here and having that available.
I just wanted to understand what the impact actually is on a day-to-day basis.
And the other question I'd have in the future is if we can break down further between the manager and supervisor classification serieses—.
Dan Ryan
Series?
Sameer Kanal
Series.
And the classifications above that.
Because I think what you mean when you say manager supervisor here is everybody who has a supervisory role, including, for example, deputy directors, directors, DCAs, everybody, right?
Unidentified speaker
That's right, yeah.
Sameer Kanal
Okay.
But I think it is actually helpful to have a third category because I don't know necessarily that what we've been talking about as— we haven't really had this conversation.
When we talk about management bloat as to how much of it is actually about the manager supervisor series and how much of it is actually the upper management level.
And so I'm not saying that there is an outcome to that, but I think that it might be helpful to disaggregate the data slightly further into a third category so we can have that conversation.
Unidentified speaker
Yeah, we can definitely provide that for the proposed.
Raymond C. Lee
And we will— excuse me, Councilor— we will also have another work session to kind of talk through span of control.
Where we'll talk through the details of that as well, because there are some nuances to that as well.
We do have some classification titles, then we also have working titles.
So there's a difference in there that we want to kind of talk the City Council through as it relates to the actual class titles that people have and the working titles that they're working with as well.
Sameer Kanal
I appreciate both of those answers.
Real quick, is that normal in other cities, the degree to which we differ on working titles?
Raymond C. Lee
Normal is a very interesting topic.
Sameer Kanal
Is that your experience?
Raymond C. Lee
That's an even better question.
My experience is no, not to the degree that we have worked with from the standpoint of just working titles as an organization.
But when you look at the form of government that we previously had, I can easily see how working titles became such a pronounced and profound thing for this organization.
Because it was elevating people without necessarily touching money for individuals.
So I totally understand how we got into the predicament that we're in.
Sameer Kanal
Thank you.
Steve Novick
Thank you.
Jamie Dunphy
Thank you, Councilor.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
I think that I know the answer to this based on your conversation with Councilor Green, but I just want to confirm the $16.1 million that is now not needed in compensation set-aside and is going directly to bureaus.
Does that mean that what would have needed to be covered in the past by compensation set-aside is included in the dark blue gap on the slide before the current service level gap?
Unidentified speaker
Yes, that's right.
Elana Pirtle-Guiney
And okay, so we are not going to end up in a situation in the fall where we say costs have gone up through normal courses of business that would have been covered by compensation set aside, but those funds don't exist and weren't accounted for.
That is accounted for in bureau expenses.
Unidentified speaker
That's correct.
Elana Pirtle-Guiney
Okay, thank you.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Councilor Murillo.
Angelita Morillo
Thank you so much, Council President.
This is part of a question on the BLT reserve aspect as well.
I understand how this is coming to be, and I appreciate that we're no longer budgeting compensation set aside separately.
Long-term, I definitely think this is a good idea, but for next year, I wonder if it makes sense to be setting up a reserve at the same time that the mayor has balanced his proposal with what is effectively a loan from the Super Harbor Fund.
And I'm a little bit concerned about that.
So I'm curious to hear what you think about this overall.
Yeah, I think that's a great question.
And throwing this out here for my colleagues as well to consider that if we should seed it with $1.7 million instead and undo the loan.
But I mean, people can't all answer up here, but you can.
Jonas Biery
Thank you, Councilor.
That would certainly be up to Council's discretion.
I mean, I do want to be careful just with the language of the word loan because it's not— I appreciate the point you're making.
It is not set up formally as a capital L loan.
So I just wanna make sure for the public to make that nuance, but point understood.
Angelita Morillo
Right, there's no interest on it, but we do have to pay it back later, correct?
Jonas Biery
Correct.
We have a choice to pay it back or not, different than a loan, which would be sort of a mandated payback.
So I think that's a fair comment.
There are different pathways to solve for the gap.
I think I'll just say from the seat I sit in, recognizing that the comp set-aside shift was kind of a one-time, opportunity that we have and using that to seed what's not the full reserve, but at least part of the reserve, that that philosophically made sense.
There's certainly other trade-offs that Council could decide to do otherwise.
Angelita Morillo
Okay.
Yeah, I think I am concerned about this long-term just because I think we have seen what happens when we regularly take short-term solutions and then later in the following quarter, we are having to find more money elsewhere.
So I think this is something we should seriously consider as a body if we want to do that long-term.
So just flagging that for my colleagues is something to consider.
I'm not sure I have a perfect answer yet, but it's something I've been struggling with a little bit.
I think that's it for me for now.
Thank you.
Jamie Dunphy
Thank you, Councilor Maria.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
I want to go back to the PCF slide.
I have a question about the slide that referenced taking PCF monies.
And I just wanted to know, the PCF money is currently all allocated in one way or another in various strategic priority and community grant pots.
So can you tell me which existing strategic programs are being used to fund PMO and Ground Score?
Unidentified speaker
I think we can I can speak to that in the CA presentation, or if they don't have that talking point, we'll get it in follow-up.
I don't have like the strategic program number handy, but we can get it.
Steve Novick
Okay.
And the other category— the thing I wanted to ask about is in terms of— I think some people will be surprised to see that there's general fund additions in this budget when we're subtracting.
What are some of the major additions?
Unidentified speaker
Yeah, good question.
Some of them are what would have otherwise been considered carryover, but because we didn't have any resources from the current year to carry over, they act as additions.
So they're things that were unfinished in the current year, and we can provide the full list of things as follow-up.
A million of it is in response to the— apologies if I get this name wrong— the storefront revitalization program that council passed a resolution on.
$200,000 Is downtown marketing.
So there's a list of a few other things.
We can get the complete list, but those are some examples.
Steve Novick
Thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Council President.
I also really appreciate you both and your team for taking a lot of feedback and requests about having a standard consistent way to look at high-level information by program and reflecting it in this process.
It's great that there's a section in the program offer document titled Equity Impact.
I think that's great.
It's on the second page of every program offer.
And yeah, overall, I think the changes thank you.
I think the changes made for this year's process is making it easier for council and also to the public to see this information.
My question is, I'm wondering if there's a way to get an overview or a list of the position descriptions and responsibilities of those vacant positions that are proposed to be eliminated.
Because I am wondering if there are any positions that we really should have— should be considering keeping and filling.
For example, last year we eliminated the position for the Black Male Achievement Program in the Office of Equity, and in my opinion, we should have considered filling that.
I'm concerned that we might be unintentionally making cuts to unfilled roles that could be really vital to reducing costs or require us to bring in consultants to fill in.
So I'm wondering if we can see those details.
Unidentified speaker
Yeah, and you'll hear some of it.
So, I mean, the process itself doesn't distinguish between filled and vacant, but as the bureaus come forward with their reductions and speak to you about what is being reduced, that they can speak to some of those.
I can see what kind of detail we can get to council specifically, like on the full list of the 100, 103 vacant positions, but they are kind of embedded.
It wasn't like we It was part of the whole— part and parcel of the whole process.
So you will hear more about them, but I can— we can also try to get a little more detail.
Tiffany Koyama Lane
Yeah, that would be great for that to be concrete detail rather than maybe it's brought up in conversations.
Loretta Smith
Sure.
Tiffany Koyama Lane
If possible.
Olivia Clark
Thank you.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Councilor Avalos.
Candace Avalos
All right, thank you.
I heard your responses to Councilor Novick.
I have similar questions.
You know, I see that like in the city administrator presentation, you're going to go a little deeper, but I think I want to just get high level on the PSF reallocation.
I just want to understand why it appears that the use of PSF is a mechanism for backfilling broader general fund.
And I'm not talking about the interest.
The interest is a separate conversation.
Um, so can you just walk me through what authority you all believe you have to redirect or repurpose money that has been allocated in the CIP, is supposedly for programs in BES, PBOT that we'll hear more about later, but what is the actual authority you believe you have to redirect things out of a CIP?
Raymond C. Lee
Councilor, I think it's more of a recommendation, not authority to appropriate those dollars.
It's just a mechanism to show council this is an option as you kind of review your budget overall.
Candace Avalos
But why do you think it's an option?
That's my question.
I get that it's your recommendation, but why do you believe you can even make a recommendation on money that is CIP allocated?
Raymond C. Lee
Well, we can make recommendations on anything as it relates to the operational piece of the organization.
Those PCF dollars are a part of the operational piece of the organization as it relates to making recommendations how you could potentially fill any budget gap that the mayor was looking to do in his proposed budget.
Council holds the authority just as well too.
If you don't like that proposed option, you most likely can say, hey, that's not a direction we want to go.
Candace Avalos
That's unclear to me because I think that, um, I, I don't believe that PCF is just allocatable money.
It has a CIP, it has a voter-mandated, uh, direction for how to use the dollars.
So I, I, I don't understand your answer.
Raymond C. Lee
We can get legal interpretation on that as well and get that to council.
Candace Avalos
I would, I would like that.
Raymond C. Lee
Okay.
Candace Avalos
Um, I think ultimately, uh, I think it's— it just is really concerning to me that we, uh, continue to, uh, believe that we can just move money out of a CIP into other uses.
And this isn't just you, this is a conversation I'm having with all councilors all the time.
But, um, what I guess— what I mean, if it's not obvious, it is my intention to take that money back.
Do you have a plan for what's going to happen for if we claw that money back?
Raymond C. Lee
I don't know necessarily we have a plan.
We would have to go back to the drawing board.
It's, it's like a change of priorities.
If we take from one bucket, we'll have to replace it from another bucket within the proposed budget.
So if council is looking at potentially saying, hey, we don't want to use those funds, we'll be looking at council to say, okay, what are those priorities or shifts that you want to make within the budget and your recommendation?
So I think the question is, That we can remove those funds from another area to replace those funds for those PCF dollars.
Candace Avalos
Well, that's assuming that we want to replace them.
I think that's my point.
Raymond C. Lee
Yeah.
Candace Avalos
So, you know, I don't know the answer right now to whether I want to replenish the dollars that it has been— where it's being taken from.
But I think it just concerns me that I don't know that, like, what is the strategy around what are we funding and how we're using PSF dollars to do that.
But also, I think this is a broader conversation we're going to have about the role of Portland Solutions and PMO and shelters and all these other things based on the discussion we had yesterday with the county, which, you know, from my view, I didn't feel like I got good answers around like the theory of change for why we're making different decisions from the county, especially given the data.
So I'm going to continue to harp on that.
But I don't think that it is a satisfying answer to say that we just get to change that.
I don't agree So I'll just leave that there.
I think there's some other questions that I have generally that we'll go into in the next couple of presentations, but I'll just flag early that I'm really concerned about some of the realignment suggestions.
I'm concerned by a lot of dollars that seem to be removing workers and replacing them with consultants or replacing them with managerial positions.
So I'll just I just flag that as something that I want to get deeper into as we get into those presentations.
I'm trying to organize my thoughts based on presentations, so I kind of have them all jumbled in one, but I wanted to flag that that concerns me.
And then lastly, I think in general, you know, something for us to keep talking about, you know, Councilor Morillo brought it up around like if we're depending on all these one-time pots, I get it, we're in a crisis, I understand that we have limited options, and yes, Like, what are the hard decisions we're making structurally so that we're not just every year finding a new one-time pot to fill operations, right?
Like, we need to make hard decisions about what are the services that we deliver.
And I don't— I just feel like we keep saying that we're not trying to kick the can, and yet we're kicking the can even further.
So I'll leave it at that for now.
I'll have some more specific questions about realignment, but thank you for your time.
Jamie Dunphy
Councilor Smith, Thank you, Councilor Avalos.
Councilor Ryan.
Dan Ryan
Thank you, President Dunphy, and thank you for this big picture, both Jonas and Ruth.
It really is helpful, and you want the council to be really competent about the big picture, so it's necessary.
I think you make the revenue struggle so real in this, in the earlier graphics.
Clearly, business license taxes and property taxes aren't keeping pace with our fixed costs, and so here we are.
We hope that with the investments we did with with the money that came on high from the feds and we focused on issues that would help get confidence back, we're still here.
And so that's our struggle.
I hope that my colleagues continue to have a lens when we bring legislation.
Will this inspire confidence in Portlanders to invest in our economy or not?
Because that's what we're seeing here is the lagging of our business license taxes and our property taxes.
Sameer Kanal
Thank you.
Dan Ryan
So I think that makes it really clear.
Real quick micro question.
If we give the county money to the sobering center, do we have a voice at the table?
And that's a question for the mayor and his team.
I'm burnt out on giving money to the county and then not having a voice at the table.
So I'm always gonna say that when we do such an exchange and what that agreement's like.
I'm uncomfortable, and I may be a minority point of view on this body, on how high I think that's a real concern for affordability for working-class Portlanders, especially when they're higher than inflationary data.
I think that's a real concern for affordability for working-class Portlanders.
The citywide position changes, like my colleagues, I think it's so important for us to understand that graphic, and I think we're all asking for more information.
I've spouted off that I think that our transition from the old form of government to this one, we haven't taken advantage of the savings that we could have.
Elana Pirtle-Guiney
Councilor Dan Ryan.
Dan Ryan
Of where I think we could be top-heavy with the formation of the DCAs and the bureau leaders at the top.
And so, but I wanna really know if that's true.
And so just more information would be helpful.
I think what would be helpful if I saw the denominator of represented, non-represented.
I don't think I see that.
So percentages for me, when I used to focus on that in economics classes and such, I always, you always need to know the denominator.
Steve Novick
Right.
Dan Ryan
And I didn't sense that from this.
So that would be helpful.
Deferred maintenance.
We all know that we've been haunted by that.
We've been haunted by that since I've been here.
I'm sure Councilor Novick was haunted by it when he was here prior.
And so I need to really understand the relationship between the contingency and reserve drawdowns and our deferred maintenance.
I don't know.
I think sometimes there is a direct relationship and sometimes there is not.
But I don't think any of us wanna be a part of the council that continues to do such transfers that feel good today.
And I think I was in agreement with a couple other people on these comments, but I just wanted to reinforce that with my own lens.
Thank you so much.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Clark, Vice President Clark.
Olivia Clark
Thank you, Council President.
And I appreciate your comment, Councilor Ryan, Particularly when it comes to asset management.
I have a very simple question, and I guess I need some assurance.
I really appreciate the presentation, the high-level presentation, and talking about reserves, but I just need to know, to be assured, that you have scoured every reserve, every contingency fund, to what we can use at the same time preserving our bond rating having enough money for contingencies.
But I just need to hear you say that you have scoured these things because I'm concerned about how we fill the gap, the general fund gap.
I just want to hear that from you.
Jonas Biery
Yeah, thank you, Councilor, for the question.
We've worked with the DCAs and bureau directors and finance staff to look at every fund fairly systematically and assess any of those resources that might be available to deploy and with understanding of those trade-offs.
Jamie Dunphy
Okay, I think we're ready for the next part of our presentation.
Loretta Smith
Thanks.
Olivia Clark
Thank you.
Jamie Dunphy
Actually, just Councilor Novick, is that a legacy?
Sameer Kanal
Legacy.
Jamie Dunphy
Okay.
Raymond C. Lee
I'll go ahead and start as the presentation comes up.
Uh, the Office of the City Administrator— and I'll go to the next slide for me, please.
The Office of the City Administrator oversees day-to-day operations of the city.
The broader CA portfolio runs central programs for the city as well.
Budget proposals are designed to build the structure capacity and systems needed to deliver excellent services in Portland's new form of government.
As note, Portland Solutions is part of this portfolio as well, but will be covered in a separate presentation on May 12th.
So the numbers you see today do not include Portland Solutions.
And some of this came up in the conversation yesterday, as this program is still looking at how they're going to meet their budget need with the services that they have to provide.
There are 332 staff and $261.1 million in the proposed budget.
Next slide.
We have a broad portfolio.
What you see here is how we are structured today and how we will build the proposed budget.
Includes 3 of our chief officer positions: engagement, equity, and sustainability.
In addition to those bureaus and programs listed, as well as many other offices.
Portland Solutions will be presented their budget separately, as I just recently said, and we'll go through that with more discussion.
Next slide.
This year, our focus is establishing the structure, the capacity, and systems we need to deliver success across this organization.
Loretta Smith
Thank you.
Raymond C. Lee
We also have made cuts to help address the city's financial challenges.
At the same time, we are putting basic resources in place to run the city and lead the organizational change that is needed.
We are also applying city values and working to appropriately resource teams from sustainability to performance management and to our central equity team.
Candace Avalos
Thank you.
Raymond C. Lee
Next slide, please.
This is a similar— this is similar to what you've seen already in the last work session.
It shows budgets in our service area with the largest several called out.
You'll note that the CFO funds are so large because they include a number of other funds such as the Arts, Education, and Access Fund, also other bond interest and sinking funds.
These are funds with a specific and established purpose.
The rest of the work of the service area is a much smaller slice by comparison.
Next slide, please.
Most of our programs are starting from a very small base.
The numbers you see here reflect several reductions and several strategic additions.
You'll see throughout the budget that the CA and the DCA offices often include several smaller programs in their budget.
In this case, the City Administrator line includes the Chief Sustainability Officer and their team, the Performance Office, and the Office of the CA and the Office of the ACA.
The DCAs and the Equity and Engagement Officers are not accounted there.
We'll walk you through the proposed changes in future slides.
Next slide.
The slide summarizes the CSL plus additions, reductions, and realignments.
I would note that council will hear the term realignment used throughout these budget presentations.
It's important to note that not every reference is tied to the core thank you, Councilor Smith.
Thank you, Mayor.
I'd like to begin by defining what is meant by core services realignment project.
In many cases, realignment simply refers to the routine one-time adjustments such as transfers or position changes made across bureaus or service areas to meet specific program needs.
The core services realignment is a distinct comprehensive effort and will try to clearly identify when items are part of that project.
The additions you'll see include both staff and funding for citywide strategic planning.
The cuts you'll see include positions, savings in risk management, reallocating CDO salary to non-general fund divisions, contract reductions, and moving the flood safety fee, $5 million, from the CFO to be recovered through utility again, we'll talk through specifics in the next few slides.
FTE summary.
This table shows changes to FTE for the entire CA office portfolio, including the CFO, but not Portland Solutions in this.
There are a lot of movements in the service area, including realignments.
Again, Spelled out here in a moment.
On the next slide, you'll hear more about the realignment project later in this work session, so we'll save some time for discussion there.
But for now, there is a slide that shows for the CA portfolio the number of FTE before and after the realignments across the 5 areas.
Procurement is the 6th.
Loretta Smith
Thank you.
Raymond C. Lee
Area, but it's not listed as we don't have dedicated procurement staff in the CA's office.
In our service area, we reduced 5 FTEs, added 2 FTEs, and then moved 2 into our service area and 3 people out of our service area.
These moves were to balance the skill sets coverage across the topic areas.
CA office on the next slide.
This slide shows a few strategic additions to the, uh, my office, adding, uh, the assistant city administrator and chief of staff roles to the organization.
Uh, these positions will help ensure that my office is stood up and staffed up adequately so that we can engage meaningfully with council directly, engage with community, and strengthen strategic planning and support organizational change management.
The change also addresses a span of control challenge and increases my office's ability to effectively lead and manage the operations of the city, ensuring that teams across the organization can be successful.
Keeping in mind, my current direct reports are around 13 right now.
This office structure gets us closer to what we are seeing in cities of our size across the nation.
And this is just what I've seen through best management practices and my own work experience.
We're building an infrastructure that was not present in the old form of government to set up as for success moving forward.
On the next slide, the strategy slide, this slide shows how we will make progress towards our strategic planning goals.
This includes funding for citywide comprehensive strategic planning efforts and creates strategy and change management lead position.
And keep in mind, this is pushing us to our first-ever comprehensive strategic plan for our organization.
This also realigns an existing position from city operations to the CA portfolio to focus on strategic asset management.
And this is looking at our long-term asset management and how we are doing with our deferred maintenance as well.
On the next slide, on climate action, this alignment adds 2 positions to support development of the city's next climate action plan.
These positions will support coordination with bureaus and service areas, development of implementation strategies, and tracking of progress towards our climate the updated plan will translate Portland's climate commitments for the new government structure.
It also aligns with recommendations from the City Auditor's Office and the C40 Cities Climate Action Planning Framework, providing clear actions, timelines, roles, and funding considerations to support effective implementation.
Performance Office, which I've been hearing a lot about and I've talked a lot about since joining the organization.
In last year's budget, the Performance Office manager was realigned to the City Administrator's Office to begin building a program.
This adjustment realigns 5 positions and associated resources from the 311 program in City Budget Office to establish a centralized City Performance Office, bringing together staffing performing similar citywide work and service innovation and performance management.
We are under— we are creating a framework to truly improve how we do business and how we use data to make informed decisions for our organization.
And this work will help support bureaus in delivering more consistent and effective services throughout the city.
Next slide, please.
In the City Attorney's Office, we see reductions including 3 vacant or soon-to-be vacant FTEs, including 1 Chief Deputy City Attorney, 1 Deputy City Attorney, and 1 paralegal.
These cuts will reduce capacity but retain all core operations.
Dan Ryan
Thank you.
Raymond C. Lee
Office of Government Relations is taking a few steps to help reduce general fund spending.
We are reducing the budget for temporary staffing and contracted lobbying support.
We are discontinuing or reducing the internal relations program— international, sorry, relations program, which is managed by a single employee.
The program manages Portland's sister city relationships and coordinates visits for international delegations.
We will look for ways to continue the essential functions of this program, but will likely not be able to continue at the same level that we have in years past.
On the next slide, Civic Life.
Independently from the realignment project, Civic Life is saving money through rent savings made possible by staffing cuts in previous years.
The remainder of the cut is related to the engagement realignment, which we'll discuss separately.
In closing, overall, the intention behind this service area budget is to effectively and strategically lead the operations of the city.
Thank you for the opportunity to share this information with you today.
We look forward to answering any questions or discussions before we move into thank you very much, City Administrator.
Jamie Dunphy
Councilor Murillo.
Angelita Morillo
I'm realizing that I think the questions I have might be better suited for the realignment portion, so I'm happy to wait for that portion.
Jamie Dunphy
Okay.
Angelita Morillo
Thanks.
Jamie Dunphy
Councilor Novick.
Steve Novick
Thank you, Mr. President.
Mr. Lee, the $700,000 for the realignment of the revenue bonds, The $600,000 for expansion of the City Administrator's Office and the $600,000 for change management, is that general fund or is it a mix?
What does it consist of?
Raymond C. Lee
It's all general fund dollars.
Steve Novick
Okay.
I just have to say that I think that you can expect some pushback on those things when we're making cuts to frontline services.
How about the money for, which I think is desperately needed, to fund people to help Vivian Satterfield rewrite the to write a new climate action plan.
Is that general fund?
Raymond C. Lee
I believe some of that is PSF funds as well that is involved in that.
Steve Novick
Okay.
I mean, can we get back to us as to whether any of it is general fund?
Because I have to tell you that, I mean, if any of it is general fund, that seems to be a better use of PSF funds than some other things that have been suggested.
Oh, thank you.
Tracy Warren
Hi, just to answer your question, Elizabeth Hilt, Interim Business Operations Division Manager.
Uh, the sustainability positions are all PSF-funded.
Steve Novick
Thank you, that is reassuring.
That's it, thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Kanal.
Sameer Kanal
Thank you.
Uh, I guess let me ask if— and please feel free to say this is better for the realignment— but my understanding is that the realignment would generally be adding to the centralized function numbers.
And so I'm curious, as equity going, uh, reducing in position, if that— is that a better conversation for the realignment?
Raymond C. Lee
Yes, it is.
Sameer Kanal
Just for the record.
Okay, um, big picture, I'm comfortable conceptually with adding to the City Administrator's Office.
I think we've talked about investments in democracy being important, important on this side and on the Mayor's Office.
But good governance is broader than just the democratic side.
It's also a capable administrator's office that's not thank you.
I also want to make sure that we're not talking about a net increase solely at the higher levels, but also moving and/or offsetting.
And I think Councilor Koyama Lane's budget proposal last year to move the Vision Zero lead up into the office is a good example of this performance office as well.
I wanted to understand, is the proposed chief of staff role an EA or executive assistant?
Is it separate?
And if it's separate, how does that differ from an ACM?
Raymond C. Lee
It's different from ACA because it won't have all the bureaus or offices reporting to it.
The Chief of Staff will have my staff that I have in my office, which includes my EA and my 2 senior analyst roles reporting to them.
This role is really to help in the coordination with the Chief of Staff, with the council offices, along with the mayor's office, along with working with our labor groups as well too.
And having that constant communication and line of communication with the City Administrator's Office.
Sameer Kanal
Okay, thank you for that.
Eric Zimmerman, Robert Taylor
Why—.
Sameer Kanal
I understand moving CBO staff into performance.
I under— I imagine there is a performance function in CBO already.
Is there a performance function in 311 that we'd be moving, or is it just position authority that's coming over?
Raymond C. Lee
I'll let Michelle come in.
Cut my mic.
I'll let Michelle come and talk regarding the actual positions that is in 311 right now that will be kind of reallocated to her office.
Tracy Warren
Hi everyone, Michelle Koenig-North, uh, uh, manager of the City Performance Office, former manager of the 311 program.
Angelita Morillo
Uh, thank you for the question, Councilor Kanal.
Um, the 311 program since its inception, um, had done a significant amount of work to help bureaus citywide, um, look at processes and try to improve how they deliver services.
Um, and we, through the Performance Office, are looking at using those same staff and elevating them, um, to do additional work citywide based on the relationships and experience they have.
Those 3 positions include 2 coordinators and 1 analyst, um, who would help us build out the performance team.
Sameer Kanal
Thanks, that makes sense, and I appreciate the, the context there.
Um, with citywide strategy being conducted by, I guess, a Chief Strategy Office, will it be conducted there or is the intent to contract it out?
Raymond C. Lee
It's much bigger than just a strategic plan.
The actual plan itself, or portions of it, will be contracted out for the facilitation of the work that'll have to be done externally in the community, along with facilitating kind of the conversation.
This role within the organization will help facilitate those conversations and manage like a lot of times what a lot of organizations do, they create a beautiful document and that document goes nowhere.
We don't want to be in that same predicament as other cities have been in.
This role is really looking at how do we operationalize the strategic plan?
How are we creating those dashboards and those linkages between the operations that are happening within the strategic plan and other priorities in the organization and what is that alignment throughout the organization?
How are we presenting this to the community?
And how are we holding the community forums to actually talk about progress that we're seeing on our strategic plan?
This is also internally in our organization as well of how we're having strategic sessions for ourselves to think through how we're moving our strategic plan forward as an organization.
And what are those opportunities for growth?
It's really having that person internally within the organization that is championing the strategic plan.
Another component of that, which we have been struggling with as an organization with the change of government, is change management.
And really looking at how we're managing some of these projects citywide through a change management strategy, which, to be quite frank and honest, we really haven't had a strategy as it relates to change management for our organization.
And this individual will be looking at a lot of the realignment work that we're doing now.
But looking at how we improve and get better with that realignment work that we're doing throughout the organization.
What we've done a lot of in this change management work as an organization is ask people to do their current job duties on top of manage the changes that need to happen in the government.
And we just have a capacity issue within our organization to do this work as thorough as it needs to be done.
Sameer Kanal
Thanks for that.
To the degree that this is about implementing a strategic plan, that makes sense to me.
I think I think to the degree that we're talking about creating it, I'll just note that from January to about this time last year, we were told that a lot of the function of— in work sessions like this, a lot of the function of the City Council was to lead on this strategic planning process.
So I'd like to have the conversation if there is a change in vision on that from the administration.
I think this has already happened to some degree without a whole lot of conversation on the engagement side.
Jonas Biery
Councilor Mm-hmm.
Sameer Kanal
Which I think is properly a council function in our form of government.
Mm-hmm.
And not an administrative one.
But that's a broader conversation that we can do in the realignment.
But I just, that's helpful.
Facilitation being contracted out as that, I can understand that as it's not an ongoing.
Mm-hmm.
But the broader part of it being contracted out would be something I'd want to avoid.
My last question, is the international relations program At OGR being eliminated entirely?
And when will we have the opportunity to— is that—.
Elana Pirtle-Guiney
Yeah.
Raymond C. Lee
It's not being eliminated entirely.
I think by code we're required to do certain things as it relates to the program itself.
We're looking at internally, how do we manage that?
Is it other resources that we need to add to OGR from the standpoint?
Is it things that we can ask additional staff to do?
Those are the things that we're kind of doing an analysis on right now.
Sameer Kanal
But the standalone position?
Raymond C. Lee
The standalone position will go away if council adopts the mayor's proposed budget.
Sameer Kanal
Okay.
I imagine that will be a topic of conversation because I will make sure it is.
Dan Ryan
Thank you.
Jamie Dunphy
Thank you, Councilor Kanal.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
3 kind of discrete thank you.
I have 2 concrete questions.
The first is, under your city administrator office budget, you're asking for a chief of staff.
I recall last year this council moved to remove the assistant city administrator position and replace it with a chief of staff.
Help me understand what you have and what you need, because I think you have a chief of staff position in your office already.
Raymond C. Lee
No, I don't have a chief of staff.
I have a senior advisor role in my office, not a chief of staff role in my office.
When, when council eliminated the ACA role within the organization, that position, that money went down to fund 2 roles within the city administrator's office from the analyst, senior advisor and the analyst role.
So it gives the city administrator 2 staff in the actual CA's office, not including the executive assistant.
Elana Pirtle-Guiney
So right now you have an analyst and a senior advisor, and you want to add on top of the senior advisor a chief of staff and an assistant city administrator.
Raymond C. Lee
The assistant city administrator would oversee all of the offices.
Currently right now I have 13 direct reports.
What this ACA would oversee is the Office of Sustainability, the Office of Equity, potentially Communications, looking at the Performance Management Office as well.
All those chief roles that we have within our organization that are currently reporting to me.
Elana Pirtle-Guiney
So would Chief of Staff be a new position designation that we would be creating?
Raymond C. Lee
For the CA's office, yes.
Elana Pirtle-Guiney
Okay.
Raymond C. Lee
Not for the organization.
Elana Pirtle-Guiney
We have chiefs of staff elsewhere in the organization?
Unidentified speaker
Yes.
Elana Pirtle-Guiney
Okay.
I may have more questions there in the future.
Um, on the performance office launch, we're moving 5 positions.
What happens to the work that those positions are currently doing?
Is that work moving with the positions?
Or is that work being distributed to other people within 311 and the City Budget Office?
I think the answer we heard before from 311 didn't quite touch on the current work being done.
Raymond C. Lee
You know, I'll have to follow up on the kind of the current work that's being done by this office right now.
From my understanding of where we are, that work is being redistributed amongst the people that are currently in the office currently, but we can kind of follow up with council with the details of that.
Elana Pirtle-Guiney
I think both 311 and the City Budget Office are places where this council has raised concern about not having enough capacity in the past.
So I'd like to understand the program impacts to moving positions out of those offices.
Tiffany Koyama Lane
Gotcha.
Elana Pirtle-Guiney
We can get that in follow-up?
Angelita Morillo
Yes.
Elana Pirtle-Guiney
Okay.
And then finally, the Civic Life reductions look like it's a cost savings because their rent in the Portland building will be going down.
The city owns the Portland building, so that is not actually money off the books.
That to me sounds like a transfer of who pays.
Tiffany Koyama Lane
City Life—.
Elana Pirtle-Guiney
Civic Life will not be paying for that.
Somebody will be because those costs don't go away.
Who is picking up the tab, and is that accounted for in the budget, or is that something that's going to cause strain on another bureau's budget?
I think that's a great question.
Raymond C. Lee
And currently right now, since they're on the floor with water and sewer, that's who will be picking up those costs.
They were paying the lease rates to the enterprise who paid for the renovations of that floor.
Elana Pirtle-Guiney
I want to be clear.
In my mind, this looks like a $300,000 transfer from our general fund to ratepayers.
Is that what we're doing here?
Raymond C. Lee
I don't know if it's that simple as a transfer to the ratepayers.
If Jonas is still in the room to kind of talk through that piece of it.
Elana Pirtle-Guiney
I'm concerned broadly that as we try to figure out how to fund our general fund programs, which I want to be clear are hugely critical, and I am not proposing that we cut deeper into those, but I'm concerned that we are making decisions that will drive up rates in other areas.
Steve Novick
Mm-hmm.
Elana Pirtle-Guiney
Not just here, but in other spaces as well.
And that we're not saying that out loud and having that be an intentional decision.
We're kind of hiding it.
And so I wanna know if that's what is happening here.
Unidentified speaker
Okay.
Sorry, so just on the specific, on the Civic Life move, they're on the first floor, which is not the water floor.
Candace Avalos
It's—.
Unidentified speaker
And the floor will become, or those seats will become vacant.
So that does mean that it would get sort of spread out throughout the enterprise.
Through this—.
Elana Pirtle-Guiney
Is that paid for then by the bureau that owns the Portland Building on the books, or is that distributed to all of the other tenants of the Portland Building, or is that distributed to yeah, basically the latter.
Unidentified speaker
And it's— there's sort of a lag in terms of how they reflect it in rates, but that the overall vacancy rates in the Portland Building do flow into rates for all kind of ratepayers essentially in the city.
Elana Pirtle-Guiney
So, and I know $300,000 is very minor in our budget, but this means that we should expect that internal service rates next year, because of that lag, will go up to account for this.
I just— we're calling this a cut for Civic Life, and this is where we budget as if these are independent entities.
We need to figure out how to reduce our total budget right now, and we're not doing that.
Is that accurate?
Candace Avalos
Yes.
Jonas Biery
Yeah, Councilor, I think that's generally accurate.
I think the pause on our end is just because of the way the costs flow through.
It's a little bit difficult to make that, you know, if this, then that in this budget cycle.
Fundamentally, you're right.
Our costs are not declining over the long term of ownership and operation of that building.
Elana Pirtle-Guiney
In the context of this budget in this fiscal year, We're pushing those costs to next year and distributing it across more bureaus.
Jonas Biery
Again, I think philosophically correct.
There's also a lot of changes that happen to the inputs to that.
And so yes, I mean, I want to be clear, you are correct fundamentally that we're not reducing an overall net cost reduction.
The way those costs get distributed through the system are just a lot more, um, indirect than that, than that straight-line relationship.
Elana Pirtle-Guiney
Okay, thank you.
Thank you, Council President.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Vice President Clark.
Olivia Clark
Thank you, Council President.
Um, Mr. Lee, I just want to signal some concerns.
I don't necessarily have any questions.
Um, I really appreciate the effort to, uh, to recognize that we're still moving forward into a new form of government and we're missing a lot of pieces in, in that.
And we've also met with resistance.
Um, and I think that I'm very supportive of your change management, uh, role, uh, to pull those bureaus forward, um, and to, um, overcome that resistance.
And I, I don't know that we've done a very good job at that.
I think you mentioned that earlier, that we've been So I'm very interested in that as a best management practice as well.
And I think on the strategic plan, to Councilor Kanal's point, I mean, we've started.
We did start.
We've never had one.
It's kind of embarrassing that this big city has never had a strategic plan.
We're not like other cities.
We're not like other organizations that have normal strategic plans, and then they have a strategic plan for their emergency management.
I think that's a good point.
A strategy to implement that plan, and they have ways to measure those things, and we don't have any of that.
And that's— it's very embarrassing.
So we have started actually with our retreat, and I think we're going to— hopefully we build off of that and we start to identify strategies and ways to measure progress in those areas.
So I'm very supportive of what you're trying to do in moving us ahead.
Loretta Smith
Thank you.
Olivia Clark
Thank you.
I do want to express my concern though about the government relations reductions.
Um, and again, I know people have used my term penny-wise and pound-foolish.
I'm, I'm worried about this, that this could definitely fall into that category.
I think we're already lean in that regard.
Um, and I, I definitely want more detail about what this really means, the contract for lobbying support.
I think I think that's very important.
It's strategic.
I don't want to just play defense all the time at the state legislature.
I want to be on the offense.
And the League of Oregon Cities is just beginning to have a conversation around revenue reform or property tax reform, and I think that's going to be very important that we have the resources we need to, to move that conversation.
But I don't want us to become just a defensive team.
I want us to be an So I'm going to dig into this.
I'm really concerned about those cuts.
And as far as international relations go, I want to know more about that as well.
But I just want to put a stake in the ground that those are my 2 areas, support for change management and what you're trying to do with strategic planning, but a real concern about government relations reductions.
Thank you.
Jamie Dunphy
Thank you, Vice President Clark.
Councilor Ryan.
Dan Ryan
Thank you, President Dunphy.
City Administrator Lee, it's an understatement to say you inherited an organization thank you.
You're leading an organization that's in major transition.
And you've also only been here a short time.
In fact, this is your first budget, which is an operational plan of our organization.
This is your first one that you have influence over.
So I want to acknowledge that.
And I think it's important for us to continue to hear your vision on what it looks like as you streamline services, as you look at especially that upper tier in how you take advantage of the fact that we haven't done that exercise yet of where there might be some clutter at the upper tier.
And so I'm looking forward to hearing your vision.
I also want to now just go into some direct specific questions.
How does a performance office connect with the strategic planning office?
Raymond C. Lee
The performance office is really the measures and key performance indicators we're using within our strategic plan.
And that office is really tracking the things that we say we wanted to achieve as an organization and the measurements that we're using to track those changes and outcomes.
How are we doing overall in doing that?
And really building the backbone for the organization to have this.
We haven't had this type of operation happening holistically for the organization.
We had it in certain specific bureaus, but looking at the organization as a whole and figuring out what those key performance indicators are that are going to inform and engage us of how we're progressing as a government and as an operational organization.
That's what those roles, that role and that office is supposed to do.
It's supposed to work hand in hand with the strategic plan and the strategy work that we're doing.
Those things have to be linked together for us to have a comprehensive model.
Dan Ryan
My history with trying to get this to be cultural so that data-driven environment is not just up here and not just the indicators that you— it's like watching paint dry because they change slowly, but it's the sub-indicators, it's the one closer to the ground.
And so I think it's important that we make sure that we make this a bigger part of the culture if we're going to do it.
I think there's a lot of talk about data-driven, but there's very few operational strategies that work in big organizations.
Loretta Smith
Yeah.
Dan Ryan
And so, you know how we have in our legislation that economic impact section, which is often blank, and it comes from— which clearly bothers me— and it comes from Prosper Portland.
I think it's important that we do something with that within the economic impact, like what— how do you measure success?
And then make it a standard practice that 6 months to a year into implementation, the enterprise leaders come and tell us.
Thank you.
What the sub-indicators are in addition to the 3 or 4 big ones up here.
So in other words, I'm excited about this clearly because I did it for a decade and it's really hard, but it started to work when we actually went into the schools.
We had a counselor, a teacher, and a community provider all at the same table, and we looked at the data till they understood those data are people.
Raymond C. Lee
Exactly.
Dan Ryan
Behind every data, there's a person that's suffering, and our focus needs to be on them.
And I think this city hasn't been customer service driven enough, and you can make data as a way to get that culture going.
Thanks for listening to that.
Olivia Clark
Bless you.
Dan Ryan
My concern— I have a lot of concerns about dropping the international liaison position, no matter where it's located.
To me, it's a big hit to our economy.
I know there's a monster-in-chief, and I don't like to talk about that guy much, in Washington, and he's making it really hard to get and God, please don't put your picture on it.
But we have to make sure that we don't give up.
And international travel, especially from the Pacific Rim, was a big part of our economic success, especially in the aughts and the tenspots.
That's a station on Sears.
And so I think it's important that we don't give up there.
In my experience with the one person that happens to be housed in Government Affairs, yes.
She does such a great job of stewarding those relationships.
We're so blessed with so many volunteers in our sister city network that are dying to be helpful to us.
And so I worry that we're not going to have anyone stewarding them.
And as a person that has gone on a couple trips to Kaohsiung, I see the advantage.
In fact, I get frustrated they're not doing more.
I saw recently that the mayor of San Francisco went to Shanghai and Seoul, and he came back we are— one of our upshots for our economy is that big— that little body of water between us and the Pacific Rim especially.
And I don't want us to be out of that ballgame.
And I don't trust that we can just rely on the state for this.
I think it's something that has to connect between the city and the state.
So I'm pushing back on that.
Olivia Clark
Thank you.
Dan Ryan
You say that there's going to be people doing shared responsibility on that.
It's hard to have accountability when they're shared sometimes, which goes against everything I said earlier, 'cause it's supposed to be shared accountability with data.
But my point is you need one person that really takes charge and is stewarding that work.
So yeah, thanks for listening to that rant.
I appreciate it.
Thanks.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Council President, and thank you for laying this out, CA Lee.
I see that there— it's clear to me there's reducing and eliminating, there's realigning and moving.
So I— that seems like it's a position that's already there and it's, it's moving that somehow.
I don't know the difference.
Is there a difference between realign and move?
Raymond C. Lee
Yes, there could be depending on how we're looking at it.
For this one, it's just really moving.
I guess you're talking about the asset role.
If you're talking about the asset role, it's moving that role that was just in one of our bureaus to the CA's office, almost like we did the Vision Zero role and uplifting that work within the organization.
Tiffany Koyama Lane
Okay, thank you.
And then where it says adding the positions, is it only the 2 positions, the ACA and a Chief of staff for you, that's also— that, just want to clarify, that's adding to the general fund?
Raymond C. Lee
Yeah, and the strategy role.
Tiffany Koyama Lane
And the strategy, okay.
Raymond C. Lee
That's 3 roles and 1 role that's being moved from one bureau to the CAO to uplift that role within the organization.
Tiffany Koyama Lane
Okay, thank you for clarifying that.
And I'm noticing a pattern with the City Attorney's Office that I wanted to talk about.
So last year we did cut, I believe, 3 FTE from the City Attorney's Office.
Eric Zimmerman, Robert Taylor
Yes.
Tiffany Koyama Lane
I'm looking to— I think that's right, um, to save around $949,000.
And then it was estimated to cost over $2.1 million to replace that work with outside counsel.
But this year's decision package proposes having 3 FTE less to save about $760,000 and says replacing that work would cost about $1.5 million.
Um, we don't have FYI, we don't have outside counsel metrics for this current year, but we know those costs have been jumping and rising.
Um, I wanted to bring, bring that part up because we're— I'm seeing that pattern.
I don't know if we can talk about it now.
Raymond C. Lee
They're coming up right now.
Eric Zimmerman, Robert Taylor
Hi, Robert Taylor, City Attorney.
Mitch Green
Thank you for the question.
Eric Zimmerman, Robert Taylor
Yes, last year the City Attorney's Office had reductions.
This year, the mayor has proposed reductions.
We do utilize outside counsel.
We can get you the reports on how much we're spending on that.
It does fluctuate from year to year.
So that's one issue.
The other thing is when we propose the reductions, so we say we're going to eliminate a lawyer position, that will reduce our capacity in the office.
If we were going to replace that capacity with outside counsel, it will often cost more.
So that's the— sometimes you'll see that in our budget submissions just to give you an idea of—.
Steve Novick
Okay.
Eric Zimmerman, Robert Taylor
Of we're going to reduce the capacity by cutting our budget.
If you were going to try to maintain that same capacity with outside counsel, it costs you more.
We wouldn't necessarily need to always get outside counsel to fill in that capacity.
It's really just a comparator so you can see how the cost for our services compares to if we had to go outside to get it.
Tiffany Koyama Lane
Thank you, Mr. Taylor.
I'd love to continue the conversation about what these impacts would look like and talk more about capacity.
Raymond C. Lee
Yeah, thank you.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Councilor Kanal.
Sameer Kanal
Thanks.
I, I think most of what I was going to say was just covered in that last exchange.
I'd forgotten to talk about the City Attorney's Office, and I think it's, it's worth having this conversation not only to ensure that they have the thank you.
I think we need to be having the conversation about how we can ensure charter interpretation is being done adequately.
And last year we had 2 proposals, neither of which actually— I think one got voted on, I think, but the other did not.
But I do want to have that conversation too, and this will probably involve some increased level of spending to get there.
So just a conversation to have.
I just wanted to put a finer point on how many people from— who maybe don't always agree on everything just talked about the importance of the International Relations Program.
I actually was intending to look at— no, well, Councilor Clark too.
There's many folks who touched on this, but I think it's worth noting that our Sister City Program does have a lot of volunteers that want to help make the city a better place, and I agree with that, but it's also underutilized broadly.
Councilor Dan Ryan.
In terms of cultural exchange and economic exchange relative to some of the other cities that I've looked into on this.
And sister cities are not the only part of, I think, a successful international relations program.
When I was in Tokyo, there is a bar there which is a PDX Taproom.
It's a local chef from Portland, and you walk in and there's like Blazers and Timbers Thorn stuff on the walls.
They serve Portland beers there, and I gotta tell you, I imagine that for someone who maybe you know we don't know every city in every other country.
We might know some of the big ones—the the New Yorks and LAs of other countries—and to get other cities like a Portland on the map in other countries, those sorts of things help a lot.
And I don't know that any in that that our city—it's not about the person in the role or even the role itself.
But our broad approach to international relations, I think, is less expansive than it could be.
Not only on the cultural side, but the economic side.
Tourism is huge.
We need to be talking about the impacts of Canadian tourism in particular, which is our single biggest source of tourism income in Portland.
This is, I think, something where there's an important and underexplored part of the work that needs to be explored at a greater degree.
And I think we should actually be not just talking about playing defense, but actually investing more in the idea of bringing in more international— I guess I would have said dollars, but whatever their currencies are.
Thanks.
Jamie Dunphy
Thank you, Councilor.
Thank you, Councilor.
Colleagues, I just want to note that it is currently 11:10.
We have 2 more full presentations, including the core services realignment, to be done by 12:30.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
Mr. City Administrator, there's a question I forgot to ask you earlier with regard to change management.
It's my understanding that the city has had a contract with consultants at something called NEX Strategies who have been working on advising the city on on, among other things, change management.
And that's been a million-dollar contract.
And I'm just wondering, have we gotten any value from that contract?
Can you take advantage of what they've done on your change management work?
Could that reduce the need for spending hundreds of thousands of dollars of new money on change management?
Raymond C. Lee
I'm unaware of that contract.
I'll have to look into that contract.
Steve Novick
Thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Councilor Ryan.
Dan Ryan
Oh yeah, just to add on, and another thing, I appreciate that Councilor Kanal went on a little deeper on the stuff I was trying to do highlights on, but I do think we didn't touch on something really important, and that is that our international airport is one of the big wins of this region of late.
And for us, we have to align with that.
And so people land in this beautiful airport, state-of-the-art, and now we want more people to come to it.
That's my point.
Like, I think it will— it's a good time to focus on this, and we need to find any economic driver we can at this time, again, because we have such flat revenue coming into the city.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Smith.
Loretta Smith
Thank you, Council President.
Um, City Attorney Lee, I have a question.
I think we there's about $17 or $18 million in the Travel Portland fund.
And as we're talking about, you know, our ability to bring in resources because of it, I'm wondering, can we get Travel Portland here to discuss some of the things that they're doing?
Because they're We're largely funded by a city pot, and we never get a, um, a review or, or a presentation on what they've been doing with all those millions of dollars that we, um, that we send over to their office.
Raymond C. Lee
Yes, we can make arrangements for that to happen.
Loretta Smith
And, and the other issue is that the auditor had a report, and they talked about how we were actually naming our Economic Development Revolving Fund and that it didn't have its own line item.
Have we corrected that yet?
Raymond C. Lee
Not sure.
I'll have to ask Jonas or Ruth if, if that's on their radar right now.
Loretta Smith
I think they put that on their list of questions to make sure that, that is fully corrected because the auditor found that as one of the recommendations in this latest Um, audit for, uh, '24-'25.
Raymond C. Lee
Will do.
Loretta Smith
Thank you.
Jamie Dunphy
Thank you, Councilor Smith.
Colleagues, because we are running behind, I'm going to give us our 10-minute, uh, restroom break right now.
We'll come back and we will dive into the, uh, city operations service area and then the core services alignment and hopefully be out of here by 12:30.
So please be back at 11:25.
All right, calling us back to order now.
We got 7 folks here.
Just a programming note, folks.
We have about an hour left of this.
We are unfortunately running long, and we're still supposed to hear both about City Operations Service Area and the Core Services Realignment.
I do not believe we will be able to make it through both of those presentations, so we will be working to hopefully reschedule what we don't get to.
So let's start, uh, welcome DCA Tracy Warren up to talk about City Operations Service Area.
Unidentified speaker
Thank you.
Tracy Warren
Just gonna bring up my talking points.
All right, thank you, Council President, and good morning-ish.
We might be on our way to afternoon.
Good afternoon, Council and City Administrator.
Thank you for the opportunity to present the proposed budget for the City Operations Service Area.
I'm Tracy Warren.
I'm the Deputy City Administrator for City Operations.
We are presenting this budget proposal during a particularly difficult fiscal moment that requires hard choices, shared sacrifices, and a clear focus on the city's long-term stability.
We recognize that behind these numbers are real impacts to our workforce, employees who are facing uncertainty, change, and in some cases, the potential loss of employment.
The reality is not lost on us, and these decisions were not made lightly.
This proposal reflects careful deliberation, effort to balance significant financial constraints while preserving the critical internal services that bureaus depend on every day to serve the community effectively.
I appreciate the chance to walk through how this budget continues to support people, systems, and infrastructure that keep our city government functioning every day.
City operations is largely behind the scenes, but our work is foundational.
We support the workforce, facilities, fleet procurement, budgeting, customer service, and oversight systems that bureaus rely on to serve Portlanders.
We have a very short period of time for the city operations service area presentation, so I'm going to try to move through that quickly so that we can save the bulk of the time for the follow-up presentation related to core services realignment.
Thank you.
The majority of the reductions in services and costs are out of the realignment efforts, and so I hope that we can spend a good amount of time there.
And while I'm leading the presentation for our service area, I do have all of our directors available to answer questions, but because we are trying to move quickly, I'm hoping we can save that for the question and answer session.
Section.
Next slide, please.
Nope.
Sorry, back a slide.
The proposed budget for the City Operations Service Area includes 764.5 staff and $1.1 billion total budget.
This service area includes both operational support functions and specialized programs.
Our mission is straightforward: provide reliable, effective administrative services that reduce improve efficiency, and help over 7,000 employees deliver services to the public.
Next slide.
This is a high-level view of the programs and services that are within City Operations.
Next slide.
When developing our budget, we remain focused on delivering reliable operational support to bureaus by leaning into standardizing processes, tools, and technology, avoiding legal insecurity and operational risks.
This is a budget focused on stability, fiscal responsibility, and practical improvements based on the moment in time we're in.
Next slide.
The city operations budget reflects a mix of general fund, internal service funds, grants, and legally restricted funds such as the fire, police, and disability retirement fund.
These figures reflect both reductions from realignment of the core services in the city operations portfolio, as well as other adjustments in the mayor's proposed budget, which I'll walk you through in the following slides.
Next slide.
We're going to start by focusing on the city operations DCA The proposed budget is for 175.5 staff and $55.4 million.
This budget includes internal realignments to strengthen policy analysis, legislative coordination, cross-bureau project management.
These changes do not add new staffing.
They reposition existing resources to better match current needs.
Overall, we are shifting capacity towards enterprise coordination I think it's important to hone in on the DCA of Operations Office.
The reason that I'm highlighting this is because it shows 175 staff, and the reason for that is because budgetarily all of the programs and offices roll up to the DCA Office's budget.
Eric Zimmerman, Robert Taylor
Thank you.
Tracy Warren
So the So that includes the business operations section, that includes communications, it includes PDX 311, procurement and grants, security, small donor elections, and then our newly formed data and privacy office.
Next slide.
This slide gives a high-level overview of positions within the DCA's office.
You'll notice a reduction of 6 FTE.
This is within 311.
Yes.
Which we'll discuss in more detail a little later on, and 12 realignments that include both core service realignments as well as the internal shifting of resources between offices within city operations to better match needs, as well as things moving outside of city operations.
Next slide.
This slide provides a summary of the DCA office budget.
This budget reflects the realignments and reductions, which we'll go over in more detail in both the following slides as well as the subsequent presentation.
Next slide.
This slide talks about a realignment to strengthen policy and project coordination within the DCA office.
This transfers a position from the Bureau of Human Resources to the DCA office.
It's a general fund to general fund movement and does not create added expense.
The position currently focuses on project and policy coordination within the Bureau of Human Resources.
I'm looking to elevate that to the DCA office to provide support across the service area versus a singular focus within Human Resources.
Next slide.
And this was discussed in the city administrator's presentation, but this action is to realign an Analyst 3 to the city administrator's office for citywide asset management.
I won't spend a lot of time there because I know the city administrator talked about his plans for that.
Next slide.
PDX 311 remains the city's front door for many residents seeking non-emergency services.
Their proposed budget is for 35 staff and $5.4 million.
In the subsequent slides, I'm going to talk about the reductions plan for 311.
Next slide.
This proposal includes reduction of 6 positions, reducing hours from evening coverage to 7:00 AM to 6:00 PM daily.
The current hours of operations are 7:00 AM to 8:00 PM.
So this will reduce evening hours by 2.
What that means is that there will be less availability to take calls during those periods of time, and they would likely be shifted to BOEC to manage and dispatch.
Next slide.
Thank you, Deputy City Attorney.
What we're preserving are a single point of contact for city services, 7-day-a-week operations, multilingual and multichannel access, 24/7 dispatching for road hazards and park safety issues, as well as we've worked to preserve the core 311 model while reducing costs, but service levels will be lower.
Next slide, please.
Dan Ryan
Thank you.
Raymond C. Lee
Next slide, please.
Tracy Warren
For small donor elections, this budget includes a partial added funding of $450,000 for the small donor elections program.
This preserves program operations through reduced resources but may limit available matching funds for participating candidates.
The program continues but at a more constrained funding level.
Next slide.
Special appropriations proposal to reduce $658,000.
These reductions are spread across multiple grants for external partners and community-based programs.
The impact would be lower funding to external organizations, reduced grant support in select areas.
When we approached our reductions in special appropriations, we looked at all of the grants that the city is offering under that program, and there really were no good places to cut, as in there was no place that we could turn where there was not a need.
So what we did is we applied an even reduction across the board.
Elana Pirtle-Guiney
Councilor Smith.
Tracy Warren
The board for all of our available grants while continuing all of our legally mandated required amounts.
Next slide, please.
This slide goes over the special appropriations budget summary.
So you can see from this slide there are reductions to the overall grants and then realignments grants, as we discuss in the follow-up realignment presentation, grants is combining with procurement, and so they will be sharing staff.
Next slide.
The Office of Police Accountability, Community-Based Police Accountability.
So this budget funds the city's new police oversight system in alignment with charter requirements tied to the 5% of the police bureau's annual operational budget.
Olivia Clark
Thank you.
Tracy Warren
Through this budget process, if there are changes made to the police bureau's operational budget, this will be changed to be comparative to the 5% that's required by charter.
Next slide.
Independent police review, which is also part of our oversight system, is staying unchanged.
It will continue to be able to fulfill the city's requirement for independent next slide.
This budget begins the formation of a citywide data and privacy office focused on responsible data governance, privacy standards, enterprise policy coordination.
Initial staffing will come through realigned positions while we continue to work with sponsoring councilors to evaluate options for realigning more staff to meet our data privacy requirements.
So the mayor's proposed budget includes the realignment of 2 staff, and then we are working on a proposal that will be shared with the full council for other options that potentially could be realigned to help support this office.
Next slide.
Now we're going to jump into slides regarding the bureaus that are outside of the realignment.
So the Bureau of Fleet and Facilities, it's a proposed budget of 141 staff, $271 million.
Fleet and Facilities is operationally critical.
It maintains city buildings, manages vehicles, supports public safety assets, and ensures regulatory compliance in relation to fleet and facilities activities.
Next slide.
This slide reflects the realignments occurring as part of the core service realignment.
As well as reductions that we will talk about in follow-up slides.
This shows the bureau going from 146 FTE to 141.
Next slide.
This slide shows an overview of the Bureau of Fleet and Facilities budget.
The Bureau of Fleet and Facilities has a very small general fund and the rest of its funds come from the internal service funds, which is a model to pay for the services within Fleet and Facilities.
So the total budget is $271 million.
Next slide.
Now we're going to jump into the proposed reductions within Fleet and Facilities.
So the first reduction that we're looking at is a lease termination of space.
We talked about this.
This in our March 11th work session.
What this does is it relocates allocated space to another area in the building, which allows for folks who are sitting in a subleased space to reduce costs.
I know that there was a conversation in the last presentation related to this.
It does shift the, the I think the challenge is when the Portland building began renovations, portions of the building were purchased by the Water Bureau and the Bureau of Environmental Services.
They did that through their own financing, which created an added cost for debt services repayment.
So when we have folks who are in other bureaus residing on space that's allocated to those bureaus, we have to pay at the, at the regular blended rate plus the debt services recovery cost.
So by allocating this space differently, the Water Bureau's obligation stays the same, but it reduces costs to the general fund.
Next slide, please.
Elana Pirtle-Guiney
Next slide, please.
Tracy Warren
This reduces contracts and services by $611,000.
It would reduce janitorial services in the downtown core.
It would reduce security for a Northwest building that has seen improved surroundings and is no longer needing the increased security level.
And then it would reduce EMS-related contract spending and fleet.
Angelita Morillo
Next slide.
Tracy Warren
This would reduce 2 positions at a $299K savings.
It would eliminate an OS2 and a welder position with minimal impacts to current services.
The Bureau of Fleet and Facilities has been working to adapt their workflows and processes.
And so this is a reduction they feel they could take and still meet current service level demands.
Next slide.
What we're preserving: compliance and inspections, debt service obligations, critical maintenance functions, long-lead skilled trade vacancies.
So for example, we've had in the past We have addressed extremely high vacancy rates within our facilities operations teams.
This allows for us to continue with programs that allow us to keep a pipeline of talent available to reduce those large vacancies.
We continue to have fleet readiness and essential services.
We will reduce costs while protecting safety, compliance, and mission-critical operations.
Thank you.
Next slide.
Now we'll talk about the City Budget Office.
The City Budget Office has a proposed staff of 15 and a $4.4 million budget.
Next slide.
This slide provides an overview of the Budget Office's budget.
The budget reflects realignments within the city to better align the work with other departments.
The next slide will show more information about the positions.
Next slide.
This provides a position summary.
So the current service level has 18 positions.
We are adding 1 position and realigning 4 positions.
The work of these positions are responsible for performance-related and will be shifting to the Performance Office as well as to another department within Community and Economic Development.
So one position to Community and Economic Development.
This was previously discussed in the City Administrator's proposal related to the realignments, but I'd like to add some additional information, which is my understanding is that the realignments of staff out of the City Budget Office would mostly take their work because it's comparably related to the Performance Office.
There would be a few pieces that would need to be picked up, and that's what the additional staff that we added is for.
Thank you.
Raymond C. Lee
Next slide.
Tracy Warren
The City Budget Office remains focused on managing the annual budget process, coordinating financial policy with the City Administrator and the Chief Financial Officer, providing information and conducting analysis to support decision-making, and to continue working a transparent city budgeting process.
Next slide, please.
This slide talks about the fire and police disability and retirement budget.
Those are all other funds.
They are driven by the city's obligation for eligible public safety employees to receive pension and disability.
The office— or excuse me, the bureau has a budget of $354 million.
Candace Avalos
Thank you.
Tracy Warren
Next slide.
One staff within the Fire and Police Disability and Retirement Bureau is being realigned as part of the technology realignment.
Loretta Smith
Next slide.
Tracy Warren
In closing, this budget reflects careful choices during a constrained fiscal year with a focus on protecting core operations reducing risk, practical improvements, and positioning city operations to better support the city as an enterprise.
Thank you, and I welcome your questions.
Jamie Dunphy
Thank you, DCA Warren.
Colleagues, we have about 42 minutes.
I do not believe we're going to be able to get through to the present— even the presentation on core services realignment today.
We're going to start with Councilor thank you, Council President.
Angelita Morillo
Thanks for being here to answer our questions.
I had a few questions about the— well, I have one question on the DCA overhead models, and then I have most of my questions on the core realignment.
So hopefully we get to those at some point.
It looks like there is a new model of DCAs charging interagency agreements from their offices to the bureaus in their service areas to pay for staffing in the DCA offices.
Can you share more about those generally, and is it being done in all the DCA offices?
Tracy Warren
I'd have to defer to our City Budget Office.
Unidentified speaker
Hi, thanks for the question.
This is a little bit related to realignment, but I can answer it at a high level.
The model that we set up in this budget is to create sort of enterprise services So it's— we're going to have to relabel them.
It's a little bit of a misnomer that they're called the DCA offices.
As Tracy said when she began the presentation, it's labeled that, but it encompasses a lot of things that fall into that bucket in the service area.
And so these enterprise service teams are going to be one of those things.
The model that we set up is essentially a service area overhead model for each of those teams, which is a new structure within our city budget.
And I'm sorry, can you repeat that?
Our kind of citywide cost allocation models because not all of them are properly eligible essentially for general fund overhead under financial policy.
Eventually the hope is to not have those, not have the money change funds via IA, but we were just time constrained in setting it up and that's the quickest thing to do because we have all those structures in place already.
So they are It is the case at each service area that there is one of those.
It's not just for the DCA office, it's for the service area, all of the staff and materials and services that serve each service area.
And the IA was just a convenient budgetary mechanism to get it there given our time constraints.
Angelita Morillo
Okay, so for clarity, this isn't creating new costs to bureaus that are being charged.
This is realignment of staff that already exist within different spaces.
Is that what you're saying?
Unidentified speaker
Yes.
I mean, I think it depends on the specific packages that are in each of those, but generally speaking, yeah, it's just putting staff into those buckets and then charging it out, allocating those costs out.
Olivia Clark
Okay.
Angelita Morillo
I think that this question might have some to do with realignment, but I think it's also relevant to both of you up here, so I'm going to ask it now because I don't know when we're going to get a chance to do it.
On Monday, we had a number of internal job openings for non-union HR positions that were posted that duplicate the work of formerly represented My understanding is that staff are being— are set up to be laid off, have been encouraged to apply for these new non-rep positions that duplicate their work.
Why is the realignment dissolving union positions and recreating them without representation?
Tracy Warren
I think we would need to come back with more details to be able to provide you a full answer on that.
Breakdown, my understanding of what has been advertised are things that are needed to provide basic services to get us started in the implementation of the core realignment.
An example of where you might see a switch from a position being represented to non-represented in human resources is that as we work through the realignment process, we recognized that that there were positions that were classified differently doing similar or same work.
So for example, we have Human Resource Analyst 1s who provide medical leave administration and ADA support.
We have folks who are doing that same work within bureaus who are classified as Administrative Specialist 3s.
Unidentified speaker
Thank you.
Tracy Warren
So as we're realigning them to move into the Bureau of Human Resources, we want to make sure that folks are compensated equitably and are in comparable classifications for the work being performed.
Elana Pirtle-Guiney
Okay.
Angelita Morillo
Okay.
I think that's all for now.
I will hold off for more realignment questions later.
Thank you so much.
Jamie Dunphy
Thank you, Councilor Morillo.
Councilor Avalos.
Candace Avalos
Yeah, I'm in the same boat of having some questions about realignment that it seems we might not be able to get to.
Just hearing that exchange there, I, you know, I, and I, like I said earlier, just feeling concerned on a reliance, what it appears to be, a reliance on consultants while also cutting a bunch of positions.
I'm very well aware and agree that we need change management support.
I know that that is necessary as we're changing our form of government.
But some of the decisions about, you know, what the discussion you just had around positions that are becoming non-union represented that seem to be similar.
And then just overall feeling like the strategy is to reduce a lot of frontline staffing.
Loretta Smith
Yes.
Candace Avalos
But also investing heavily in organizational development and change management consulting.
So it just feels, when we're looking big picture at the long term, right, when we say things like penny-wise pound-foolish, right, that to me is that we are cutting dependable city staff to replace them with consultants.
That's just how I view it.
That's how I'm seeing it.
So again, we can talk more about that later.
I'll save some of those questions for there, but let me let me end by asking, where's the mayor?
I mean, genuinely, is he not planning on being here?
Because I don't understand how this is the mayor's budget and he is expecting staff and the city administrator to answer for these decisions that are— many of which are values-based, are clearly strategy in how he sees the operations of the city that he's put in this budget, and he's not here to answer to those.
So where is the mayor?
Has he shared why he's not coming?
Is there any plan for him to be at these work sessions?
And if not, I would like to request that.
Raymond C. Lee
Yes, he will be attending these work sessions.
Candace Avalos
So he's just not here for a scheduling conflict, or like just in general?
Raymond C. Lee
Can't answer that question.
Candace Avalos
Okay, but he— it is intended for him to be at all of the, um, the future ones?
I don't know from a scheduling perspective he will be at all of them, but he will attend work sessions related to okay, well, just wanted to state that on the record, that I think it's important that the mayor be here to answer to his own budget, that it not be on your shoulders, because again, um, this is his vision and values for how we're supposed to operate the city, and I want the questions to be answered by him.
So I'll leave it at that for now.
Thanks.
Jamie Dunphy
Thank you, Councilor Avalos.
Councilor Zimmerman.
Eric Zimmerman, Robert Taylor
Thanks.
I'm looking in the fleet fleet and facilities and maintenance and repair, page 272 of the budget.
Generally, it looks like it's floated in the external revenues and around the $2 to $3 million.
Last year it bumped up to $42 million.
This year it's less than $1 million, which generally I can put together based on what's written in the content of that page.
But I'm sensing a trend here that many of the narratives are not really getting to what the numbers are telling us.
And so, uh, can you help me understand, and I, um, what it is that is going in the— into that in the significant changes and, um, what that jump from $32,000 grand total in 2024-25 to $84,000 now to $75,000, what that— what we're signaling there?
Dan Ryan
Sure.
Eric Zimmerman, Robert Taylor
That would be helpful.
Unidentified speaker
Hello, Aaron Beck with Business Operations, and I believe what you're seeing there is the impact of the Cutter Garage project where we have the bump up in the revenues for the debt sale that we're anticipating.
Eric Zimmerman, Robert Taylor
Okay, got it.
I think that to classify that as an operating fund is sending an incorrect narrative, and I look to the CBO's office for once again just like we've gotta do a better job of, 'cause I had a feeling that was exactly your answer.
And because I cannot make a rational decision when in '24-'25 the operating funds, the operating funds, city fleet operating fund was $2.6 million.
The next year it goes to $41 million and this year it's $820,000.
Loretta Smith
Yeah.
Eric Zimmerman, Robert Taylor
Meaning there's no way to do apples to apples, oranges to oranges when that kind of difference happens in the way we lump things together.
So I want to highlight that mostly to nip it right now before we go a lot further on that.
If there are things that in your budget that are going to have broad changes like that, I think that our categorization and how we use it would be thank you.
I think that would be more helpful.
Similarly, I could point to the very next page, 274, in new and replacement acquisitions.
We go from '23— in 2023, $675,000, in 2024, $1 million, in 2025, $17 million, in 2026, $11 million.
I am sure there are good explanations behind that.
I just think that categorizing them as operating funds It leads us to question— it leads me to go, what is happening here?
When I bet one sentence within the description could probably solve that question.
But I appreciate that clarity, and, and you're just the benefit of being first up there, so I got you.
Now I want to move a little bit into the budget office.
I have made the point now through 2 budget processes about the size of the central budget office.
Raymond C. Lee
I agree.
Eric Zimmerman, Robert Taylor
I'm noting that you've identified 15 FTE.
As I go through, and I've been going through all of the other bureaus, and I'm trying to find how many budget and finance people do they have.
Now, I'll just tell you, that is not something that really flies off the pages the way our documents are written, given that if I go to any subgroup program offer, it won't tell me how many employees are in an area.
So my question from last year remains, how many bureaus or sub-bureaus have a larger budget and finance office than the central budget office?
Tracy Warren
We do have rough numbers that Director Levine could provide for how many finance staff are in bureaus.
I would add, and I was going to talk about this in the realignment, Thank you.
I don't know if you saw in the presentation, but the City Budget Office and the budget and finance function was originally part of the core service realignment.
We paused that work so that we could get through budget development and make sure that they could, you know, support this process.
But there is a need to pick that back up, and they will continue to look at ways to collaborate and provide better support across the city.
Loretta Smith
Okay.
Tracy Warren
But I will invite Ruth up if she wants to give that rough number.
Candace Avalos
Thanks.
Unidentified speaker
So just in answer to the direct question, there are 72— we did go through the process of identifying, you know, which positions currently do this work.
There are 72 budget positions citywide, including the City Budget Office.
I don't off the top of my head know the numbers in each of the bureaus, but we could get that for you.
Eric Zimmerman, Robert Taylor
But I think my question was more about making the point here.
Steve Novick
Fair enough.
Eric Zimmerman, Robert Taylor
So I, given the answer that Tracy just gave, this is similar to how you approach the realignment with HR, which was we have some that we're going to do, then HR is going to happen at a different point.
You're identifying that later in the upcoming fiscal year, more budget will— budget teams will happen that way.
The reason I'm bringing it up, Mr.
Administrator, is I think that you should ask for the support from the council to really strengthen those centralized budget functions and the centralized finance functions to ensure that the bureaus and the staff who work on those functions within the bureaus understand that they do so as a customer service to that bureau and that their real true bosses, if you will, are our Central Budget Office and our Central Finance Office.
Because I think that part of our apparatus in the old form of government was always subdued, and we are We are decades into them playing second fiddle to who should have been second fiddle.
And so I think, uh, I wanted to highlight that for you, and this is an area where investment will be worth our time.
Now, I waited given the last presentation, and this kind of goes to both, um, presentations because I wasn't really sure where it was going.
When I listened to some of the services that are coming out of Central— excuse me, excuse me.
City Operations, and then I also listened to the city administrators.
I'll tell you, I'm still a little bit concerned about the operations that I see come out of Civic Life.
So as I read the neighborhood outreach and support document, it says that they're going to revisit and go through the operating guidance, which I think in In parlance would be the ONI standards.
It also says that they are going to put out a request for proposal for people who run the coalitions.
I want to highlight that as something I've now been hearing from the neighborhood coalitions and the neighborhood associations.
Not once has that director ever come and said, this is what we plan to do.
So So I find that abrupt, and it reeks of the old war that existed in this bureau, which was a war against neighborhood associations.
So I offer this up.
I'm damn close to just proposing an amendment to pull this entire program offer out and put it somewhere else, because something tells me the Office of Civic Life has an axe to grind here, and that if we're going to protect the neighborhoods, we have to take drastic action.
But I want to offer that up to the both of you because I see some alignment between both CA's office and City Operations DCA, and frankly, the, the 311 operations.
I think there is a place in which some really good stuff can happen, but I also think that the neighborhood associations could easily work for Council Ops.
And so I'm really trying to get a sense for what is the culture that exists in civic life and why has this been such a surprise that frankly has members of our community's hair on fire and we've had no briefings on it?
So I'm prefacing what, what could be a fairly drastic amendment to protect the neighborhood coalitions and neighborhood associations.
But I have a feeling just by raising it that the 3 of us and others can have a conversation about how to maybe nip this real fast and get that stuff out of this budget.
Thank you.
Jamie Dunphy
Thank you, Councilor Zimmerman.
Councilor Green.
Mitch Green
Thank you, Mr. President.
Thank you, DCA Warren, for the presentation.
I'm going to kind of start back at the small donor election, um, program offer.
I, I know we're in a tight budget year and it's difficult to find the money to fully fund, um, that program given that we're laying staff off and all this.
And I just I just need to raise this up for my colleagues that when we do adopt budgets that cut the small donor elections program, it privileges the incumbents.
It privileges those of us who have already been elected.
It's much harder to beat an incumbent if you don't have name recognition.
That's why those dollars exist.
I say that at my own risk.
If someone wants to challenge me for my seat, It'd be much harder for them to do it if we continue to whittle away at this program.
And last year we did adopt a budget that beefed that up a little bit.
And so I'll be looking for opportunities to find something here that, that does that, because I think it's unfair.
I think it pulls the ladder up.
And I know that's not your intention, but that is the practical impact for those who pay attention.
So, um, I'll be looking at that.
Um, the other question I have is actually I might go into the weeds a little bit, so forgive me, but it is about the Internal Service Fund, and it is about the line items in the budget for internal materials and services, because I suspect that the IMS budget line items are where you would account for the Internal Service Fund rates, but that's not all they do.
Is that true?
Tracy Warren
That is true, but I'm going to look behind me to get the— Yeah, it was— yeah, go ahead.
Unidentified speaker
Yes, Aaron Beck, Business Operations.
Yeah, when, when the bureau— when you see in the internal materials and services part of the budget, you are seeing the total cost of the internal service funds to deliver those services to the bureaus.
And so what you're seeing budgeting is a combination of rates and the units of services.
So that— and those are the rates that we've developed for the services that we anticipate them— or to provide them during the fiscal year.
Plus, we're also including estimates for variable services.
Those could be things like fuel in the case of fleet.
So it's the whole package, really, that the bureau needs to budget for our services.
Mitch Green
Thank you for that.
I guess I ask this question because I've been thinking about this for a while because I know it's an internal rates fund model.
Do we have that rates fund formula methodology posted anywhere for the public?
Unidentified speaker
Well, all of the individual funds have their own rate methodologies that we include in our website to describe how we're calculating each one of those rates.
The rate methodologies are actually kept by BISOPS, but the actual explanation of that is on our website.
Mitch Green
Okay.
That's helpful.
I think for any entity that has a rate methodology for funding its work, I think the best practice is to publish a very clean model with data that— this data is already publicly available, right?
So that way when folks kind of look— because I I'm going to this place because— I'll give you an example.
If I'm a member of the public and I'm reading the fire, police disability retirement fund item, and I'm not picking on the work that that very important charter function of our city does, but the internal materials and services line item is $65 million for this proposed budget.
And I know why.
I'm going to get there.
But it goes from $40 million and it goes to $66.
And that's actually just for the sworn PERS contribution largely.
But it's not the same dollar amount for the sworn PERS contribution.
So if you didn't really know that nuance and you're like, well, the IMS is all just internal rate services, you would think that there's a rate methodology that is somehow lumping a lot onto FPDR in a way that it doesn't elsewhere.
And so does my question or sort of statement make sense to you?
Unidentified speaker
Oh yeah, yeah.
I mean, so basically when you look at the internal materials and services It's not just fleet facilities, BTS, risk management.
There's a whole world of bureau— what are referred to as bureau-to-bureau transactions that are billing for very specific things, and that's what your FPDR example is about.
Mitch Green
Thank you.
And that's why I asked that question originally, is, you know, is IMS just a one-for-one on the Internal Service Fund, or is it more than just— and it sounds like it's more than just the Internal Service Fund.
Unidentified speaker
Much, much more.
Mitch Green
Okay, that's important because when we talk about bureaus that are funded by the Internal Service Fund and not so much general fund, it does eventually hit general fund because, you know, my office, for instance, has an IMS line item that funds my part in the broader cost of fleet and facilities and all the rest.
And so it's just an indirect general fund.
It might also be an indirect but the point being is it just needs to be really, really transparent how these dollars are flowing together and how that methodology is proposed, because you can always do different methodologies.
We might want to have a conversation as we approach, you know, DCIB area and the work that we're doing on our financial stabilization work is thinking about, is there a strategy to decouple that and think about other ways to do that?
I think that's a great point.
To pay for the stuff that are the large fixed costs associated.
You know, the Portland Building is a good example.
It's a very expensive project.
It's driving a lot of this ISF, I imagine.
And so when we think about a capital strategy that's related to our asset management strategy, that's related to our Get Well health plan, I think that that conversation should happen.
And I'm not proposing that we do it now, but I just— it's hard to read these documents and then think about that monetary transfer through that service fund in the back of my head without sort of daylighting a little bit.
Tracy Warren
Thank you, Councilor Green.
I agree, I think there's an opportunity there to review for sure.
Mitch Green
Thank you, I appreciate it.
Thanks for letting me dig in deep there.
Um, and I understand that the sworn purse contract, it's just something that we have to do.
It is part of law, it's part of, part of our charter reform.
Um, okay, uh, I want to go back to I think one of my colleagues picked this up a little bit, was there's a line of questioning about the core services realignment, and there was also a line of questioning about the use of consultants.
And so as we've gone through the HR realignment, have we relied upon consultants for that rather than sort of in-house staff?
Tracy Warren
So when the project first got started, we did use a contract.
And that is the contract that Councilor Novick was speaking to.
That is a broad umbrella contract that has done different activities across the city, and we'll follow up with Councilor Novick's office on that.
But they did do a portion of work at the start of the realignment to assess, work with bureau directors, folks who are performing the work, and identify where there were key opportunities for change and realignment.
So they developed an initial analysis and then they did some initial work on subgroups and work groups to bring staff who are performing that work to kind of dive into those different functional areas for human resources, IT, and procurement.
That ended, Gosh, I don't know, several months ago last year.
And all of the work that has led us to this point has been done by myself, by my senior advisor, Haley Blonsley, and then the bureau directors.
So we've really been lifting this project internally since that initial analysis.
Thank you.
Mitch Green
Thank you for that.
And was the scope of work for that contract, did it include sort of direct engagement with those line staff, interviews with those line staff, and those sort of those who might be affected in this strategy, or was it more disconnected, high-level, we're just going to give you our first pass?
Because I think what I want to know is, did we ask them to do direct engagement?
Did they do the direct engagement?
Tracy Warren
Did we follow up on there was some direct engagement, but you're talking about a footprint of roughly 400 to 500 employees.
So there was no way to do direct engagement with all of those folks through independent interviews.
So they did do some of that, and then we did some direct engagement through subgroups where we asked for bureaus to identify employees to sit on these workgroups.
And I think that's what we're talking about.
Angelita Morillo
Thank you.
Tracy Warren
So we did have a number of focus groups to inform how we would structure the process moving forward.
I would say that since that time, most of our efforts have been on doing internal analysis of the work through managers.
And then the next layer of work that we're going to be doing is direct engagement with staff as part of the service level agreement development.
Mitch Green
Okay.
I appreciate those answers.
Sounds like there's more work going on.
I just want to flag that, you know, if you're the ones being affected by these conversations, when, when there's this outside consultancy that's making decisions about your job, about your job and not with you, it hurts pretty bad.
Unidentified speaker
Absolutely.
Eric Zimmerman, Robert Taylor
Thanks.
Jonas Biery
Thank you, Councilor Green.
Jamie Dunphy
Colleagues, we have 15 minutes left.
4 more people have requested the floor.
Councilor Smith, there are no more people in the queue.
My team is going to work with the budget office to find a time to reschedule the conversation about core services realignment at one of our other upcoming work sessions.
Councilor Kanal.
Sameer Kanal
Thank you, Council President.
I'll just, without repeating it, agree with Councilor Zimmerman's point about the central budget office, Councilor Green's points about small donor elections, and both Councilor Novick and Green bringing up the NEX contract.
I'd love information on that.
I think enough of us have talked about contracts that are paying people to think for us, that I think the whole council might benefit from that.
Um, on staffing, you said there were no staffing changes, but I also know that OCPA is adding 14 positions on paper to, you know, allow for that hiring.
Does that mean that there's a net of zero because 14 other positions are going away, or is it actually 14 positions separate from a net of zero?
Does that—.
Tracy Warren
My understanding is for the the CBP or the OCPA, so the Office of Police Accountability, is that there's 20 positions in the budget as placeholders.
There is one position filled on a limited-term basis, and then there is a director that they are recruiting for.
Once the director is hired, the director would need to develop a budget for spending within their office that would then come back to council.
Sameer Kanal
Right.
But you— they've already had 6 positions authorized.
This would be adding 14 authorizations to get to the 20.
Tracy Warren
That's correct.
Sameer Kanal
And so my question is, across your service area, you led off by saying there were no— there was no net change in staffing.
Does that mean that 14 other positions were cut somewhere across the rest of the No, that may have been a misspeak from my end.
Tracy Warren
So the CPA— OCPA, excuse me, I keep getting these acronyms confused.
The OCPA is having placeholders for staff so that when a director is hired, they can then hire.
That is not increasing across the city operations, and they are not— they are in their own budget, if that makes sense.
Candace Avalos
Okay.
Sameer Kanal
I'll just make a comment and then I'll ask the other question.
The comment is I want to have some information on the other buildings that we rent.
You mentioned one in Northwest for city employees.
I know there's a couple in Northeast as well.
And as we look there, while it's important for us to have a presence around the city, Obviously fire stations, police stations, things like that.
The rental, I want to look at that and where— and get more information on that because especially to talk about what Councilor Pirtle-Guiney was talking about, if there's space being vacated by bureaus within the Portland Building, it might be a good opportunity as leases expire to bring people back in-house and avoid that general fund impact, the indirect one.
My questions are on FPDR.
So the Portland Central City Task Force made recommendations in August 2025.
Raymond C. Lee
Thank you.
Sameer Kanal
Next up is item 14, which is on FPDR.
The proposal is to, quote, begin a phased transition from pay-as-you-go funding towards prefunding to the extent feasible.
And I just want to note that this is something that could prevent a line item that is currently 1/3 of the city's property tax obligation from growing to over 40% in the next decade without making any changes to benefits that are guaranteed to the retirees.
Is this something that the service area is interested in, in principle?
I understand there's a money issue to prefund right now, but in terms of setting up the structures, is this something that, that there's been a conversation about?
And do you as DCA support exploring this?
Tracy Warren
I'd ask for Sam Hutchinson, the director, to come up.
I know that he works closely with the board that manages the use and gives direction for their bureau.
Loretta Smith
And so there has been discussion.
I think we've talked about it before.
I'm Sam Hutchison, Bureau Director for Fire, Police, Disability, and Retirement.
We've talked about it before.
The scope is the board authority does not include changing the funding plan because their job is to make sure that the plan and the fund are being operated correctly and within within the scope of that board.
So there has been some discussion, but they do not have any authority to take any action on that.
You have heard before that some of the people on the board would be willing to participate in any of the exploratory options for what goes forward, but it's not up to the board to initiate that action.
It's been— our concerned citizen has been at the board meeting several times, and there's been a lot of discussions, but the board can't do it.
'Cause the only people that really can initiate that has to come from council.
Especially if there's a charter change.
And again, the board is willing to participate on that as well as my staff providing some expertise and information.
Sameer Kanal
Yeah, I appreciate that clarity.
And I think the distinction's important here.
I was more asking if in terms of the higher level, we all know that if the administration were to come out against a council proposal, that makes it a lot harder for it to happen.
It's happened several times.
Likely to happen maybe even this week.
And so I want to just see if there is high-level administrative buy-in for exploring something that could prevent our— and by the way, it's not just one concerned citizen anymore.
This is now Portland Metro Chamber, the Central City Task Force, the governor, you know, that convened that.
These are not people who necessarily align politically on everything with each other who are exploring how do we find a way to save tax dollars and create generational equity.
So is there high-level, meaning DCA, City Administrator, buy-in in exploring this is what I'm asking?
Tracy Warren
I would just answer, I'm always open and interested in considering any opportunity that helps us to be more efficient and effective and saves money.
So—.
Sameer Kanal
Great, thanks.
And then I'll just ask a rhetorical question and then pass it along, which is I am still not clear and I'd love to know where in the charter or city code it says that IPR is a part of oversight system established under Charter 210, which is still being used in the mayor's proposed to fund it when it is actually the vestiges of the system being replaced by the oversight system.
Thanks, Council President.
Jamie Dunphy
Councilor Kanal.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Council President.
I am looking at the reduction in operating hours at 311, and I want to understand the program impact to that.
Do we receive— do you know, do you have data around when we receive maximum call volume, and if those are the hours when we should be reducing to have the least impact on Portlanders, or was that chosen for financial reasons and is actually perhaps not the right time in terms of impact for providing service to Portlanders to cut back hours?
Tracy Warren
Thank you, Councilor.
I appreciate the question.
I'm going to turn it over to Betsy to—.
Unidentified speaker
Hi, uh, Betsy Drake-Studstill.
I am interim 311 program manager, and yes, there is definitely data on the call volume.
It is peak before 6 PM.
That's true seasonally.
So, um, we have information I can share too in terms of like charts and all of the records of this so that you can understand kind of why that is still technically the best place.
If we are going to cut hours, it is the fewest people impacted.
It is, however, a unique space in the community because there is not anyone else.
So there's BOEC and 911, but actually 211 is now closed after 6 PM and also on weekends.
So for us to decrease our hours, it is still going to hit vulnerable persons pretty significantly, but at a lower volume.
So that's kind of where the trade-off was.
Elana Pirtle-Guiney
Are the calls consistent in terms of type of call, or should we know about a disparate impact on one type of call versus another by choosing those evening hours?
Unidentified speaker
I would say that the calls that come in are still consistent across the day, not like dependent upon the hour.
It's just that more people are going to call for things that they know they can only reach the government got it.
Elana Pirtle-Guiney
Okay, thank you.
Um, I am— nothing else on 311.
Unidentified speaker
Okay.
Elana Pirtle-Guiney
Um, but similar in that I want to understand program impact, the Data and Privacy Office transfer of positions from SEDSA— is there a program impact in what we are already doing from that, or are they bringing the work with them?
What happens there?
Tracy Warren
My understanding is they're going to be bringing the work with them because their work currently is mostly focused on data governance.
Elana Pirtle-Guiney
Okay.
And then finally, can you help me understand what the 18 people in Fire and Police Disability and Retirement do?
We have one position coming out for realignment.
You didn't share what that position and that's just an area that we haven't talked about much in terms of what our staff doing, and it's notable to me that they are not taking any reductions at all.
Tracy Warren
Yeah, and they do— they, they manage the, the system, so the disability and retirement system.
The one realignment I'll speak to, and then I'll ask Sam to come back up and give you a little bit of an overview of the other ones, is the one that we're doing in the but the one realignment is for a business systems analyst, I believe, who helps with their system.
And so it would still be providing support to FPD&R.
It just would be doing it from a centralized reporting structure.
Elana Pirtle-Guiney
So is that part of the IT realignment?
Tracy Warren
That is.
That's correct.
And then, Sam, could you give A brief overview of the other staff.
Elana Pirtle-Guiney
Staff who support the system.
But it stands out to me when over half of the offices within City Operations are taking cuts, that this is one where it's— DCA Warren, you chose not to take any cuts.
I don't know what was in the—.
Loretta Smith
I'll give you some back— excuse me, go ahead.
Tracy Warren
Just one minute.
So I would add that that has to do with the funding type and the control over that particular budget, which is the board governs how they are resourced, and then we present that to council.
So—.
Elana Pirtle-Guiney
Are all resources internal and taken from the specific portion of the property tax that is allocated to fire and police disability and retirement?
Tracy Warren
It is completely funded through the charter tax obligation.
Elana Pirtle-Guiney
I don't need to go into other details.
Thank you.
I will just note that there's a lot in here on realignment.
I know we're not going to get to talk about that today.
When we do get to that, I have some questions about how some of the decisions were made around who was moved and who wasn't that I think get back to questions that some of my colleagues have asked about the inclusion of voices from, from I have heard in a few cases conversations about somebody being labeled as HR or IT or whatever else is in the realignment position, but that what they actually do on the ground is functionally different from what you might consider a core service.
And so I'd like to understand as we move through these budgets, how the decisions were made to move positions and how the decisions were made at times to keep positions and, and whether our frontline staff who are doing the work were involved in that or not.
I can hold on that until we talk about realignment, but because there were so many positions moving around in your section, I just wanted to flag that here as well.
Tracy Warren
Absolutely.
Thank you.
That's very helpful as we prepare to come back to you.
Elana Pirtle-Guiney
Thank you, Council President.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Councilor Ryan.
Dan Ryan
Yes, thank you, President Dunphy, um, and thank you, Tracy, for your presentation.
You move through slides really fast, I just have to say that.
Tracy Warren
I was trying to get to both, I'm sorry.
Dan Ryan
No, it's all right, it's a skill set.
Um, I realize you're in a hot seat and I want to call that out.
Um, leadership has great responsibility and you made it clear that we're talking about people's jobs in an environment in flat and declining revenue from our bread and butter So this is really hard.
And so thanks for naming that.
I had— I love the questions about 311.
I had almost all the same questions, and it makes me happy to serve with Council Member Pirtle-Guiney in District 2.
But I still want to get at it a little bit more.
I did a sit-along last week at 911 Bowick, and they made it really clear that activity yes.
It gets busier late afternoon, early evening.
And I experienced that as I was leaving at 4 o'clock.
I didn't want to leave because it was just so riveting.
My point is, do we have data that goes on over the last 3 years on this?
So I was going to ask, is there a heat map?
Is there an impact map about when we receive calls?
And is some of the reason— hi— is some of the reason why perhaps the calls go down at 6 is because they assume that we're not open?
And has there been a trend as people expect it maybe to be open?
Because, you know, Portland wants— they want— Portlanders want someone to pick up the phone and they want someone to listen to them.
And 311 has that space in a way that the BOEC 911 people do not.
Unidentified speaker
Yeah, so thank you for the question.
There is absolutely data in terms of the relationship between our open hours and the impact and benefit that BOEC has from us being open until 8 PM.
Absolutely.
That was the original decision when we open evenings was actually to match where they were busiest.
Yes, um, the ratio is still much smaller, um, so if we are going to need to back out of time— and again, I just want to make sure that the relationship between us cutting hours is because of staff and not having enough capacity, um, to fit those hours.
Dan Ryan
But has there been a trend since this has started where maybe there are more calls after 5 as people realize that we're actually open?
Unidentified speaker
Yes, but very small.
So I can provide you also with—.
Dan Ryan
That could be on us for not promoting that enough.
But anyway, I just had to say that I'm going to keep picking apart this one a little bit.
Yeah.
Small donor office.
What is the generous public fund ceiling for a council candidate each cycle?
Tracy Warren
Season.
Dan Ryan
I forget, is it $125,000 per candidate per campaign?
Jonas Biery
There she is.
Tracy Warren
He's here.
Unidentified speaker
What is the ceiling for which— I'm sorry, Susan Matei, Small Donor Elections Director.
What is the candidate ceiling for which office?
Dan Ryan
Yeah, so each candidate, um, has a ceiling, I, I assume, per, per election cycle, not per fiscal year.
What is that ceiling?
Unidentified speaker
Uh, for mayor it is $750,000.
Dan Ryan
For auditor, from the gift, from the match from the matching from the public, yeah.
Not total, okay.
Unidentified speaker
Correct.
For auditor is $50,000, and then for council, it is divided into 3 tiers depending on how many contributions from unique Portlanders they've collected.
If they've collected 250 contributions from Portland donors, it's $100,000.
750 Is $200,000, and 1,250 opens up $300,000.
Dan Ryan
So a candidate can receive up to $300,000 per election cycle?
Unidentified speaker
For council members.
Dan Ryan
Council members.
Okay, that's higher than I thought.
Um, but thank you.
And then since this is dormant for the most part from a little into November all the way through June, it'll be important to see like if a candidate actually hits that ceiling, which is higher than I assumed it was.
And I apologize for not tracking this.
It's changed quite a bit and I participated I've updated it 3 times and it changes every time.
Then we'd have a way to look at the data differently because right now it looks like it's $450K from July 1st through early November.
Unidentified speaker
I, let's see.
Oh, $450,000.
Oh, that is the additional funding over the $1.3 million of ongoing funding.
Dan Ryan
Just made me more confused.
Okay.
Unidentified speaker
Okay.
Yeah, you're looking at the $450,000 in the mayor's proposed budget?
Tracy Warren
Yeah.
Dan Ryan
Okay.
Right.
So that's what we— that's all we can go from here.
Yeah.
Unidentified speaker
Yes.
So the program gets $1.3 million of ongoing funding annually, and the mayor proposed adding $450,000 of one-time funding to this year's budget.
Dan Ryan
Okay.
And each candidate running for City Council has a ceiling of $300,000 per election cycle?
Steve Novick
Yes.
Dan Ryan
Not per fiscal year?
Unidentified speaker
We do carry over unspent funds from each prior cycle because basically the mayoral cycle in 2028 costs about twice as much as the auditor cycle in 2026.
And so rather than asking for a small amount in odd-numbered years and more In even-numbered years, and a lot in the mayoral cycles, we look at 4 years of elections, divide that by 4, and then make an even request every year.
So the program— the Portland Elections Commission estimates that the program needs $2.2 million all 4 years in order to cover the 2026 and 2028 election— elections.
And so So in 20— last year it got $2.1 million.
This year it's— the mayor's proposed budget has $1.3 of ongoing plus $450 one-time.
Dan Ryan
Okay.
And in aggregate, in past elections in 2024 and 2022 and 2020, 3 of which I all participated in, I don't recall the ceiling being this high of $300,000 from the public.
Unidentified speaker
Oh, it was for council.
The ceiling was $440,000 before It was $200,000 in the primary and $240,000 in the, uh, general election.
Mitch Green
Point of clarification, can you describe the administrative rules that that office has done to limit the tiers?
Because I think that's what's happening here, is just a confusion between the— yeah, thank you.
Unidentified speaker
Um, well, so in the 2024 election, the program was underfunded, and so it had to reduce the number reduce of tiers that it could do.
The match caps, um, in, uh, for the mayor's race from $750,000 down to $100,000, from auditor from $100,000 down to $40,000, and for council tier 1 was instead of $100,000, $40,000, instead of $200,000 for tier 2, $80,000, instead of $300,000 for tier 3, $120,000.
Dan Ryan
Okay, I'd like to see that in writing.
Maybe we will have these questions, but I really want to sure.
How much per cycle can a candidate leverage from the public coffers, period?
Unidentified speaker
For council, $300,000 at most.
Dan Ryan
Yeah, no, we've— thank you.
And you have made that clear.
I just want to do a comparison to the past with each cycle.
So we're in a really tough budget cycle right now.
So I just want to make sure that we're clear about that.
Unidentified speaker
I can give you a 1-page sheet.
So everyone understands how much the political sector sure, I can get you a one-pager with all of that historical information.
Dan Ryan
Okay, thanks so much.
Jamie Dunphy
Okay, thank you, Councilor Ryan.
Um, colleagues, we are over time, so we will reschedule our, uh, council conversation about core services realignment, and we will be back here for our council meeting at 2 o'clock.
Unidentified speaker
Thank you.
Jamie Dunphy
We are adjourned.