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
Yeah, good morning everybody.
Calling to order this welcome to the work session of the Portland City Council.
It is Thursday, May 14th.
Congratulations, friends, this is our final work session of this budget season.
I think it's our 13th.
Um, this morning we're going to be hearing from the Auditor's Office, we will be hearing from a Public Works service area, and we will also be having a, a presentation on solid waste rates.
I believe I am turning it over to Madam Auditor.
Good morning, welcome.
Apologies to everybody for us starting a little bit late this morning.
Simone Reddy
I think Diana is going to advance my slides.
Um, good aft— good morning.
It is the morning.
Um, President Dunphy and councilors, uh, thank you for having me today.
Um, I'm City Auditor Simone Reddy, and today I'm joined virtually by Chief Deputy City Auditor Reed Brodersen.
We're here to present my office's budget, which I've requested and the mayor has included in his proposed budget for next fiscal year.
I'm going to start by providing an overview of the Auditor's Office and our functions, as well as our budget, and I will share with you the approach that I took to developing this request.
Then I'll hand it over to Chief Deputy Brodersen to get into the details about the cuts and changes that we're making before we answer your questions.
As a reminder, our city charter requires the auditor to submit a requested budget to the mayor and city council, who are required to consider the auditor's priorities and duties.
Mayor Wilson, out of respect for my independence and the outcomes that my office ensures, has incorporated my requested budget into his proposed budget without modification.
And I ask that you adopt my budget without making further cuts beyond those I've consented to, which I'm going to go over with you today.
So thank you for your consideration.
2 more slides.
One more.
Thank you.
So the Auditor's Office mission, which I know you're all familiar with, is to ensure open and accountable city government.
So that all people in Portland experience a sense of belonging.
Our requested budget for next fiscal year totals 45 FTE and about $14.6 million.
Next slide.
The Auditor's Office is organized into 7 divisions that are directly overseen by myself or Chief Deputy Brodersen.
Our divisions help Portlanders access public records, participate in elections and council business, challenge city decisions, resolve complaints, and understand whether city programs are operating effectively, efficiently, and equitably.
We also maintain administrative independence, which allows our office to do all of that work without depending on the systems and officials that we are responsible for holding accountable.
Next slide.
So my approach for developing this requested budget was really to prioritize legally required work and services and make reductions where possible.
It uses reserves strategically to avoid deeper disruption and to help the office retain as much of its skilled workforce as it can.
The result is a budget that that makes cuts and changes responsibly and reflects our shared responsibility to respond to the city's fiscal crisis.
Next slide.
The Auditor's Office's greatest asset is our capable staff, and so it's no surprise that personnel is our largest expense at about $9.3 million, or 64% of our budget.
Therefore, most divisions, which are depicted on this slide, are driven primarily by staffing levels.
The exceptions are archives and records management and operations management, which carry facility costs for the Portland Archives and Records Center and City Hall office space.
And those costs total about $2.5 million, or 17% of our budget.
Next slide.
As you can see, the office is funded primarily through overhead general funds at about $14.1 million.
About $250,000 comes from interagency agreements for services provided by our hearings office, and we have about $220,000 in reserves.
We also receive a small amount of intermittent miscellaneous revenue from sources like reimbursements from Prosper Portland for performance and financial audit work, candidate filing fees, enforcement penalties, and interest earned on the Auditor's Reserve Fund.
Next slide.
My requested budget includes roughly $300,000 in additions and $800,000 in reductions from, from the general fund at current service level.
And Reed is going to walk us through those details shortly.
Next slide.
As I mentioned, my requested budget includes 45 FTE.
And if you adopt the proposed budget as is, 2 divisions, Audit Services and Operations Management, would each lose 1 filled position.
Next slide.
While my requested budget includes cuts, it protects services and outcomes that Portlanders expect from my office, those that build access, trust, and participation in our government.
That includes administering municipal elections, providing voter education, and enforcing the city's campaign finance laws, preserving the city's history and making it available to city employees and the public, administering city council business and maintaining records of council action, building trust in city spending and programs through financial and performance audits as well as ombudsman and fraud hotline investigations, and providing fast, fair, and impartial adjudication of alleged city code violations.
Next slide.
Before I hand it over to Deputy Brodersen to highlight the significant cuts and changes, I want to acknowledge that budget reductions for government accountability offices are not a trend that we like to see.
Thank you.
But one that we humbly accept.
We recognize that our independence, which raises the standard for conduct in our office, does not make us immune to changes that are facing our jurisdiction.
We must be responsive to them.
And now I would like Reed to go over the details with you.
Reed Brodersen
Thank you, everybody.
Good morning, Council President Dunphy and councilors.
Appreciate the time.
My name is Reed Brodersen.
I use he and him pronouns, and I'm Chief Deputy City Auditor.
Before I get into the weeds, I'd be remiss to not at least acknowledge the human impact of this requested budget.
We are, like the auditor already mentioned, we do propose to lay off 2 existing staff.
And while we're not suggesting this is avoidable, and I don't envy council's job in decision-making, I at least wanted to start with the people behind the numbers before we get into the details.
If we could move to the next slide, please.
Okay, our first cut eliminates a filled Performance Auditor 2 position, which would result in fewer performance audits completed.
As a reminder, authority for the selection of audit areas resides solely with the auditor, and the loss of a performance auditor means adding less to the annual audit plan.
Thank you.
Which is published each June.
Next slide, please.
Our second cut eliminates a filled Administrative Specialist 2 position within operations management.
This position provides human resources and finance support, and its loss will slow our processes in both of these areas.
Next slide, please.
Our third and final set of cuts reduces external materials and services budgets.
This includes eliminating budgets for equity training and facilitation and other office-wide strategic initiatives, reducing budgets for advertising as well as nonessential software, and finally bringing operating budgets into alignment with historic spending levels.
Next slide, please.
Our requested budget also does include 2 addition packages.
The first, totaling about $106,000, is required to implement the labor agreement that council ratified on April 29th.
This increase to personnel budgets ensures the office can meet its obligations to represent its staff, of which there are 30 in the office.
The second adds $190,000 in one-time funding to elections for our contracted voter education services.
Provided by community-based organizations.
Though election cycles span 2 years, most voter education, of course, occurs in the summer and fall of election years.
So with that in mind, the office planned to underspend these funds in fiscal year '25-'26, the current fiscal year, and carry them forward into fiscal year '26-'27.
Since it's our understanding that any encumbrance carryforward tool may not be available through the fall bump this year, We were asked to request this previously budgeted but unspent funds as an add package for next year's budget.
Next slide, please.
Finally, our requested budget draws from the Auditor's Reserve Fund to mitigate deeper service impacts to Portlanders.
The Reserve Fund was established through a fiscal year 2019-2020 budget note and is replenished through Auditor's Office underspend.
Up to a cap of $500,000.
Our use of the fund demonstrates its purpose, which is to allow the auditor to independently manage urgent or emergent budget needs, such as the current fiscal crisis.
Our draw next fiscal year would deplete the fund by 44%, leaving enough, we believe, to help us manage what is expected to be a multi-year crisis.
Next slide.
Thank you.
So I'd like to thank you all for your consideration of Auditor's priorities and duties and reiterate her ask to adopt the requested budget without further cuts.
And with that, Auditor Reddy and I are available to answer your questions.
And we're also joined by our Business Operations Manager, Rosie McGowan, who can help us get into the weeds if we need to.
Thank you.
Jamie Dunphy
Thank you very much.
Colleagues, we're now going to move into discussion and conversation.
We have about 20 minutes or so for this section, so I'm going to try and hold councilors to 5 minutes again as normal.
Councilor Koyama Lane, take us away.
Tiffany Koyama Lane
Thanks, Council President.
I want to start by saying how proud I am that Portland has an elected independent auditor.
Not all cities do.
Councilor Kanal and I, we recently met an elected independent auditor in New York State, and he was very excited to hear that we have one in Portland.
This structure is very important.
Portlanders voted themselves to reinforce this importance when they approved stronger independence for the Auditor's Office.
You know, Portlanders have made it clear that accountability, transparency, independence, oversight— those are really core democratic values in our city.
So, Auditor, first I want to ask candidly, can you explain what— do you see efficiencies or reductions that you believe can be reasonably made in the office, in your office, without materially impacting the mission?
Like, is there fat to trim, as people often say, or are these proposed reductions really going to meaningfully affect the office's ability to do things like audits, investigations, oversight, accountability work?
Can you outline that a little bit?
Simone Reddy
So I think— I'm not sure which slide where we outline some of those cuts, but we are trying to get rid of any nonessential software.
There are certain materials and internal services charges that we can't avoid, particularly associated with maintaining the Archives and Records Center on PSU's campus.
There's very specialized costs and needs associated with preserving and documenting our city's history.
So I think we have done our finest job of looking for efficiencies outside of the personnel costs, which again make up the majority of our expenses.
Thank you.
And I would invite my deputy to add any more to that response.
Reed Brodersen
Yeah, thank you for the question, Councilor and Auditor.
I would tend to agree.
Our EMS cuts, I think, pretty minimally impact services to Portlanders.
I think we eventually would want to rebuild some funds there to support staff development, particularly around anti-racism equity and facilitation in that space.
In terms of personnel, you know, I do think we are looking at a multi-year rebuild plan, particularly for the auditor position.
That is a material loss of a service, right?
That is an auditor of a few who deliver that work.
So that is— that would be a temporary loss as we look to rebuild in the future.
Tiffany Koyama Lane
Thank you.
With those positions, those FTE proposed to be cut, what work could we expect to be delayed or minimized or have to be set aside if those proposed cuts happen?
Simone Reddy
Thanks for that question.
So with the elimination of the performance audit position, that role is responsible for completing performance audits from the annual schedule.
We publish that schedule every June.
So it essentially means adding less to that because we probably, I would guess, complete one less audit every 2 years with the loss of that position.
It would not affect our ability to continue our charter-mandated responsibility of the annual financial audits of results that I've presented to you each year.
Tiffany Koyama Lane
Thank you.
And can you or Mr. Mayor explain how the reduction scenarios came about?
Was this similar to the other bureaus, other service areas that were asked or did this come from the Auditor's Office?
Keith Wilson
Yeah, Councilor, I appreciate this conversation.
I think Auditor Reddy would agree it was very difficult conversations we've had for probably 4 months.
The good thing is that she came forward with the hard and important work already done.
And so she came into my office and said, we recognize the difficulties that the city's facing.
Here's what I think my department could reasonably and that at that point I couldn't accept it because the guidance was 10%.
And so she went and did hard work and explained that it was gonna have a material effect on her department if she took a cut that deep.
We held off, we worked on the budget, and in the end we ended up with about a 4%, which certainly wasn't something she wanted.
But in the end, she recognizes that being a part of the jurisdiction is—.
Jonas Biery
It's important.
Tiffany Koyama Lane
Okay, just to be really crystal clear, the auditor came to the executive branch saying, we'd like to show you the 10% cuts, or that's something that you asked of the auditor's office?
Keith Wilson
Yeah, the guidance was a 3 and a 7, ostensibly would be a 10.
Tiffany Koyama Lane
From your office.
Keith Wilson
And she proactively came with the 3 and said, I can deliver, with all due respect, auditor, I don't wanna put words in your mouth at all, but she said, you know, I can deliver my charter mandate at this level.
And then at that point, I had to say I can't accept it because of the challenges we were facing writ large.
And then we went to work to try and get as close to that as possible.
And I think we achieved that.
Tiffany Koyama Lane
Mr. Mayor, I would love for you to talk a little bit more because I do have some structural concerns because I believe the independence of all the different bodies are important because I believe you did not ask council to prepare reduction scenarios for our offices, but it was asked of the independently elected Auditor's Office.
Can you explain a little bit the difference there?
Keith Wilson
Yeah, you're right.
As far as council, I trust the 12 councilors as the budget writing committee to be responsible to their own budgets.
The auditor is under the mayor's purview as far as setting the budget.
And the auditor and I have a close relationship, and we've worked together over this last year, uh, certainly in the trenches this last 4 months in particular on her budget.
Tiffany Koyama Lane
Okay, well, I just want to note, while public trust in the government is fragile these days, I do think it's very important that we have strong independent oversight.
I'm especially concerned about the cut of those FTE, and I'm looking to see about how as a council we can make sure that we can restore those at some point, hopefully in this budget.
I think they're really important to the integrity of our form of government.
And just to be clear, this is not something that anyone from the Auditor's Office is directly asking of me.
From the beginning, when I saw that they were being asked to provide these cut scenarios but council wasn't, I had those concerns coming up for months.
Thank you.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Councilor Zimmerman.
Eric Zimmerman
Thanks.
This is a tough one for some of those audit cuts and performance, so I appreciate you coming forward and helping us kind of see how this goes.
I share some concerns with Councilor Koyama Lane in terms of, you know, an independent elected office.
I wanted to talk a little bit about the the elections office with the changes that are going on, and it remains a little fuzzy for me, right?
The Secretary of State conducts elections, then the county elections offices conduct elections.
I don't think any of the other cities inside Multnomah County, and a lot of cities outside of, of Portland, don't have their own elections office.
So can we talk a little bit?
Is it a, is it a core service when the county also does elections, or what is the reason other cities don't have an elections office?
I'm trying to understand what, what happens at our level that is different than if we were to just pay Multnomah County to, to do elections on our behalf, which I think is how other cities and water bureaus and and school districts do it.
I was hoping to talk a little bit about that.
Simone Reddy
Yeah, thanks for that.
I think what's unique, I guess going back to this point that Councilor Koyama Lane made about accountability and oversight, a big part of our muscle is our ability to enforce the city's campaign finance laws.
And that is a specific regime that Portlanders voted into law.
That we are uniquely responsible for overseeing.
I can't speak to the other jurisdictions, but for the City of Portland, that is a unique function that is citywide and is our responsibility in the Auditor's Office to oversee those.
So where we have increased our budget and filled vacancies is to make sure that we have enough staff to oversee elections, including implementing ranked-choice voting and educating voters about how that system works, as well as making sure that we have enough staff to enforce the laws with a larger number of elected officials in the new form of government and the number of candidates that are vying for those positions.
Eric Zimmerman
So Multnomah County has an election finance limit as well?
Do you know who enforces their campaign finance laws?
I actually don't.
Simone Reddy
I don't know.
I don't know if Chief Deputy Brodersen has the answer to that question.
Reed Brodersen
I think it might— I think our elections manager Deborah Scroggin is in the audience and maybe be able to best answer that.
Deborah Scroggin
Good morning, councilors.
Good question.
Multnomah County Elections enforces that law.
I will note, and I think that they would agree, that they have not seen a lot of complaints or action compared with the city.
Eric Zimmerman
Yeah, I think there's— it's because there's this more straightforward— it's you just can't take more than $603, right?
Deborah Scroggin
Maybe that's actually a very similar law.
Okay, passed and proposed by some of the same folks.
Eric Zimmerman
Okay, thanks.
So if we were to adopt this ordinance, If we didn't do it, who would do it?
Does it fall— because elections fall under the Secretary of State's purview, does that then trickle down, or do we like pay for like almost like a contracted service?
I'm not sure how that would work.
Or is it incumbent upon any jurisdiction that puts a campaign limit on themselves that they then have to create an enforcement division?
Deborah Scroggin
I don't actually understand.
Eric Zimmerman
That one.
Priya Dhanapal
That one.
Reed Brodersen
Okay.
Deborah Scroggin
We are in charge of enforcing our own laws, and in fact to the city charter states that the city auditor will enforce that campaign finance law that voters passed.
Eric Zimmerman
Got it.
So the school district who has unlimited giving, if they were to limit their contributions, for instance, they'd have to create a similar type of structure then.
Okay, that's really helpful.
My next question was around, it looks like about a $200,000 increase for voter education.
Now, I'm all for it, right?
'24 was challenging for everybody to learn and I think it's really good.
I'm trying to just put some comparison tools in place, but unfortunately this open book program doesn't give me squat when it comes to what did that program look like in '24 and how much did we spend in the '24 cycle and how's this look?
Because $200 is right now just a number with no context.
Yeah.
And since the elections are about to be half the size, I'm just kind of curious, what's that program look like moving forward and how do we use it?
Deborah Scroggin
I think we have a mandate in city charter to conduct voter education campaigns to educate Portlanders on ranked choice voting.
And so this is approximately the same, a little less than we did in 2024.
We know that the second year after the second election after implementing a reform reform like ranked choice voting is an incredibly important year because you don't get as much media attention and it's not as much in the news.
And so you can see a drop-off in voter participation and understanding.
And so our goal is to make sure that all Portlanders feel comfortable voting their ballot, and the money that is requested is actually an underspend of this year's because we did budget it.
Eric Zimmerman
Got it.
So is that to say that in '24 cycle we had about $200,000 that went out to community groups to do education, or is this—.
Deborah Scroggin
Correct.
Eric Zimmerman
Okay.
Keith Wilson
So—.
Deborah Scroggin
There was actually a larger contracted process overseen by United Way and a coalition of folks that did voter education on behalf of, in partnership with the city.
Eric Zimmerman
Okay.
All right, so again, just in context, this is the same amount of money as we used in '24 though?
Deborah Scroggin
It is a little less because we brought the project management in-house.
We are managing all of that process and the oversight of it ourselves instead of contracting that out like the city did in 2024.
Eric Zimmerman
Got it, thanks.
And then a lot of organizations have like multiple branches, but we'll say they're all part of the same organization.
How will the Auditor's Office ensure that the voters' education funding that goes on remains, I'll say, nonpartisan or not connected to groups who then also do endorsements, right?
Because there's the education piece that should be sacred in terms of how to fill out a ballot.
And then there's the advocacy piece.
Sometimes in our community, our community partners do both of those things.
How do we, is there a firewall there or is it kind of loosey-goosey?
Deborah Scroggin
No, absolutely.
Our staff are working really closely with these organizations We have only contracted with, proposed contracting with 501s, and there is strong language in our contracts that C4s cannot be engaged in this work.
We also have meetings and work with them very frequently, so we know what they're doing, and we have oversight monitoring built into our contract operations that we expect to be meeting with them.
They have benchmarks.
We know who they're reaching and how they're reaching folks.
Eric Zimmerman
That's awesome.
I think they did a great job, frankly, the education.
I mean, it was a challenge.
You guys really put it out there between you guys and Multnomah County.
I think we did a good job.
There's a little bit of confusion though when the C3, C4 issue, but it's, let's say, 75% of the same board members and all the names are exactly the same except they put the PAC at the end of one of 'em and not at the other.
And so everybody knows this doesn't pass the smell test.
Yeah.
In that situation, would that be something where the Auditor's Office would feel, hey, we've gotta go in deeper, or do we just accept if you're a C3 or C4, we just don't, we see no evil, we know no evil?
Or is it like, eh, this is getting a little too close for comfort of being an advocacy versus, you know, education-focused?
Jamie Dunphy
And Councilor, you're at 8 minutes.
Sameer Kanal
Thanks.
Deborah Scroggin
I will say that issue has not come up.
We were very closely working with the, the folks that did the transition in 2024, and there was nonprofit contracting, and that just never became an issue.
We did not hear about the issue.
We were closely involved and we didn't see that become a problem, but we're very aware of it.
We've provided trainings to them and we're in constant communication with them about that very strict firewall.
Eric Zimmerman
Got it.
Thanks for these answers.
Those are really great.
I think the firewall is important, so I appreciate it.
Are you the director now?
Priya Dhanapal
No?
Simone Reddy
Division manager.
Eric Zimmerman
Division manager.
Okay.
I think that's a promotion maybe since last time we talked, but congratulations.
It's nice to see you in the seat.
And thank you, Madam Auditor.
I appreciate your time today.
Jamie Dunphy
Thank you, Councilor Zimmerman.
Councilor Kanal.
Sameer Kanal
Thank you, Council President.
Thanks to everybody for being here.
It's always a pleasure to have the auditor here.
I see a lot of the team back there as well.
And thanks, Reed, also.
Agreed with everything Councilor Koyama Lane said about how nice it is to have an elected auditor.
Shout out to Sam Fain in Albany, New York, who's who we met earlier.
I appreciate the framing of the independence and the comment you made before passing it to Reed earlier.
I also really support the decision to propose the budget as you've proposed it.
And I, in terms of budget decisions, for the same reason, I think my starting point is to support it as is, although I am actually interested in restoring A position, if not both.
Slide 8, there's a point about interagency revenue that got added this current fiscal year that would be continued to next year but wasn't there before that.
Can you speak to what that is and what it's for?
Simone Reddy
Well, it's nearly invisible on the slide because it's so small.
That's miscellaneous revenue.
The interagency revenue, I think you see growing because of our becoming home to the hearings office again.
Okay.
I believe that's the primary driver there.
Sameer Kanal
Okay.
I think you've given information on one of the 2 positions pretty significantly.
Can you just give a little more on the audit services one?
You're saying that each position is effectively one audit every 2 years.
Is that accurate?
Simone Reddy
It's a rough, yeah, if I could respond to that.
So our audit schedule as is, we can only take on a handful of new topics every year 'cause our work is so in-depth and thorough and follows the government standards for performance audits.
Our audit service team also responds to reports through the fraud hotline.
So those are projects that land in our lap depending on what concerns are coming from either city employees or the public that are brave and bold enough to bring their concerns to us.
Thank you.
That work is also on the plate of Audit Services.
We also spend time following up on recommendations that we've issued in the last 5 years.
So that audit impact report that I present to you annually is a way that we are able to hold the city accountable for recommendations that we've made in our audits.
So it's a rough estimate to say that the reduction of one staff person would mean one less audit every 2 years.
And again, that is one area unlike the City Elections Division where we are responsible for enforcing the campaign finance laws on strict timelines, as well as our hearings office, which also delivers on strict timelines.
Performance audits are at my discretion, so we can choose which topics, how in-depth to go, And which areas of the service we're going, or the city we're going to be looking at any given year.
Reed Brodersen
Great.
Sameer Kanal
For the slide on the EMS reductions, it's a 2-part question.
How much of the $215,000 is equity training specifically?
And was the decision on reducing equity training framed by the executive order, or was it an independent decision of your office?
Simone Reddy
That was an independent decision of my office.
We have strong commitments at every division and at the office-wide level for advancing results-based accountability initiatives.
I don't know if we have an exact figure for that.
If Reid or Rosie could help me with that.
But the $215,000 is the sum of all of these cuts.
Reed Brodersen
Yeah, thank you, Councilor Reid-Brennersen, again.
Rosie may be able to answer a little more specifically.
I think it was in the ballpark of $50,000, but I may be a little off there.
Simone Reddy
Yeah, Rosie McGowan, Business Operations Manager.
Elana Pirtle-Guiney, Rosie McGowan
Um, we had a couple contracts that were ending, so it is about, uh, $25,000, um, in specific ones that we had finished some work we would have liked to been able to continue, um, but decided to not continue that training for this next fiscal year.
Sameer Kanal
Great, thank you.
And then I, I, my last 2 questions, they're kind of, um, it's the same question, but it's about 2 different things.
It's a 2-parter.
One is, do you think that this is the role of the auditor's office, and/or can you let us know that it's not so that we might be able to do it somewhere else in the city?
Um, because, and I'm, I'm just basing this off of, uh, previous auditors had said our discretion as to whether or not this falls into our office's purview.
And when they didn't want to do it, uh, do a function, they said you have to— the rest of the city has to find a place to put it.
Um, I'm thinking of IPR specifically.
So given that context, I'm asking for 2 different ideas.
Do you think each of them is something that's within the auditor's office or not?
Uh, and based on that, whether or not we could pursue it somewhere else.
And if you do believe it's the auditor's function, this is the second part, can you help me set it up?
And I'm raising these here because I don't think we haven't really had a space to do it, and I can't really until we get back to Committee of the Whole meetings.
But first idea is I'd like a way for city employees, rank and file, to anonymously and directly get, or one layer indirectly, get information or suggestions to the mayor and city council without having, especially in the whistleblower context, without having to go through their manager, manager, manager level to get up through 9 layers.
This is something that I've seen done in independent offices, or at least through contractors where the contract is held by an independent office in other jurisdictions.
The second idea is I'd like to have rank-and-file city employees be able to suggest a way to reduce spending without reduction of service level and be rewarded for it.
We have 2 examples.
One is the Chief Savings Officers in New York City.
The other is the Washington State Secretary of State, which has a Washington State Productivity Productivity Board that has rewarded state employees with up to $10,000 for coming up with ideas.
It has led to a savings of over $11 million and revenue increases of $727,000 from 163 proposals.
For that just shy of $12 million of net budget improvement, they've paid, quote, in excess of $120,000, end quote.
So it's slightly over 1% is the cost for getting that much of a budget improvement.
Um, in each case, anonymous feedback and suggestions and budget, uh, saving ideas— do you believe that this is something that the Auditor's Office should do, can do, or would you let us say that we can do it somewhere else?
Is the first question.
And if you do believe it's the Auditor's Office, would you be willing to assist me in developing the legislation budget and all that stuff to be able to implement that?
Jamie Dunphy
Councilor, you're at 7 minutes.
Loretta Smith
Just—.
Sameer Kanal
That's my last question.
Reed Brodersen
Great.
Simone Reddy
Thank you for the question.
So there's a few different ways I would approach this.
I think the first is just to emphasize that my office is a performance audit shop in terms of the performance improvement services that we provide the city.
That means we're not necessarily looking for budget savings when we take on a topic.
We might recommend— recommendations for efficiency, but that's not the primary driver because I report directly to the public.
I'm looking at issues that Portlanders care about, things they voted on, issues where promises might not be kept, and that is a much broader scope than looking for cost savings.
I would look to my colleague, the city administrator, whose chartered responsibilities are the financial condition of the city.
For housing a function like that so that my office is not in a position to be making management decisions around the city's finances.
Sameer Kanal
And just that, thank you for that.
So that I'm going to interpret that as saying there would be no opposition from the Auditor's Office, and I'm asking this because of previous auditors, not because of anything you've done, I want to be clear, to us doing something in the other branches of the government.
Simone Reddy
As long as it wouldn't compete with our gold standard of performance auditing in my office, then I wouldn't have an issue with it.
Raymond C. Lee
Great.
Sameer Kanal
And then the other question was about, uh, the, um, anonymous feedback portion, which has nothing to do with budget, but just the ability to provide information to council and mayor without having to go through managers.
Simone Reddy
Well, our, um, other jurisdictions in our region have yeah.
Fraud hotlines.
They're branded differently as good governance or ethics hotlines.
I think we use that tool as an anonymous intake point.
We protect folks' confidentiality that make reports through that channel, and we're able to refer people elsewhere if their concern doesn't have to do with fraud.
That's often the service that we're providing, often with the Ombudsman as well, is thank you for this, let us tell you where you can get your need addressed.
I don't know what the demand for the service that you're proposing would be.
I know that our— the demand for our services are pretty high right now with complaints to the ombudsman in particular.
Jamie Dunphy
We are at 9:30, so thank you very much, Councilor.
Colleagues, we are already over time for this section, so Councilor thank you, Councilor President.
Olivia Clark
Most of my questions have already been answered, but I just want to express my appreciation to the auditor and her office for your support with the clerk, and especially for the audits.
I have used your audits repeatedly in my work from day one, and I really appreciate that.
If my colleagues have ideas on how to restore the audits, I would love to hear them.
Thank you.
An auditor.
I'm interested in learning about that and potentially supporting that.
I just want to make clear that you said we're going to lose one audit per every 2 years.
How many audits are we expected to perform?
Simone Reddy
Um, our audit schedule generally adds 3 topics per year.
I want to say that we we aim to publish about that in addition to our audit impact report and the fraud hotline investigations that pop up.
So we might add one less topic for the next biennium.
Olivia Clark
So from 3 to 2?
Simone Reddy
That's new topics.
Olivia Clark
New topics.
All right, I think that's unfortunate.
And colleagues, I'm interested in any ideas on how to restore thank you so much, Auditor Reed and staff.
Jamie Dunphy
Thank you, Councilor Clark— Vice President Clark.
Councilor Ryan.
Dan Ryan
Yes, thank you, Council President.
Good morning, Madam Auditor.
It's good to see you and your staff.
Councilor Clark just asked the question about how many per year, 3, and it looks like you'll go to 2 for performance audits.
Simone Reddy
Yeah, that would just be new topics that we're adding to the schedule.
Raymond C. Lee
Okay.
Dan Ryan
Do you ever do performance audits?
And I think the ones that you do on tax measures in particular and tracking the performance is really, really helpful.
Do you ever do joint audits with the county and neighboring counties?
I'm thinking of SHS because that could come to the ballot sooner than we think.
And so I wanted to know, is that one being discussed among auditors in the metro area?
Simone Reddy
Yes, thanks for that question.
So my audit colleagues in other jurisdictions have been very busy auditing housing and homeless services over the last few years.
It's in our audit standards that we coordinate when taking on topics that have a similar scope.
And so we meet regularly with the Metro Auditor, Multnomah County Auditor, and sometimes even auditors in other counties on the topic of housing and homelessness.
It has not I've not seen a joint audit conducted in my audit lifetime, but the purpose of that coordination is really to make sure we're not duplicating effort and we're sharing information so that we're saving the city and our jurisdiction's time as well as our own audit resources.
Dan Ryan
So thinking out loud with you then, I think that this is one where, you know, Metro could be the point since it's a Metro audit, it's a Metro performance collection.
Mm-hmm.
Even though our revenue division collects the money, which people think it's just coming to the city because of that.
But my point is, I really do think that's an important one to have as a focus.
And I will be very supportive of that journey that you'll be on, because it'll be complex.
It'll be more challenging than some because of that coordination.
But the voters are all in one space for this.
So it's important that we do that.
And I look forward to making sure that that's a priority in terms of performance audits.
Does that make sense?
Simone Reddy
Yeah, and I would like to add that the influx of those dollars did increase audit resources for my colleagues at Metro.
I think that is a point that I'm trying to make here about being sensitive to the changes in our environment that we audit.
As the city grows in its complexity and its responsibility, I hope that my office too would reflect those changes.
Dan Ryan
Yeah, I think it's important that a city gets in on that one because that's one of the challenges of the performance of the SHS funds is that the cities don't have access.
It's all through the county, and it's a model that's frustrating for cities throughout the metro area.
So I think it's really important that we have a voice at the table.
The other question Councilor Zimmerman asked, that was good, it was about elections and just making sure we have that firewall.
Have you considered working with community groups that don't have C4s and that weren't part of the coalition that brought us the charter that we voted on in 2022?
Simone Reddy
I'm going to ask my deputy or Deborah to answer that.
Dan Ryan
Hi, Deborah.
Reed Brodersen
Thank you, Councilor.
Yeah, that sounds great.
Deborah Scroggin
Thank you, Councilor.
Well, I will note that we didn't— we just noticed awards of contracts contracts recently, and none of— not all of them are C3s or C4s, sorry, have a component C4.
So we do that regularly.
We're looking at service providers, we're looking at folks that work with Oregon Food Bank that are providing service daily to different groups and can reach folks in a way that they are trusted in their communities where we aren't always.
And so sometimes those are C3s with the C4, and sometimes those okay.
Dan Ryan
I just am happy to hear that there are some that aren't connected to that network, the political nonprofit network, because then the firewall is a lot easier to manage.
Deborah Scroggin
Absolutely.
Dan Ryan
In fact, the firewall's taken care of because they don't have that arm.
The coordination with the Small Donors Office continues to make me think that we need to have a better understanding of how that works.
How does that work?
I think that when you're actively campaigning, it was a time where you looked at the elections office as your go-to, but increasingly the real experience day to day is the small donors office.
How do you coordinate?
How do you overlap?
Where does the buck stop?
And I think the lawsuit that occurred was one of those examples where it got messy.
Deborah Scroggin
We enforce the city charter-based campaign finance laws, and Small Donor Elections enforces their city code and rules.
That does require close coordination, and so we do meet with the director there, especially during an election season, more frequently to coordinate and make sure we both— both offices know what's going on.
We recognize this is not an ideal situation for the public, but try to work as closely and as best we can in the system that we have.
Dan Ryan
I thought the, the what we passed out of governance was better legislation in terms of those firewalls between the two of you, if you will.
And I was disappointed that, um, the final version that came to the full council, I thought weakened that.
And I thought I was basing mine on what we could have learned from the lawsuit.
So, um, I just wanted to put that on the public record.
Thank you.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Green.
Mitch Green
Thank you, Council President.
I'm going to be brief because we're already over time.
Uh, thank you for the presentation today.
And explaining sort of the process of how, uh, this proposed cut came to be.
Mr. Mayor, thanks for explaining how that sort of interaction worked with, uh, the Auditor's Office.
Um, I think for my part, if there's any councilor who's working on an amendment that's looking to restore at least one of these positions that's cut, uh, I'm willing to support that amendment.
And it's not because I don't think you had good conversations to sort of find the shared sacrifice.
I just think that just as a matter of principle, I don't think that we should be cutting into the other independent branches of the elected officials' governments beyond what they would prefer, because they're the sort of duly elected officials that steward, that steward those, those charter obligations.
So I understand that you've made this negotiation, but I think your preferred cut level was 3%.
And so I'm willing to work with anyone who's working on that amendment.
There's other places in the City of Portland that we can find these cuts.
And I think it's really, really important that we preserve as much capability of the audit function as possible so Portlanders can find their trust in the City of Portland.
And it's just all I wanted to say.
So thanks.
Jamie Dunphy
Thank you, Councilor Green.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney, Rosie McGowan
Thank you, Council President.
I'm sorry, I was hoping I could not say anything to buy us time or save us time.
But, uh, Auditor Reddy, because it has come up a few times that some of my colleagues are interested in restoring cuts, can you explain to us what the difference between the 3% and the 4% is?
And I'll, I'll just editorialize first and say, I really appreciate you digging deep and thinking about, at a time when we are having to cut core services, frontline services that Portlanders depend on day to day, how do we make sure that we without having to dig more deeply into those core services that Portlanders also rely on, right?
Both are so critical.
And as we're thinking about that balance, if we are looking at any restorations, I want to make sure that they are the restorations of the things that you were most concerned about cutting.
Thank you.
And not just based on what, what we think that might be.
Simone Reddy
Thank you, Councilor.
Um, I'm interested in working with Council in the long term on getting the appropriate resources for my office to provide the commensurate level of oversight that our city needs.
I've been very thorough in the proposal that I've made, which was accepted by the mayor, just to clarify.
It did not go further than what I asked for.
Um, I'm interested in, in working on a longer-term solution because I'm, I'm worried that a short-term solution to today's problem could put my office in a worse position a few years from now when we're still working our way out of this fiscal crisis.
Elana Pirtle-Guiney, Rosie McGowan
Thanks for that clarity.
I really appreciate that.
I am a firm believer that when we have independent elected leaders running other portions of the government, we need to defer to you on what cuts to take and, and not go in on our own, but also that we need to have that shared sacrifice.
And I appreciate you stepping up for that, and I appreciate your clarity today about some of those long-term conversations that we need to have.
Thank you.
Jamie Dunphy
Thank you, Councilor Pirtle-Guiney.
Checking Councilor Zimmerman and Clark, are those, uh, legacy hands?
Okay, thank you very much for your presentation today.
I think we're ready to move to the next one.
Thanks.
Uh, it wasn't talked about.
That's part of the function.
So next, we're welcoming up our friends from the Public Works Bureau.
I believe I'm turning it over to DCA Dhanapal.
Is that correct?
Yeah.
Welcome.
It feels like we were all just here just moments ago.
Thank you for spending your entire life in this chamber.
Priya Dhanapal
We live here, Councilor.
Good morning, Council.
Jamie Dunphy
Good morning.
Priya Dhanapal
For the record, my name is Priya Dhanapal.
I'm the Deputy City Administrator for Public Works.
I'm joined by Ting Lu, our Public Utilities Director, who oversees both Bureau of Environmental Services and the Portland Water Bureau.
Today, Ting Lu will go through the proposed budgets for both bureaus, and our finance leads are also in the audience and are available to answer any questions.
We will aim to move through our presentations quickly to allow ample time for your questions.
Next slide, please.
Thank you for the discussion regarding the proposed parks and PBOT budget during the April 30th work session.
Today we will focus on the proposed budgets for the Office of the Deputy City Administrator and the utility bureaus.
And following those presentations, we'll— the proposed Public Works and Community Economic Development rates, fees, and charges ordinances scheduled for council consideration next week.
Will be presented to you.
Next slide, please.
We provided an overview of the public work service area during the previous budget work session on April 30th, so I will not repeat those details today.
I'll fly through the next few slides as a brief reminder.
The proposed budget includes approximately 3,000 staff and roughly $4.8 billion in total resources.
Next slide, please.
Public Works includes 4 primary bureaus: Parks, Transportation, and the Utility Bureaus, which includes Water and BES.
Next slide, please.
The Public Works service area is facing rising costs that are outpacing available revenues, and this budget prioritizes maintaining essential infrastructure and meeting regulatory requirements while aligning service levels with available resources.
You'll see those trade-offs reflected in the proposals we discussed today.
Next slide, please.
This provides a financial overview by each public works bureau and the funds for all of the public works bureaus as well.
We've seen this at the previous work session, so I'm not going to go into the details of this.
If there are questions, we're happy to answer that.
Next slide, please.
This slide summarizes the position changes within Public Works as a part of the core services realignment effort.
Overall, the positions decreased from 229 to 156 FTEs, which is driven by 62 reductions and limited additions and realignments.
The negative realignments reflect positions shifting out of Public Works to centralized citywide functions rather than being eliminated.
And I will transition to the next slide.
Next slide, please.
So I want to provide a high-level overview of the proposed budget for the Office of the Deputy City Administrator for Public Works.
This office provides executive leadership, strategic oversight, and policy coordination across the public works bureaus to support organizational alignment, infrastructure stewardship, and reliable public service delivery.
The proposed budget includes approximately 131 staff and $26.6 million in total resources.
I want to make sure we understand that there are no additions or reductions to the DCA's office.
A significant portion of the staffing level that you see in this slide, which is about 121 FTEs of the total FTEs, reflects a realignment of the embedded teams into the— from the core services realignment into the Public Works service area.
They're not new positions or direct additions to the DCA's office.
They are embedded core services team in HR, IT, procurement, equity, and engagement that provide coordinated support across the Public Works bureaus.
Next slide, please.
This slide summarizes the proposed budget for the Office of the DCA for Public Works.
The proposed budget the budget totals approximately $26.6 million, as I mentioned earlier.
There are no significant additions proposed within the DCA's office budget itself.
There's a small reduction that is reflected in the table, and it's associated with the citywide interagency reductions applied across bureaus.
The increase from the current service level primarily is the realignment of the embedded core services teams into the Public Works service area as a part of the citywide core services realignment.
And then these are existing positions, not new staffing.
Next slide, please.
This table shows a high-level overview of the changes to the DCA office positions, including additions, reductions, and realignment.
There are no proposed staffing additions or reductions within the DCA's office.
The increase from 10 to 131 reflects the realignment from the core services realignment efforts.
And with that, I will pass it on to Director Lu to provide an overview, overview of the proposed budget for water and BES.
Ting Lu
Thank you so much, DC Dhanapal.
Good morning, Council.
My name is Ting Lu.
I'm the Public Utilities Director.
The Bureau of Environmental Services is responsible for protecting public health and the environment for over 650,000 customers.
We achieve this by management of Portland wastewater and stormwater infrastructure infrastructure, including thousands of miles of sewer and stormwater pipes, green infrastructure, close to 100 pump stations, and 7 watersheds.
We also operate 2 treatment plants, including one of the largest in Oregon.
This vital work is carried out by over 600 dedicated employees and is supported by a $1.55 billion budget.
Next slide, please.
This slide provides a summary of our proposed budget compared to the current service level.
The proposed budget is approximately $1.55 billion, which is about $6 million below the current service level.
This reflects a $1.1 million addition supported by congressional earmark funding, offset by $3.3 million in reductions and $4 million in realignment.
The change is specific to the 3.3 million reductions will be discussed in the upcoming slides.
Next slide, please.
This is the overview of all the changes to the bureau's position counts, including additions, reductions, and realignment.
I want to note there was a slight data error in the FTE count, so the amount in this table and elsewhere in the proposed budget shows a reduction of 3.3 FTE, and it should reflect 6.3 positions, or above about 1% change.
This brings our total proposed budget to 605.7 FTE.
This will be corrected in the next iteration of the budget.
I also want to note that this 6.3 positions being proposed for reductions are vacant positions.
We'll dive into the specifics of these positions in the upcoming slides.
Next slide, please.
Our sewer and stormwater system operates 24/7 and is essential to our public health, livability, and environmental protection.
Our goal is— in this budget cycle was to prioritize 4 core areas.
First, we maintain the service necessary for federal and state regulation— regulatory compliance.
Second, we preserve the financial assistance programs that support affordability.
Third, we continue to preserve capital investment in critical sewer and stormwater infrastructure using a risk-based asset management approach focused on high-risk treatment and pumping systems currently.
Finally, we continue to maintain the core operational resources necessary to provide reliable wastewater and stormwater services and minimize service disruptions.
The reductions you will hear about today were developed a system-wide review focused on identifying efficiencies, prioritizing core functions, and minimizing impacts where possible.
Next slide, please.
We bundled our reductions into 5 categories.
The first one is a business support program.
This category eliminates 2 vacant internal support services positions and $20,000, or 5% of a janitorial service contract.
Thank you.
These changes total 430,000 in reductions.
The staff reductions may lead to reduced capacity for engineering support and internal administrative support.
Work will be reprioritized with existing resources to maintain core engineering and administrative support functions.
Janitorial services will continue to prioritize sanitation and high-touch areas with reduced focus on lower priority cosmetic cleaning.
Next slide, please.
This category reflects reductions within the Project Management Office program.
The proposal eliminates one vacant project delivery support position and reduces the bureau's transitory budget for urgent and unforeseen work by $1 million, from $6.9 million to $5.9 million.
These changes total $1,198,000 in reductions.
The transitory budget provides contingency funding for urgent and unforeseen non-capital operations and repairs needs.
These reductions decrease the contingency resource available for unexpected needs.
The bureau will continue prioritizing emergency response, operational resilience, and minimizing impact to the community through through reprioritization of existing resources as needed.
Next slide, please.
The 3rd category is a strategy and integrated planning program.
This category includes reductions of $230,000, or roughly 50% of professional service contract funding for integrated planning support.
It also includes a partial reduction of 1 FTE that supports project communication coordinations non-urgent planning support work.
These changes total $296,600 in reductions.
The bureau will continue prioritizing planning work related to essential infrastructure, regulatory compliance, and high-priority risk analysis within existing resources.
Next slide, please.
Our 4th category is the leadership program and security services.
This category eliminates 2 vacant positions and reduces contracted security services by $491,000, which is 16% of the contract.
These changes totals $1,120,436 in reductions.
The reductions of the management position will increase the span of control for the remaining manager from 5 direct reports to 7 direct reports.
The reduction of an analyst position will reduce internal capacity for strategy analysis and operational support.
I would like to note that we are continuing to strengthen coordination across the top leadership teams between Water and BES to continue to improve coordination, efficiency, and long-term system planning.
Roles and responsibilities associated with these functions will continue to be evaluated as part of that effort.
In addition, security services will be scaled to focus on priority locations and higher-risk facilities with increased reliance, reliance, reliance on alarms, cameras, and as-needed responses.
Next slide, please.
And finally, our 5th category is the Technical Services Environmental Compliance Program.
This category reflects a reduction of over $223,000.
Thank you.
Which includes elimination of one vacant analyst position and one seasonal support position for illicit discharge investigations.
These changes may reduce capacity to select planned code updates and development-related update activities.
We're refining our workflows to ensure that we prioritize our specialized expertise for critical environmental needs and code development support, as well as outfall screening and urgent responses.
Overall, Bureau's reduction packages reflect our thoughtful approach to ensure we prioritize on high-impact, risk-based— high-impact, risk-based approach to align with our financial and resource capabilities.
This concludes the presentation for the Bureau of Environmental Services.
With that, I'll now move to the Water Bureau budget presentation.
Next slide, please.
Now we'll dive into the Water Bureau.
Water Bureau provides safe, reliable drinking water for nearly 1 million customers and not only support public health but also economic vitality of our region.
This essential work is supported by over 550 dedicated staff and totals $2.1 billion budget.
Next slide, please.
This slide provides a summary of our proposed budget compared to the current service level.
The proposed budget includes a total adjustment of $19.2 million since the initial requested budget.
This is driven by 3 main factors: the removal of $0.8 million facilities integrate— facilities interagency agreement, a $15 million adjustment to lower our ending fund balance and a $3.3 million reduction in decision packages, which I will discuss in more detail in the upcoming slides.
Next slide, please.
This is the overview of all changes to the bureau's position counts, including additions, reductions, and realignment.
I want to note there was a slight data entry error in the FTE count, so the amounts in the table and elsewhere in the proposed budget show shows a reduction of 15 FTE, and it should reflect 14 positions instead.
This will be corrected in the next iteration of the budget.
I also want to note that these 14 positions being proposed for reductions are vacant positions.
We will dive into the specifics of these positions in the upcoming slides.
Next slide, please.
Similar to BES, we're priority— prioritizing core services to protect public health and maintain regulatory compliance.
Our approach focuses on 4 core priorities.
First, we are preserving services necessary to meet regulatory and permit compliance.
Second, we remain committed to support financial assistance programs to support affordability.
Third, we are preserving capital investment in drinking water infrastructure, including treatment, water mains, pumps and distribution system to support the long-term system reliability.
We have prioritized the key CIP project and strategically delayed other investment to avoid high peak rates to our customers.
Finally, we are preserving resources to maintain reliable services for safe and reliable drinking water 24/7.
The reductions you will hear from us today were developed with a deliberate system-wide approach through reviewing services and identifying efficiencies with a focus on prioritizing core functions and minimizing impact where possible.
Next slide, please.
We have 20 budget reduction packages totaling $3.3 million that includes 14 vacant position reductions, and we are— we have bundled them into 4 categories, and I'll start with the drinking water operations.
Thank you.
The package reduces operational capacity through the elimination of 4 vacant positions across lab services, backflow inspection, system flushing, and water quality functions.
These changes total $632,000 in reductions.
These reductions reduce capacity for selected non-regulatory sampling, inspection, and system flushing.
Regulatory compliance and core drinking water operations will continue to be prioritized.
Through strategic reprioritization, we're confident in our ability to continue performing all regulatory and essential work, ensuring our system remains safe, reliable, and in full compliance.
Next slide, please.
This package reflects reductions within system maintenance.
It reduces staff capacity for system maintenance, facility management, and water loss prevention activities.
Thank you.
It also includes a streamlined street opening permit process to achieve cost savings.
These changes total $781,000 in reductions.
This category eliminates 4 vacant positions across equipment maintenance, construction field support, facilities management, and water loss prevention.
Work will be reprioritized within existing resources, with a priority maintained for urgent repairs, Regulatory maintenance and continuity of critical services.
Non-urgent facility support requests and some water loss reduction activities may experience longer timelines.
However, the state-mandated annual water loss audit will remain prioritized.
We'll continue exploring shared opportunities between water and BES to improve coordination, optimize staff resources, and support operational efficiencies.
Next slide, please.
This package reflects reductions in engineering, planning, and coordination category.
In this bundle, we are eliminating 4 vacant positions that support engineering, planning, intergovernmental coordination.
This change totals $910,000 in reductions.
This change reduces capacity for early project planning, project implementation support for permitting and land use review, development and maintenance of engineering standard, and coordination with the regulatory and partner agencies.
However, consistent with our approach to other impacted work, we have prioritized key resources to ensure continuity of critical services and regulatory requirements.
Additionally, we'll continue to explore and implement shared opportunities between Water and BES to maximize our efficiencies and impact.
Next slide.
The final category is the customer services, with adjustment to customer engagement, billing approaches, and security operations and logistics.
This change totals $990,000 in reductions.
To achieve this, we are eliminating 2 vacant positions with our customer contact center and customer billing teams, along with reducing printing and mailing costs by $200,000.
By expanding paperless billing, shifting to an opt-out model, customer service levels will remain consistent, supported by expanded use of online self-service option and strengthened by increased adoption of paperless billing and electronic correspondence.
We also anticipate cost avoidance with a reduction to permitting payment processing fees when Portland Permitting and Development shifts credit card processing fees to developers.
The Water Bureau expects to save $200,000 annually.
Additional reductions in consulting, sponsorship, and contracted security services will be focused on aligning resources with immediate operational priorities and citywide coordination efforts.
This concludes the presentation for the operating budget of Water Bureau.
With that, I'll now transition to the proposed rate projections for both bureaus.
Both water and BES rely on utility rate revenues to support day-to-day operations and to finance major capital investments through long-term bonds.
The proposed budget includes an 8.1% increase in water rates and a 5.15% increase in BES rates, resulting in combined rate increase of 6.36%.
Second.
For the upcoming fiscal year.
Over the next 4 years, water rates are projected to increase by 9.8% annually through 2031 to fund essential health and safety projection— protections.
For BES, rates will increase to 5.5% before decreasing by 0.5% each year.
We project that these annual percent increases will stabilize for both bureaus around or under 5%.
Thank you.
In 5 years as of current forecast.
The forecasted assumptions include 30-year term bonds and is really a base projection and is updated each year as part of a budget process and adjusted with updated assumptions and budget decisions.
Next slide, please.
This slide illustrates the impact of this investment on our single-family residential customers.
Currently, the average single-family customer using 500 cubic feet, 5 CCF, for water pays $160.29 per month for combined water, sewer, and stormwater rates services.
With a proposed combined rate increase of 6.36%, these customers will experience an increase of $10.20 per month to their total bill.
Thank you.
I also want to note that many households consume less than 5 CCFs due to the Conservation and Water Efficiency Alliance, which further lowers individual bills.
We are continuing to invest in financial assistance programs, including bill discounts, crisis vouchers, flexible payment plans, and stormwater discounts to help every customer regardless of their financial situation.
Next slide, please.
Also want to share about the Portland bill, how we compare with other utilities.
A common misconception is that Portland has some of the highest utility rates in the region or even the country.
Despite the cost pressures, Portland utilities continue to keep costs to customers within range of comparable national peer utilities that have similar scale of water, sewer, and stormwater systems.
The chart on this slide includes 2 types of utilities: neighboring utilities, which are geographical— geographically close to Portland, and here for reference, and peer utilities, which share similar system characteristics such as combined sewer overflow infrastructures and drinking water filtration requirements.
The most apples-to-apples comparison is made between peer utilities.
Utility costs vary based on geographic infrastructure age and regulatory requirement, but this chart provides important context.
Portland's rates are not an outlier; they reflect the real cost of maintaining a safe, reliable, and modern system.
Many of our peers have completed filtration but haven't addressed combined sewer overflows, which BES did with the big pipe.
Types many years ago.
So we expect to remain in the middle of the pack of comparable peer utilities as filtrations completed in Portland and other cities address CSOs, as this capital investment represents similar magnitude of the cost.
This slide shows a holistic overview of our financial assistance programs with dedicated $40 million funding support.
For, for example, we provide bill discounts of up to 80% based on income.
For the Low Income Bill Assistance Program, households earning up to 60% of the state median family income are eligible for Tier 1 assistance, 50% of a typical bill.
Households earning up to 30% of the MFI are eligible for Tier 2 assistance, which is 80% of the typical— 80% of the typical bill.
Programs like RAMP and Clean River Rewards also support renters, affordable housing properties, and customers who manage stormwater on site.
Our RAMP program specifically supports regulated affordable multifamily properties, ensuring these benefits reach renters and the nonprofit housing providers.
The Water Bureau's water efficiency teams works closely with the business and the resident— residents to help reduce water use and save money on their utility bills.
We have also simplified the application process and partnered with the Bureau of Planning and Sustainability to reduce administrative burden on residents seeking help with the garbage and recycling bills.
So there is a comprehensive program.
Details are available on the website.
Customers can also contact us by calling 503-823-7770 to learn more about our programs and confirm their eligibility.
Next slide, please.
This concludes our presentation on water and BES proposed budget.
We'll now discuss utility fees and charges that will be coming to council next week for consideration.
Next slide, please.
This chart shows the primary revenue categories for BES and the Water Bureau associated with the annual rates, fees, and charges ordinances that will be before council next week.
Utility rates revenues account for approximately 90% of total revenues for both bureaus, while permitting, development, and other fees and charges account for the remaining approximately next slide, please.
This slide summarized proposed utility rates, fees, and charges associated with the customer account development and permitting activities.
First, customer account-related fees including late notice fees, disconnection fees for non-payment, and water service restoration fees are proposed to remain unchanged.
Second, The bureau is proposing adjustment to development and permitting fees, including system development charges and other permitting-related fees, generally at the cost of service and not to exceed 9%.
Some development and permitting fees currently do not fully recover the cost of providing those services.
Priya Dhanapal
The proposed adjustments are intended to better align fees with service delivery costs and reduce reliance on utility rates revenues that concludes our presentation for the utility bureaus, and I would like to call Jeremy Patton from PBOT to talk about PBOT's rates, fees, and charges.
Jeremy Patton
Morning, Council.
Jeremy Patton, Public Works Enterprise Services.
Can we jump to the next slide, please?
So the PBOT fee ordinance that will be discussed next week is going to include 8 separate schedules and over 500 fees.
These fees account for about $152.2 million of the total PBOT resources, or 26% of our overall budget.
Most of the fees within the various schedules are either set to inflationary increases or cost recovery targets.
Next slide, please.
So stated in the previous slide, most fees are increasing by the bureau's weighted inflation factor, which covers cost increases for things like personnel, central services, office and building supplies, and vendor contracts.
Other factors that drive rate changes include construction cost increases, market conditions, cost recovery targets, and regulatory or contractual constraints.
Next slide.
Bit of an eye chart, but this is the $152 million in fee resources that cover costs within 14 of our 20 programs these fees support services like permitted uses of the right-of-way, such as block parties and street parking reservations, regulation of private-for-hire vehicles and towing companies, street openings to access utilities, and the use of parking garages, and parking permits and meter charges which support all transportation needs.
Next slide, please.
I know I'm flying through these a little, but come back for questions.
Thank you.
This is a list of all the general transportation revenue fees.
These are fees that can support any transportation-related need, and they include things like parking meter fees, parking permits, parking citations, temporary street use permits, and transportation network company fees.
Table includes some examples of the expected increases for these fees over the 5-year forecast period based on current projected inflationary factors.
These fees are— increases are necessary to maintain the current revenue forecast is presented to council during the budget development process.
And these are the fees that are tying into what we mostly call GTR.
And when we're talking about our forecast, it's heavily reliant on these fees and then state highway funds.
Next slide, please.
So just as a point of comparison, this is the parking meter rate for downtown and how it compares to other cities.
And you can see that we kind of land right in the middle of the pack compared to those cities.
Next slide.
And then finally, the proposed budget includes $3.1 million of fee revenue related to the creation of new fees for development-related work and eliminates the interagency with Portland Permitting and Development that funded this work in previous years.
There are 44 new fees ranging from $151 for an additional sidewalk or driveway inspection to $7,631 for a street lighting public works permit, just as a few examples.
And this concludes our presentation of the PBOT fees, and I'll now pass it over to DC Oliveira.
Yep, he is here.
Donnie Oliveira
Thank you, Jeremy.
Uh, good morning, Council.
Donnie Oliveira, for the record, Deputy City Administrator for Community and Economic Development.
I want to just take a moment to thank the council president, vice president, and Deputy City Administrator Dhanapal for letting BPS sneak into this presentation to cover the BPS waste rates and have a quick note on the, um, on the piece of interest, I believe.
Next slide, please.
Um, so real quick, councilors, um, I'm joined by Director Engstrom from BPS.
We covered some of this information, um, at the, the CEDSA work session related to BPS, but just to package this with the rate content that you're contemplating today, we just thought we'd bring back the waste and recycling rates.
Just as a reminder, and as we shared last week, the waste and recycling utility is divided into 2 primary systems, residential and commercial.
The residential waste system generates about one-third of the waste in the city, and the commercial system generates about two-thirds of the waste.
The city has a rate-setting authority over the residential system, but not the commercial system.
Thank you.
System.
The residential system is franchise system where private companies provide service on behalf of the city to assigned geographies, and the city sets the rules governing the types of service that must be provided through franchise agreements.
And as a reminder, the rate formulas are set by franchise agreements that are negotiated every 5 to 7 years.
Council reviews the rates annually, but there is not much discretion in annual rate setting.
The expectation, of course, is that we honor the agreed-to formulas so that we maintain services across the city.
Per the franchise agreements, residential rates are set based on a cost of service plus an allowance for target operating margin and incorporation of the city's franchise fee.
In contrast, the commercial system is a free market system where the city sets rules and establishes a per-ton tipping fee, but customers may choose their hauler.
And again, we don't set those rates.
Excuse me.
Next slide, please.
Real quick, This slide just encapsulates some of the things that we're solving for as a part of the rate setting.
Of course, you have the typical things like fuel, wage benefits, maintenance and repairs that contribute to increasing costs, not just in the waste system but across the board in our economy.
But this year we're also calibrating against investments from the Recycling Modernization Act related to glass incentives and recycling process costs that are continuing to evolve with the state's legislation.
So that's, that's some good news for our future as well.
Next slide, please.
And this is intended to give a snapshot of what this looks like for our customers for the residential rate setting.
So just for backdrop, the review process begins in January when we have a detailed cost report from each hauler.
Uh, sent to us.
We send those to a certified public accountant to vet those costs.
We then adjust costs with the CPA and work with economists to prepare the rate model.
In early April, we meet with the haulers and host public information sessions.
And included in that cost, of course, is the Metro disposal fees, which they set annually.
In prior years, we would have used the actual proposed Metro fees, which don't become available until May.
But in order to create more time for council to absorb those proposed rates and act on them, this year we are to use an assumed Metro rate based on the prior year's cost escalator.
If Metro's actual rates increase more than a forecasted inflator, then we'll, we'll have to catch up with our system.
That appears to be the case this year as Metro is considering 10% increases for waste and organics disposal, which would continue the trend of disposal increases well above inflation.
Because proposed rates include a modest increase this year, driving higher costs include wages, benefits, as I alluded to, We'll have to calibrate that.
We are not proposing any increase to the commercial tonnage fee this year.
And if you adjust our rates for inflation, waste rates overall have been flat over the past 2 decades, rising slightly less than the overall rate of inflation.
That means your garbage bill today is similar to what it was in 2012, adjusted for inflation.
Last thing, a reminder that in 2025, we implemented a financial assistance program for qualified homeowners that comes with a discount of about $22 per month as at the $35 a gallon service level.
Since launch in November, we have 900 customers enrolled.
We're now working on ways to expand eligibility to low-income renters, and we also launched standardized rates for bulk items this year.
I also want to thank the director of BES and Water for their support in getting that launched, and thanks, team, for your collaboration there.
And next slide, please.
Next slide, please.
And the last thing we'll touch on, as has been adopted the last 2 years and the proposed fiscal year '26-'27 budget, there's a proposal to transfer interest accrued, in this case fiscal year '24-'25, from the PSIF interest into the general fund.
That amount is, as you see on the screen, is just a little over $26 million.
This is a one-time effort, so it each year council contemplates it.
We will have to come back to amend the code to make that adjustment, and that will be, um, a part of this year's— it's built into this year's budget, proposed budget.
And that's— that wraps for our content.
Jamie Dunphy
Okay, thank you all very much.
Colleagues, it's 11 o'clock.
It is time for a quick restroom break.
I'd like everybody back here at 11:15.
See you in a few minutes.
Hi everybody, welcome back to this, and we're going to jump into questions.
And since most of my colleagues are not here, I'm going to lead us off.
Um, I wanted to briefly sort of connect our conversation yesterday about the water bonds and talk about the rate increases that we are projecting and how that what that really sort of means for people.
You know, in my district in East Portland, like most communities, people are feeling really stretched.
At the same time, the combined One Water Bureau has a $3.6 billion-ish budget.
And from what I can tell from these slides, we're cutting about $6.6 million between BES and water, largely by eliminating vacancies.
And some sort of smaller cuts like custodial services and security.
But if my math adds up correctly, while $6.6 million is a big number empirically, in comparison to the total budget, it's like 0.02% of the total budget that is being cut while we are also raising rates by 6% this year.
So my first question is, if expenses are outpacing incomes, why are these 2 bureaus not taking deeper cuts proportionate to what the other city bureaus are taking rather than raising rates?
Ting Lu
Thank you so much for the question.
We also recognize balancing affordability and the long-term investment for the utility bureaus.
I want to say, even though you see there is over $1.5 billion and $2.0 billion for both BES and the Water Bureau, but that's actually the operating budget of those billion dollars are much smaller than the billion dollars there.
So for BES, about $700 million, less than $700 million are operating.
A lot of them are already obligated for different PURS and other payments.
And then we also have about 1/3 of that is a capital program.
We are very committed for the CIP project and making sure we don't defer any of the risk to the future generations too.
And then another 1/3 of that is to the debt payment and all the fund management.
And it's really fund moving within the— between the city construction and CIP.
So the true operating budget that BES can adjust is a little bit over $200 million.
So it's not the Water Bureau.
The operating budget is around $100 million on the operating side that we can adjust.
Jamie Dunphy
Okay, that makes some sense.
So on slide 28, I think it was, our model combined the water and sewer bill on— sorry, I'm reading my notes funny.
Looks like the model shows that the combined water sewer bill will double to about $300 a month by 2035.
And if we held a conservative, like steady 4% increase after that to 2060, to pay our covenanted water bonds, today's young people, when they're looking at retirement, will be looking at a bill of almost $800 a month.
If we adjusted for— if we accounted for inflation based on today's median retirement income, that bill would still be roughly 50% of monthly income.
I feel like we should be doing a lot about this right now.
So my question is, what are we doing to prevent future, uh, rising costs that we know a lot of these costs are out of our control, but what are we doing now to correct this course for those folks in 2060?
Ting Lu
Uh, yeah, I look at it as both as how we are adjusting right now for operation efficiencies as well as looking to the long-term financial planning to making sure we have sustained financial health for both bureaus.
There are multiple ways we are looking to this holistically first, we are looking to, like I mentioned, based on the risk-based asset management approach to prioritizing our CIP project.
We know we won't be able to address all the capital asset.
So combined for both water and BES, we have over $50 billion for the asset underground or above ground.
So there is a lot of the investment and aging infrastructure we still have to maintain.
Thank you.
So we are really prioritizing and using risk-based approach for that.
The second is making sure we are continuing to explore business opportunities and diversify our revenues.
So how we can attract more business and the commercial partners just with other bureaus together within the city.
I truly believe we have the great water source and we are here and we want to support folks coming to Portland.
The last piece is, I will say, is we are continuing to seek extra external funding opportunities, including low-interest loans and grants.
And for BES, we are already looking to 5 additional grants.
And this is going to be also for Water Bureau.
We are actively looking to different ways, incentives to lower the cost.
The last piece, the operational efficiency between the 2 bureaus.
I'm very confident with the One Water effort, we can look into additional shared services and cost savings moving forward, and happy to provide more update on that effort in the future.
Jamie Dunphy
Great.
I would love to make sure that we do have that.
I think that this is a narrative that the community wants to have.
We want to hear if we are investing this much money into our infrastructure, that also it's not going to bankrupt us in the future.
And there are a number of terrifying cautionary tales that we've seen around the country where municipalities get into infrastructure and then end up declaring bankruptcy and we privatize systems.
And I'm honestly really worried about this.
So I hope that is the, you know, this great chapter of these bureaus is about the filtration plant and getting the 2 to combine.
I hope that the next chapter is about affordability and that we look at every area that we can start cutting pennies and trying to make this system more efficient.
Priya Dhanapal
So if, Councilor, if I may add one additional thing that the bureau is focusing on is rate design, and we look forward to working in the next couple of years on how we can streamline that as well.
And that will play a huge role in affordability as well as how we can make it better for different customer classes.
So that's something that's upcoming as well.
Jamie Dunphy
Thank you very much.
My time is up.
I'm at 5 minutes.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Council President.
I want to build off of where Council President just left off and where you were kind of starting to head.
I know my office has been in discussions starting to talk with your team about rate design and what it would look like to engage in a significant rate structure review process.
This is something that Councilor Green and I, I know is at the top of our list and when we're talking about public works.
And I do believe there's a strong need to undertake a comprehensive redesign of our rate system.
I'd like to invite you, Director or DCA Dhanapal, or a combination of you both to speak a little bit more about that effort and what you're thinking.
Priya Dhanapal
I'm gonna have Director Lew talk about the different strategies.
We are looking at rate design, and we're looking forward to partnering with you all on this too.
And thanks to Councilor Green and you, Councilor Carmelina, as well on the interest in rate design.
Ting Lu
Yeah, I think this is really building to the holistic rate strategy and how we want to make sure we have affordable, equitable rate for everyone.
So right now, the Water Bureau, we have the rate is the— everyone have the same, the base rate.
So I think there's different ways we can look into.
It's really looking to what the outcomes we are looking for.
So for some of the cities, they are looking for conservation, and then you'll want to incentivize people conserving the water.
And others are looking for economic development, and then you want to look into how do you build the policy and rate design to support the outcomes you are looking for.
So we would love to get the council's feedback.
And before we get into this, Councilor Loretta Smith.
Next stage and making sure we are continue having that engagement with council members and communities and moving forward on this very important initiative.
Tiffany Koyama Lane
Thank you.
Are there resources or funds ID'd to get this plan moving as soon as possible?
And how soon could we be starting these conversations and this work?
Ting Lu
We have already started the conversation within the bureaus.
So it's really getting these outcomes and the policy guidance first, and then we, we can already kind of starting to put some of the information and data on where we are, um, so we can follow up on that after the budget here.
Mitch Green
Great.
Priya Dhanapal
To specifically, we do have, um, a budgeted amount in this fiscal year to account for rate study.
Ting Lu
So great.
Tiffany Koyama Lane
I look forward to exploring this more in the Public Works Committee.
Ting Lu
Thanks.
Jamie Dunphy
Thank you, Councilor Koyama Lane.
Councilor Green.
Mitch Green
Thank you, Council President.
Director Lew, you have a very difficult job, but I have the full confidence in you that you can do this job.
I've been impressed by your leadership.
You bring a level of industry-standard leading-edge expertise to the table, and I just wanted to say that first because we've had a lot of discussion coming out of my office in particular about calling the question on certain projects and rate proposals.
So I don't want my skepticism to be construed as a lack of faith in the current leadership.
I think you've made a great choice, DCA Dhanapal.
So my question though is to sort of speak to— I don't understand though on the rate slide how we get from 9.8% in a 2038-2031 rate proposal and then down to 6%.
So I think that's a great question.
Because my understanding is that we have constant debt service that's going to happen through 2060 at like $168 million.
And then also, I think the WIFIA loans start to be in repayment.
So help me understand a little bit.
And maybe, you know, if I see— well, I see, I see Mr. Biery approaching.
Um, I, I don't really get how we get that drop.
And so help me understand.
Thanks.
Jonas Biery
Yeah, thank you, Councilor, and apologies 'cause I don't have a detailed set of numbers in front of me.
But for the record, Jonas Biery, City Chief Financial Officer.
As we kind of mentioned during the council session last night, there's a lot of dynamic things changing up and changing down, right?
And so the bureau's forecast considers all of those, right?
The operational costs, and a big piece of that is the debt service cost.
Because we have, in the context of this slide that I think is still up on the screen, because of the capital investment happening right now on the project, we're sort of adding debt, right?
As we're doing additional issues over the next few years to meet the obligation, that debt service is increasing over time.
And then you get to, I think in this slide, around '29, '30, we stop those increases in debt service and it levels out.
I'm oversimplifying a little bit.
Yeah.
But that's where you start to see that ability to drop because we're gaining other things in the forecast, customers, et cetera.
But you don't need that incremental increase to meet new additional incremental debt service.
Mitch Green
I want to go back to a thing you just said, which I don't think has been obvious to everyone else in the public, which is there's other stuff in the forecast.
We're gaining projected increases in revenues.
Okay, that's really important to emphasize here because there's 2 pieces of the ledger.
And so thanks for saying that.
So what I'm reading here is the incremental difference between $6.2 and $9.8 is driven largely by just adding these new debt obligations in the short run.
But because we'll stop adding the new debt obligations, and then at the same time, we're projected a growth in revenue through population growth, economic, whatever our forecasts are, That helps bring it down.
That's right?
Jonas Biery
Yeah, that's correct.
I mean, essentially it's stopping that, you know, no longer needing those incremental, significant incremental increases in debt service as that project gets completed.
Mitch Green
That's helpful.
So what happens, and I don't, if we don't plan this far out, but what happens after 2025, 2036, Director?
Do we have a long-run rates forecast that goes like 30 years out or do we, is it just, Is it just through '35?
Ting Lu
We do have the historical as well.
Okay.
Yeah.
And I will also add, Councilor Green, this is also typical for large infrastructure investment.
So, you know, for BES, when we are building the big pipes, so the rate for certain years getting to the double digit.
And because we also have get the 25-year loans and we are just getting paid off on that, so that's, Typical when you have this large infrastructures getting to the double digit and getting down and now it's really stabilized and focus on other day-to-day maintenance part.
Jonas Biery
And sorry, Councilor, if I may jump in, I think your question was also what happens beyond '35, '36?
Mitch Green
Yeah, does it stay at 5.7%?
Jonas Biery
Yeah, and I'll add, I think there's probably Bureau staff in the room who know the answer to that.
The Bureau does forecast beyond that.
The one thing I'll note is, you know, as you go farther out in the chain, those forecasts become a lot more unpredictable.
Mitch Green
But your jaws of uncertainty.
Jonas Biery
That's exactly exactly right.
Right.
And I just would use that example you just made, the JAWS example.
What I would love to be able to do, not just for the utilities, but for all citywide forecasts, is develop the bandwidth and rigor so that when we prepare forecasts, we're not just preparing that straight-line forecast, but being able to prepare those more gradient levels of outcomes.
We're not there yet, but I just will plant that seed today that that's something that I'd really like to be able to achieve in the coming years.
Councilor Herbold.
Mitch Green
I'd like to support that.
I'm going to move on because I only have a minute and a half left, but thanks for that clarification.
As I've worked through the budget amendments, as we've all worked through the budget amendments, we've had to deal with the general fund discretionary versus general fund overhead type of costing problem.
And my understanding is the general fund overhead is an overhead cost that needs to go back to— and it's billed by things like rate-funded bureaus as well as other parts of the agency.
And so this might be too complicated of a question for the time I have, but how much of the management or the staff outside of the bureaus are being funded by rates through this overhead model?
And I can take an answer in writing later, but I'm starting to kind of see that a little bit as I'm looking through this.
And it's— I see Director Levine getting Nancy back there as well.
So that's a question that I think we do need to get a handle on at this council.
Deborah Scroggin
Thanks.
Simone Reddy
Yeah, for the record, Ruth Levine, Budget Director.
Just real quick, and then we can get you the exact numbers.
It fluctuates based on the fiscal year and how big each of the respective bureaus is, but water, sewer, and transportation are each roughly 10 to 13% of our revenue.
Of the sort of, if you think about the revenue paying for those overhead costs in the city, depends on the year and the specific bureau.
We can get you those.
So that's the percentage of the overhead cost pool that is paid by each of those bureaus.
Mitch Green
Thank you.
I think I just wanna flag one of the things I'm concerned about, and it's not just about the bureau, the rate-funded bureau model.
Contributing to the overhead.
But when we grow our city and the billable parts that are overhead of our city, we start to put a cost on our rate-funded bureaus as well as, you know, when we grow our costs in the internal services fund model.
It's this indirect way of also putting costs on the general fund, and I just— that gives me a lot of anxiety.
And I hope that as we develop these budgets going forward, we start to really make that very clear earlier on, and we think about what we can do to, to ring-fence a little bit the impact, particularly to ratepayers.
Because I, I think at some point you get outside of what's an allowable, um, uh, rate cost, cost of service thing.
And so, um, I don't have a— I'm not asking for an answer right now, but it's thanks.
I think I'm out of time.
Jamie Dunphy
You are.
Yeah, thank you, Councilor Green.
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney, Rosie McGowan
Thanks, Council President.
I'm gonna stick with the water and BES questions here.
You know, some of my colleagues have asked questions about those increases, and I want to note that on that graph that was just shown, the increases in the CFO Biery, you used language about things coming down.
What we're talking about is the rate of increase coming down, but we still have increases through those out years when we're finished paying off the bonds.
Rates don't come down, they just go up less every year under these projections.
And so I'm wondering Director Liu, if you can help us understand what service would look like if we asked you, not for this year, not for this budget, but it's budget season, so we get to talk about this.
What would it take to not have rates increasing at the doubling rate that they are, to not not to see 9.5 or 9.8 on top of 9.8 on top of 9.8, and then that dropping to between 4 and 6% a year, but to, I don't know, maybe cut by 25% that rate of increase.
What would that mean in terms of changes in service level, changes in customer service, changes in— where would you go if we said that it was a priority of council to not have rates increase?
Well, I think that's a great question.
At that rate?
Ting Lu
Thank you so much for the question.
I want to recognize this is where we are looking for the long-term financial strategy here.
Like I mentioned earlier, so one is really growing our customer base, rate base for both the utility bureaus and for the Portland city as a whole.
I think we have a great infrastructure, we have a great city.
I'm very confident for the future, people coming here and the business and commercial partners that will really help.
Spread the rates in the future.
At the same time, I also want to say it's a trade-off.
It's a risk-based approach.
And this is something we would love to also provide more information from an asset management perspective to getting council's, the policy decisions too, because some of our infrastructure is 50 to 100 years old.
So we are looking to a risk-based approach.
Thank you.
And understanding the condition and what is the most likely to fail for this infrastructure.
And then we are going to do that investment first.
So that's really helped us to be more prioritizing based on risk model and minimizing the customer impact.
And then there is a trade-off and risk on that.
Anything that if we don't address, there is emergency repair, that's always—.
Right.
Expensive just because, you know, you have to pay that right away and it really doesn't support your infrastructure overall.
So it is a trade-off discussion on how we are growing our customer base together.
But I'm very hopeful how we are getting more consistent and projecting our rates and getting better in the future.
Raymond C. Lee
And Councilor, I would like to add to that as well.
What you see in most cities when they go through this type of conversation or have this type of conversation, this is when you start getting to the situation of deferred maintenance and just putting off things that you had routinely scheduled for now to a later date.
And that number just starts to grow over time.
That number does not go away.
It just starts to increase.
Elana Pirtle-Guiney, Rosie McGowan
I appreciate that.
And I think there's maybe a broader conversation that I'm not on the committee, but Vice President Clark, maybe your committee could have on, on council's behalf before next budget season.
Because if the answer truly is the only things we can cut are maintenance costs or service costs, then I think we need to have that honest conversation with Portlanders and be really clear about the fact that rates are going up.
We are in line with comparable cities, and if we don't do this, we'll pay later.
And if there are places where we could provide service differently, really do the hard work to make sure we're identifying those.
We only talk about rates in the middle of budget season for the most part, when it's kind of a yes/no, as opposed to these longer conversations.
And I'm very uncomfortable hearing that our—.
Jamie Dunphy
Councilor Smith.
Elana Pirtle-Guiney, Rosie McGowan
Our only solution right now is to shift who pays how much, which I don't think always actually works out well for consumers, or to assume that growth will take care of this for us by spreading the ratepayer base, which I assume Portland will grow, but the extent we would need to grow to do that makes me a bit nervous.
So I hope that we can have some broader conversations with the Bureau and the service area.
Thank you.
Council President, can I just respond to that?
Simone Reddy
Absolutely.
Olivia Clark
I just— I appreciate that, um, Councilwoman Pirtle-Guiney.
We have already talked about restructuring, that that's on our agenda, but in September we're going to In be having September, a discussion about the budget.
We're scheduled to receive the asset management report, which will give us an idea of where we're behind as well.
And that might also be an opportunity to kick off this conversation.
But I really appreciate your input.
Elana Pirtle-Guiney, Rosie McGowan
Thank you, Vice President.
And as you know, I'm a big supporter of that asset management work.
And maybe that's a place where we can not necessarily lower costs, but pay for things in a different way so that that right on.
Thank you.
Thanks, Council President.
Jamie Dunphy
Thank you.
Councilor Smith.
Loretta Smith
Thank you so much.
I just want to piggyback on what Councilor Pirtle-Guiney was talking about.
I think a more appropriate place would be at the Committee of the Whole in the finance section because we're talking about money, and those are the things that we need to talk about, not just in our specific Public Utility— I mean, Public Works Committee.
And I'll talk to Councilor Kanal about that.
The only question— thank you all for the— thank you for the presentation.
I appreciate it.
It's tough when you have to talk about ratepayers and that they have to pay increased costs.
It's just, you know, one of those things that you hate to really talk about.
But I want to go back to the budget.
Yes.
Um, in your, in your service area, um, DCA, um, Priya, what is the projected ending balance for the Water Bureau, Parks, and Transportation?
Priya Dhanapal
Jeremy, um, Are you able to answer that?
Loretta Smith
And if that projected— and if in the second piece to it, and if that projected ending balance is going forward to pay for '26-'27?
Priya Dhanapal
That's a great question, Councilor Smith.
We will work on it and get back to you on that question.
Loretta Smith
Okay, so you don't know that it's— if it's rolling over to the new year to be— to fill the gap?
Jeremy Patton
I can, I can answer from a PBOT perspective.
Yes, some of those balances are rolling into '26-'27 to pay for projects in '26-'27.
So those balances, if that's your question—.
Loretta Smith
Not some of the balances.
What is the ending balance?
What is the projected ending balance of PBOT?
And if that ending balance is being rolled over into the '26-'27 to be used to balance the budget?
Raymond C. Lee
She's basically asking, are we encumbering funds for projects that we're going to be doing next year.
Jeremy Patton
Yes.
Loretta Smith
Okay, I'll try that next time, those nice $2,000 words.
Thank you so much.
Reed Brodersen
Thank you.
Jamie Dunphy
Thank you, Councilor Smith.
Councilor Kanal is not here.
Councilor Ryan.
Dan Ryan
Thank you, Council President.
It's good to see you all, um, especially the 2 that were here late last night.
DCA Dhanapal and Director Liu.
I thought that was a really good conversation.
It was necessary.
We had dialogue as opposed to just us giving speeches and hoping that you will justify what we just said.
I thought there was a lot of listening to understand what the heck's going on, 'cause it is a really big project.
I really enjoyed Councilor Zimmerman's—.
Thank you.
Use of language about the fact that basically I was asking questions that, you know, can we really pivot to do something different?
Because there has been new people at the table now joining opposition that were never around before.
So it's become more political.
And I thought you handled all of the questions really well.
We don't want a big hole to nowhere and we don't want Trump Water, if I could summarize.
I thought that was really great language last night, so thank you.
That said, it reminds me as a taxpayer, as a ratepayer, the Big Pipe was, it was hard.
I remember getting those bills from BES.
I didn't realize there were 2 bureaus at the time.
Before I go any further, this feels more like One Water than any other presentation.
So was that by design?
Priya Dhanapal
Yes, we have a joint utility director now overseeing both bureaus, and we are looking at both bureaus together.
Dan Ryan
Director Lu is overseeing the One Water?
Priya Dhanapal
Yes.
Dan Ryan
Okay, congratulations.
Yeah, so I got a little distracted because of that, but I just wanted to acknowledge that's a milestone moment.
I think when you— the rates did go down, I recall that.
But I also think that when you're visually showing that, it might be good to use that as Exhibit A on what happened with our bills during Big Pipe.
Was that in the late aughts that that went up?
And anyway, that visual could help.
I think one of the challenges with a group of employees that are engineers— God love you engineers, you're smarter than I'll ever be— but you're not the best, let's see, not the best communicators on making information digestible.
Yeah.
So work with some really smart comms people to help you make it digestible.
And visuals help.
And we need to see— I think we don't tell the story very well.
So that's why I'm trying to help you with— you have an example of Exhibit A with what happened with the Big Pipe.
So that was just offering some suggestions.
Because sometimes when I read your information, I'm becoming more familiar.
Thank you.
But I keep thinking how important it is to make it so it is digestible to your average taxpayer and Portlander.
Does that make sense?
Priya Dhanapal
Yes, Councilor, thank you.
Dan Ryan
Yeah, no, you're welcome.
Big picture, 'cause most of my questions have been asked.
Thank you, colleagues.
I know you're listening.
So I hope that you also can explain this.
Of all of the work areas, I think with public service, we experienced some of this as well.
The transition to how we're organizing the city with DCAs is taking some dramatic pivots right now.
And so a lot of your movement seems to be, from what I can see, from bureaus into the DCA world.
And so I'm going to bring in City Administrator Lee as well.
I think that also I saw some of that with Economic Development, Donnie Oliveira's group.
So I think as a council member, I'd like to understand the this transition of how we're structurally organizing the city at this moment.
And I don't need a lot of time 'cause I'll be told I'm over 5 minutes, but just your vision on where this is.
Is this a better practice that you experienced in other positions that you're seeing nationwide with cities?
Are we moving towards a more efficient model of how we do our organization chart in general?
'Cause this is a big shift from last year's budget.
Raymond C. Lee
Yeah, I think it's unique.
I think public safety was the first service area to kind of move to this model of a kind of an enterprise method of pulling the HR, performance management, finance all under one consolidated area to provide those services for that whole service area.
Public safety, a large service area.
Public works is the largest service area that we have that is looking to do the same.
I think historically through the city, they've seen some success through that model and really trying to establish that in another service area.
Is it something that I've seen throughout my career as it relates to large cities and how they have functioned?
Not necessarily.
But that doesn't mean that it's not a model that can work for Portland if we're seeing success in one service area altogether.
I think it's something that I will continue to evaluate.
To see if we're seeing the efficiencies that we would want to see in having this type of organizational structure for the organization and see if it's reaping the benefits that are best for Portlanders as it relates to service delivery.
Dan Ryan
Okay.
And I think that that helped me understand that this is fluid.
Raymond C. Lee
It is.
It's always fluid as we look at this.
And we're always looking at how do we do business better as an organization, how we can be more efficient.
And effective and economical in the services we provide.
Dan Ryan
And it's, it's never black and white and easy to understand, but in some worlds you think it's a pyramid with— and so what I'm seeing with this is that it goes down into positions that could be very close to the ground within the DCA office.
And I think for councilors, it's important for us to try to understand the evolution of this change to the org chart.
Raymond C. Lee
Most definitely.
Dan Ryan
And I think that it needs to be a current conversation that we have throughout this year, because I imagine now that you'll be here more than a half hour, but you'll have more of a year under your belt, you'll have a chance to work with the DCAs to keep refining this as we go into the next budget year.
Raymond C. Lee
Most definitely.
Dan Ryan
And I think that's where we'll also see opportunities in our restructuring to look at some of that pruning and efficiency that we've been trying to get at.
Raymond C. Lee
Correct.
Dan Ryan
Okay, so thank you for, um, your, your visuals made it more clear to me that that shift was taking place.
But I'm going to be curious as time goes on to understand if we're delivering better services, because that's what people complain about.
They complain about 2 things all the time.
Everyone up here knows that they're spending more money to live here, and they can't understand why the services aren't as good as they used to be when they paid less that's it.
And so we're trying to get an organization chart that will allow us to provide better service.
Simone Reddy
Thanks.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Novick.
Steve Novick
Thank you, Mr. President.
Oh, sorry.
Thank you, Mr. President.
On the filtration plant, one thing I wanted to say is that to me, and I suspect to a lot of other people, the the argument that, well, this is legally required isn't very compelling because frankly my response is, okay, let them go ahead and sue us.
The penalties we pay won't be anywhere near as costly as building this filtration plant.
The argument that I do find compelling is if there's a wildfire or an earthquake, the water will be contaminated and people will get sick.
And I'm wondering, do you have access to a public health expert who can explain that to To us and to other people?
What would happen health-wise if the water is contaminated?
Ting Lu
Yeah, we can definitely follow up on the public health.
We have worked with the Multnomah County, the public health, and then they have been seeing the benefit of filtration.
So we can follow up on that.
Steve Novick
I really think that, I wish I'd thought about this a few weeks ago, but I think it would've really benefited if in these discussions we'd had the public health person here to say, the other question is, I think I want to find out how long can we use— I think you might have said, Director Lew, yesterday that we can rely on the groundwater backup supply for up to 180 days, or I might have heard the number wrong.
Ting Lu
That's what I heard.
Priya Dhanapal
Okay, I can take the question, Councilor Nowak, if that's okay.
What?
Ting Lu
I can take the question if it's okay with you.
Priya Dhanapal
So, you know, our Columbia Shore well field is designed as an emergency and supplemental supply, not a full-term replacement for our Bull Run system.
So based on our current modeling and assuming there's no well failures, the groundwater system could provide approximately, you know, 78 MGD, million gallons per day, for about 30 days.
30 Days.
For 30 days.
So it's 78 million gallons for 30 days.
For context, Portland's average annual demand is about 90 million gallons.
So it doesn't meet the demand.
And so, and summer demands can be 120 days.
So in plain speak, it will not meet the demand that we need.
And the 30 days is where we are at right now.
Dan Ryan
Okay.
Steve Novick
That's very helpful.
'Cause if it was 180 days, then I think people would think, well, by then all of the stuff will have settled anyway and you could just restart the old system.
But 30 days does not sound like very much.
Priya Dhanapal
And then if Bull Run was unavailable during the summer season, during peak hot weather season, the city will likely have to implement like curtailment measures in less than 1 month to reduce the demand and preserve ground— and so we can preserve groundwater supply.
So that's the estimate that we can provide.
Steve Novick
I think that in the aftermath of an earthquake, people would be okay with some water rationing, but if it's going to run out in 30 days, then that's a problem.
I also wanted to note, I mean, we're all concerned about the financial impact on people, and it's huge.
This is not really going to be very helpful, but I mean, I should note that the city of Ashland in 1993 adopted a 5% tax on restaurant meals that they use largely to offset the utilities costs.
And I actually polled on a 5% restaurant tax in like 2015 and for something else, and it was disastrous.
But I mean, that's like, I think that's the kind of option that we might at some point want to consider.
I also had a couple of more specific questions about the thank you, Mayor.
Jeremy Patton
Thank you, Deputy City Administrator, for the presentation.
Steve Novick
I was curious about the cut to the staff person that— the cut to non-regulatorily required water sampling.
And I just want to know what kind of sampling is that and is cutting that going to make the water less safe even if we are still meeting regulatory requirements?
Ting Lu
For the non-regulatory sampling, we do definitely— this is going to be in full compliance.
We will be prioritizing everything, but it's really some of the things that we could kind of hold the sampling a little bit longer.
So instead of analyzing like for a few days, we're going to take it a little bit longer, but it's still within the hold time.
So there's no compromise for the water quality for our communities.
Steve Novick
Okay, if it doesn't matter, why do we have that position to begin with?
Ting Lu
We do having that position and we want to expedite a lot of the sampling and the results and things.
But this is the things we can reprioritize and making sure existing staff have done that.
Jamie Dunphy
Okay.
Priya Dhanapal
And the regulatory requirements is the, like, the minimum guidance.
We tend to do more so that we can be better with operational, the way we operate a system.
So it is something that you know, we want to do more than minimum.
So that's what the non-regulatory is about, non-mandatory is about.
Ting Lu
The other thing I want to add is that, you know, for water quality sampling, there is regulatory compliance and things.
There is also internal process optimization.
We use sampling and the data analysis to inform our operation optimization.
So some of this we can adjust and optimize.
Those are the things we're reprioritizing.
So it's not about the end quality, but it's about operational optimization and sampling and how we optimize that.
Simone Reddy
Okay.
Steve Novick
Another position that you talked about cutting was for engineering standards review.
And since I'm not an engineer, that sort of scared me.
It's like, wait a minute, does that mean that we'll be doing things that don't meet engineering standards and things will all fall apart?
Ting Lu
No.
We'll continue having the engineering standard, the design standard and things, but it's really looking to more consistent engineering standard and also looking to more, when you're looking to the project planning and things, a more standard approach.
So we have been getting that information prior, getting that workload prioritized with the existing engineering staff.
But this is a part of where the One Water effort, we are looking both bureaus from Water and BES, how we can have that consistent engineering standard across the utility bureaus.
So this is a type of a position we're evaluating, making sure we have that consistent standard.
So it's a strategic priority for us.
Steve Novick
Okay, but how does cutting this position affect that work?
Ting Lu
Uh, it, it's not going to, uh, affect that work.
So we are looking to both from a project level rely on existing engineering staff to focus, comply with the standard.
But across the bureaus, we'll look for shared services and resource to support the developing somewhat consistent standard.
Steve Novick
Okay, thank you.
Jamie Dunphy
Thank you, Councilor Novick.
I have myself back in the queue.
I got a couple questions I wanted to follow up on from Councilor Ryan.
About realignment.
First, of the positions that are being cut, do we— do you have a sense of which ones are managerial versus administrative versus service level?
It seemed like a lot of them were vacancies, but— and I saw the, you know, you are cutting a vacant supervisor position that's going to lead to a broader span of control, but just sort of generally, do you have a number To say like frontline versus admin versus managerial?
Priya Dhanapal
I know that for the utilities, all positions that are being cut are vacant.
Do you have the breakdown of—.
Ting Lu
We don't have the exact breakdown for the managerial or frontline, so we can definitely follow up on that.
There is a few managers and there is the different positions there.
I will also say the vacancies, those are for the last 6 or a year.
So there's a timeframe for the vacancy reduction here.
Priya Dhanapal
I'm just getting an update from the Water Bureau.
For the Water Bureau, 2 of the cuts is non-represented, whereas the rest are non-represented.
I think we have total of how many cuts at the Water Bureau?
Ting Lu
16.
Priya Dhanapal
16, Yep.
Jamie Dunphy
Okay, thank you.
Similar question.
With realignment, I'm seeing, you know, we're noticing a lot of the positions moving the rate bureaus into the DCA's office.
And that means that we are now— your office is now both general funded and ratepayer funded.
How are we differentiating between the staff in those positions?
How are we— are we braiding those fundings?
Are we keeping them very separate?
How are you approaching that budgeting challenge?
Priya Dhanapal
Thank you, Councilor Dunphy.
I'm going to call Director Levine to talk about the rate model for okay.
Ting Lu
Or, Chief Biery, if—.
Jonas Biery
My apologies, Councilor.
Would you kindly repeat the question?
Jamie Dunphy
Yeah, well, in the DCA's office, she's now going to have, uh, ratepayer-funded positions and general fund-funded positions.
How are we— are we braiding those funds into one FTE?
Are we keeping them totally separate?
How are we maintaining faith with the—.
Jonas Biery
Yeah, yeah, no, it's a great, great question.
And I do know there was a question earlier about sort of management of the concern about the ratepayer funds.
And so we are very, very mindful of monitoring and managing that.
Ruth can probably follow up separately for the sort of the technically accurate answer, but I'll sort of say generally, there'll be multiple years of sort of transitioning to this different model, right?
And so we have both the flow-through of general fund overhead, right?
We kind of generally know how that works.
And then within the DCA's office, you know, be carefully monitoring to make sure that we're allocating those appropriately within the service area.
Okay.
And making sure that that's tying back to a supportable nexus to the work that's being done.
As we realign the work citywide, we know that there are lots of things that we do that we typically did and thought of very vertically, right?
That this service only serves this bureau when in fact much of those services reach across the organization.
And we weren't able to sort of track and see that in the prior iteration.
Jamie Dunphy
Yeah.
Jonas Biery
So we'll do that work.
The last thing I'll say is as we implement that this year, we'll also be continuing to look and say, where is it not quite right and where do we refine that in future year budget adjustments?
Jamie Dunphy
Okay, great.
Glad that— I'm glad I asked.
Moving to, I have a specific question about the transportation development review fees.
Slide 42.
One of my main priorities in my time in office has been supporting the streamlining efforts that we are doing to drive more development activity and to right-size cost recovery without simply relying on fee increases.
That is the focus of Cap 2.
So I'd like to better understand how we're estimating the revenue impacts here and what the net effect of the changes to the Transportation Development Review fees will actually be.
Councilor look like for permitters, people who are applying for permits?
Do we have, you know, what is— how are things going to be different?
Jeremy Patton
So at a highest level, there will be new fees coming from transportation within the fee schedule that those developers will have to pay.
Those revenues were coming from existing fees in PP&D, but those existing fees in PP&D are not cost recovery.
They are not enough to provide the program.
So there was basically 2 choices to be made.
You either increase those fees in PP&D and continue to transfer funds to PBOT, or you just make up that difference by creating those kind of similar fees in PBOT to collect those revenues.
And so we chose the latter.
Sameer Kanal
Gotcha.
Jamie Dunphy
Can we talk— I want to talk about that actually specifically, the interagency agreement with PP&D and the historic relationship, and then I guess how this is sort of moving forward.
I understand that the IGA between PBOT and PP&D is no longer in place or no longer going to be in place.
What is that actually gonna mean in practice beyond the fee recovery component of it?
Do we know what, how that will be operationalized?
Jeremy Patton
Yeah, the only thing that it means in practice is rather than charging PP&D for those services from a PBOT perspective, we will collect our own revenues to provide those services.
Jamie Dunphy
Okay.
And just so— just one last thing, you know, we're adding some fees on the PBOT side.
Are any fees being retired?
Are we getting rid of any fees?
Are we reducing anything?
Jeremy Patton
There are, um, not related specifically to development review fees, no.
Jamie Dunphy
Okay, okay, thank you very much.
Councilor Green.
Mitch Green
I, I just got back in the queue if we had time because I wanted to make one point on the sort of thank you.
I just want to echo the broad conversation on the sustainability of our water rates.
I've said this before, but I think it's really important that we're doing everything we can to unlock housing development in the City of Portland.
And I know that this effort's underway because the more meters that we can add to our system, the more that we can spread the fixed costs of that project over a larger rate base.
So that's part of the rate design question.
But it's also part of this idea that there's a positive interaction effect by promoting densification.
I know that that's going to require some upgrades and some system assets that are downstream of the plant, but if that provides more ratepayers at a pace that's faster than the cost of the upgrade to those pipes, then we're going to be able to get ourselves on a trajectory where you actually can lower those rates.
As Councilor Pirtle-Guiney had sort of suggested, rather than saying we're going to reduce the rate of increase, we might get to a place where we could actually just lower rates.
And I think that's what we should be striving towards.
So it's part of your vision, Mr. Mayor, of economic development.
Just want to reaffirm that I think this council should be supporting that with every tool that we have.
Donnie Oliveira
Thanks.
Elana Pirtle-Guiney, Rosie McGowan
Thank you.
Jamie Dunphy
Councilor Green.
Raymond C. Lee
And I'll add something to that, Councilor Green.
I think in any rate-based utility like this, you need those large users from an industrial and from a commercial standpoint.
That's the only way to truly have a financially sustainable system.
So I think that's something as administration, I know the mayor is keen on as well, is how do we recruit and retain those large industrial commercial users to help balance the system.
Thank you.
Jonas Biery
Thank you.
Jamie Dunphy
Councilor Ryan.
Dan Ryan
Thank you, Council President Jeremy.
I don't have any planned questions.
I just want to have a conversation with you about the lovely topic of parking meters.
I think after like gas prices, parking meters like really hit home for Portlanders.
And so there's a lot of nuances on this one.
I was surprised that we were in the middle of the pack, to be honest with you.
And I think it's because I maybe have the unfortunate circumstances of meeting somebody for a meal while there's a Blazer game going on, and so it's higher.
So we have prices that are situational, correct?
Jeremy Patton
Correct.
Dan Ryan
And how do we—.
Jeremy Patton
In certain districts.
Pardon me?
In certain districts.
Dan Ryan
In certain districts, of course.
And so I assume the data that you compiled is quite a, Collection of all those different, okay.
And so that's why someone could feel like they're paying a lot more than that if they show up at those places at peak times, right?
Jeremy Patton
Correct.
Dan Ryan
Okay, stay with me.
And so I know a lot of people have never gotten over the Sunday, the Sunday, free Sundays were quite popular.
Just, that's not a question.
And then I also would say that, How can I— I hear this often from storefronts and restaurants that their employees, they want some relief.
And so when we think about the program, the storefront program support, I hope that we think creatively about something like this.
So restaurants where the people who work there are doing working-class wages, and when they get off their thank you.
So if you have a bad shift and they didn't have a great night and then they have a parking ticket, they're really upset and they want to quit.
And so I've heard from people explain these stories that it's an angst for many of their employees.
Is there a program where that we could come up with, maybe a councilor could do a resolution or an ordinance on this that— but I don't want to get that micro.
I'd rather work with you to have some sort of adaptable program that works with the restaurants, works so they could have some access to some free parking for their working-class employees.
Jeremy Patton
And there are existing programs for reduced levels of parking in the garages.
So if those employees work in the garages and say on night shifts, there are reduced rates for those particular employees, but we can explore more.
Erica Namioka-Niebel
Absolutely.
Dan Ryan
When you say parking lot, you're talking about SmartPark?
Correct.
'Cause we have jurisdiction over that.
Jeremy Patton
Correct.
Elana Pirtle-Guiney, Rosie McGowan
Okay.
Dan Ryan
I knew that, but that was one of those rhetorical questions.
So how do I get back to some folks that would like to tap into that program where there aren't big parking lots, where they're in, like, say, the Pearl that doesn't have as many parking lots, or they're in the Lloyd area that don't have those, and no one could park in those empty parking lots at Lloyd Center for some reason?
How do I work with PBOT to try to provide some relief to the storefronts who are suffering and their employees who are angry about parking fees?
Jeremy Patton
Yeah, happy to work with you.
We actually have Erica in the room, and that's who you'd be working with.
She's in the back over here, but she'd be happy to reach out to your office.
Dan Ryan
Oh, thank you, Erica.
Hi, Erica.
Erica just stood up.
Thank you, Erica.
Staff.
Just remind me that we're gonna have a meeting with— do you wanna be in that meeting?
Jeremy Patton
Absolutely, yeah.
Dan Ryan
All right.
Okay, it's really just, I think we have to have some parking meter solutions as we, and adaptability across the city on that.
How do we study though if it's working?
So what's the impact of the rate increases and if it's in fact hurt the businesses that might, therefore we might have another business go out of business Go out and we have another 4 lease signups.
So how can we look at the trade-off of that data?
Like, are we bringing in more money because of the parking fee?
Are we bringing in less money because the parking fee might be hurting businesses and then we have less business taxes from them?
Jeremy Patton
I would say that the revenue from the fee increases is bringing in more money because of the fee increases themselves.
There are usually with any fee increase, slight downticks in the number of transactions of people utilizing parking, but usually the fee increases are more than covering those particular downward trends in transactions.
As far as hurting businesses in turnover, that's a question I actually don't know the answer to.
I would say businesses typically like turnover, so they want to make sure that those parking rates are at a rate high enough to make sure that people aren't parking there all day in front of their business because they do—.
Dan Ryan
No, they like the 15.
Yeah.
Yeah, especially in the neighborhood business, the Main Street areas.
Okay, I think we haven't figured out what that economic analysis is on when it hurts businesses and that hurts us because then we have less revenue coming from them, or if we just get more from the fee.
And so I keep trying to figure that out.
That's what I'm doing with you in real time without any prepared questions.
So that's the kind of conversation.
I do think one, That would allow us to provide some— a win, and that some of these— we've had a lot of restaurants close, and some of the issues is that they can't keep staff, and it's really become rough for them.
So I think anything we could do to provide some help for them, that would be, that would be something I look forward to working with you on.
And Mayor, maybe in the storefront support program, we can look, as this is one of the ideas.
So the point is that Anne Hill or who, who's the point?
Okay, all right, Victor.
Victor's the point.
And Anne.
Those people, that's who I talked to about this.
All right, thank you.
Jamie Dunphy
Thank you, Councilor Ryan.
Councilor Smith.
Reed Brodersen
Thank you.
Loretta Smith
Okay, I just forgot my question.
Deborah Scroggin
Just too much meat to start talking.
Loretta Smith
Right, right.
And I think I actually asked the question.
Thank you.
Dan Ryan
Don't take yourself too seriously.
Jamie Dunphy
Okay, Councilor, uh, Councilor Novick.
Steve Novick
Thank you, Mr. President.
I think that there's a lot of reasons to make sure that we're charging appropriate prices for parking.
There's a value to turnover, there's a value to reducing traffic.
But I am struck by Councilor Ryan's question about employees, and I was just wondering, have we ever, come up with a concept like where in a metered district there's people who work there that have like, you know, monthly permits where they pay less than they would if they were parking, paying a meter?
Jeremy Patton
That's a question.
Yeah, I'm gonna bring Eric out to maybe answer that.
Erica Namioka-Niebel
Hello, Councilors.
I'm sorry, Commissioner Novick, or Councilor Novick, I apologize.
Can you repeat that question for me, please?
Steve Novick
I was just, this is an incredibly vague question, but have in the parking context, have we ever like come up with a special employee permit where they would pay less than people than they otherwise would on the street or in another context, or like in one of our garages where if an employee works in a particular place, There's some sort of discount for them?
Erica Namioka-Niebel
Yes, and I'm sorry, for the record, my name is Erica Namioka-Niebel.
I'm the division manager that oversees parking operations and regulatory operations at PBOT.
We do have business permits in some of the districts.
Downtown is not one of them for central city reasons.
Yeah.
SmartPark would be a great space for that, especially since the garages have capacity right now and they have been for the last few years.
However, zoning does not allow us to sell monthlies at, I believe, 3 of our core garages, which would be 10th and Yamhill, 3rd and Alder, and 4th and Yamhill.
Steve Novick
Zoning doesn't allow us?
Erica Namioka-Niebel
I believe so, yes.
Steve Novick
Yeah.
Erica Namioka-Niebel
That's—.
Steve Novick
How would— I wonder why that would be.
We can follow up on that afterwards, but that's interesting.
Erica Namioka-Niebel
Yeah, and there are other garages that also cannot sell monthlies because of that reason, but I'm happy to follow up.
Simone Reddy
Okay.
Steve Novick
And also, I think that I read recently that by rolling back the extension of meters to 10:00 PM, we lost about $5 million a year.
Is that right?
Erica Namioka-Niebel
I'm going to switch over to Jeremy.
Jamie Dunphy
Okay.
Jeremy Patton
We've never actually fully collected a full year's worth of revenue, but based on some of the revenues that we saw coming in when we first initiated that until we stopped it in the fall, if you projected that out, it would probably be close to about $5 million.
What we had actually only built into the budget was about $1 million for the current year that we then paused.
Steve Novick
But it would have been— but we think it would have been close to $5 million a year.
Jeremy Patton
If you extrapolate out what we saw earlier, that just depends on, yeah, if that was a spike in parking during those particular months.
There's just a very, very small data set that we'd have to use for that.
Steve Novick
Yeah.
Thank you.
Jamie Dunphy
Thank you, Councilor Novick.
Pausing for dramatic effect.
Seeing no one else in the queue to discuss, thank you all so much for being here for your presentation.
This is going to conclude our final work session of this budget season.
Colleagues, just— and for the folks watching at home, just so we know what next steps are with the budget.
On Monday, this coming Monday, we will be hearing all public testimony for the budget, both for the city's budget and for the Prosper Portland budget.
That will be happening right, you know, starting up the day in this chamber.
So everyone plan to get comfy.
Tuesday, we will be hearing the Portland City of Portland budget and the Prosper Portland budget.
And then on Wednesday, we will be hearing our rate bureau— our rates and our utility ordinances, followed by final work on our amendments.
Councilor Ryan, last word for you.
Jonas Biery
Oh, sure.
Dan Ryan
I just want to thank CA Lee and all of the DCAs and bureau directors that have shown up for these budget sessions, work sessions.
I think these are the most important sessions we have because this is our chance to understand, ask questions understand how to run a city.
And when we jump too quickly into policy without having the context of what's really going on and how we operate a city, I don't think we're behaving in a way that will move our city forward.
So I just know this has taken up a lot of time, but please know it's so helpful to the public and to those of us that represent the public.
And I, I think that we should always lean in.
Thank you.
To such sessions each year.
I actually think we could have them earlier and, and we could be in a more relaxed environment where we're doing dialogue.
This isn't about gotchas.
It's to understand how to run the city.
And I really appreciate the openness that's occurred as these have taken place.
Thank you.
Jamie Dunphy
Yeah, thank you, Councilor Ryan.
Thank you all for your patience.
Thank you all for your participation.
And with that, we are adjourned.