WEBVTT 1 00:07:36.240 --> 00:07:37.661 Good afternoon, everyone. 2 00:07:37.742 --> 00:07:42.312 I'm going to call this meeting of the Committee of the Whole of the Portland City Council to order. 3 00:07:42.797 --> 00:07:45.656 It is Wednesday, September 16th, at 2:03 PM. 4 00:07:48.170 --> 00:07:49.492 Um, Rebecca, will you please call the roll? 5 00:07:51.990 --> 00:07:52.314 Koyama Lane? 6 00:07:53.466 --> 00:07:53.579 Here. 7 00:07:54.682 --> 00:07:55.088 Morillo? 8 00:07:55.997 --> 00:07:56.110 Here. 9 00:07:56.889 --> 00:07:57.442 Novick? 10 00:07:57.685 --> 00:07:57.814 Here. 11 00:07:59.322 --> 00:07:59.726 Clark? 12 00:08:00.535 --> 00:08:00.649 Here. 13 00:08:01.649 --> 00:08:01.958 Green? 14 00:08:02.216 --> 00:08:02.425 Here. 15 00:08:03.055 --> 00:08:03.492 Zimmerman? 16 00:08:03.815 --> 00:08:04.026 Here. 17 00:08:04.721 --> 00:08:05.108 Avalos? 18 00:08:06.434 --> 00:08:06.918 Dunphy? 19 00:08:07.209 --> 00:08:07.418 Here. 20 00:08:07.951 --> 00:08:08.064 Here. 21 00:08:09.970 --> 00:08:10.357 Smith? 22 00:08:15.910 --> 00:08:16.459 Pirtle-Guiney? 23 00:08:16.459 --> 00:08:18.220 Here. 24 00:08:18.220 --> 00:08:19.019 Ryan? 25 00:08:19.019 --> 00:08:21.420 Here. 26 00:08:21.420 --> 00:08:22.259 Uh, Councilor Avalos? 27 00:08:22.259 --> 00:08:22.500 Here. 28 00:08:22.500 --> 00:08:24.360 President and Kanal? 29 00:08:24.360 --> 00:08:25.779 Here. 30 00:08:25.779 --> 00:08:27.800 Christopher, will you please read the statement of conduct? 31 00:08:29.480 --> 00:08:32.159 Welcome to the meeting of the Finance and Governance Committee of the Whole. 32 00:08:32.159 --> 00:08:42.379 To testify before this committee in person or virtually, you must sign up in advance on the committee agenda at www.portland.gov/council/agenda/committee-whole or by calling 311. 33 00:08:42.379 --> 00:08:45.181 Information on engaging with the committee can can be found at this link. 34 00:08:45.597 --> 00:08:48.418 Registration for virtual testimony closes 1 hour prior to the meeting. 35 00:08:48.499 --> 00:08:51.288 In-person testifiers must sign up before the agenda item is heard. 36 00:08:51.688 --> 00:08:53.341 Public testimony will be taken on an item. 37 00:08:54.014 --> 00:08:56.883 Individuals may testify for 3 minutes unless the Chair states otherwise. 38 00:08:57.235 --> 00:08:58.966 Your microphone will be muted when your time is over. 39 00:08:59.655 --> 00:09:00.538 The Chair preserves order. 40 00:09:00.601 --> 00:09:07.703 Disruptive conduct such as shouting, refusing to conclude your testimony when your time is up, or interrupting others' testimony or committee deliberations will not be allowed. 41 00:09:08.072 --> 00:09:09.722 If you cause a disruption, a warning will be given. 42 00:09:09.802 --> 00:09:11.839 Further disruption results in ejection from the meeting. 43 00:09:12.224 --> 00:09:14.980 Anyone who fails to leave once ejected is subject to arrest for trespass. 44 00:09:15.429 --> 00:09:20.145 Additionally, the committee may take action your testimony should address the matter being considered. 45 00:09:20.193 --> 00:09:21.917 When testifying, state your name for the record. 46 00:09:22.239 --> 00:09:24.412 If you're a lobbyist, identify the organization you represent. 47 00:09:24.557 --> 00:09:27.166 Virtual testifiers should unmute themselves when the clerk calls your name. 48 00:09:27.375 --> 00:09:27.682 Thank you. 49 00:09:31.014 --> 00:09:32.000 Thank you, Christopher. 50 00:09:32.549 --> 00:09:35.865 All right, we're going to get into, uh, everything in just a moment. 51 00:09:35.929 --> 00:09:40.342 I just wanted to give a, a quick announcement, um, regarding the CEI Hub item. 52 00:09:40.570 --> 00:09:48.100 So on September 1st, 2026, the Bureau of Planning and Sustainability sent legislative notice via email announcing that the recommended draft yes. 53 00:09:48.100 --> 00:09:48.100 Second. 54 00:09:48.100 --> 00:09:48.179 Motion passes. 55 00:09:48.179 --> 00:09:48.440 Thank you. 56 00:09:48.440 --> 00:10:02.360 Consideration of the draft of the Critical Energy Infrastructure Hub policy project, including comprehensive plan policy and Title 33 regulatory amendments, was scheduled for the City Council Committee of the Whole meeting today, September 16th, 2026, at 2 PM. 57 00:10:02.360 --> 00:10:17.278 Consideration of the ordinance for the recommended draft of the CEI Hub policy project has been referred to the full City Council by request of 4 city councilors without objection and has been continued to a City Council work session on Thursday, Thursday, September 17th, 2026. 58 00:10:17.326 --> 00:10:18.784 That's tomorrow at 2:00 PM. 59 00:10:19.571 --> 00:10:25.501 The work session on September 17th will include a presentation by city staff and a council question and answer session with staff. 60 00:10:25.903 --> 00:10:35.087 Additionally, council has requested brief informational presentations from the Oregon Department of Environmental Quality and a balanced panel of representatives from engaged environmental and industry organizations. 61 00:10:35.681 --> 00:10:39.849 Council will not take other public testimony, vote, or take any action at the work session. 62 00:10:40.649 --> 00:10:48.506 A public hearing to take oral testimony for the ordinance— I think it's ordinances actually— is scheduled for Thursday, September 24th at 2 PM. 63 00:10:49.629 --> 00:10:52.903 Consideration of the ordinance for the bulk— I think I'm going to say the same thing here. 64 00:10:53.080 --> 00:11:08.244 Consideration of the ordinance for the bulk fuel terminal capacity reduction requirements, amendments to Title 17, has been referred to the full City Council by request of 4 councilors without objection and is being continued to a City Council work session on Thursday, September 17th, 2026 at 2 PM. 65 00:11:08.804 --> 00:11:14.245 The work session on September 17th will include a presentation by city staff and a council question and answer session with staff. 66 00:11:14.677 --> 00:11:22.917 Additionally, council has requested brief informational presentations from the Oregon Department of Environmental Quality and a balanced panel of representatives from engaged environmental and industry organizations. 67 00:11:23.236 --> 00:11:27.052 Council will not take other public testimony, vote, or take any action at the work session. 68 00:11:27.485 --> 00:11:32.581 A public hearing to take oral testimony for that ordinance is scheduled for Thursday, September 24th at 2:00 PM. 69 00:11:33.254 --> 00:11:41.157 The testimony period for both of these items is open, and testimony can be submitted in writing or orally at the public hearing, both in person and virtually. 70 00:11:41.653 --> 00:11:45.703 You can register Uh, to testify orally, either online or by calling 311. 71 00:11:46.107 --> 00:11:53.153 The agenda and a link to the oral testimony registration will be available Friday, September 18th at portland.gov/auditor/council-clerk/events. 72 00:11:59.399 --> 00:12:02.918 All right, uh, thank you to the city attorneys for that information. 73 00:12:04.152 --> 00:12:08.942 And with that, we're gonna— about to get into the, um, uh, the items today. 74 00:12:09.023 --> 00:12:33.933 Just to, to be transparent, we're intending to get through the committee chair updates as well as our 2 items together on fire and police disability and retirement financing, then take a break and then come back and open items 4 through 8 together, which are items, uh, regulatory program update, uh, changes from Councilor Novick, um, after the break and get as far as we can into those today. 75 00:12:34.558 --> 00:12:38.644 Um, and so with that, I'll ask if we can call agenda item 1, please. 76 00:12:38.692 --> 00:12:38.804 Second. 77 00:12:40.330 --> 00:12:44.374 Item 1, Committee Chair Updates, document number 2026-324. 78 00:12:45.304 --> 00:12:50.953 All right, so I'm not going to read through everything on here, but, um, I passed out the item. 79 00:12:51.018 --> 00:12:54.019 It is also attached to the legislative item online. 80 00:12:54.371 --> 00:13:05.188 Um, I did want to flag that, uh, there have been a couple things that have moved around a little bit, but the one that I wanted to highlight is we are still planning to do the Future of Downtown, uh, conversation in November. 81 00:13:06.105 --> 00:13:14.716 And we've started, and I appreciate the administration helping us to chunk together the appointment items for our Wednesday meetings of this committee. 82 00:13:14.764 --> 00:13:18.283 For those who don't know, we meet, you know, Wednesday right before the evening council meeting. 83 00:13:18.879 --> 00:13:22.590 That's once a month, and trying to do appointments at that meeting has been really helpful. 84 00:13:22.975 --> 00:13:31.394 The other item I wanted to flag, and I think I mentioned this last week, is we're currently planning— it's tentative yet— an oversight hearing on Urban Alchemy on November 5th. 85 00:13:33.462 --> 00:13:34.379 Everything else is in here. 86 00:13:34.975 --> 00:13:36.052 Feel free to read that. 87 00:13:36.261 --> 00:13:43.947 I've also updated part 2 and part 3 of the report, and I just wanted to be more transparent adding in the other work groups that have been there. 88 00:13:45.024 --> 00:13:54.321 But I don't really have a whole lot today that's, that's different from last time, so I'm just going to stop talking and see if there are any questions before I pass it over to Councilor Clark to give an update on the Public Works Committee. 89 00:13:56.379 --> 00:13:58.423 Seeing no one in the queue, Councilor Clark, please give us an update. 90 00:13:58.490 --> 00:13:58.972 Thank you, Council President. 91 00:14:00.009 --> 00:14:02.298 Thank you, Mr. Chairman and colleagues. 92 00:14:02.363 --> 00:14:03.764 I apologize I'm not there. 93 00:14:04.926 --> 00:14:08.407 I am treating a tooth with an antibiotic. 94 00:14:08.504 --> 00:14:14.071 I'll explain all the details later if you want to know them, but I'll be there for the council meeting hopefully tonight. 95 00:14:15.293 --> 00:14:30.321 The Public Works Committee at our last meeting had a great overview of the potential for encouraging more community-based partnerships for we're calling it Portland Public Spaces Partnerships. 96 00:14:30.947 --> 00:14:43.346 We had a great panel conversation with people from the Portland Arboretum, the Community Music Center, the Interstate Firehouse Cultural Center, and the Parks Foundation. 97 00:14:43.635 --> 00:14:44.792 And it was a great conversation. 98 00:14:44.841 --> 00:14:55.408 I think it hopefully will result in potentially a resolution coming to you, but it's definitely about the culture change that's going on within the Parks Bureau, which we all really appreciate. 99 00:14:56.869 --> 00:15:09.985 Next week, the Public Works Committee is going to be taking care of some housekeeping items from PBOT on property rights acquisitions and the Montgomery Park Streetcar Extension CMGC approval. 100 00:15:10.515 --> 00:15:19.047 But we're also going to hear an update on the implementation of the transportation utility fee and the street damage restoration fee. 101 00:15:19.720 --> 00:15:32.131 And that update is going to be focused on things that we're very concerned about, the non-residential methodology, And the financial assistance options that will be available for people under the TUF. 102 00:15:33.830 --> 00:15:53.404 Then in October, drum roll, we're going to hear the long-awaited asset management strategy plan, and hopefully, hopefully we're going to get to meet the city's new Chief Asset Management Officer who will be in CA Lee's office. 103 00:15:54.196 --> 00:15:55.381 We're looking forward to that. 104 00:15:56.278 --> 00:16:09.639 But the big lift, the really big lift for Public Works in the upcoming months is going to be working to develop a regulatory framework for automated or autonomous vehicles. 105 00:16:10.937 --> 00:16:14.831 You know, the technology we all know is coming and we need to get in front of it. 106 00:16:15.600 --> 00:16:24.219 I'm very concerned, and I know many of you have heard from me about this, concerned about what's going to happen in the next state legislative session when it comes to autonomous vehicles. 107 00:16:25.052 --> 00:16:32.423 So we need to lead by example on this work and make a case against preemption on the part of the legislature. 108 00:16:33.625 --> 00:16:35.226 So stay tuned for that. 109 00:16:35.371 --> 00:16:40.081 I know we're all very, very interested in the future of autonomous vehicles in Portland. 110 00:16:41.076 --> 00:16:51.187 We're also planning to have a briefing around utility rate setting, which addresses the budget note from Councilor Koyama Lane, hopefully in late October or at least this fall. 111 00:16:51.315 --> 00:16:51.490 Thank you. 112 00:16:53.034 --> 00:16:56.035 So with that, uh, Chairman Kanal, that's my report. 113 00:16:57.863 --> 00:16:58.955 Thank you, Chair Clark. 114 00:16:59.167 --> 00:17:02.426 Um, any— anyone have any questions for Chair Clark? 115 00:17:05.515 --> 00:17:07.989 All right, uh, Councilor Novick's on deck for next week. 116 00:17:08.246 --> 00:17:11.619 I've been bad at giving people the reminder, so I want to start doing that. 117 00:17:12.166 --> 00:17:14.126 And, um, thank you so much. 118 00:17:14.191 --> 00:17:15.718 And that concludes the chair's update. 119 00:17:16.287 --> 00:17:19.278 Um, Rebecca, will you please call agenda items 2 and 3 together? 120 00:17:21.730 --> 00:17:28.478 Item 2, Fire and Police Disability and Retirement Finance Discussion, document number 2026-330. 121 00:17:29.121 --> 00:17:35.916 Item 3, Fire and Police Disability and Retirement Financing Public Input, document number 2026-331. 122 00:17:37.250 --> 00:17:38.695 All right, thank you, colleagues. 123 00:17:38.759 --> 00:17:45.973 Today we'll be discussing how we finance and pay for police and fire disability and retirement and whether any alternative financing options might be viable. 124 00:17:46.696 --> 00:17:50.352 We'll first hear from the City Attorney's Office about the charter governing FPDR. 125 00:17:50.961 --> 00:17:56.988 Then we'll hear from our Chief Financial Officer and the FPDR Deputy Director to learn how the program is currently financed. 126 00:17:57.532 --> 00:18:06.782 Finally, we have a special guest from the Pew Charitable Trust State Fiscal Policy Project who'll be joining us online, sharing their research and recommendations around public pension funding practices. 127 00:18:06.830 --> 00:18:11.159 And I want to thank Principal Officer David Drain for being willing to join us today. 128 00:18:12.265 --> 00:18:20.190 It's important for this council to understand how we pay for the public safety pensions and discuss the options available to us in line with the city's core value of fiscal responsibility. 129 00:18:20.785 --> 00:18:31.022 However, I also want to note that some of our public safety partners have expressed concerns to me that this conversation, which is strictly confined to how we finance FPDR, will veer off track. 130 00:18:31.071 --> 00:18:33.108 And so I want to take this opportunity to clarify. 131 00:18:35.026 --> 00:18:39.833 We're not here today to discuss any changes to FPDR benefits or the funding provided to FPDR. 132 00:18:40.836 --> 00:18:46.711 The city's City Attorney's Office is going to explain to us in part that we legally cannot change any of these things. 133 00:18:46.824 --> 00:18:50.945 And as committee chair, I want to be clear as to what's within the scope of this conversation and what's not. 134 00:18:51.954 --> 00:18:56.363 So I'll call to order any councilor who veers outside the scope of the financing discussion today. 135 00:18:57.726 --> 00:19:02.246 And I want to also say, as a councilor, obviously people can talk about those issues elsewhere if they so choose. 136 00:19:02.309 --> 00:19:04.025 It's a, you know, free council, free country. 137 00:19:04.136 --> 00:19:10.998 But I want to be clear as a councilor that I'm fully supportive of maintaining robust disability and retirement benefits for our city's first responders. 138 00:19:11.590 --> 00:19:17.313 First and foremost, I support the will of the voters and will always defend the city charter, which includes voter-approved text around FPDR. 139 00:19:18.003 --> 00:19:23.751 And additionally, it's just a moral issue that the first responders who have served the city deserve their pensions. 140 00:19:24.266 --> 00:19:46.260 I've been thinking about this in light of the fact that last Friday was the 25th anniversary of 9/11, and I was at the fire memorial ceremony that was held by Station 1, and we remembered the sacrifice made by first responders across the country, but in particular in New York and D.C. Those who served in this way have earned their disability and retirement benefits. 141 00:19:46.422 --> 00:19:56.531 And while I will continue to talk about transparency, accountability, and fiscal responsibility, speaking as a councilor, I want to be clear that I'll be fighting for the benefits our workers have been promised, that they have earned, and that they deserve. 142 00:19:57.880 --> 00:20:03.834 As part of helping frame this conversation, I'm going to hand it over to Councilor Green, and then we'll invite up our guests. 143 00:20:03.994 --> 00:20:04.316 Thank you. 144 00:20:05.584 --> 00:20:07.155 Thank you so much, Chair Kanal. 145 00:20:07.766 --> 00:20:09.915 I don't have much to add beyond just I'll start. 146 00:20:10.011 --> 00:20:15.143 I'll start by just saying, really appreciate the level setting that this is not about benefits. 147 00:20:15.448 --> 00:20:17.596 This is not about breaking any promises. 148 00:20:17.804 --> 00:20:20.481 It's not about any of that. 149 00:20:20.594 --> 00:20:31.704 This is about just kind of looking at the long-run actuarial forecast and having an honest conversation about the intergenerational equity on who bears the cost of this. 150 00:20:32.603 --> 00:20:34.494 And we've gone down this road before. 151 00:20:35.328 --> 00:20:38.598 Some of you in the audience have been down this road before, and these are tough conversations. 152 00:20:40.317 --> 00:20:58.968 But I think we owe it to taxpayers, both present and future, to really make the best effort we can to really exhaust all of the options available to us and be honest about what the lifecycle cost of our current approach is. 153 00:20:59.031 --> 00:21:01.704 And if there's a way to save taxpayers money, we should try it. 154 00:21:01.753 --> 00:21:02.654 We should always try to do that. 155 00:21:02.816 --> 00:21:04.459 So really appreciate this conversation. 156 00:21:04.569 --> 00:21:08.010 It's not easy, um, and, uh, let's get into it. 157 00:21:08.300 --> 00:21:08.494 Thanks. 158 00:21:08.738 --> 00:21:10.159 All right, thank you. 159 00:21:10.256 --> 00:21:13.778 To start us off, I'm going to invite up from the City Attorney's Office Franco Lucin. 160 00:21:15.294 --> 00:21:22.862 I think we're going to do this sequentially, but if you'd like to also, uh, at any point, if you want to have, um, the next presenter up too, let me know. 161 00:21:22.959 --> 00:21:34.159 Okay, uh, good afternoon, Council, Committee of the Whole, uh, President Dunphy, and I— there's you seem to be the chair today, Councilor Kanal. 162 00:21:34.222 --> 00:21:34.673 Good afternoon. 163 00:21:35.652 --> 00:21:38.671 Thank you for asking our office to present on this. 164 00:21:39.345 --> 00:21:43.359 I've been asked to present for 5 minutes, so I'm going to honor that. 165 00:21:43.519 --> 00:21:47.679 And I've got about a dozen slides focused on the charter. 166 00:21:48.498 --> 00:21:57.827 And at the very end, I have a slide about the ballot measure in 2006, which is one of the amendments to Chapter 5 of the charter. 167 00:21:57.971 --> 00:21:58.631 Thank you. 168 00:21:59.180 --> 00:22:07.887 I'll refer to that throughout, but I've listed out some of the things that that ballot measure accomplished with respect to funding. 169 00:22:09.220 --> 00:22:12.211 And Leslie's been kind enough to help me with the slides. 170 00:22:12.307 --> 00:22:13.989 So next slide, please. 171 00:22:16.619 --> 00:22:25.337 So just very high level here, Chapter 5 of the charter is the fire and police disability retirement and death benefit plan. 172 00:22:26.029 --> 00:22:30.859 It's known as the FPDR Plan, defines what the FPDR benefits are. 173 00:22:33.067 --> 00:22:40.175 It sets forth the requirements for FPDR to have a board of trustees and what the authority of that board is. 174 00:22:41.286 --> 00:22:49.135 It includes the fund administrator's authority and probably most germane to this discussion, how the FPDR levy operates. 175 00:22:50.464 --> 00:22:51.666 And the slides track this. 176 00:22:54.801 --> 00:22:56.699 Next slide, please. 177 00:22:58.675 --> 00:23:06.663 So here, I won't, I won't get too far into the, uh, the details here, but, uh, just basically the, the plan has disability benefits. 178 00:23:07.319 --> 00:23:18.553 The 2 main categories are service-connected, uh, and that can be thought of as the workers' comp, workers' compensation benefit for sworn police and fire employees who are injured at work. 179 00:23:18.778 --> 00:23:20.249 And then the other category is the general disability benefits. 180 00:23:22.087 --> 00:23:32.099 And then there's the non-service-connected benefit, which is a little bit more limited in terms of the members who can access it because they have to have at least 10 or more years of service. 181 00:23:33.579 --> 00:23:37.217 So it's also paid, as the slide indicates, at a lower level. 182 00:23:38.976 --> 00:23:47.776 And just for the record, the capitalizations here are because these terms are defined in the charter. 183 00:23:47.987 --> 00:23:50.325 They're not just random capitalizations. 184 00:23:50.616 --> 00:23:51.298 Next slide, please. 185 00:23:53.690 --> 00:24:05.969 And also in the plan, in addition to disability benefits or retirement benefits, there are 3 tiers, 1, 2, and those are both paid from the levy. 186 00:24:08.007 --> 00:24:11.166 The pension is paid from the levy and paid from this plan. 187 00:24:11.362 --> 00:24:17.798 And then there's FPDR Okay. 188 00:24:18.219 --> 00:24:22.946 And from the levy, the employer contribution is paid to PERS. 189 00:24:23.931 --> 00:24:36.192 And as indicated there, the FPDR 3 members are those who are hired on or after— or actually, I'm sorry, I think the charge says sworn on or after January 1st, 2007. 190 00:24:40.316 --> 00:24:52.549 There's also death benefit for surviving spouses, which is a term defined in the plan, and for surviving dependent minor children. 191 00:24:54.762 --> 00:25:03.007 The death after retirement benefit is only payable for FPDR 1 and 2. 192 00:25:04.787 --> 00:25:10.010 And then there's a funeral benefit available for all 3 tiers, all 3 programs. 193 00:25:10.221 --> 00:25:10.900 Next slide, please. 194 00:25:14.170 --> 00:25:29.019 The composition of the Board of Trustees, and this is another product of the 2006 ballot measure, the board was changed from an 11-member board to a 5-member board comprised of the mayor and mayor's designee as the chair. 195 00:25:30.647 --> 00:25:37.006 An elected active member from the Fire Bureau, elected by the active members of the Bureau. 196 00:25:37.247 --> 00:25:43.073 And the same for the Police Bureau, a police trustee elected by active members of the Police Bureau. 197 00:25:44.380 --> 00:25:45.519 2 citizen trustees. 198 00:25:45.714 --> 00:26:01.941 And the enhancement here from the reform in 2006 was that the— the slide doesn't indicate it, but the charter says the citizen members are required to have relevant experience in pension or disability matters. 199 00:26:03.675 --> 00:26:17.948 And then, as indicated there, the mayor would nominate these citizen trustees, and they would come to the city council for a vote on whether to approve. 200 00:26:20.641 --> 00:26:36.489 And then the charter has a prohibition on the mayor, mayor's designee, citizen trustees, none of them may be active or past members or beneficiaries of the fund, or none of them can ever have been employed by the Portland Fire or Police Bureaus. 201 00:26:36.601 --> 00:26:48.622 Terms for the trustees, as indicated there, are 3 years, and the charter indicates some staggered terms that were necessary in order to implement these amendments at the beginning of 2007. 202 00:26:49.521 --> 00:26:50.147 Next slide, please. 203 00:26:52.431 --> 00:27:00.041 The The Board of Trustees has the power to, under the charter, to adopt administrative rules for administration of the FPDR plan. 204 00:27:01.182 --> 00:27:07.506 The board may pay its administrative expenses from the fund and may borrow from the general fund. 205 00:27:07.923 --> 00:27:14.519 The charter says the board may, but has no obligation to pay other financial incentives that demonstrate a reduction in disability costs. 206 00:27:15.080 --> 00:27:16.092 They may purchase bonds. 207 00:27:16.285 --> 00:27:16.605 They may—. 208 00:27:16.605 --> 00:27:18.098 I have a question. 209 00:27:19.803 --> 00:27:36.090 Approve the appointment by the mayor of the fund administrator, subject again to confirmation by the city council, and they have the authority to determine the cost of living adjustment annually for FPDR plan retirees, and that's capped at 2%. 210 00:27:36.252 --> 00:27:38.387 Next slide, please. 211 00:27:41.089 --> 00:27:44.896 The fund administrator's authority— I have to correct myself on this first yes. 212 00:27:44.944 --> 00:27:48.443 So the first bullet, it actually— that actually derives from the Portland City Code. 213 00:27:49.204 --> 00:27:53.561 But the code has the fund administrator serving as the director of the FPDR Bureau. 214 00:27:55.119 --> 00:28:14.367 But the charter sets forth the powers of the fund administrator to make disability and retirement benefit claim decisions, to decide approval of a settlement brought by an FPDR member against a third party for subrogation, like A car accident is kind of a classic example of that. 215 00:28:14.997 --> 00:28:21.913 And to settle any claim up to the maximum amount that the FPDR Board prescribes through its administrative rules. 216 00:28:22.125 --> 00:28:31.702 It's at $35,000 currently, and it's been that way for— I'd have to look back, but it's been several years, maybe more than 10. 217 00:28:32.221 --> 00:28:32.917 Next slide, please. 218 00:28:35.316 --> 00:28:38.019 Okay, and here's how the FPDR levy operates. 219 00:28:39.250 --> 00:28:40.528 This is all just straight out of the charter. 220 00:28:41.683 --> 00:28:55.917 And so on an annual basis before the deadline that the City Council sets, FPDR's Board of Trustees is tasked with preparing and transmitting to the Council a statement that includes the following items. 221 00:28:56.769 --> 00:29:03.211 It's the amount of— number one is the amount of money required for the next fiscal year to pay and discharge all the requirements of the fund. 222 00:29:04.078 --> 00:29:07.002 The vast majority of those would be retirement benefits. 223 00:29:07.773 --> 00:29:18.613 And that's the estimated revenue to the fund during the next fiscal year from all sources except the levy, plus the balance estimated to be in the fund at the beginning of the next fiscal year. 224 00:29:19.309 --> 00:29:30.059 My understanding is the— that represents probably about— the non-levy revenue represents about 2% of the overall fund liabilities. 225 00:29:30.722 --> 00:29:32.657 A statement of all payments made. 226 00:29:33.084 --> 00:29:34.672 And here's a typo here. 227 00:29:35.065 --> 00:29:39.818 It should say thank you. 228 00:29:41.877 --> 00:29:55.818 The total amount paid into and estimated to be paid into the fund from all sources except loans from the general fund and advances from the reserve fund during the current fiscal year, plus the balance of the reserve fund at the beginning of the current fiscal year. 229 00:29:56.842 --> 00:30:00.884 The reserve fund is capped at $750,000. 230 00:30:00.965 --> 00:30:01.518 Next slide, please. 231 00:30:02.143 --> 00:30:11.491 And then the last item required for the levy is a statement setting forth the total amount of money required by the fund to discharge its obligations. 232 00:30:11.605 --> 00:30:16.335 And there's a formula in the charter explaining how that works. 233 00:30:17.281 --> 00:30:24.770 And then the other source of funding for FPDR in the charter is referred to here. 234 00:30:24.851 --> 00:30:27.240 It's actually in Chapter 5. 235 00:30:27.305 --> 00:30:28.428 There's pardon me. 236 00:30:28.476 --> 00:30:41.842 This cross-reference to Chapter 7, which provides for another— in addition to the 2.5 mills, which a mill is like a thousandth of a dollar or a tenth of a cent. 237 00:30:42.069 --> 00:30:42.720 Yeah. 238 00:30:42.963 --> 00:30:52.708 In addition to those, that maximum allowed under Chapter 5, Chapter 7, 110.5 allows an additional 3 tenths of a mill on each dollar. 239 00:30:53.553 --> 00:30:56.381 Of assessed valuation to be levied. 240 00:30:59.619 --> 00:31:00.208 Next slide, please. 241 00:31:03.660 --> 00:31:15.304 Straight from the charter again, minimum levy has to be no less than $1 mil per dollar valuation unless that levy— unless levying the minimum would cause a reserve fund to exceed $750,000. 242 00:31:19.102 --> 00:31:27.986 The levy is not subject to the limitation of Section 11— or sorry, I should say Article 11, Section 11 of the Oregon Constitution. 243 00:31:28.965 --> 00:31:35.986 Um, and the proceeds of the tax levy, to the extent of the amount required by the fund, shall be paid into the fund. 244 00:31:36.917 --> 00:31:39.922 Uh, any balance, uh, should be paid to the reserve fund. 245 00:31:40.788 --> 00:31:48.795 And there's also, um, any, uh, assets of the fund, uh, Are to be deposited with the city treasurer. 246 00:31:50.579 --> 00:31:56.335 So there's some theoretical opportunity to invest those within the legal limitations. 247 00:32:01.535 --> 00:32:02.313 Next slide, please. 248 00:32:07.599 --> 00:32:21.114 So the authority to change the plan when required by law, and this has happened over the years, council may extend to FPDR members additional benefits not described by Chapter 5 of the charter by ordinance. 249 00:32:23.089 --> 00:32:29.739 Charter also allows council to include reductions in corresponding benefits as another authority under the charter. 250 00:32:30.304 --> 00:32:36.807 Charter requires council to seek the advice of the FPDR board before taking action to change benefits, even when required by law. 251 00:32:39.161 --> 00:32:42.539 And then any other changes to the FPDR plan would require a ballot measure. 252 00:32:44.819 --> 00:32:46.421 Uh, next slide, please. 253 00:32:48.200 --> 00:32:50.769 I think this— I think I've got maybe 2 left. 254 00:32:51.429 --> 00:33:06.825 Um, so the 2006 ballot measure, um, was referred to voters by the City Council, and a lot of what I've described, um, were amendments that resulted from that ballot measure, which passed. 255 00:33:06.892 --> 00:33:15.324 Um, for funding, the significant changes were creation of the FPDR 3 program for sworn fire and police employees. 256 00:33:18.859 --> 00:33:26.630 And under the plan, FPDR 3 currently only gets the disability and death benefits. 257 00:33:26.678 --> 00:33:30.839 That's what that first, or one of the sub-bullets there is intended to mean. 258 00:33:30.887 --> 00:33:32.227 The way it's written is a little confusing. 259 00:33:32.324 --> 00:33:41.107 But now that they're in PERS, in other words, for FPDR 3, The FPDR plan applies to them with respect to disability and the death benefits. 260 00:33:44.175 --> 00:33:50.536 Including the FPDR levy, PERS contributions on behalf of sworn members involved— I'm sorry, enrolled in PERS. 261 00:33:51.116 --> 00:33:53.762 That was another change from the ballot measure. 262 00:33:54.344 --> 00:34:01.179 And it also— the ballot measure also allows the fund to pay PERS contributions on behalf of sworn employees enrolled in PERS. 263 00:34:06.079 --> 00:34:07.398 Um, man, I may have one. 264 00:34:07.592 --> 00:34:08.510 Is there one more slide? 265 00:34:09.025 --> 00:34:09.844 That's the end. 266 00:34:10.086 --> 00:34:11.052 That's it. 267 00:34:11.132 --> 00:34:13.230 I, I hope I stayed within my 5 minutes. 268 00:34:14.106 --> 00:34:14.269 Thank you. 269 00:34:14.351 --> 00:34:14.675 Thank you. 270 00:34:16.461 --> 00:34:17.128 Thank you so much. 271 00:34:17.226 --> 00:34:25.751 I'm going to open this up for questions before we, um, we'll probably— we might end up asking you back up if there's no questions now as well, but, um, I'll just open it up, so feel free to get in the queue. 272 00:34:25.994 --> 00:34:26.960 Uh, Council President Dunphy. 273 00:34:27.041 --> 00:34:28.277 Thank thanks, Franco. 274 00:34:28.324 --> 00:34:35.063 Maybe you can tell me a little bit of the history regarding the most recent ballot initiative to improve this. 275 00:34:35.143 --> 00:34:39.692 Do you know what ultimately the impetus for this update was? 276 00:34:39.739 --> 00:34:43.532 Was it just that like an improvement to the model, improvement to oversight? 277 00:34:43.581 --> 00:34:49.809 What was the reason why we did a ballot, a second ballot initiative on this in the 2000s or whatever it was you said? 278 00:34:49.922 --> 00:34:54.659 See, I brought a copy. 279 00:34:55.260 --> 00:35:02.659 There was a, uh, an election in November of 2012. 280 00:35:05.559 --> 00:35:08.085 Pardon me, it's just hard to keep all these straight from memory. 281 00:35:09.929 --> 00:35:49.623 Um, So there have been, there have been a number of, uh, well, the ballot initiative in 2012, um, I can't tell which of these amendments is by ballot measure. 282 00:35:54.014 --> 00:36:02.648 Let's see, there was a special compliance amendment, but I don't know that that went to the voters. 283 00:36:04.329 --> 00:36:08.000 Um, I might have to get back to you on that, President Dunphy. 284 00:36:08.260 --> 00:36:08.585 No problem. 285 00:36:08.925 --> 00:36:11.005 Apologies, there's, there's a number, a number of amendments. 286 00:36:11.396 --> 00:36:14.865 You're not expected to be a historian and a lawyer, so thanks. 287 00:36:15.141 --> 00:36:15.547 Thank you. 288 00:36:17.980 --> 00:36:19.016 Thanks, Council President. 289 00:36:19.097 --> 00:36:28.592 I, I might maybe— would, would the same answer apply to a slightly different question, which is, can you explain not the 2012 change but anything about why 2006 happened? 290 00:36:30.054 --> 00:36:31.340 Why 2006 happened? 291 00:36:31.420 --> 00:36:55.362 I think, um, I mean, it preceded me, but I do think that there was an examination of the The structure of the plan and how it was funded and how could, um, how to minimize the risk to the, to the plan, the participants, and the taxpayers, um, by virtue of how the, how the plan was funded. 292 00:36:56.213 --> 00:37:10.563 And so the, uh, you know, the result obviously was the creation of FPDR 3 and less, less of the beneficiary population as being subject to the pay-as-you-go funding. 293 00:37:11.503 --> 00:37:12.217 Okay, thanks. 294 00:37:13.626 --> 00:37:16.181 Seeing no one else in the queue, I'm going to say thank you. 295 00:37:16.230 --> 00:37:24.664 We might ask you back up at some point, but I'm going to welcome up the Deputy Director of FPDR, Stacy Jones, as well as our Chief Financial Officer, Jonas Beery. 296 00:37:25.148 --> 00:37:26.039 Thank you both for being here. 297 00:37:29.306 --> 00:37:33.661 Acknowledge that we have a director in the back there, and I want to acknowledge him for his service. 298 00:37:33.773 --> 00:37:38.349 I know that he's On his way to retirement, if I hear soon or not. 299 00:37:38.349 --> 00:37:42.469 I don't know exactly your date, but I just wanted to say thank you for the service as well. 300 00:37:43.650 --> 00:37:44.230 But take it away. 301 00:37:44.230 --> 00:37:45.269 I don't know who's going first. 302 00:37:45.590 --> 00:37:45.989 Great. 303 00:37:45.989 --> 00:37:47.869 Thank you, Chair and committee. 304 00:37:47.869 --> 00:37:59.789 And yeah, thank you for acknowledging current, for a few weeks anyway, current Director Sam Hutchinson, who's, I believe, leaving us as the longest-standing bureau director currently at the city. 305 00:37:59.789 --> 00:38:03.429 And so appreciate Sam for all your commitment to the city. 306 00:38:03.789 --> 00:38:04.550 So we'll start. 307 00:38:06.507 --> 00:38:08.545 Just the quick slide. 308 00:38:08.833 --> 00:38:10.021 Yeah, thank you, Leslie. 309 00:38:10.695 --> 00:38:17.996 So just quick run of show for the next few minutes with Stacy and I, and then get to other speakers and questions. 310 00:38:18.525 --> 00:38:24.541 We just want to share a little bit about the current FPDR plan and funding expectations under the current circumstances. 311 00:38:24.974 --> 00:38:30.077 We'll probably skip past a couple slides because Franco covered a couple of these in greater detail than we have. 312 00:38:30.590 --> 00:38:37.393 And then also want to end with a quick snapshot of why kind of potential funding alternatives May present some challenges that council should be aware of. 313 00:38:39.130 --> 00:38:51.630 So let's move forward, Leslie, and I think we'll skip through— we have just for reference a couple of slides that summarize the plan and the fund, but this is largely similar to the information City Attorney just presented. 314 00:38:52.114 --> 00:38:56.496 So we'll move on to a couple slides further in the interest of time. 315 00:38:56.932 --> 00:39:02.813 Yeah, so just wanted to talk a little bit about very generally kind of standard pension funding models. 316 00:39:02.878 --> 00:39:03.903 And we can go to the next slide, please. 317 00:39:03.952 --> 00:39:14.012 The standard The standard model for most pension funds, public pension funds, is to pre-fund or at least partially pre-fund for future costs and liabilities. 318 00:39:14.751 --> 00:39:19.068 That typically can be less expensive, aligns to the principle of intergenerational equity. 319 00:39:19.887 --> 00:39:23.400 And acknowledging this is, I think, where the question— line of questioning a moment ago was going. 320 00:39:24.251 --> 00:39:32.436 Since 2007, FPDR has been transitioning to a partially pre-funded model via that charter change in 2006. 321 00:39:32.485 --> 00:39:32.661 Thank you. 322 00:39:33.864 --> 00:39:43.769 That moved sworn employees to be covered by PERS and the prefunded, partial prefunding model of PERS. 323 00:39:43.914 --> 00:39:46.864 So that is underway, and I think Stacy will talk a little more about that. 324 00:39:47.873 --> 00:39:48.498 Next slide, please. 325 00:39:49.797 --> 00:39:54.414 The FP&R plan, at least the legacy model of the FP&R plan, is a pay-as-you-go plan. 326 00:39:55.487 --> 00:40:00.041 A few decades ago, this kind of a plan was very common for public pensions. 327 00:40:00.777 --> 00:40:04.432 I think today, other than Social Security, there are very few. 328 00:40:05.458 --> 00:40:09.340 Strictly pay-as-you-go plans, public pension plans remaining. 329 00:40:09.467 --> 00:40:19.713 And again, the FPDNR system does— was historically and partially remains pay-as-you-go while the long tail of transitioning to state PERS is completed. 330 00:40:20.596 --> 00:40:40.375 Also really important to note, as was previewed in the City Attorney presentation, FPDNR system is extremely unique among public pensions in that it, despite it being pay-as-you-go, Also has extremely unique one-of-a-kind payment source, which is the dedicated charter-approved property tax levy. 331 00:40:40.519 --> 00:40:48.802 So just acknowledging that that unique element makes it a little difficult to do apples-to-apples comparisons to other pension systems. 332 00:40:49.235 --> 00:40:55.766 Just a— uniquity is a word someone used recently, a uniquity that we have to consider as we think about that. 333 00:40:56.681 --> 00:41:04.612 And happy to dig into this more, but in the interest of time, we'll just go ahead and hand to Deputy Director Jones for the next few slides. 334 00:41:05.208 --> 00:41:05.592 Thanks. 335 00:41:05.849 --> 00:41:06.605 Good afternoon. 336 00:41:06.733 --> 00:41:08.244 Thanks so much for having me today. 337 00:41:08.501 --> 00:41:15.487 For the record, I'm Stacy Jones, Deputy Director/Pension Manager/Finance Manager over at FPDR. 338 00:41:15.568 --> 00:41:17.510 Can we go to the next slide, please, Leslie? 339 00:41:18.313 --> 00:41:24.322 So as Jonas and Franco have both mentioned, the FPDR pension plan was closed at the end of 2006. 340 00:41:24.900 --> 00:41:27.518 So what does that look like in a chronological yeah. 341 00:41:28.416 --> 00:41:35.126 Well, the good thing about operating a closed plan is that you have very predictable and obviously finite time horizon. 342 00:41:35.784 --> 00:41:40.503 And we also have some really clear demographic and financial markers as we close out the plan. 343 00:41:41.322 --> 00:41:51.659 It is a long process, and that is because pension plans are very long-lived things, which is because human beings are long-lived things, which is probably a good thing, or at least I'm sure we all think it is. 344 00:41:52.253 --> 00:41:54.485 So I just want to point out a few things on this. 345 00:41:55.961 --> 00:41:57.340 Number one, where are we now? 346 00:41:57.951 --> 00:42:11.878 Here in 2026, a little over 4/5 of our legacy FPDR plan members are retired, and those remaining active employees are going to retire over the next few years. 347 00:42:12.969 --> 00:42:25.661 Second, just want to point out that the FPDR plan benefit costs and the FPDR tax levy— and I'll talk a bit more about why those are slightly different— are going to peak in the next 5 to 10 years and then start declining. 348 00:42:25.775 --> 00:42:25.951 Thank you. 349 00:42:26.994 --> 00:42:34.637 And then last, just the total plan closeout will likely happen by the 2070s when the last FPDR beneficiaries pass away. 350 00:42:35.023 --> 00:42:43.291 And at that point, then the FPDR levy will only fund PERS contributions for active sworn employees and FPDR disability plan costs. 351 00:42:43.389 --> 00:42:46.391 If we could bump to the next slide. 352 00:42:47.161 --> 00:42:50.902 So let me talk a little bit about how the FPDR fund itself works. 353 00:42:51.192 --> 00:42:51.481 Thank you. 354 00:42:52.159 --> 00:42:56.192 Costs, the tax levy, and projections for both of those over the next few decades. 355 00:42:56.804 --> 00:43:00.869 So I promise I won't read every word on this slide, but let me just point out a few things. 356 00:43:01.769 --> 00:43:15.556 The levy is stress-tested every 2 years by an independent actuarial firm, and that testing shows near certainty that the levy will always be an adequate resource for FPDR costs within that charter cap. 357 00:43:17.186 --> 00:43:28.954 Essentially, you know, the odds of ever needing resources beyond what the FPDR levy can provide to cover FPDR costs is very, very low, like lower than the probability that I'll ever get through my email inbox. 358 00:43:29.130 --> 00:43:30.269 It's never going to happen. 359 00:43:30.992 --> 00:43:41.259 Another thing I just want to point out is that like all permanent levies, the FPDR levy is both a victim and a perpetrator of tax compression, and we can talk more about that later if you like. 360 00:43:42.222 --> 00:43:45.960 I do think this slide is also a good place to mention, although it's not on the slide, Yes. 361 00:43:46.007 --> 00:43:52.137 So I just wanna remind that the total FPDR plan liability is $3.6 billion as of June 30th. 362 00:43:52.635 --> 00:43:56.197 And you will sometimes hear people talk about that as an unfunded liability. 363 00:43:57.304 --> 00:44:09.916 And it is an unfunded liability in an accounting sense because governmental accounting standards require us to book all those future benefit payments all the way out until the very end of the plan as a liability today. 364 00:44:11.023 --> 00:44:19.512 But we cannot— governmental accounting standards prohibit us from booking all those future tax revenues that will pay for those benefits We cannot book those as an asset today. 365 00:44:19.929 --> 00:44:22.623 So in an accounting sense, it is indeed unfunded. 366 00:44:23.137 --> 00:44:27.387 But in a sort of practical cash flow sense, there is no funding gap. 367 00:44:27.789 --> 00:44:35.199 The projected resources from the levy are sufficient at projections to fully offset those future benefit payments. 368 00:44:35.248 --> 00:44:37.525 So just wanted to mention that kind of important point. 369 00:44:38.938 --> 00:44:40.188 Next slide, please. 370 00:44:40.300 --> 00:44:42.065 I'm going to make you look at charts. 371 00:44:42.275 --> 00:44:43.815 Well, they're kind of pretty anyway. 372 00:44:43.862 --> 00:44:44.086 Thank you. 373 00:44:44.969 --> 00:44:49.014 This chart illustrates projected FPDR plan benefit costs. 374 00:44:49.159 --> 00:44:54.393 So this is plan benefit costs through 2063 in nominal dollars. 375 00:44:55.130 --> 00:44:58.148 And this was prepared by an independent actuarial firm. 376 00:44:58.759 --> 00:45:09.722 And so you can see that we're still in like the climbing phase of the plan closeout, although we're almost to the top because we expect those plan expenses to peak in about 10 years. 377 00:45:10.798 --> 00:45:14.443 Unfortunately, there's no quick like gondola ride down the other side of the mountain when we get to the top. 378 00:45:14.490 --> 00:45:14.539 Yeah. 379 00:45:15.597 --> 00:45:28.856 But once all the legacy plan members have retired, then mortality will start to have its impacts, and then we'll have this long continuous decline in expenses throughout the 2040s, 2050s, and 2060s. 380 00:45:29.641 --> 00:45:39.405 So this is just, you know, kind of a good visual of the natural bell curve trajectory involved in closing a pay-as-you-go plan in a dollars and cents sense. 381 00:45:40.206 --> 00:45:44.438 If we weren't starting at 2024, it would really look more like a bell curve if you could see those earlier years. 382 00:45:44.487 --> 00:45:44.599 Thank you. 383 00:45:45.018 --> 00:45:45.585 Ramping up. 384 00:45:46.086 --> 00:45:56.077 I mean, it actually looks a lot like the amortization of an unfunded liability in a prefunded plan, but this is happening over a longer period of time. 385 00:45:58.360 --> 00:45:59.572 Next slide, please. 386 00:46:00.755 --> 00:46:10.052 So this chart shows a 20-year projection of total fund costs, not just plan costs, also prepared by an independent actuarial firm. 387 00:46:11.059 --> 00:46:29.387 So the costs on this slide now include the prefunded PERS contributions for sworn employees hired after 2006 who are in PERS, not in the FPDR plan, as well as the costs you saw on the previous slide for the pay-as-you-go FPDR plan benefits as the plan closes out. 388 00:46:30.188 --> 00:46:38.646 But it shows a similar pattern with total FPDR fund costs peaking in the 2030s and then starting to decline. 389 00:46:38.742 --> 00:46:45.648 The decline is a little more gradual because we've folded in those PERS contributions and those PERS contributions are never going away. 390 00:46:46.050 --> 00:46:47.813 So that's why the decline is a little more gradual. 391 00:46:48.277 --> 00:46:57.795 So I think this slide is a better depiction of the whole transition, and I think it shows best why this moment in the transition is so expensive. 392 00:46:58.773 --> 00:47:22.259 Current taxpayers are intentionally bearing the full or almost full double burden of both funding current pay-as-you-go pension benefits for an entire cohort of legacy retirees and prefunding the sworn pensions of almost an entire cohort of the current active sworn workforce. 393 00:47:22.708 --> 00:47:24.876 So you can kind of see that in this slide. 394 00:47:24.940 --> 00:47:32.965 I mean, of course they're doing that to secure long-term savings for future generations of taxpayers, but that double burden is there right now. 395 00:47:33.045 --> 00:47:38.358 I mean, it's kind of like paying for your kids' college tuition while you're paying off your student loans, if any of you have ever had that experience. 396 00:47:38.840 --> 00:47:42.737 So I think that's a good way to think of it. 397 00:47:42.833 --> 00:47:44.019 Next slide. 398 00:47:44.291 --> 00:47:45.030 Sorry, can I just—. 399 00:47:45.222 --> 00:47:45.286 Yes. 400 00:47:46.264 --> 00:47:54.170 When that thing that you just described with the double payment, what is the time-bound— like, what is the era in which people are paying double? 401 00:47:54.699 --> 00:47:59.670