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.
Unidentified speaker
I'm calling to order this work session of the City Council.
Uh, following in my tradition of trying to defer to subject, uh, areas for the chairs of the appropriate committees, I'm going to be turning the running of this work session over to Councilor Kanal.
Sameer Kanal
Thank you, Council President.
Just pulling up my notes here.
So I'm gonna be kicking this over to Councilors Zimmerman and Greene in a second, so I might need to pause for that part of it.
But thanks everybody for being here today.
We're here because we've recognized that our city's financial situation is in crisis, and it's not solely that we've had one or two bad years, but that there are structural long-term issues that need to be addressed.
This is something that our CFO, Jonas Beery, has been talking about for a while and working on for a while.
Thank you.
I'm thankful to him as well as to councilors who've been working on a workgroup on this for a while to provide recommendations for how to address it and stabilize our city's financial outlook.
So what we're going to hear today is the result of many months of work from many people, including CFO Berry, Councilor Zimmerman, Councilor Green, and some community members.
And I'm sure he'll have a list of everybody who's here.
At this point, I'm supposed to hand it over to Councilor Zimmerman.
I think he's running a minute behind to provide a framing remark.
Eric Zimmerman
Thank you, Councilor Sameer Kanal.
Sameer Kanal
Or 2.
Or 2.
So, okay, um, you, you're, you're— we rang the bell and you were here.
Uh, I was about to pass it over to you, Councilor Zimmerman, to, uh, slowly finishing the sentence, provide some framing remarks.
Eric Zimmerman
Hi, how are we all doing?
Thanks for letting me walk in a couple minutes late.
It was busy.
Um, are we just doing our opening remarks, sir?
Councilor Green?
Sameer Kanal
You're going first and then Jonas and then Councilor Herbold.
Eric Zimmerman
Great.
So, you know, this idea really stemmed from my time as a chair of the Finance Committee in the last iteration and looking at the challenges that we had with both last year's budget and getting ready to craft this year's budget is that we are oftentimes a reactionary government.
And these last several years since 2020 have, I would classify as, A reaction, right?
2020 On has been a reaction, and it's time to be more deliberate.
And I asked Councilor Green his interest, and we both thought it is time to start thinking about how can council work with the administration to see what a stabilization, out of crisis, out of fire at your feet mindset could look like.
And at the same time, our CFO was certainly having those conversations, and these kind of— we married up at the same time.
Councilor Green and I represent very different sides of the ideological spectrum on this council.
We both sat on the Finance Committee, but we're both finance folks, and we felt that we could represent a good forward-facing perspective from our chairs to give the body's work some credibility with our council and to aid wherever we could for our CFO, for the finance team, and then all of our volunteer members To try and deliver something that can land in this council, get thoughtfully discussed, and not maybe from one ideological side or another.
And I want to just give a lot of appreciation to the CFO, Mr. Beery, the entire team that he worked with, because in the recruitment of volunteers and in working with us, the amount of work that's gone into this stabilization project has been It's been a big lift.
And the volunteers that sat this group with us, I am just so deeply appreciative to, coming from a variety of walks of life, a variety of parts of our town, a variety of organizations from which they either have worked, retired from, or currently working, and, and, and the neighborhoods.
And so their, their effort on Friday afternoons for these last few months have been quite welcome, and I'm, I'm happy that Some of them are here and happy to lend my, uh, time to anything that Jonas and his team needs.
Unidentified speaker
So with that, I'd turn it over to my co-chair, Councilor Green.
Uh, thank you so much, Councilor Zimmerman.
I remember when I got the call from you, uh, it was like, I think, coming out of the Christmas recess, and you had gotten advance notice from incoming City Administrator Lee, who first thing you have to do when you walk in the door is like, oh no, we're in a financial crisis.
So I was like, yes, I'll serve, you know, I'll help.
I think this is a great idea.
And really, you know, Jonas, you put in a lot of work personally, but also kind of making sure that this table was set with a range of voices from our community who span the private sector, the labor, you know, our labor, you know, the House of Labor, as it were.
You've got— we had community-based organizations.
And so So really some intentionality there to make sure that this wasn't just a thing that, you know, you and your team cooked up over a weekend or a week.
This wasn't just a thing that Councilor Zimmerman brought forward or I brought forward, but really trying to be what I think is what this new government is supposed to be doing more of, which is sort of reaching into our communities, pulling some good ideas from there, and then sitting as leaders to see how we can shape it and move it forward.
And I agree, this was The effort here was to lend some credibility to the exercise.
And so there's no decision that we have to take right now.
What we're going to do is we're going to see some really, I think, thoughtful set of priorities for us to engage on.
And I encourage my colleagues to keep an open mind and just know that in those Friday workshops, there was a lot of candid discussion and not necessarily agreement, but a shared understanding that if we don't tackle these things together, In some kind of a way that our city will suffer, irrespective of your priorities.
And so I'm really eager to hear from our CFO.
And I would just ask my colleagues, as we work through this over the process, is just know that we're all trying to build something together that provides more resiliency and soundness to our balance sheet, which we owe to Portlanders.
So thank you.
Thank you.
Sameer Kanal
Thanks.
And so just before passing it over to CFO Beery, I did want to note, because this is a big topic and we've been approaching the budget, as has been pointed out, primarily in a reactive way, and this would be reframing that conversation, we asked for a lot of information from CFO Beery.
And so this is a long presentation and that's not his fault.
That's how we set it up.
But I just want to get that on the record first.
We're going to do that presentation.
We'll probably take a break.
And then the idea is that the second half of the conversation is led by this side of the dais.
So just wanted to make sure everybody was aware of that first.
And with that, our city Chief Financial Officer, Jonas Beery.
Unidentified speaker
Great.
Good afternoon, councilors.
Thank you, Councilor Kanal, for that.
And thank you, Councilors Zimmerman and Green, for the tee-up.
I think you'll hear some reinforcing of some of those same points here today.
And yeah, just thank you in advance for listening to what will be an unusually long presentation from me today.
Councilor Kanal, possibly is partially my fault.
I prepared the presentation, but appreciate that acknowledgement.
As we begin, I wanted to start by just a couple of introductory comments.
I believe that development of a comprehensive financial strategy is among the most critical things that we can do and something that we have rarely, if ever, had an opportunity to do under the prior limitations of the prior form of government.
Our financial systems underpin everything we might hope to achieve, and we cannot effectively deliver basic services or meet policy objectives without stable and reliable financial systems and strategies.
Also, I can't begin today's conversation without recognizing and appreciating the city's financial professionals who do this work every single day, often under difficult circumstances and unfair criticism, to quietly keep the city moving forward as best we can.
Thank you to the individuals who enter and verify the accuracy of financial data, who collect incoming revenues, who answer phone calls and assist Portlanders with billing questions, who process payments to employees and vendors, Thank you.
Thank you, Councilor Loretta Smith.
Thank you, Councilor Sameer Kanal.
Thank you to the City Budget Office and to everyone throughout the entire organization who plays a critical role in keeping the city's financial systems up and running.
As you'll hear today and you've heard previewed, it's been a massive lift to get this to this moment.
But I do think the value of the process will be seen in the outcomes as we get there.
When I presented this concept, I think I called it an impossible dream to deliver to you in spring.
I was right.
But it was really important that we be more patient and let the roots grow and foster some less traditional Thank you.
Traditional to the city anyway for input and dialogue.
2 Primary outputs that I'm going to share today.
The first is a set of broad recommendations that were developed specifically by the Financial Stabilization Workgroup.
And then the second output is a set of potential implementation actions identified by myself, by me as Chief Financial Officer, that respond to and flow from the recommendations.
And as the next step in the effort, I look forward to sharing with you today how I believe we can continue moving to improve our financial condition and meet a wide range of council administrative and community objectives via a citywide action plan and financial strategy.
As the ultimate decision makers and the direct connection to Portlanders, it's essential that City Council understand and support the city's financial strategy.
So in addition to receiving your feedback and suggestions, I hope that the information shared today will offer you and offer Portlanders some increased confidence that we have the collective ability to navigate the city back to a Thank you.
So just to run a show quickly as we move to the next slide.
First, I'll provide a little grounding in the project itself, the workgroup, and the process.
Second, I'll give you a summary of the recommendations developed by the workgroup and also note that that information was provided to your inboxes on Monday.
It's included, I believe, as an attachment to today's agenda item, and the recommendation report and this presentation are also posted online at portland.gov/hello/financials.
Financial stabilization.
And we intend to use that page to update information as that becomes relevant as this work moves forward.
And then the third piece of the presentation today is I've used the workgroup recommendations to translate into 44 potential implementation actions.
I don't expect we're going to have space to review every single one in detail, but these actions and the action plan that comes out of them are where I recommend focusing most of our attention today.
And then lastly, of course, I want to hear from you so we can refine approaches Thank you.
Again, it'll be a lot of me speaking, certainly more than I'd prefer, but thank you ahead of time for giving that space.
I think getting through the content will maximize the value of the time for questions and discussion.
I'm going to get through this as rapidly as possible.
I don't want to shortcut too much because there's a lot of high-value content.
I think the background context is really important, but each slide really here is going to be a building block that will make the action plan at the end, I think, more clear and understandable.
All right, so just a reminder of the big picture context.
Why are we here?
As was previewed, we've come from a place of kind of being a legacy reactive organization, having repeated budget challenges, having repeated mid-year budget adjustments.
And so really started this project to think more strategically over the long term, not just budget to budget, aligned to expectations of 2024 charter reform.
While there are signs of improvement, sort of some green shoots starting to appear in the data and financial condition, I do anticipate that we'll still be in a financial crisis mode for fiscal '27-'28 budget development, but with defined action today, we'll be able to And hopefully collective intention, I do believe we can move, start to move forward towards stabilization.
All right, before we move into the details, just a little bit of background and context on the workgroup and the recommendations, which is what I'll present to you first.
And in particular, I wanted to preview what the workgroup is and what the recommendations are and what it is not.
The work here of the workgroup is acknowledgement of a need to think differently.
As mentioned, it was convened by the co-chairs, myself and Councilors Green and Zimmerman, but the conversation largely driven by the workgroup.
It was an evolutionary process.
It's intended to be a framework and a guiding document and a starting point for the conversation, which I think we'll see it is.
What this work was not, it's not indicative of unanimous agreement.
As was mentioned, there was lots of disagreement in the room and acknowledgment that that was okay.
It's not intended to be a single path forward.
It's not a prioritized list.
It's not executive recommendations for action or implementation, although those will be the second part of the presentation today.
And certainly it's not a complete or final answer.
So just the background on a little bit of how we structured this.
The highlighted box in the middle is the workgroup.
That was the primary forum where this work occurred.
And the participants, as was mentioned, were really an amazing group of Portlanders.
Who committed to spend over 20 hours together on multiple Friday afternoons doing this work.
And I'm deeply, deeply grateful to every one of those individuals for their expertise, for the honesty in the room, and their shared passion for making Portland a better place.
As was previously mentioned by Councilor Green, I believe, the conversations were robust, were deep, and were very engaging.
While they were Friday afternoons, I always walked away from every meeting I also do want to acknowledge Councilors Green and Zimmerman, who agreed to participate as co-leads and co-facilitators.
I do— I did experience and believe that their direct participation, their direct support, having that input directly from the legislative branch was extremely valuable to the conversation, to the workgroup members, and I'm personally thankful to Thank you.
Thank you both for your ongoing commitment to this effort.
In addition to the workgroup meetings, which was the primary forum, we also facilitated space to collect input from some other voices to bring as much input to inform the conversations as we could, and then also to inform the eventual action plans.
Those additional input points were engagement with an interagency support team.
We met twice with that team that included financial representation from our governmental partners at the county, Metro, Port of Portland, Portland Public Schools, and TriMet.
We'll talk a little bit about maybe some of the outcome of that, but really valuable input coming in from there.
Also met twice with a group of city labor leaders and separately met twice with the citywide equity practitioners group, including an additional smaller focus group of those members, and pursued some additional kind of one-on-one dialogue with community members to supplement that.
And I expect you'll see input from all of those groups incorporated here in the recommendations and, and in the As I mentioned, this was sort of evolutionary.
We operated this process from a place of really allowing the workgroup to drive the direction.
This wasn't the traditional exercise of saying, here's some administrative recommendations and give us a thumbs up or thumbs down.
The expectations of the workgroup evolved as the discussion progressed, which was often uncomfortable and sometimes left us a little bit unclear about where we might end up.
But I think we have ended up at a really, really Good spot.
I think this was an approach that was both unique but also really healthy.
And again, kind of got us to a good place here of being open about receiving that feedback and then being able to translate that into actions.
And for awareness and recognition, I wanted to share here the specific wonderful humans who committed their time to the workgroup and the recommendations.
I won't go through every name, but you can see them on the screen.
And if you see or know these people, please join me Thank you.
I wanted to just flash a couple slides up here quickly about the flow of work and the kind of general methodology to get to the recommendations.
I won't read the details here.
You can see them.
But I did feel it was important to kind of flash this on just to provide some context and give a flavor for how things were generally discussed, the types of topics that came up during those 7 workgroup meetings.
I also think it's just really valuable to note that the workgroup pretty quickly identified that financial instability is maybe more of a systems issue and not just a math problem.
And so you'll see that perspective reflected throughout here.
And then akin to the prior slide, this just provides a different kind of lens on the flow of that conversation and the key topics that were addressed at each of those 7 workgroup meetings.
Thank you.
All right, so moving on to the second section of the presentation, I'm going to share information about the recommendations that came out of the workgroup effort.
And again, these are reflected in a 15 or so page report that's, that's also available.
A few notes as we begin.
The recommendation report was largely drafted by Next Strategies, who played a really important role in helping manage the meetings, helping guide the discussion, Although often letting the room drive the discussion, and then independently synthesizing the input into suggestions back to the workgroup and refinement into the final report.
These are not recommendations from the CFO directly.
They're not recommendations from the city administration, although we are indeed largely, almost completely in alignment.
And I'll highlight a few examples as we go through that clearly illuminate where I think the workgroup added deep, deep value and led Thank you.
And I appreciate the work that the workgroup did in coming up with these recommendations.
And I think it's really important to recognize that the workgroup was able to come up with a lot of good suggestions that likely maybe wouldn't have been brought forward if not for receiving their direction.
As previously mentioned, these recommendations aren't prioritized.
Something showing up first or second in the document doesn't suggest it has any more or less importance than something at the end of the report.
And again, to just lean into, while there was general agreement in the context of the recommendation report, nothing in the recommendation should be interpreted as indicating consensus.
There was absolutely disagreement and differences of perspective and opinion, which the workgroup I do think there's a few common themes that show up throughout and will be reflected in the actions as well.
Those are— the way I would group those is around improving financial literacy, both citywide and within the community, the criticality of data and communications in support of building public trust, maintaining not just an operational lens as maybe we're used to, but really leaning into a community outcome focus.
I think that's a great point.
Engaging with community and frontline workers, and value in regional coordination.
So let's move to the recommendations.
At the highest level, this is how those recommendations have been bucketed, and I'll go through each of these individual lines a little more closely, but wanted to kind of bookmark this page as we'll reference back to some of these categories as we go through the recommendations and into the action items.
And then I'll also just preview that many of these will lead to, connect to actions that are already in progress.
And so we'll talk about that when we get to that point as well.
I think more than anything, these recommendations are really helpful framing of the problems and desired outcomes so we can continue to putting actions in motion.
And I believe you'll see that, I think you'll see these recommendations respected and reflected in the proposed Additionally, excuse me, you can already see value from the workgroup input in at least a couple of items at this high level.
For example, I would venture an educated guess that biennial budgeting and regional coordination probably wouldn't have hit the top 10 in the conversation if this would've been something that I personally brought forward.
And so I just think those are kind of obvious examples.
We'll go a little deeper here, but Thank you.
So these are just some of the obvious examples of things that these workgroup participants were able to elevate in importance to explore.
And so again, I want to highlight that and elevate that.
Before we dig into the details, I just want to also give a last reminder that I am not— with regard to the workgroup recommendations, I'm not editorializing or modifying the information.
I'm simply reporting out on the content in the report to frame up the more specific potential actions that will flow from So let's go.
The first recommendation is around— within the bucket of financial strategy and discipline— is around developing a more stable, sufficient, and equitable revenue strategy.
Much of the energy around this area related to looking for durable and less volatile revenue streams, but also expanding additional flexibility within additional— within existing revenue Thank you.
There is recognition that for any revenue the city collects, somebody down the line ultimately has to provide that revenue, whether directly or indirectly.
There is robust conversation about avoiding regressive impacts and being mindful of where changes in revenue sources may have impacts that are disproportionate to the resource availability of payers, including pass-through impacts.
I'd also note that the workgroup's recognition— I'd also note the workgroup's recognition that the city has a legacy and indeed a habit that we're still trying to break of more siloed thinking around Where one revenue stream may change in isolation without adequately connecting to the impacts of other costs or community income realities.
The second recommendation area is to reorient financial policies toward long-term sustainability.
Many of the city's financial policies are in need of a refresh to align to post-charter change expectations and to be more responsive to recent changes in economic conditions.
Thank you.
In particular, the group identified a need to look with fresh eyes on policies around reserves, use of one-time resources, transfers, set-asides, and fund balances.
The workgroup also recommended enhancing policies that may be open for variable interpretation and those that result in frequent exceptions or noncompliance.
In addition to policy development itself, it was suggested that the city explore ways to be more accountable for ensuring awareness that these policies are in place.
Thank you.
And again, I'm— a lot more detail on the slide than I'm going through here quickly, so we can come back if there's questions about this.
Next section was related to biennial budgeting.
The recommendation here was to adopt biennial budgeting.
And while there was some disagreement about the details and potential pros and cons that might exist within a pathway towards biennial budgeting, there were strong opinions that it was important to adopt biennial budgeting.
Eric Zimmerman
Thank you.
Unidentified speaker
That shifting to a 2-year cycle could avoid surprises, increase predictability, and strengthen financial planning and coordination.
Also recognition that that's a heavy lift.
And so it's probably not gonna be a flip a switch kind of a moment.
And again, we'll see that reflected in the actions.
In addition, the workgroup acknowledged here the need to increase involvement of frontline workers, improve equity analysis and financial analysis into the budget process, All of which frankly are things we should do regardless of whether we shift to a biennial cycle or not.
The second primary bucket here, decision support and governance.
The first recommendation within that bucket is to define core services and establish service expectations.
This recommendation was rooted in the general idea that it's difficult for the public and for city decision makers to decide and communicate budget values without clear understanding of service priorities Yes.
The workgroup identified some key considerations such as legal requirements, i.e., what are we mandated to perform by charter or statute?
What are the city's priorities or other formal commitments?
What are the actual needs of Portlanders?
And what role can non-city partners, i.e., other local governments, nonprofits, or private partners play in supporting service delivery?
In existing— in addition to evaluating existing programs and Yes.
Suggestions in this area were around establishing formal service level expectations and performance measures and clearly communicating the commitments and trade-offs of the choices the city makes with regard to service delivery.
The next recommendation is to ensure citywide financial data reliability and visibility, which centered on ensuring that information about financial realities is adequately assessed and communicated.
Important considerations here were to improve inputs and outputs related to equity impacts and potential differences of impacts at a more micro-localized or neighborhood level.
More specific suggestions related to formalizing a single point of information for financial truth, improving financial and revenue impact assessments, and emphasizing clear public communications that balance appropriate detail with accessibility and ease of understanding.
And the third recommendation within decision support and governance The primary objective of this recommendation is to ensure councilors and council offices have adequate access to information and also have shared understanding of how to use and interpret that information.
The group suggested that perhaps there's a model where council offices can more intentionally share analytical resources rather than dividing those resources among multiple offices.
Additionally, this area again emphasized the potential value of having district-level financial analysis and reporting.
Analysis Thank you.
Along the citywide impact assessment.
The 3rd general issue area is regional coordination and advocacy.
The 2 recommendations within this area were around the, uh, 3 general concepts.
One is that there can be confusion and misinformation about which government entity provides which service.
2 Is that when governments are not in coordination and cooperation, there can be overlap or gaps in And 3 is that regardless of the questions of service, regional decision-making and advocacy could be strengthened by improved intentional and strategic collaboration.
The first recommendation in this 3rd category around regional coordination is to coordinate regional service delivery and fiscal strategy.
And you can see listed on the slide the specific area— the areas the workgroup recommends for collaboration, and noting also the recommendation that the city take a leadership role in organizing those efforts.
The workgroup also called out the importance of involving community in the conversation, as well as looking to collectively streamline opportunities for efficient coordination between community partners and intergovernmental partners.
And then the second flavor of recommendation here is to lead advocacy for state fiscal reform, specifically around revenues.
This recommendation recognizes that many of the challenges that limit our ability to grow revenue streams or increase increased flexibility of revenue streams is not isolated to the city and similarly impacts regional partners.
In particular, the workgroup discussed the statewide impacts of property tax limitations, Measures 5 and 50, and other state fiscal policies that impact the city's finances either directly or indirectly.
And the final area and recommendation was to reduce administrative burden and improve operational effectiveness.
This area includes a bit more of the technical recommendations, including review of rules and systems for efficiency improvements, reviewing span of control, assessing contracts and contractors, and involving frontline workers, all of which are things that are currently being prioritized, as we'll see in the actions.
So as we wrap up the workgroup recommendations, I wanted to also note that the workgroup did also identify some really important Thank you.
And so these have been considered.
I think you'll see these questions reflected in the upcoming implementation actions and other follow-up items.
But certainly these are not the final answers to the questions, but wanted to be transparent about the questions that were kind of left here in the workgroup report.
And then lastly, there were a handful of implementation considerations.
And so again, these are These are things that I've attempted to start to seed and reflect in the actions.
But just note there's a whole page of important questions identified for considerations in the report.
And so I wanted to highlight that.
All right.
So I think I'm rocking and rolling through this and staying ahead of schedule.
So this will be wonderful.
I'm going to take a second to drink some water.
Thank you.
All right, so moving to the part of the presentation that I think will be of greatest interest, which is moving from the recommendations to specific implementation actions.
What I'll present over the next 15 or so slides are potential actions, again, from my perspective as Chief Financial Officer, and I've attempted to translate these directly from the recommendations as written from the broader workgroup conversations and from input that I received from outside the workgroup, including intergovernmental partners, labor equity partners, and others.
I'll also have a couple slides here that are actions that I think are of critical importance, but that were maybe not as directly reflected in the workgroup report.
And so we want to fold those in as well.
I certainly expect there will be other perspectives that supplement or modify these suggestions, including hearing from and CFO Beery, are you going to give us the color code on this one?
I will give you a color code.
Yep.
Thank you for, thank you for that.
You're, um, you're 3 sentences ahead of me.
Um, thank you, Councilor.
Um, so for each of the following slides, um, uh, just to set up, uh, what, what we're kind of going to do here is, um, I've attempted to identify within each of the recommendation buckets, uh, for each action, a potential timeline, who I think will be best to lead the effort, I also want to just acknowledge, um, it's sort of assumed that— well, it is assumed that council has the ultimate decision-making authority, and it's assumed that folks like the city administrator, myself as CFO, communications support, community engagement, equity support, those will overlay all or nearly all of the items.
But we're really just looking to call out here there's specific connectivity or direct participation in an action is likely to be needed.
I also say these actions have been developed with an intention of being sort of universally good, by which I mean that they're actions that I believe are good and valuable for council, for the nearly 8,000 city employees on the operational and administrative side from top to bottom, and ultimately for the Portlanders that we all to your question, Councilor, I've attempted to add some colored dots to indicate kind of how implementable I think an item may be.
These are not to indicate a thumbs up or a thumbs down judgment, but really more as a guidepost to help inform a potential implementation strategy.
So as we go through these, a green dot reflects an action that to me seems fairly clear and ready to go.
A yellow dot or Yes.
So the green dots are areas where there's some outstanding questions, some expected challenges, or we need to do a little bit more due diligence.
Orange dots are things that I think will be very challenging, and so we'll see a few of those, not many, but a few.
And then there's a few that are kind of clear or blank, and those are intended to signify areas where I think just need some additional specific direction from council or others in order to really identify a course of action and some of the details around timeline and responsibility.
So again, I'll walk through each set of actions within a recommendation area, and then we'll come back after that.
And I want to summarize all of that into a more strategic fashion with items suggested for immediate action, future action, outstanding questions.
And again, as we did with recommendations, don't expect to go through every single item in great detail.
You know, we are shortcutting for the presentation.
They only have A sentence or two, maybe a phrase.
And so there's a lot more probably under the hood that we can unpack, but want to get through as quickly as we can here in the first half of this meeting.
All right, item 1.
So this is within the first bucket, develop a more stable, sufficient, and equitable revenue strategy.
The first item here is provide education of financial facts and regular council updates.
Eric Zimmerman
Thank you.
Unidentified speaker
This is largely in development and under current work in progress.
For example, we're currently enhancing information gathering and our ability to report out on contingencies, reserves, and fund balances.
And we've recently had a separate work session to discuss continued major improvements to budget processes.
But it would be valuable for sure to have feedback from council on preferred formats, forums, cadence, et cetera, if we do wish to formalize Aye.
Item 2 is to prepare a report regarding current revenue sources.
Some amount of updated revenue reporting is already in progress.
We're improving our revenue forecast communications and other information improvements in the context of budget planning, work sessions, budget development, et cetera.
But this specific action would be to produce a formal report with a standard and consistent set of measures and trade-off considerations Yes.
That assesses major current city revenue streams, including things like fees and charges within CEDSA related to economic development, other fees or funds that sometimes might fly a bit underneath— under the radar.
Item 3 would take that a step further to look at prospective revenue streams.
And though I'd note our ability to execute that action will largely depend on working with Council Council to identify which revenue streams should be included in that assessment.
So this is on a somewhat different timeline with the current revenue assessment coming first and then the prospective revenue report coming somewhat later, but hopefully using a consistent format and et cetera.
And then the last potential action here is a little less clear as to how to proceed, ergo the clear dot.
But this action could be to develop an actual policy or formal guidance document that frames the Yes.
All right.
So the idea is to align the city's desired structure characteristics and utilization goals around city revenue streams.
It's potentially a pretty thorny path.
I'm sure that'll be a robust discussion, but one that perhaps could be pursued.
All right, moving quickly along.
The second set of actions is around financial policies.
Item 1 is to improve education of and compliance with current financial policies and So we begin here with another education-focused item, which is really to ensure that stakeholders across the organization have greater awareness and clearer understanding of existing financial policies.
Frankly, over the last few years, as we've been scrambling to just maintain basic functionality and we've been experiencing significant staff turnover, we've lost some of that historical understanding of the whats and wherefores of financial policies.
Thank you.
In addition to elevating education about the policies, we should consider what enhancements may be viable to improve expectations and accountability for actually following those policies.
Then items 2, 3, and 5, the green dots here on this page, are all pretty closely related but divided up to differentiate a few important details.
I expect that items 2 and 3, which are updating financial policies and creating potential new policies, Yes.
Would travel together, and I would hope to bring back that first package of policy change in early 2027 in advance of next year's budget conversations.
Examples of critical updates here might include updates to things like FIN 2.03 around financial planning, 2.04 around budget process, 2.07 around reserve funds, and things like cleaning up legacy references to OMF, the old Office of Management and Finance, or other inconsistencies or language that's inconsistent with our current alignment.
Examples of new policies might include things like creating new fund-specific reserves, might include forecasting-specific policy details around fund management responsibilities or other high-priority items we might identify.
And then the second phase, item 5, the second phase of those policy updates would include things that are gonna be much more complicated to pin down.
That might include things like pulling asset management out into its own policy item, might include things like cost allocation and general fund overhead or other items that require a lot more dialogue than we expect to have space for over the next few months.
Excuse me.
And then the fourth item is to, kind of going outta order here on this one, but fourth item is to perform a comprehensive evaluation of one-time funding Yes.
Including programs and pilots.
And really the goal would be to assist with clarity of information and decision-making about what might continue as one-time funded versus looking to shift to something that's not one-time funded, ongoing, or something that should be differently prioritized.
And again, hoping to execute that before, in alignment with budget conversations.
The next one under financial strategy and discipline The next one aligns to the recommendation around biennial budgeting.
And I will editorialize a little here.
I have some personal skepticism about whether biennial budgeting can result in meaningful improvement to fundamental stabilization of the city.
But there is certainly strong passion about exploring the possibility, and these actions respect and acknowledge that suggestion.
And I certainly don't disagree with, with doing the analysis.
Thank you.
So the first 2 recommendations relate to biennial budgeting specifically.
The initial action would be to undertake a feasibility and readiness assessment, which would examine things like potential charter and legal provisions, readiness of the city's current technology and human systems to support that switch, council and public engagement expectations around a 2-year timeline, and other timeline and operational considerations.
Thank you.
Thank you.
I think here we see the first appearance of an orange dot.
It's not red because it's not impossible, but orange in prioritizing and implementing biennial budgeting.
Obviously, any future decision would need to be based upon that readiness assessment.
And so that would be of somewhat uncertain timing until we can do that.
Yeah.
And so that's why that's identified as an orange dot here.
And then the last item on this slide is improving organizational structure and alignment for forecasting.
This is on the front edge of being in motion, and it's something we can and probably should do.
This work would likely need to occur over multiple years so we can define appropriate practices and expectations, establish communication, and identify pathways for communicating and sharing information That align to ongoing changes in the budget process.
So I think you'll see some of this improvement happening in this year's budget cycle, including in the upcoming forecast in December.
But a little bit in progress, but gonna be a long tail to get that work done.
All right, moving to actions related to the second category of recommendations around decision support and government.
Kind of a mishmash of different actions here.
The first is to use strategic planning to define core services.
And in this context, The term core services is meant to refer to what are the essential services expected by Portlanders.
So thinking about things like transportation, utilities, public safety, et cetera.
I'll fill in the blanks.
You can likely already see a little bit of the connectivity with the recommendations here and the upcoming recommendations and upcoming actions related to regional coordination.
This is a potential difficult and heavy lift, but I do believe Yes.
And is likely to be aligned with the responsibilities of the newly created strategy and change management officer within the City Administrator's office.
Second item is to establish service level expectations and to develop performance measures.
And this is another one of those things that's always on the forefront of action and is somewhat in early, early motion via the emergence of that strategy Yes.
The action specifically here is intended to be more than just sitting in a room and coming up with measures, but actually doing robust work to identify the right measures and institutionalizing the use of those measures in financial decision-making.
And the last one here, again, is already in progress, which is to improve communication of current service commitments and trade-offs, especially if and when funding or prioritization of those commitments should change.
The details here would include taking a consistent citywide approach involving frontline workers in the assessment of those service change impacts and developing more dependable protocols for reporting out, including enhanced use of dashboard-type information.
All right, next item around data, data reliability and visibility.
The first item in this category, assess and identify community data resources, was really rooted in the acknowledgment Uh, from the workgroup that there are lots of good sources of data that exist in the community, in the world, but the city has a tendency to navigate largely based upon data that's produced by or sanctioned specifically by the city.
So the initial action here is to perform an inventory assessment of the data that currently exists and develop expectations to reasonably incorporate that data into the And again, I think this is another great example that really emphasizes the value of the workgroup's input.
One of the things that was really important to me to acknowledge at the front edge of this work was that we typically don't know what we don't know.
And so highlighting these additional data resources was really important to help bridge that knowledge gap.
The second item here is one that I do want to highlight for a second, and that's improving financial impact assessments that accompany council Council legislation and other budget-related decision-making.
This is an example of a handful of improvements that I think is of great interest to many and would be a very, very high value.
But development of the right inputs and timeline expectations, assignment of responsibility for doing the assessments, that won't occur at the flip of a switch.
If the goal was to implement the change as soon as possible, this would likely be the only action that we would be able to undertake in the near term.
Thank you.
Given bandwidth and other priorities.
So the immediate action that I think we can take forward over the next 6 months or so, hopefully less, but is to convene a workgroup, a small workgroup to assess the needs, to consider the right information, responsibilities, and process, and then develop an executable timeline and strategy so that we can confidently and consistently put those improvements into practice as soon as practical during calendar 2027.
Thank you.
Second.
Second.
Second.
Second.
Motion passes 7-0.
Third item on this slide, to identify and establish a primary access point for financial information, was also something called out specifically by the workgroup.
I certainly have an opinion about where the most appropriate access point for financial information should reside, but I would look first to council for your thoughts and desired outcomes before recommending a specific path forward.
And the last item under data reliability and visibility is to improve financial reporting systems and communications.
Second.
The suggested action here is to assemble a team to identify system gaps and develop recommendations.
Given the various improvement and realignment efforts currently underway, I think this would optimally begin later in fiscal '26-'27 so we can proceed with this action with the benefit of understanding how the current improvements have shaken out.
This work would also functionally need to likely begin after The bulk of next year's budget development work is completed in spring so we can prioritize getting that work done, including the budget process improvements that we'd like to prioritize.
Next slide.
Thank you.
2 Potential— so this is under the Strengthen Council's Decision-Making Support.
2 Potential actions suggested here.
The first is already in progress, which is offering resources, enhanced resources and training In particular, the City Budget Office is already scheduling opportunities for drop-in conversations, and we're always willing to be invited onto council or committee agendas to provide financial or budget information as council pleases.
Additionally, the City Administrator's Office is improving citywide protocols and expectations in response to the prior budget note about information access.
The second item is another that will need some input and direction from council before we can move to a vote.
Eric Zimmerman
Councilmember Herbold.
Unidentified speaker
The workgroup identified value in having dedicated and consistent analytical access for council, much like we've modeled over the past 2 years with the partial-time appointment of a kind of concierge CBO analyst during the heat of budget cycle.
But there's multiple approaches that we could take here, all of which will have costs and trade-offs.
And so we stand ready to support any further council conversation around All right.
Moving to recommendation area 3.
Many of the action items on this and the next slide are largely outside of the financial realm directly, but certainly connect to broader service prioritization and clarity of decision-making, including the prior action around defining core city services.
However, the first 2 items here are directly financial related.
Thank you.
Thank you.
The first item came directly out of the initial meeting of the aforementioned interagency support team.
One of the key takeaways from assembling that room was that participants immediately agreed that there was high value in bringing together regional financial leadership to talk about shared challenges, operational practices, and communication alignment.
The workgroup also agreed this was important to a healthy regional financial ecosystem.
So this one's kind of a no-brainer.
I anticipate looking to set up a regular cadence, potentially quarterly, as soon as feasible, so we can reap the benefits of those conversations.
Second item here is to put some additional coordination and consistency to development of intergovernmental agreements, or IGAs, including developing enhanced training on what makes a good IGA, which would be one that balances durability and flexibility And potentially developing a specific policy to guide IGA development.
The last 2 actions here are valid future actions, but really are dependent on completion of our in-house work to identify our own service priorities and expectations, as previously described under the section related to Recommendation 2A.
And then the second bucket around regional coordination and advocacy The actions here are a little more nebulous, at least to me, and lean heavily on the Office of Government Relations, or OGR, as referenced on the slide.
The general intent of these actions is twofold.
First is to improve our ability to respond to new or proposed state legislation that has material financial impact to the city.
And the second is to undertake a coordinated effort to drive and advocate for legislative reforms to address issues that either incur material costs to the city Yes.
While the core of these actions has been driven by workgroup recommendations, the details here have been identified in collaboration with Office of Government Relations, and thank you, team, for that.
The last 2 items, which are developing a shared regional agenda and advancing reform priorities, are obviously going to be very difficult tasks, indicated here by the orange They'll need to undergo significant dialogue among City Council, with our regional partners, and of course with partners around the state and in the Capitol.
And then the last slide tied to the workgroup recommendations includes 3 actions that are related to administration and operations, all of which are currently in motion.
The first is to review and refresh procurement rules and practices, including reviewing and communicating out The second is to review management span of control specifically and administrative process more broadly, and this work is also already in progress.
The third is to actively involve frontline workers in identifying and implementing efficiencies and to formalize the protocols and expectations for doing so.
Creating space for these conversations is also a current work in progress, and I, I hope and expect to see that carry forward.
Thank you.
So then the next couple slides here related to implementation actions include an inventory of some things that I believe are of really high importance but were maybe less directly called out via the workgroup effort.
So the first slide here is an inventory of key actions that are either near-term initiatives or things that are important to call out as already in progress.
The first 3 here have had or are currently having Thank you.
We are having robust discussion in other forums.
Asset management strategy is being discussed at the Public Works Committee, and I believe at an upcoming session.
I'm not sure if it's going to be the whole or work session.
Budget process improvements received a full work session a couple of weeks ago, so I won't use our time to reiterate those conversations, but we obviously do anticipate progress on those fronts.
One area that's under discussion, but for sure we'll need more dialogue and direction, Yes.
Is determining a new pathway for budget advisory committees.
I think we're getting close to completing the work on the broader work on advisory body alignment, but look forward to working with our community engagement partners and of course the City Budget Office to put a pin in that plan so we can move forward with reestablishing some form of budget advisory committees.
The 4th item here is to develop metrics that we can use to track progress and hopefully eventually Yes.
While that is certainly doable, I do wonder right now in the crisis response mode if that's sort of something that should take priority over other actions.
But if we did want to prioritize that, I think it is doable and likely important at some point.
5Th item here is maybe a bit of a heavier lift, and that's to refresh a citywide economic development strategy.
And my understanding is that Prosper Portland is aligned and ready to do that work within their current work plan expectations.
And then the 6th item here, assessment of FPDR funding, fire and police disability and retirement funding, is one that was recently discussed at Committee of the Whole.
It's marked here as an open color item, largely just given the outstanding question regarding identifying a potential funding source to support any kind of alternative funding option.
But as discussed at that prior committee meeting, happy to help carry that forward however council chooses.
Thank you.
Aye.
And then the last item here on kind of other related actions.
These are a handful of things that I'm suggesting should be on the radar for bringing in the conversation maybe next fiscal year and beyond.
Many of these are dependent on progress that we make on some of the earlier mentioned or near-term actions.
Also just note that most, maybe all of these actions have also been on the back burner of previous priority lists.
So I'm hopeful that this conversation can help bring them back to the forefront.
One action I'll highlight here is the second item, which is to assess and reconsider general fund overhead and internal service funding models.
This has been a recent and recurrent topic of interest, and it's been on my personal priority list since the day I walked into this job almost 3 years ago.
I expect it will happen, but it's a very difficult and complicated task.
Thank you.
Yes.
I recognize that this is a difficult task, particularly in an organization that's undergoing such significant and frequent change.
I'm optimistic that the organizational changes and process improvements currently in motion will give wind to this eventual reassessment, but also recognize it would be overwhelming at this moment to begin this discussion given those moving parts.
On a positive note, we have recently stood up an improved, more coordinated process Yes.
For information sharing and decision-making around internal services in the context of budget development.
So in addition to drawing attention to the longer-term need, we are in fact starting to put the scaffolding in place to build into this work in the future.
Second item I'd highlight here is the third one, which is to refine and realign citywide financial services.
And while some city services have undergone, currently undergoing realignments, Yes.
Financial services generally remain dispersed throughout the organization.
We certainly do not need to reduce our capacity to deliver these services, but I do think there's likely value in streamlining to improve consistency and efficiency.
I don't think that transition conversation can occur within the next year given the massive volume of actions, change, and basic work requirements, but I do think it would be valuable to pick that discussion up for potential adjustment in the future.
And the last item I'd highlight on this page is the final action regarding centralizing revenue collection.
This item stems specifically from a 2022 recommendation from the city auditor.
And I do agree that there's value in evolving to a centralized citywide revenue collection approach.
This would be a generationally difficult transition.
And so I'm in favor of the ambition.
Thank you.
But this, uh, we'll just acknowledge this would be massively, at least temporarily, disruptive to the organization, to the people doing that work, and to our revenue collection systems, and potentially to the people who pay revenue to the city.
Not to say it shouldn't be done.
I wanted to include it because I do think it's important to keep on the radar.
I just would recommend that once some of our foundational actions can be completed and we're more clearly in a place of stabilization, that's when I would advocate that we pick up All right.
So that's a ton of potential actions.
What do we do with all that?
How do we try to move from that inventory of action to something that feels like an actual strategic financial plan?
So here's what I propose.
The next few and final slides present a proposal about how I think we might do that.
This sort of introductory slide displays the big picture phases of what that action plan might look And then as I wrap up the presentation, I'll move into a little more detail for each of these phases.
The first step would be to acknowledge that there's a significant amount of work that's already occurring and continue to prioritize that work that's already underway.
Recalling back to the very earliest slide about the current moment of financial crisis, the second phase of action, which would occur alongside the work we're already doing, would focus on responding to that crisis with the highest value, immediately implementable The 3rd phase, if we want to be serious about stabilization, is that we'll need to start putting actions in motion now to start to get there.
So these are stabilizing intention actions that I would expect we begin in '26-'27.
4Th phase would be looking towards future and starting to bring forward those actions into the queue when possible.
And then lastly, just identified some number of questions that still need further explanation.
So that's how I've organized it.
Thank you.
Thank you.
So I've organized the actions on the next few slides to move onward to something that feels like an action plan or strategy.
And again, this is just repeating the actions I just went very quickly through, but realigning them in maybe a little bit more of an implementation plan order.
All right.
So again, good news is we're already doing lots of important things to respond to the financial crisis, to think ahead towards stabilization, and to be responsive to known priorities and requests for improvement.
The many actions that are already in motion are listed on this slide and the next slide, and they're placed in order that they showed up in the prior actions inventory.
While all these are listed as in progress, they may be in different states of progress, some on the early end and some nearly complete.
And some of these actions, such as those related to education, training, and communication, will never really end and require ongoing effort and attention.
The actions currently in progress Yes.
Thank you.
Thank you.
Thank you.
So the actions currently in progress are education of financial facts and regular council updates, improve education and compliance with current financial policy and practices, improve organizational structure and alignment for forecasting, improve communication of service commitments and trade-offs, and provide training and improve information access to council and staff.
And then page 2 continues that list of actions currently in progress, and those include review procurement-related rules and practices, Yes.
Second.
Second.
Motion passes.
Review span of control and administrative processes.
Involve frontline workers in efficiency and coordination efforts.
Develop a coordinated asset management strategy.
Develop community engagement and advisory body direction.
And implement budget development process improvements.
Because primary responsibility for the actions in progress is somewhat dispersed throughout the organization, I'm hopeful that we can continue to rapidly demonstrate Thank you.
So the first phase of new, so to speak, actions that I would recommend prioritizing are the 8 or 9 listed here.
These are actions that I believe can and should be prioritized over the next 9 months through summer 2020 to focus on continued crisis response.
These actions are organized on this slide by the estimated timeframe for completion.
The one concern that I'll note here is you can see a common thread regarding the proposed Lead.
And I'm not complaining.
I'm obviously committed to doing this work and putting it forward to you here today.
But I do also want to be realistic and transparent about how much is reasonable to take on, especially given other things in motion that will require attention.
That being said, I do think that the first 4 items are among the highest value immediate exercises, and I do intend to carry them forward as rapidly as possible.
Those 4 things?
Yes.
The next 3 things are to bring forward the Phase 1 policy updates and high-priority new financial policies, to convene a regional financial coordination forum, and to develop a plan to improve financial impact assessments.
And as previously mentioned, Prosper Portland should be aligned to deliver a refreshed economic development strategy.
The last 4 items on this page are also of high importance and would be the next in the queue.
At least that's my recommendation.
Next in the queue for action.
Depending on how much we can accelerate and achieve the items in progress from the prior slides and the top 4 or 5 items here on this slide.
And then the next list of actions are things that I believe support movement towards longer-term stabilization, but also have a high value to prioritize and begin in motion during the current fiscal year '26-'27.
Should be no shock that these are all yellow dot items.
They typically will have a little bit more complexity Will certainly require more robust coordination and likely have longer timelines to do the work, and/or they may have some mild outstanding scope questions.
Mostly these items are about building the bones for longer-term improvements, which include evaluating options, identifying new resources, processes, opportunities, et cetera.
Future actions.
So this is kind of the inventory of capturing the dozen or so items that I think should be on the radar for next fiscal year, for '27-'28.
That's only 9 months away.
And these are certainly still relevant to the city's financial stabilization effort, but perhaps, at least in my assessment, have a little bit lower immediate value, have long timelines, have very high complexity, or require other foundational work to be completed before progress can be made.
Yes.
And so I'll just pause for a quick second.
I won't go through them all, but, um, just wanted to at least acknowledge this is sort of the, the next in line, uh, if we can get through, uh, the items, uh, on the prior, prior slides.
All right, and then, um, I, I promised there was sort of some outstanding items.
So lastly, here are the potential actions that definitely have some questions, either uncertain timelines Unclear lead responsibility, kind of missing information, or a need for deeper conversation and input from council or other stakeholders.
So friends, we made it almost.
60 More seconds.
I hope this afternoon's presentation provides a reasonably clear picture of actions and activities that the city can undertake now and in the near future To put an end to the financial madness of the last few years, to rebuild trust in the city as a responsible steward of the public's dollars, to improve information, transparency, and decision-making, and ultimately to effectively and efficiently deliver services to Portlanders.
As we move to the last slide, thank you for your attention, and now would love to hear from you.
I'm not sure if we want to go ahead and go to questions or take a break.
I think I'm a little bit ahead of schedule here.
I think we can take a break.
Thank you.
Thank you, Councilor Sameer.
So I know we're at the end of the year, but I've attempted to seed a few questions for conversation.
What are your initial reactions?
Are there items that need further clarification?
What resonates?
What, if anything, do you think might be missing?
What refinements might you suggest to timelines, responsibilities, or scope for any of the proposed actions?
And how do you advise we can collectively carry this work forward?
And while positive affirmations are wonderful and appreciated, this work is also too important to not be honest.
So I'd be happy to receive any of your thoughts and feedback.
Also noting we do have at least a couple other subject matter experts in the room to assist if needed.
So thank you again.
Thank you for listening.
Thank you for your support in this work.
Defer Councilor Kanal back to you to guide us forward.
Sameer Kanal
Thank you so much, CFO Beery.
I think we were going to see if there was anything additional that Councilors Green or Zimmerman wanted to add.
To add before we open up the queue, but I think you both— Okay, great.
So just giving a, a run of show here, we have about an hour and 42 minutes including, you know, if we take a break, uh, with 12 of us here, that's about 8 minutes per person including time for, for responses.
Just giving that framing here.
So I'm going to take probably 2 or 3 folks, and then whenever the, the first, um, pause is after 3:20 or so, we'll take our break, uh, and then come back.
Um, and if you are following along online, you're seeing it.
If you are here, it's the 3rd to last slide that has the reactions, refinements, and moving forward.
Um, these are the questions that, that, uh, CFO Beery raised, so feel free to, uh, say whatever else.
But I think what would be most helpful is to help, um, ensure that we're getting answers to those, uh, 5-ish questions.
All right, we'll open it up with Vice President Clark, followed by Councilor President Thank you, Councilor.
Unidentified speaker
Um, this is the first time I've seen this, so this is my initial reactions.
First of all, I just want to say thank you to my colleagues for all the work and the time you put into this, and the people in the audience who are here that also put a lot of time into this.
I really appreciate it.
I think Jonas did a great job getting through the whole thing.
It was super.
Just a couple comments.
I'm going to have to leave early, so I'm just going to give you a few comments now and And I'm happy to do more offline.
Uh, there are a couple things that pop right out at me that are my priorities.
Um, and I'm— I'm clearly— you included asset management, which everybody knows I care about, so that's cool.
Um, but there are a couple things you have on here that are really your future actions that I feel are, um, more immediate, at least from my perspective, and That's the audit city facilities costs and usage, because that involves also the disposition of assets.
And we need to eventually figure out what we do own and what we really need to own as a city.
And then secondly, I am very concerned about— where did it go— uh, the core services definition.
I talk about core services all the time.
Yeah.
What is it that are the basic services that we should be providing as a city?
And getting down to the nut.
And I'm hoping that— I know that CA Lee has talked about a strategic planning session.
Perhaps we're going to be doing that in the not too distant future so that we can wrap in really what are our prior— our core services that we have to provide.
I think that's a great idea.
And I think that's going to help us if we can define that sooner rather than later when it comes to the next budget and what we're going to do about the next budget.
And that goes back to, at some point, working with the public on like a conversation with Portland or something along those lines to help people understand the nature of our budget.
It's huge, but all those funds are— most of those funds are dedicated.
Loretta Smith
Right.
Unidentified speaker
And we're really only talking about general fund when we're talking about cuts, and those are core services.
So, um, that's my greatest concern, is getting to, um, trying to identify what those core services are, what are the basic things that we should be doing and focusing on, particularly when it comes to the next budget.
And then the, um, audit city facilities costs and usage, I— you put those on your future actions.
I think they're a little bit more more immediate from my perspective.
But I'll just leave it at that.
Um, I don't—.
That's not 8 minutes, but that's plenty for me.
Thank you.
Thank you, Councilor.
Sameer Kanal
Feel free to jump back in the queue later if you, if you think of stuff, uh, to add.
Um, Council President Dunphy followed by, uh, Councilor Smith.
Unidentified speaker
Thank you very much.
Um, Jonas, I think we're certainly on the right track.
And also, I'm not a numbers guy, and so I'm going to trust that you, you, uh, are on the right track because it's Yeah.
But I got to say, some of these things seemed less financial and more just sort of like good things that this city should do.
And so I'm wondering why some of these things are on your list versus just like honestly the city administrator's list.
Like an organizational structure and understanding defensibly why we have this org structure, that seems like it should be a big citywide thing but not a financial stabilization thing.
Similar to— well, some— yeah, that one in particular, developing IGA protocols, really good policy.
Is that specific to financial stabilization?
Angelita Morillo
I don't—.
Unidentified speaker
That doesn't seem like it to me.
It seems like it's just good things we should do to get our house in order.
I have real concerns, and I think you properly arranged the sort of prioritization of the recommendations.
I have deep concerns about biennial I have been lobbying the state legislature, um, in different capacities since 2009.
Um, I was there for the first legislative short session when the, uh, the— in 2012, whatever it was.
Um, the voters and the lawmakers all agreed that the biennial budgeting is not, you know, without some ongoing touchpoint, is not a great thing, and that leads to some problems.
And I think there are still some problems in how the state does Yes.
So I agree, don't prioritize that.
That doesn't seem like it's a thing that's actually going to lead to financial stabilization.
With regard to regional coordination as a recommendation, do you mean this as coordinating to have the same sort of language and maybe even excel spreadsheet formats as the county and Metro, or do you mean actually sitting down with the Housing Bureau and saying the Housing Bureau is going to spend and then the, you know, the county's homeless services division or whatever they're called now is gonna spend Y.
Is it internal facing?
Is it externally facing?
Is it a tool for us to say like, oh, that's not our job, that's the county's job.
And by the way, here's how much they're spending on it.
What did you, could you say a little more about that for me?
Yeah, Council President, thank you.
And maybe just to your very first observation.
Yeah, you're right.
Some of these don't feel like they're directly financial related issues.
Thank you.
Again, they're issues that the workgroup identified as feeling like it was connected or important to that work.
And so I wanted to be mindful of carrying that forward.
And I do think that there is always some connectivity, right?
I mean, IGAs are an example where it came up in the context of it's hard to understand for a community member what happens in an IGA if there's someone who's a party to the IGA.
But I do acknowledge that some of these Or again, not what I might have, if I just sat in a room with a couple of my financial friends, might have come up with.
With regards to the regional coordination, I think there's, to answer that question, I think there's both flavors, right?
I think the action and the thing that I would prioritize around the regional coordination forum with the sort of financial experts is not around the details.
It's more around—.
What's the goal?
You know, here's a problem I'm seeing in my financial system.
Help me peer respond to that, right?
Or just having awareness of things that are going on.
A great example could be if the city knew we were going to be putting forward a GO bond and one of our regional partners knew that they were going to be putting forward a GO bond, it's an opportunity to flag that maybe 2 years ahead of time so we have space to collectively navigate those kind of conversations.
So that's what That forum would be more about.
The broader forum, the kind of the third bucket around regional coordination, is I think that bigger, broader conversation that's really outside the realm of the CFO and really more a citywide, you know, city administrator, government relations-led conversation.
Excellent.
I think my last question, you said what is the primary access point for accessing financial information, and I don't really know what that Is that, is that in the terms of like council accessing to understand it, the public understanding?
I don't— how do I access any of this financial?
Yeah, my understanding from the conversation, and certainly be welcome to hear from the co-leads who are in the room as well, but my understanding is there was just some, I'll say, anxiety in the room about hearing different things from different authority points in the city that conflict.
And so being really clear and intentional about when the city says this is a financial fact, fact, knowing that that's the official mandated source, right?
Now, it's never going to be perfect, of course, but that was sort of the genesis of that feedback is, you know, how can I as a community member understand which of maybe 3 or 4 different realities is true?
Thank you.
I will leave with just my one last comment, which I say a lot in every different context.
Portland loves to reinvent the wheel.
Please Please don't.
Please just find what works elsewhere and do that.
Whether it is with regard to potential prospective revenue sources or regional coordination or any of the internal controls that we have, please don't build something new.
Let's just double down on good practices elsewhere.
Sameer Kanal
Great.
Unidentified speaker
Thank you.
Thank you.
Thank you, Chair.
Sameer Kanal
Thank you, Council President.
We'll go to Councilor Smith, followed by Morillo.
Loretta Smith
Thank you.
Uh, CFO Berry, don't we have a place we can go to now?
I noted on your presentation that, uh, spring of '27 that you were going to put together something of all the, uh, revenue resources, but don't we have something right now that we can go to to see all the revenue resources, um, that are there?
Unidentified speaker
So yeah, yeah, Councilor, thank you.
Um, yes, we do.
I mean, certainly, um, the budget The annual audit lists numerically and has maybe some narrative about financial sources.
The action here would be to do a little bit deeper analysis.
So something more than would show up in just a budget document or a spreadsheet, but that really does a little bit of kind of maybe more widely opening the door around—.
Right.
What are the, you know, we just see the numbers say here's a number and here's the source.
But let's be consistent about talking about is this sort of a, you know, 1 to 10 volatility?
What is the sort of impact?
And so it would be putting a little more color to each of the revenue streams.
And I think importantly, not neglecting, right?
We talk a lot about the general fund, right?
We maybe talk a lot about things like PSF or BLT, utility revenues.
Eric Zimmerman
Right.
Unidentified speaker
But there are a lot of other revenues that don't get that level of attention that we also end up talking about and not having clear understanding of.
So that would be really what that action is, is producing a little more robust body of information.
Loretta Smith
Have a work session on it.
Because in our budget that you delivered to us, in the beginning, it shows all the different revenue sources, right?
That's correct.
Or did we leave anything out?
Unidentified speaker
Nope, that's correct.
Loretta Smith
Okay.
I was just trying to make sure.
It's like, okay, that's weird.
We already know that.
Unidentified speaker
Yeah, yeah, no, that's a good point.
I mean, it certainly— the, the very base information exists, um, the, the numbers exist, but it doesn't often have— and we've encountered this in this room— a lot of the necessary context, uh, to both inform decision makers and, and for the public to understand what's, what's underneath those numbers as well.
Loretta Smith
So will that include things like the opioid, um, monies?
Because we're expected to get that for the next 20-some odd years.
Is that also line items?
Unidentified speaker
I think it could, yeah.
Loretta Smith
Yeah, those, those are the kind of things that I want to know about, that we have revenue sources that are not in— that we don't see line item but should be considered ongoing money because we're getting it for more than 5 years.
And so, and then have a deadline date of when we stop receiving it.
Those are the kind of things that I want to see Yeah, we can— I think, you know, understanding those different pots of money before spring is more important than in spring, because in spring we're in budget cycle, so it gets to be a bit much if we want more information.
I think that information we should understand a little bit better in our forecast in December when Peter comes and gives us the forecast.
That should be, you know, some sort of work session to tell us about all the different sources and also include those resources that we don't generally put in but should be considered as ongoing money, like the opioid, um, settlement.
So I appreciate you putting that up there, and, um, I'm looking forward to having that conversation.
Unidentified speaker
Great, thank you, Councilor.
Sameer Kanal
Thank you, Councilor Smith.
It's exactly 3:20.
Councilor Morillo, would you prefer to go before or after the break?
Angelita Morillo
I'm, I'm fine to go after.
Sameer Kanal
Okay, cool.
Then we will take a break, uh, for about, let's say, 13 minutes.
Let's be back at 3:34, and we'll pick back up where we left off.
And I have, just because the note— the thing's going to change the order when we go out of the share screen, so I have Morillo, Novick, Ryan, and then Pirtle-Ginney.
Thanks.
All right, we're gonna pick back up.
Give it a second while folks get resituated.
Um, but I'm going to pass it to Councilor Murillo and then to Councilor Novick.
Angelita Morillo
Uh, thank you, Chair.
Um, thank you, Jonas, for joining us again.
I hope you had a bit of a break since you had to give us such a long presentation.
We appreciate it.
Um, I— that was really helpful, and I really appreciate genuinely, um, just getting to learn more about our broad financial stability Thank you.
Thank you.
Thank you so much for coming and talking about the revitalization plan and hearing about what I know folks have been working on for a few months on this.
I have only one very simple question for you because I know we have a lot of people in the queue.
And that's just, you know, you've been having— you've been doing a lot of outreach with our offices and you've been getting a lot of feedback from us on the budget process for us as councilors, how we get information, what we do moving forward.
And I'm wondering what progress you and CBO have made on integrating that feedback into the next budget process and what that's going to look like?
Unidentified speaker
Yeah, Councilor, thank you for the question.
Thank you for the acknowledgement of the break.
I did appreciate that.
So yeah, we're still, I think, working through that.
I think the next place we'll see that really materialize, that progress on the budget improvement process items, is in the TAO discussion.
So part of that will incorporate potential calendar schedule.
And so I think that'll be the next place.
And I think we have a work session just in a couple weeks here around that.
And so that's the next place I think you'll start to see some of the action happening around taking that feedback and putting it into motion in the context of the schedule.
Angelita Morillo
Gotcha.
Unidentified speaker
And certainly happy to explore.
I know Ruth and I had a— Budget Director Ruth Levine and I had a conversation about, Is there a way that we can actually do kind of a report-out assessment?
And so we haven't lost that.
We just want to make sure we're actually getting the work done and prioritizing that over the reporting.
Angelita Morillo
Yeah, I agree.
And sometimes I don't think we need a whole full-blown bureau report or anything like that.
Just getting to hear updates on how our feedback is being integrated into the new process is helpful.
So when you're able to come back and give us those specifics, that would be helpful.
Thank you.
But that was my only question.
I think this was a really thorough presentation.
It was very helpful, and I agreed with a lot of the stuff, especially I think the thing that stood out to me is making sure that when we're passing any revenue policies that they're not regressive, that they're not impacting the very people that we're trying to help with the services that we're changing.
So just really appreciated seeing that in there.
And yeah, thanks for all of your time, and Councilor Green and Zimmerman as well.
Unidentified speaker
Thank you.
Sameer Kanal
Thanks, Councilor Morillo.
We'll go to Councilor Novick, then Ryan.
Steve Novick
Thank you, Mr. Chairman.
I just wanted to take this opportunity to— since span of control and contracting out were on the list, I just want to reiterate that I think that we should have thorough discussions of both of those topics in the next couple of months, either in the Committee of the Whole or as a part of a council work session.
If Councilor Green brings CHOP from the top back next year, I want to either feel confident voting for it or more confident than I did last year voting against it.
So having a thorough discussion about span of control level, how much additional— have we really added tons of additional managers the last several years?
And what about those 50 people that supervise fewer than a few people?
I think that's critically important.
Also, I was pleased to see I just wanted to put in a plug that I think that every year we should review that every— everything that we're spending one-time funding on and have a serious conversation about, do we really think this is one-time, or— and we're prepared to let it go when the one-time funding runs out, or do we think that we're probably going to want to keep this and have to compete with other things in the budget that right now are not listed as one-time?
I think that's a great point.
Unidentified speaker
Great.
Yeah, thank you, Councilor.
And I think what you just described in regard to one-time funding is exactly the intent, among the intents, of doing that additional elevated work.
Thank you.
Sameer Kanal
Thank you, Councilor Novick.
We'll go to Councilor Ryan, then Pearl Guinea.
Unidentified speaker
Thank you, Councilor Knoll.
Thank you, Jonas, and your team, and all the volunteers who showed up today.
To give us this work at this time.
Just some context setting in the workgroup recommendation 1A.
When they were studying, if you will, in their inquiry phase, did that include how much of— how far back did we go?
Was it just the last year, last 2 years, or was it 10 years?
No, that's a good question.
I mean, we look back in most cases 5 to 10 years, or in some data cases even farther if we had that consistent data.
I think it's good I think it's important to look back before 2020.
2020 Is an anomaly, A.
B, most people were more satisfied with the services of the city in 2015, if you will, in that era.
So I think it's always important to look at why that was, like how much were we funding proportionally and such for each bureau.
So that's why I asked that question.
Thanks for understanding the intent with that.
Thank you.
Another context one is on staffing and structure.
I think we often just look internally to our FTEs of the city.
I think it's important that we look at how many of our bureaus partner, especially with the nonprofit partners, and how much is going there.
And also to the course, the contracts, they tend to be More procurement around bricks and mortar and such.
But I think that the public's wanting to see that accountability as well.
Since I think if you look at a, like a 15-year look back, you'll see that proportionally a lot more money goes out to partners.
Not a good or bad statement.
It just, it's a what is.
And I think it's important that as we look at where we were and where we are today and where we're going, that we have That makes sense?
Yes.
Yeah, Councilor, thank you.
And then I had a theme of yellows that I couldn't believe weren't greens, and I couldn't wait to ask that.
Then when I fast-forwarded to your very efficient but long presentation that you did a really good job on, I noticed that some of those same yellows were in your recommendations.
And maybe I just want to underscore a few of them that they're actually The first one was prepare a report regarding current city revenues.
And when that was yellow, I really couldn't understand why for the life of me.
So I hope that that keeps moving towards a green.
I think that I've experienced on this council that there's a level of confusion around that, that very basic idea.
I think that's a good point.
Yeah.
About where revenue comes from and how that's flowing.
On that same regard, I know the county is more dependent on revenues from property taxes, but when I continue to read about the deep devaluing of properties downtown and the foreclosure list, which is longer than anyone wants to talk about, that we really factor that into the equation.
The cuts coming to county government based on that are going to be quite severe if we look at the Xs and Os that we've been accustomed to, and that has a large impact on our general fund as well.
So I want to make sure that when we go into the budget season, we have eyes wide open about this.
That makes sense?
Yeah, yeah, yeah.
Councilor, thank you for acknowledging that.
If I can just responding to your question on the current revenues, Just to be clear that, A, the colors are an art, not a science here.
And I indicated that item around revenue sources as yellow largely for the reason that Councilor Smith highlighted, which is I think there's a question to be determined about how deep does that go, right?
So the yellow is not it's good, bad, or indifferent.
The yellow is just, it's a little, there's some questions around, you know, how, what are the characteristics that we want to communicate and how gradient do we want to be?
So I just want to be clear, it's the green.
Yes, I agree.
I agree with all of it, like the designation ones, which we had some civics lessons on this morning.
But I think it's also really important that we look at the general fund bread and butter revenue, 'cause that's what's been dropping dramatically of late.
Yeah, and to that point, the other just quick response I'd make is that we will have, I think, I don't know if it's been scheduled yet, but looking to have We have before the end of the year a work session or moment for conversation around the general fund forecast.
And so that will be a moment to have dialogue about those realities that you're describing on the general fund side.
The other ones I just wrote that on real quickly is when we looked at strategic planning to define core services and that remains yellow.
Is that because, like, that seems to me It'd be a bright green one.
And so is it yellow?
Why is it yellow?
Well, I think again, yellow does not indicate that it's, you know, should or should not do.
It just means it's fuzzier how to proceed, right?
Yeah, you're dealing with the 12 of us, so it's fuzzy.
But the fact is—.
No comment.
The 12 of us are elected to be grownups that show up to try to figure that out, even if you don't agree with everybody all the time.
So you need some guidance from the council on that.
That's our responsibility.
Eric Zimmerman
That's right.
Unidentified speaker
And I know we had a take one on it, and I think, I hope we have a take two that goes a little bit deeper.
I could see Raymond Lee so well now, 'cause I'm only 2 slots away from him.
You're shaking, you're nodding.
And so I look forward to your leadership helping us do that exercise this year in a new and improved manner.
I hope data-driven on potential action, access, and identity, identify community data resources.
We talk about that a lot.
We continue to struggle in the government input, how much money we're spending for something as opposed to what the public wants, which is the outcomes of those investments.
And we struggle with that.
And then we move goalposts when we don't like it.
And everyone's onto that.
So I think we just need that type of transparency to our voters and taxpayers.
I will end with I'll just end with one more.
I have more, but I'm trying to pick one for time.
The one that was yellow, the last one that I hope is green, is to refresh a coordinated citywide economic development strategy.
I can't think of anything more important for us to be seen as hopefully going from the 80th out of 81 across the nation on where someone would wanna invest to going much higher.
And I think one reason we could start to move up that ladder is if leadership shows that we actually have an economic development strategy.
I think the body up here is really struggling with that, and there's partisan nipping at this, and it's getting in the way of how we can provide some clarity for the marketplace, which goes well beyond Portland.
And I hope that we take some more time Um, to get more clear about what the dreamers of this city want this city to be.
This was a city that was built upon a lot of creativity, innovation, and entrepreneurism.
A lot of people that built small businesses that became larger.
And right now, when I listen to people talk about their kids not moving back, their kids are now in their 30s, it's because they don't think Portland's a place that they can do that anymore.
And so we have to We have to not allow that to be the story unless we want to be an isolated island in the rest of the nation.
So I hope that we can really get down into those conversations, and I hope that the people that showed up in that group had some understanding of that.
We had about half the people there, those that want money from the trough called government, and then we had a few that are generators of revenue, and I hope we continue to listen to those who generate revenue for the city so that they continue to want to do that here.
I will always be a champion for trying to create more revenue for my hometown, and I wanted to make sure I got those out as I glanced through this.
Thank you.
Thank you, Councilor.
Sameer Kanal
Thanks, Councilor Ryan.
Councilor Pirtle-Guinea, and then we'll go back to Councilor Green, actually.
Unidentified speaker
You're going back to Councilor Green first, or should— okay, thank you.
I missed the word then.
First off, thank you for convening this group.
Thank you for putting in the work.
I know this is something that we talked about a lot over the first year that we were all here, and it's great to see some tangible items come out of it.
And thank you to Councilor Zimmerman and Green for really shepherding this through and making sure that, um, you were able to both hear what, uh, the other folks on that group were saying and bring that to us and also kind of read the tea leaves on how you thought we might react to things and bring that into the group.
Jonas, I had a couple of questions as you went through this, and it, it felt like there was a lot here.
The way you divided it out is really helpful.
There's also a lot that I think we need to dig in on where there are some policy choices, and so I have some questions about how how we get to those policy choices.
But the first thing that I would love to hear a little bit about is how this fits with the other conversation we're having, which is we need to change our budgeting process.
We need to make sure that there's more transparency.
We want some of those processes backed up and to look differently.
I've asked for us to have a tool that allows for more engagement from Portlanders in the budget development process.
So how does this work, which I think you rightfully pointed out says CFO and CBO all over the lead column, fit with that less long-range look work that we have also asked you to do?
And how are you balancing those 2 things?
What should we expect in terms of trade-offs in the timing of getting both of those done?
Thank you, Councilor Loretta Smith.
Yeah, Councilor, thank you for the question.
Um, and, um, yeah, so certainly these actions were developed with, um, awareness, in some cases deep awareness, in the example of budget process, in other cases more, uh, um, less active awareness of lots of activities that are going on around the city around improvements.
And so, um, largely the, the time frames that are identified here Um, the, um, our artful decision about what, what color dot to indicate, um, the leads, those were identified with some knowledge of those other overlapping efforts.
Um, I mean, there is a very— there is a specific item, uh, implement budget development process improvements, um, that I would say encompasses all of that that we've talked about previously in the work session.
Obviously, they're kind of overlapping, um, efforts.
Angelita Morillo
Thank you.
Unidentified speaker
But my expectation in the context of this action plan would be that all of those budget process improvements that we've talked about previously and are in motion are embedded within this work.
Okay.
Near term, the dates are right, we can do everything.
Medium, long term, the things that are on that crisis response list, we might need to start thinking about some Is that a fair way to interpret what you just said?
With one minor caveat, I would say we can, we can try our damnedest.
Perfectly reasonable.
So on that second list, the crisis response list, where we get into needing to think about some timing trade-offs, are these things that if you don't hear concern from us, we should consider Assumed things that you are going to do, or are these things where you are waiting for direction from council to put them in motion?
That's a great question.
I mean, my assumption is that, and frankly my recommendation is, we need to do these things.
And so unless I hear from any point of authority, absolutely do not do this, I would intend that these carry forward.
Okay, and that's through the crisis response and stabilization lists both?
Yeah, I think so.
And I would even argue, I mean, largely into the future actions to the extent that those are implementable.
Okay, I want to note that I do agree with Councilor Clark that audit city facilities piece, we've had a number of conversations amongst this body about the importance of understanding our assets better and what we would need to do to address asset management in a more holistic way.
I know there's work already happening there, but this piece around auditing our city facilities feels like an important part of that.
And so however we can make sure that that is part of the work that's moving forward, you know, not the immediate, not the now, Thank you.
I think that's a really important piece for stabilizing not just our near-term finances, but our assets and our longer-term responsibilities as well.
I also just want to note on the revenue piece, I think it is really important to have those Identifications of revenue, prospective and current revenue sources on the crisis response list.
I want to make sure that whatever we identify as a potential prospective revenue source is not limited to what we can do in the near term, but also goes through a filter of what the What the possibility is there and what the impact is.
I believe Councilor Murillo talked about being aware of regressive policies moving forward, and I think there are some really important screens we need to put on that piece before we get too far.
So I think that the report, the identification, great to see that on a near-term list.
I don't want to rush it.
I don't want us to move faster than we can evaluate things though that come out of that report.
I hope we get more time to give you feedback on each individual thing.
I don't want to go deep into all of these right now, but wanted to get a little more information there about what you were looking at in terms of the timeline.
I also will just pull out that piece around And I think it is really important if we move forward with some changes from what we've had in the past, that that position still stay within CBO and support us with the full knowledge and access to resources that the rest of the team within the budget office has so that we are operating from the same information that we have.
Thank you.
That the mayor is operating from, that the city administrator is operating from as we move forward.
I actually think a lot of what you have before us gives us the opportunity to see our budget work as a centralized asset that serves the work of the administration, the executive, and council.
And many of these changes could allow you all to be that central point of expertise for us as you look at what is the clearinghouse for budget information.
That is one of those as well.
And I hope that we maintain that as a central point again so that we are getting the same information that the other branches are receiving.
Great.
Thank you, Councilor.
Thank you.
Sameer Kanal
Thank you, Councilor.
We'll go to Councilor Green and then Council President Dunphy.
Unidentified speaker
Thank you, Councilor Kanal.
Thanks again, Joan.
Thank you.
Steve Novick
Thanks, Your Honor.
Unidentified speaker
This was a slog, but you laid out a lot of really important stuff.
And thanks for kind of teeing up.
And thanks to my colleagues for engaging with it with openness and, you know, I think productivity.
That's really important.
I just wanna pull out a few things that I thought about a lot during the process, and then I was glad to see are part of the sets of actions and themes that emerged.
I wanna speak first to the span of control piece.
Councilor Novick, thanks for— you brought that up multiple times that we need to have that discussion, and that's good.
I just wanted to let you guys know that I, in my check-in with the city administrator just yesterday, I got an update on the state of play of the Green 7 budget note, which is doing some of that work.
And that what the city administrator is going to do is go further than the positions that were envisioned in Green 7.
Steve Novick
Okay.
Unidentified speaker
And I'm really encouraged by the direction I'm seeing.
And I think what Mr. Lee indicated was that the intention is to have that information and those learnings available as part of the City Administrator's Report.
Do you want to say briefly any more than that on that?
Yes, Councilor Green.
As we continue to kind of look at overall kind of staffing, span of control, where we stand as an organization from a leadership capacity, And then we know as it relates to staffing, spending control, contracts, these are all things that we want to make sure that we do a fair analysis on and assessment of where we stand as a city and making sure that we're also providing that information to City Council as you are deliberating on the overall city budget.
Within this report, as it relates to staffing, I would want to add some type I want to make sure that I'm providing a comprehensive analysis on what I see overall for the city, but also some recommendations as it relates to where there may be areas for improvement for us.
Or if I'm saying, hey, the numbers are what they are, I would not recommend changing things in these areas, but maybe in this other area.
But we just want to make sure that we're providing a comprehensive analysis of that to the council.
But also, I want to make sure that I'm providing you my professional opinion on the matter as well.
I appreciate that and look forward to seeing that, and we'll all be better off for it as we go into the next budget.
So that's, you know, I think the thing is connecting to the next budget, but also with this longer view, which was the whole point of this stabilization exercise.
I'll speak briefly to biennial budgeting.
I agree, that's going to be probably one of the biggest, the toughest ones that we might want to tackle.
And for that reason, it probably doesn't need to be the first.
Like, we have other things that are low-hanging fruit that we want to address earlier on.
So I support that being sort of not the highest priority.
As somebody who is sort of advocating for biennial budget in those groups, I just want to make my own case.
Steve Novick
When—.
Unidentified speaker
I think that we need to move to 2-year rate-setting cycles for our water and sewer utilities.
And our transportation utility fee kind of rate refresh.
I think a 2-year biennium is appropriate for capital project-intensive utilities.
And I think aligning a budget-setting process such that that's either in the off years you're considering the rate proposal or subsequent— or contemporaneously you're considering that, that helps Yeah.
It helps us figure out how the rest of the enterprise interacts with those rate-funded bureaus, because there's not a clean delineation always, right?
So that's kind of my main motivation.
And also, it may be too difficult for us to do, and there's pros and cons to it, so I'm not going to die on that hill.
But I do think, though, there's one area that we talked a lot about which I'm glad to see in here, which is sort of a refresh of our reserves policy, and that's one of your high priority actions.
I think if we're going to think about biennial budgeting, it needs to be in the context of what other policies we'd adopt to make that workable, and the reserves policy is an inherent piece of that.
I see Peter in the back.
We're always talking about this, but really this is, you know, I know Peter's thinking about it right Right now.
And forecasting our revenue, we know, we know BLT is volatile.
It's a volatile source of our revenue.
And so, you know, I support any methodology that allows us to have some certainty that our budgeted programs over a couple years that we want to say these are council's priorities, these are the mayor's priorities, this is, this is where the city should be going, that we're We're forecasting the revenue sufficient to meet that, but if we're having overages, like if there are tail years where you have like a really good year or a bad year, we're adopting a reserves policy that trims the volatility in those tails.
There's a parallel conversation going on at the state right now vis-à-vis the kicker.
And so I just think you can't control the market, and the market determines BLT.
So what We can control our— what we assume for the BLT, I think, is kind of where I'm going with that.
And we've already started— I mean, the city's already started going down a BLT stabilization road anyway.
We did that in the last budget cycle.
So I know we're heading that direction.
I didn't want to miss an opportunity to uplift that revenue is actually a big topic that we talked about in this space.
And that's going to be an area where a lot of people, I think, have tension.
And revenue is both economic development, as Councilor Ryan is right to point out, but it's also our tax policy.
And so in the memo that came from the CFO, as well as there was a memo from labor, from like I think every bargaining unit at the City of Portland during the budget cycle that laid out a series of suggestions and recommendations.
I see Lori smiling I'm sorry.
I'm sorry, I didn't mean to interrupt you, Councilor Stein, because you probably had a pen on that.
There was one area that said let's revisit the CEO pay ratio tax, and that was also mentioned in the CFO's report.
And I just want to let my colleagues know that Councilor Morillo and I today have introduced an update to that tax that we think is going to raise $72 million on average in new BLT revenue while providing relief to small businesses.
So please Please check your email, you know, look for that to come to the Committee of the Whole on October 8th and let us know what you think.
But I know that's a little out of sequence, but I think that if we don't try to do something to raise that revenue in the immediate term, then we are gonna be dealing with a cuts budget for 4 years.
And I think continuing to make cuts And so just wanted to announce that.
And I think I'll leave it there.
Thank you, Councilor.
And if I can just also maybe acknowledge a point that I don't know if you intentionally made, but it's a really, really good observation that I want to take a second to lean into.
You know, you mentioned the importance of the revenue assessment and the revenue conversation.
Steve Novick
Yeah.
Unidentified speaker
Forecasting, budget process improvements, policy.
The point is that they are all part of an ecosystem, right?
And so while these are listed out as discrete actions, the reality is it's all extremely interactive.
And so I just wanted to lean into that a little bit, that it is really hard to isolate any one of these without impacting and sort of forcing some conversation about many of them simultaneously.
And that's also why they're sort of packaged largely in the way they are, to recognize that we have to do some of that work simultaneously.
So thank you for kind of the opportunity to call that out.
You're welcome.
And I just wanted to, before I yield, because of that interactivity and because there's like an inherent connectedness between the reserves policy and our budget priorities and our revenue structure, the proposal that Councilor Morillo and I I— Morillo and I have filed will need to be supported by a reserves policy.
Like, if we were to go down that road as a body, we would need to make sure that we're assuming and recognizing that the volatility in the BLT would be amplified, I think, by a change in the upper end of that surtax.
And so don't want to sugarcoat that.
I think that's, that's something that we need to wrestle with if we decide to, um, uh, increase our ability to pay for Thank you, Councilor Green.
Sameer Kanal
Council President Dunphy, followed by Councilor Zimmerman.
Unidentified speaker
Thank you.
CFO Beery, thank you for this presentation today.
Thank you for all the work that came into this.
But colleagues, during the break, I actually— I learned some information that was not included here, and I think it would have actually helped inform my position throughout this work session.
Today is Jonas's birthday.
Oh, so happy birthday, Jonas.
You're 21 years old.
I hope your first legal beer is something pink and shiny from Dolly Parton Dance Center.
You know, after, after being 21 for so many years, over and over and over, it gets better.
No, thank you, uh, uh, Council President.
Um, and, and just as a, um, local government CFO, right, what birthday present could be better than talking about financial stabilization with my friends?
So, so thank you.
The gift that keeps on Thank you.
Sameer Kanal
He told me I had 2 sentences and I didn't know.
Yeah, all right, happy birthday.
Uh, Councilor Zimmerman.
Eric Zimmerman
I thought we were about to get hit with some surprise there, Dunphy.
Um, all right, Barry, happy birthday.
Um, I actually think, colleagues, it is interesting to hear that both Councilor Green and I, uh, are reacting somewhat positively to the idea of a biennial budget.
And so I want to lift that up because it's one of those ideas that is a big lift.
You've heard concerns from our CFO.
Within the workgroup, there were concerns.
And at the same time, it did continue to at least have, I'll say, baby legs.
I do want to offer up, just because I think I might be one of the only ones who have worked in a municipality that has had one of these, right?
And while I wasn't sure I liked it when I was a deputy city manager in a city Yes.
With a biennial, there is an attractiveness given the host of the topics that you saw laid out today and a timeline that is not supportive of achieving all of those topics necessarily, that I actually think some of the get ahead of it work, um, may be more achievable if you're not constantly moving into budget adopted, now budget prep mode.
And so I do offer that as it's— I think this is one of the things that's nice about this work group, which is there were some hard stuff put up there that is worthy of intellectual debate and where we could go.
And at the city level, in one of the cities that I've worked in, I will say it was pretty good.
And I was surprised that it was pretty good, having come from 2 municipalities where we were very Thank you.
So I do offer that up.
And then the overall, what I'm looking at this for is what I've appreciated is the buckets and the umbrella is kind of the words I keep using and the classification of different items.
What I'm taking as this is happening is that there are going to be some things in here that when I think that's a fair point.
But I think when you peel back the onion a little bit and understand what they mean in the specifics, there's going to be some sacrifices to either the level of service or the type of program.
And I guess I'm signaling that I'm ready for some of that will come forward.
And I also plan to take a look at when it comes to amendments or it comes to things that the administration proposes in the new budget, pilot programs, those types of things.
I guess I'm going to hold this up as kind of like where would this fit within the scope of what this group put forward to help me evaluate a little bit more on the administrative, more of a should it happen, not can it happen.
And that helps me.
I think that the first 2 years of this government could largely for me be signaled at We passed a lot of things that we care about, or we signaled a lot of things that we care about.
And part of the job, having done it for so long as a staffer, as an administrator, and now as an elected, is there's also a patience for the things you care about because not everything can be achieved in the first fell swoop.
And so there are going to be some good ideas that maybe don't fit into alignment with this, and I will be kind of using this maybe as cover Yes.
To say, you know, maybe not this year because that doesn't really fit with our year 1, year 2, or year 3 aspect of the mitigation plan.
So just signaling that for folks.
And again, I, as one of the people who was in the room for all this, I'm not going to debate too much of it.
I'm really kind of— I'm taking notes for what everybody's saying, but appreciate that I think everybody's coming to this fairly intellectually and open to the ideas and the volunteers, uh, work.
So thank you.
Sameer Kanal
Thanks, Councilor Zimmerman.
I'm next in the queue, and I'm, uh, last in the queue.
So folks, if you have other things, please feel free, especially if you haven't used your, your full time to, to do so.
Um, thanks, Jonas.
Thanks to everybody who was on the working group.
I particularly want to shout out, uh, Noah Bernstein, D2 small business owner, uh, in addition to making a mean bagel at Bernstein's.
Uh, also thank you for, for volunteering here.
Um, I also think that it— I'd like to see more small business owners involved in this, and I understand that I know that makes it hard to schedule these sorts of things, um, and I know it's hard to just include more folks.
I think that's something that everybody who's not in that line of work and hasn't been, um, in the past, uh, it's good for everyone to experience that because it's hard to schedule as a small business person.
Um, I also want to start by saying I agree generally with the, the first points that Councilor Ryan was making there.
I think the first 3 were looking back 10 to 15 years, looking at money going out to orgs, nonprofits, as well as private businesses, and then on the importance of revenue report, as well as what he said about digging deep into the bread and butter revenue.
Not just, you know, you can go there quicker than to all the other little sources.
And then I also want to partially agree about the economic development strategy.
One thing I haven't heard much of that we talked about Prosper, but I think that should be something on the elected side.
I'd like to hear the mayor's economic development goals because I haven't, outside of commercial real estate, I haven't heard anything about that.
Thank you.
That.
So I think that's a worthwhile thing to, to talk about.
Getting into the recommendations, I really appreciate the advocacy for avoiding a regressive tax structure.
On the developing policy guidance, I'll just echo what— and values, I'll echo what my colleagues have said about that being more our wheelhouse and a 2.0 of our strategic priority settings seeming to be the best way to do that.
On 1B, I really want to uplift the one-time resource Yes.
Uh, piece, uh, we, we continue to have, um, a problem with programs maintained as the funding drops off the balance sheet.
And so it's that year 2 problem when year 1 revenue, uh, goes away but the program continues.
Um, appreciate everything you said about aligning things to, uh, community outcomes, and I think this is where maybe the new citywide performance, uh, position and office are, are going to be very helpful.
As it relates to analytical support, I think this is the place to talk about a legislative budget office, a legislative budget, you know, staff, really about not having the same source of analysis that led to the mayor's budget if that's going to try to inform us potentially changing it.
And so I think that independence is really vital for this.
On the piece about regional coordination, I really appreciate the thing about IGA templates.
I love the idea of making that more transparent for potential partners, for the public, and to council as well.
And also to ensure that the template includes clear, at least a default of clear opt-outs and regular cycles and cadences for renegotiation of terms as needed.
Some of these things that we get into, especially these 25-year deals, at least having a place where we can And say at this stage along the way, here's a place to revisit this.
The state piece is great.
I think I agree.
I think everybody said that they support the idea of going down to the state and talking about at least Measure 5 and 50.
I appreciate that the kicker was also mentioned in a later slide.
On our internal piece, the span of control, and I'd also add degrees of separation in terms of layers of management, are things that I'm really interested in involving frontline workers and Efforts, as mentioned there too.
My intention is to bring that discussion, which has been on our unscheduled, uh, to the Committee of the Whole in probably December at the rate we're going, um, the first week or second week in there.
Um, so just wanted to flag that.
And then I thought there was a lot to dig into in the other related actions section, and I really appreciate you bringing that up.
Um, budget advisory committees, loved everything in there, but did want to make sure that council's involved in that as one of the leads I do think this is a place where it's, it's, we need the same input from the community.
And what Councilor Perlogini was talking about with access to information applies to community input too.
Economic development strategy, same idea, not just Prosper.
I think both mayor and council are a part of that.
I've been waiting on anything that's not commercial real estate related from them as well.
So would love to have that.
Thank you.
I appreciate what Council Vice President Clark and somebody else, I can't remember who, sorry, said about the footprint and reducing the footprint of city buildings.
This has been something that has come up in a couple of the, like, contracts when we're replacing a location with a new place.
I think we did this for the community safety folks recently, and I really am supportive of it.
I just want to make sure that I'm putting on the record here that we're not just prioritizing our budget, but also the geographical reach of city buildings.
Thank you.
For example, if we were— if the next leases that are up are the buildings we have in D1, I think we should keep in mind that we need a presence in East Portland too, kind of thing.
I know that that's something that's already on the radar, but I wanted to mention that.
This is also really important for things like fire stations and community centers, which already have a disproportionate infrequency on the east side.
Thank you.
Okay, um, I wanted to follow up with both you and, uh, City Administrator Lee.
There's a piece on collect and share bureau innovations.
A while ago I asked about, is there a place to suggest— for employees to suggest things anonymously?
So it's not just what's already been implemented at the bureaus being shared, which is vital, but also the ideas that maybe never have had the chance to be tried.
Um, and I, I know that was something that CA Lee had expressed some interest And has anything— has there been any progress yet on that?
Unidentified speaker
Not yet.
I think part of the conversation that we'll have as I get some of these other roles in the organization is— and strategy change management is really taking a look at that and how do we set something up that when people are bringing ideas is something that we can actually have an evaluation process on just a capacity and bandwidth with thing right now is reason why we haven't been able to really just pick up strides with it yet.
Sameer Kanal
I appreciate that.
Um, I like that how you reconfigured everything into sort of waves, uh, in those sort of slide 36 and on, and I, I appreciate that a lot.
The, the pieces I wanted to highlight here that I haven't already mentioned are, um, The court community engagement piece is in addition to just the budget advisory piece.
I think we have an opportunity now with, to, with the staffing changes there to reconsider how engagement lives in the city org chart.
I really want to take that opportunity.
I know we funded a position that hasn't been filled yet for that in Council Operations.
That's a part of that solution.
Obviously, the Civic Life and the Chief Engagement Officer position are a huge part 38, I've also mentioned the same thing about Prosper already.
And then the one-time resources, to me, I like everything in here.
I just love to see it earlier because I think it's the single thing— Councilor Smith has talked about this a lot too— the idea that we just keep adding things that we don't have a plan to pay for in the future.
We have one-time costs— sorry, one-time grants or funding sources The shelters are the key example of this, and it's such a huge part of our general fund at this point that I think it would be remiss to not explicitly mention that.
So those are all the sort of run-through of that that I wanted to get done.
But I really appreciate how you framed this.
You said that your goal was to put an end to the financial madness of the past few years, to rebuild trust in the city as a responsible steward of the public's dollars, to improve information, transparency, and decision-making, And ultimately to effectively and efficiently deliver services to Portlanders.
And all I can say to that is amen.
So thank you.
Thank you, Councilor.
Colleagues, we have 41 minutes left and nobody's in the queue, so I'm going to do the pause for dramatic effect and give folks a chance if they'd like to get on, on the queue.
Seeing none, that's the, the sound— the sign that we've done well, and, and primarily you and the work group.
So thank you everybody for that.
Thanks, colleagues.
And I guess we can wrap up a little early.
Thanks so much, and I'll wrap up the, uh, work session at 4:20 PM.