The record · Transcript
Council session — 2026-04-08
Transcript from the session's official auto-captions (24,324 words), shown in readable case and split into speaker turns. Speakers are AI-suggested and editor-reviewed (low confidence — auto-captions garble names); each color marks a speaker.
Good afternoon. I am calling back to order the council work session on the afternoon of Wednesday, April 8th. I'm going to first turn it over ever so briefly to cfo jonas biery.
Great. Thank you. Council president and councilor Councilor councilors. Good afternoon. For the record, jonas biery city's chief financial officer here with city economist peter holtzman, who's going to share a few slides with details about the most recent general fund forecast. That document was published in, published and also distributed directly to council offices on March 24th. We've previewed some of this information at prior budget work sessions at the spring telework session last week. Also, just note for those following along online on at home, the presentation that we're going to have today was distributed to council late yesterday afternoon and is available publicly on the work session page on Portland.gov. Before heading to peter, I just want to spend a couple of minutes framing up some facts about the city's forecasting efforts. The city's forecast objective is to estimate revenues and expenses as closely to accurate as reasonably possible, using assumptions based on verifiable data and economic trends, and informed by specialized economic expertise and experience. Forecasts can be a very tricky thing. When projections are too high, forecasts can be villainized because revenues were lower than projected and spending needs to be adjusted. When forecasts are too low, they can be villainized because not enough revenues were put on the table initially to support timely decision making. Because inputs to forecasts are highly variable, and we'll hear about some of this today. Changes are inevitable, especially in an organization as large and complex as the city often changes to the forecast result from externalities that are outside the city's control. For example, global volatility and unexpected state or federal legislation can impact the forecast in sometimes unpredictable ways. And we'll hear about some of that today. We already have. Additionally, recent city forecasts have been impacted by never seen before reductions in property tax values or reduction in property tax value growth that developed in the aftermath of the COVID 19 pandemic. It's because of this expectation of change that the city economist provides multiple updates to the forecast throughout the year. One of my favorite quotes, which some of you, maybe all of you have heard me say before, is all predictions guaranteed wrong? I love that quote because it's sort of a cheeky nod to the fact that it's impossible to expect perfection in forecasting. Forecasts will be forecast, will be imperfect by their very nature, but hopefully minimally. So. I'll also preview. We'll hear more about this in a moment, but I'll preview that the five year general fund forecast remains balanced over that five year period, consistent with current city policy. However, it's important to call out that the forecast is based upon current appropriation levels or Kanal, not current service levels. We know our csl. We know that csl expectations are typically higher than Kanal. So if that trend continues to hold true and nothing else changes, we can expect some amount of gaap next fiscal year. Despite the current forecast appearing balanced at zero next year. Lastly, and as previously discussed in this room, I'm on the very front edge of working on a five year financial stabilization and recovery plan, and I expect that effort will provide support for future council discussions and deliberations about long term forecasts and finances, and look forward to sharing more with you as that work begins over the next couple of months and over the summer. With that, I'll hand over to peter. Thank you.
For the record. Peter holtzman, city economist. And can we go to the next slide, please? So this shows my favorite, least favorite graph, which is about economic uncertainty. And so in forecasting and economics we differentiate between risk and uncertainty. Risk being something that's quantifiable. You have a probability of this thing happening and uncertainty being we have no we generally don't know the range.
Peter, sorry, I hate to interrupt, but I wanted to start before we jump into this. I just I just need to get. I just need to say something earlier in this chambers. And these days, there was a characterization of another bureau as engaging in malfeasance because one of my colleagues did not like the answers that they were getting has been frustrated. I think we've all been frustrated with the changing balances of the housing related stuff, but you guys are doing hard work. Jonas, you said it yourself. All forecasts are wrong. I can't let something like that go stand without correcting the record. The people who work in the housing bureau are some of the hardest working, and they devote their hearts and souls into this work. And so if we have an issue with our bureaus, we have an issue of accountability that needs to stay at the level of leadership. We can talk about needing to change our organizational structures. We can talk about the need for oversight, but we never just wholesale critique a bureau as being corrupt or engaging in malfeasance or in previous situations, like maybe you're doing a bad job as a city economist. I'm just going to rebuke that. If I hear it again, I rebuke it again. And I just I needed to say that before you guys launch into this, because this is going to be a heavy topic too. Thank you for allowing me to jump in. Thank you.
And just to continue. So the, I assume distinguish between risk and uncertainty. We have a way of tracking uncertainty, which is basically how often it comes up in newspapers, periodicals and that sort of thing. And this is the index from the mid 80s. And as you would expect during COVID, economic uncertainty was at an all time high. It was also at an all time high last April when I released the April forecast, largely related to the tariff announcements and the uncertainty that that created for both economic policy, financial markets reactions and things like that. You'll note that while it is not at those levels this April, it is accelerating. And so I just want to flag that as important context because basically, this chart shows all the many ways that I could be wrong by things that are not in my like, I'm not assuming I'm not assuming a recession. I'm not assuming some sort of further escalation of geopolitical conflict, anything along those lines. And so as all those possibilities exist, it, it sets the context for the forecast that I'm going to present today. And so we can go to the next slide.
Council president, can I ask a clarifying question about that slide first before we move on? Yep. Thank you. I am wondering if what we're looking at here is a look forward, a look back or a point in time and what in time? So just to clarify that the top of the blue line is where we sit today based on the reality on the ground today, meaning we are not making any projections about what we think could happen, but it is also not a backwards look where the last month on here is, for example, February, and we're saying this is what the uncertainty was in February. It is literally the top point of that line is sitting here today based on the conditions on the ground, not what we think might happen, not what we've already seen, where we stand.
Yeah. And just because your your question, I think I should explain the methodology a little bit, which is basically tracking how often economic uncertainty is mentioned as a major risk in periodicals and things along those lines. And so those are daily. And so this is an aggregate of a daily measure that is, I believe it's weekly. So this week we are at this level.
So to that end, that means that there are not adjustments. Looking back after the fact to say, oh, we got it wrong, uncertainty was higher or lower. It is literally a metric of how often do people talk about uncertainty as a condition that matters, and therefore it is in a sense, maybe a look back of a day or two because it's a reflection of what has just occurred.
Yes, exactly.
Okay. Thank you. That's helpful.
All right. Now next slide. And so while I know we're here to talk about fiscal year 2627, I think this is a good opportunity to talk about the current year deficit as well. Sometimes in my effort to daylight every small change to the forecast or trend muddled by fiscal years or accounting idiosyncrasy, I think I might have missed an opportunity to better highlight a relatively simple story. House resolution, one otherwise known as the big beautiful bill passed in July after the April 2025 forecast, which set the budget, the legislative revenue office at the state estimated the impact to the state revenue, similar to the ones that make up the business license tax. So it's a portion of the personal income tax and all of the corporate excise tax at $362 million. For the current fiscal year, I worked with lro legislative revenue office over the fall and tracked returns in October. In November to estimate the impacts of house resolution one to the city of portland's business license tax revenue estimated that the state's 362 million translated to about 21.4 million for the current fiscal year. For the city of Portland, this analysis was completed after the fall, tao in November, December, and again, I was waiting in part on final returns. And then there was also discussion of disconnecting earlier. And if they had disconnected, if they had formed a special session and disconnected earlier, they could have actually impacted tax year. The previous tax year, and we wouldn't have felt it in the current year. And so as a reminder, current year revenues are expected to come in $17.1 million below the April 2025 forecast, which is less than the estimated impact of hr one on the current fiscal year. So I think it is fair to say that based on these estimates, had hr one not become law after the April 2025 forecast, there would be no current year deficit. I do also think that this ties back to that opening slide on uncertainty, because in April of last year, my number one concern was not federal tax policy of this kind. It was federal tax policy of the tariff kind. And that was my primary concern. And that kind of shows the range of potential outcomes of things that could disrupt the forecast is that it's not necessarily predictable. What it could be. And then I since the slide is up, let me explain the rest of it. First of all, the impact of hr one broken down by type is shown in the table below. You'll note that the bonus depreciation section is grayed out, and that the totals at the bottom do not include that. That is because the state's partial federal disconnection disconnected from that provision specifically. So this. The this March forecast update includes that disconnect. And the other. This is the business license tax forecast. Going forward. We. One of the reasons we're on track to get 220 million is in part related to the tariff story, the tariffs. While it did not have the impact I anticipated or may have anticipated, it did shift some revenue forward between fiscal years and also has reduced underlying liability. And so you'll see that I'm actually anticipating and forecasting recollect less business license tax revenue next year. Next slide. So so the March forecast is really an update. It's almost a change log compared to the the much longer and more detailed December forecast release. And so these are all of the changes that have occurred since the December forecast. And they're rolled into this on net. It is a positive. But there's a lot of, you know, canceling out of different effects. And so I'm just going to hit on like the big ones. And if there's any questions on any of them, please let me know. First of all, business license taxes that is directly related to that 5.3 million. That is the federal disconnect. I anticipate $5.3 million more next year. That is in the forecast. You'll notice that there's -3 million on utility license and franchise fees. Last time I came here I talked about the the other category, the 150 plus other utility franchises in previously they had or last fiscal year, they got 16 million of them from that group. I had previously had forecast 13 million because, you know, there's some we get back payments and things like that. We're on track for about 11 million. And so that is mostly me accounting for the current year tracking of utility license fees. Most of the other ones are smaller adjustments. But I'll also note that the current appropriation level or cal, there's been expense reductions. The biggest one of those is that because of the ongoing cuts that we need to take, we no longer have to do a general fund transfer or a transfer to the general fund reserve to meet our 10% threshold. And so our 10% threshold doesn't change by the amount that was previously anticipated. And so we do not have to make that transfer anymore. The net of all of this is an improvement of $2.5 million in fiscal year 2627. Next slide. So this is what this all means in terms of the five year forecast. As a reminder, this is current appropriation level, not current service level. My forecast by financial policy is current appropriation level. And that 50.1 million is made up of 35.6 million in ongoing cuts and 15.1 million in 1 time cuts. I think the other thing I would flag on this is that it's balanced in fiscal year 2728. There's not a whole lot of room in 28, 29, 1.8 million is a very thin gap. But the other piece of better news is that in fiscal year 2930, there is a significantly more available revenue anticipated. This is largely due to pension obligation bonds falling off. We'll have completed paying those. And so that's $19 million of that. Next slide. And then so what's next. This this shows current year business license tax collections and what is anticipated for the rest of the year. You'll see the bump where we got the larger payments in September, October that were for prior years, possibly tariff related. What is next is that in may, if this if we get revenues above or below expectations significantly just for business license taxes, I will come to council and basically give a revenue update on that in early may. I. At this time, I don't anticipate that happening or if I do, it would be a relatively small positive amount. But going back to that first slide on uncertainty, it applies here as well. And then last slide. And finally, and just to circle back on the uncertainty question, these are a few recession probability odds that I grabbed. And I think two things I would note is that they're sort of all over the place. No one really can agree. Again, tying back to the uncertainty slide into a recession is not in anyone's baseline, which I think is important because it is not in mine either. And that that may change in the coming months. And I hope it doesn't. But a little bit of good news, I guess, is that no one is expecting currently a recession, and that is all I have.
And thank you, peter. Excellent, colleagues. Questions about the presentation. Councilor Green.
Mitch Green: Thank you. I have two questions. Thanks for the presentation, peter. I really appreciate that you led with the ep or the sorry, economic policy uncertainty index. I appreciated councilor Pirtle-guiney questions. I think I want to make sure I connect the dots for folks. Did you lead with that? Because it is a direct explanatory variable or perhaps a way to contextualize volatility in the blt?
It's primarily tied to blt. Yeah, I think that's the most direct connection is there's a lot of. Aspects that influence business license taxes that are not necessarily in the city's control or have to do with anything, and it has to do more with international and national and federal tax policy or situations. And so that is a big reason why. Yes.
Thanks for just level setting that. I think for all the good things that we're trying to do to bring folks back downtown to kind of activate stuff, we are facing that headwind of just the random variable shock almost every day. I'm very concerned about the looming energy crisis. Our stockpiles are pretty good in north America. If you look at southeast asia, that's an indication of what could be coming our way. If this situation in the middle east doesn't resolve itself very soon. Dismal science. Right. The other question I have is the if you go back to the slide that has the 2627 forecast, it might just be the table of numbers. We'll do it. I think there was. Yeah. That one. Does this forecast include the expected incremental revenue from the blt that we're expected to get from the moda center transaction?
No.
For the trailblazers transaction?
No.
Okay. Do you have a sense of how much that is expected to be? Because I mean, it's a known value. It's a single transaction. So we should be able to know roughly what it is.
Yeah. Councilor I'll jump in and answer that question. I won't be able to give you a number for that because under taxpayer confidentiality law, we can't comment on tax liability of any specific taxpayers. I know that's not a satisfactory answer, but from from the advice from the city attorney is that we should not. From at least the seat I sit in, not codify a number on that I.
I understand that you've got that guidance from the city attorney, but that law is designed to make sure that we're not revealing of a traded sector. Some competitive advantage. But there's just one. It's obvious that it's.
Yeah. So let me I'll answer the question this way without a number. I mean, I think the expectation is at some point a transaction will occur that will result in a in a tax liability that will that will ergo result in a large payment related to that, that income related to that transaction.
Was reported in the press, right? It's like $4.28 billion. Right.
I have heard numbers reported in the press. Yeah. And I think there's some numbers that folks have done where there's been numbers publicly stated, and you can do the math. The reality is we don't know what that actual tax payment is until it comes in and audited. So I think there's a there's been publicly discussed expectation, and we don't carry that in the forecast. Just as we, you know, any large. We can't predict any the timeline or outcome of any specific large, you know, revenue income stream beyond what we see in the trending. So the expectation is my understanding is that when that revenue stream comes in, is audited and verified and received in our coffers, and that amount is.
We're not going to we're not going to forecast it. We're going to wait for it to accrue. And if it if the trend. Is it generally true if a transaction happens in the current fiscal year, we would expect the revenue in the next fiscal year. Is there that kind of a lag?
I it's the lag is not necessarily predictable, which is one of the reasons why I don't include it in the forecast, because things can get challenged and.
And also possible that that could come in over, you know, more than one tax cycle, depending on how it's structured by the, by the property, by the, by the individual taxpayer.
Okay, so thank you. I think that's about all I needed to level set. I just didn't know if that was already being assumed in here or not. And so if we're going to talk about the uses of those funds, it's just I need to know if we're going to double count the use of those funds. If we're if it's is it on balance sheet? Is it off balance sheet? But I think I understand what you're trying to say here. Thank you.
Thank you, counselor Green. Counselor. Smith.
Thank you. Council president peter, it's good to see you.
Good to see you, too.
Franchise fees. We got it. We all got an email from pg and e that said that they were raising their their rates. So since they're raising their rates, are we going to raise our rates, our franchise fee rates to them?
Yeah. So we don't raise the rates to them, but we get the. So if they increase fees by 5%, then that passes through to city because we, we charge them 5% on their revenues.
Okay. Just curious. The other thing I see the, the blt was forecasted at 212 million and now it's forecasted for March for 217 million, which is a nice jump from December, what we thought it was going to be. And we always have this conversation about when we need to fill a gap. The first thing that I hear from from cbo and others and jonas, we were down on blt. But when I look at the numbers, it doesn't appear to look that way. It looks like we actually have increased our numbers in the blt from the original forecast. So does that have a bigger impact on what how much we're going to have for the general fund, for our budget?
Yes. And so let me rewind a little bit. That 5.3 million is directly connected to the federal disconnect. So since the state passed the the partial federal disconnect, that is what was added back basically as that provision and short answer is yes, that it just directly. And this kind of this slide goes through all of the changes of that. And the net is that it's 2.5 million better because some things got a little bit worse and some things got a little bit better, but on net 2.5 million better.
And I have two last questions. We're in such a global predicament right now. And we have started a couple different wars. Do you include that kind of thing when you're forecasting what's happening on the federal level? Because I'm really concerned that every day I hear different things from our president, he's saying he's going to blow things up, blow up civilians. I mean, I don't know what he's going to do. We can wake up all dead tomorrow morning and not know it. But he concerns me in how we actually are able to keep our assets improving instead of going up instead of going down.
I hear your concern and I completely agree. And actually, can we go back to the first slide? So I that was kind of how I opened my presentation, was talking about the massive amount of uncertainty that has been created both last April with tariffs this April with geopolitical conflict, and also it just huge legs. And it is a real forecasting challenge. I don't include any specific scenarios like that in the forecast, in part because there are so many ways that it anything could play out and not just talking geopolitically, but also talking recession or ai bubble bursting or things along those lines. But that that does, does one of the many ways that my forecast could go wrong.
Okay, well, I appreciate it and it although it's not where I would want it to be, but it is looking better.
Yeah.
Thank you. Councilor Smith. Councilor. Pirtle-guiney.
Thank you. Council president. I want to start with a question totally separate from anything we've talked about on the forecast line. It says that your forecast on transient lodging taxes is down by $1 million. Is that based on actuals that we've seen in the first quarter of the year, or is that based on projections for summer travel or something else? How concerned should we be?
So I was projecting some growth in both occupancy and average room rates. I have not seen that growth. These in the most recent data I've actually seen, a slight decline is the most recent trend. And so I basically reduced the forecast to next year to be. It's the same as this year until I see actual data that shows improving, then that will then flow into the forecast. How concerned should we be? There is a lot of factors that influence that. And I mean, a big one that I spoke about last time is reduced travel from canada there. And it's really hard to compare year to year sometimes as well, because we have events at different times and things along those lines. In general, I wouldn't I wouldn't overweight a $1 million adjustment and worry necessarily about that. I would worry more about the longer term trend, which is that the last three years, there really hasn't been any improvement.
And your projection that there might be, I think, keeps folks a little optimistic. And it sounds like we're not necessarily projecting a decrease at this time, but we are putting off the increase.
Yeah. And as a reminder, summer travel is the biggest time for us. And so that I think post summer would be the time that I would update in a potentially increase that forecast again.
Okay. And councilor If I can just jump in a note too, I think it's important context. Peter's probably too modest, but I mean, a lot of work is spent collaborating with peter's colleagues at the county, at metro PSU, the state regionally, to make sure that we're sort of sharing information about some of those expectations. For example, the fta visitor facilities trust account relies heavily on that transient lodging tax revenue stream as well. And so there's a lot of activity to make sure that we're having that collective dialog and being as informed as we can about those those long term assumptions.
Can I just want to jump in for a second to say that when I talk to people close to this issue, they say until the convention center accounts start going up again, that we're not in a good place. The majority of our lodging tax comes from big, successful conventions, and they're struggling right now to book events. They're looking better about 2 to 3 years out.
Yeah, that's a trailer.
They're in kind of a very deep valley at the moment.
Yeah, that's a trailing indicator because they book so far out. I'm saying this. So it's on the record in this conversation. They book so far out that what we're seeing now are things.
That.
For the most part, were booked two or 3 or 4 years ago, except for the small things that book just a year out. So we're still.
Seeing a lot of bookings in 2019, and we still lived off a little bit of that, but we have not done well since.
We now have the tail from 2021 and 2022 that we're experiencing, and we expect that to tick up in the next couple of years.
Thank you.
Okay. Next question. The you mentioned that the projections are based on on cal, not current service level. And we have an increase in the expected cal on the slide after this. If we were looking at current service level instead. And I'm just I'm still a year in wrapping my head around how we do our projections and how this new csl fits in with cal that we still rely on. When we think about csl and how these projections could be affected by that. Do you project the angle of the csl line to divert and continue to get farther from cal, or do you project csl to be higher than cal, but maintain the same angle as it increases into the future?
I understand the question. I will say I don't project anything with current service levels because it's council adopted as one time. And yes, I think ruth is probably better to answer this one.
Sorry. Did you. Ruth levine for the record.
We don't have your mic yet. It's still red. There we go.
Thank you, ruth levine. For the record. Budget director. I mean, I think it really depends ultimately on on quite a few variables that, you know, things like, you know, the costs of labor negotiations, the costs of health benefits going into the future that will be in, in cal going forward, you know, choices around things like things we buy with our internal service funds, money. So all of those will impact it, I think. So I, you know, I think the it's really hard to say there's also this like kind of step function in the gap, right from the one time money, like the gap, the line is really higher above it. So I think it's hard to say. The part I can speak to is that we're trying to capture more. So things like the internal service fund rates. We're trying to do a better job at capturing those. So that that doesn't surprise us as like a gap between cal and current service level. But I think going forward, the this forecast for cal on the total expense line will inevitably increase in the out years. But to some extent that is, you know, impacted by council decisions, decisions that you all have control over. I think some of the external variable risks to the forecast are more on like the health fund on the health benefits side, just with the cost of claims and things like risk insurance rates, things that we don't have as much control over as a city. Those are kind of the main risks there. But yeah.
And apologies to keep jumping in. But I also just note that the delta between those two, the sort of the legacy, you know, there were very good reasons why cal was established in policy as the baseline, you know, 20 plus years ago. And the world has changed. And so I mentioned up at the top that kind of five year stabilization plan project. And this is an example of one of the types of things I think might be a topic of that work is to identify how do we better align in policy and practice perspective so that we don't necessarily have two separate and competing sets of assumptions to facilitate making these decisions and making a little more clear to support transparency and decision making.
Okay. Thank you. I'll look forward to seeing that final question on the same slide. In 2930, you talked about a I'm not going to call it significant, but a meaningful increase in available ongoing revenue based on some pension obligation bonds, fulfilling is that 25.6 million accounted for in the 830.3 cal in 2030 31, or if that 25.6 million is fully allocated, will we have a deficit in 2030 31.
Great question. That gets into the weeds of how this table is constructed. It is basically assumed that that $25.6 million will be allocated to ongoing programing, and that makes up the 830.3 million includes that. So there is no new deficit. It's that we will not only. And that's how the balancing works, is that it needs to be balanced over all five years. And so yes, at this time, if there are no new labor agreements, no new ongoing costs and current appropriation levels hold like that and revenues hold like that, we will be allocating $25.6 million of new revenue of new ongoing in 2930, largely related to obligation bonds. I will say there's a lot of ifs in that statement, but.
A lot of ifs that we know will not actually be negatives. Probably those things will all happen or change. But under the projections, which is all we can work with the the neutral 0 million available ongoing in 2030 31 means that we have allocated the 25.6 to ongoing program. We don't have anything new extra in 3031, but we're not running a deficit from that allocation.
Yeah. And I'll just say me putting the $8.2 million in one time versus ongoing is just a choice. I could have put that in ongoing as well, but because I don't project out the next five years, it feels incorrect, like an incorrect assumption to put it in ongoing, because I don't know if the next five years of revenue can support it.
Okay. Thank you, thank you, council president.
Thank you, councilor Pirtle-guiney. Councilor Ryan.
Dan Ryan: Thank you, council president. I saw your email. And eventually we'll get to the priorities right. This question is looking at expenses. There it is. I guess the slide is up. We're spending more time on revenue because that's what you focus on now. I see your your friend up there, jonas, who has more. He sees everything of course. But on the expense side, I started to get a little bit like yours is definitely a forecast. It's an economic forecast. Everything you said that was a minor in economics, a minor. So I kind of followed everything you were saying. So yes, true. On the expense side, it's usually a little bit more certain, I would think. And jonas, I'm not tracking what I'm seeing here, so next year you have one number and then it goes down quite a bit in 27, 28. And then it jumps back up again. I'm I'm tracking that. I'm trying to figure out were those numbers that you're really attached to talking about right now, or is this too soon?
So for that.
Still the, the economists that will talk about our expenses.
Yeah. And just because this table is my fault. So the I think you're looking at the total expenses Kanal line that is before the decisions that you will make or council will make, which is includes that $35.6 million of ongoing cuts. If you look at the bottom line, that is where we need to be in terms of what the available resources will support. So the total expenses after accounting for ads cuts and one time spending, and I probably should have made that more clear, is 742 million, 8.5 million, which is the amount of revenue that is anticipated for fiscal year 2627. So it's total expenses before ongoing reductions. And then the line at the bottom is after the ongoing reductions. And that's where you get a steady increase. I hope I made sense.
You made sense. And the exercise, when I looked at it, it looked like we had to match our expenses because we have to balance our budget and like the federal government. And so we, we did that exercise by balancing it. But this presentation's been explaining our revenue side, but we haven't explained our expense side. That's all. And I don't need to do that here. But to me, it just felt like we're filling in the cell on the spreadsheet to make sure it matched the revenue that comes in.
Councilor to some degree. I mean that the words you just said are true, right?
We all I can go from.
Yeah, we forecast the revenues and then we have to build a budget that fits within the expected resources we have. Ergo, in this year, a reduction to get to the 742. And then just to be clear, you know, this the 7767 and 28 2728 is an increase above that. 24 that 742 number for the current year. Does that make sense? So it's not it does show revenues are continuing to increase from 742 in 2627 to a projected 767 in 2728, etc. Based upon cal specifically, and the sort of technical vagaries of how that cal current appropriation level is calculated, does that is that helpful?
Yeah. I don't think I'm going to take any more of our time up on the expense side. I think we're going to have plenty of time to dive into that. So I'll let it go. But I think today's presentation from our economist is about the revenue.
Thank you.
Councilor and I will make more comments on that later.
Yes, sir. Great. Thank you. Councilor. Councilor Smith.
Loretta Smith: Thank you. I want to piggyback on what councilor Ryan was talking about when we were in the previous committees. I was the chair of the labor and workforce committee, and there were 450 people who are current employees that were eligible for full 30 year retirement. Are there any policies that that we have around retirement and being at full retirement and what that looks like? I know that's a huge deal because we have to pay out vacation time on all those employees and convert some of their sick time into time that we have to pay. But just in terms of expenses, it would be helpful to see what those expenses are. Are they fte expenses? Are they? External services, internal services? I'm just trying to figure out where that where that count is. And the other thing I would really like to see, I've been asking about it, but I, I'd like to see and I think this number reflects it, but I just don't know what the breakout is of our debt service over the one, two, three, four, five next five years. It would be great just to see when does debt service drop off and how does that impact these total? Total expenses and total resources? Just so that I can see what it looks like. What are we paying in total debt service right now?
Let me let me take the the second question and pass it as a first. So the debt service I have been including and I should start including in presentations because it's a question I get asked a lot, the general fund debt service. So I have a table that breaks that down. And as I mentioned, a big reason why we have available resource in 2930 is related to debt service falling off.
And that's what I was thinking. That was, but I didn't see where that was coming from. And that was going to be my next question. Is that big jump in 2930 debt service, lack thereof. Debt service.
Yes. So it's related to about $19 million of pension obligation bonds falling off. And then just a little bit of other revenue. But that's the big piece. And I can get you that table. We do a lot more debt service than just what's in the general fund. I mean, the water bureau and all those do that.
But but I would like to see that too. I'd like to see the total debt service even in the restricted funds, because that's important. That that helps me to understand if there are things that are going on. It's not just this, this is a pension obligation fund, but the debt service that's in those big departments like the water transportation parks, those kind of things.
Yeah, yeah. Councilor we certainly have that information. It's published in a few different places at various points throughout the year, and happy to redirect you to those via email.
Thank you, thank you.
Thank you, counselor Smith. Councilor Kanal.
Sameer Kanal: Thanks. There's a few things that I think have come up that I want to make sure there's room to discuss in the appropriate space. So just mentioning for the future, I think there's a conversation about internal rates. There's a conversation around trying to anticipate what our long term paths on a few of these things are. But one thing I wanted to circle back to that my colleague asked about here was the transient lodging tax. And if you can go back to that slide, I really appreciate it. Yeah. So this one shows the reduction in the forecast. But as part of the conversation, councilor Ryan mentioned that there's a conversation specific to the convention center. What I'd love to know is how that's how that data can be broken down. Further to understand geographically, size of hotel, whatever sort of information that that can be broken down on at least those two levels. If there's other levels that would be helpful as a person with an event planning experience, including here in Portland, I can say that there is a lot of they're kind of actually similar to many of our other problems. We have incentives to come here for the first time, but not a lot to help you when you're already here. And we also don't have a lot of help for event planners who are trying to scale. So this is a challenge that I think could be highlighted. I was intending to talk about this in the earlier conversation today, but obviously we went over time to try and use some of the tlc money that we're already collecting to reinvest into helping some of our events who like to stay here, continue to do that. Because if it's actually this, the parallels to other conversations are really high here. If we're able to bring in some new business but maintain all of it, we will do better. Whereas if we are bringing in new business, but we are losing our existing business, we will be spinning our wheels. So I would love to understand that a little bit better. Is that data that you can disaggregate?
Yes, there is revenue by location. It's normally split between like four business areas, 4 or 5. The big ones tend to be around the airport and downtown, and then other areas related. I, I'm, I believe our revenue division can get more granular, but the convention center also, we have pretty good data on that too, as.
Yeah, I was just going to add as part of the fta, the visitor facilities trust account, those projections which are managed by the county, the collector of the transient lodging tax, has a breakout for it's specific to the convention center hotel, but the revenues that they collect under that broader tax tlt, regional tlt and a forecast that's a little more tied to projected activity at the convention center. And so that's a really good proxy of expectations relative to convention center activity over the next few years. And so that's certainly something that's available. And then yeah, happy to explore getting additional data by other disaggregation.
Yeah, that'd be super helpful. I think over time it would be something that might be worth trying to develop more tools for that to understand, because there is a difference between an event, some, you know, meeting space revenue from bookings that include a meeting space component or not, I guess is the question I'm looking at there. The other thing I wanted to mention.
While we're on this, I'm used to work sessions being a little more conversational. Okay, so I'm glad that we're having this dialog. The reason I wanted to bring that up earlier is because when I was with a group of hotel motel owners and managers and restaurateurs, I wanted to hear how exciting March madness was because I saw a lot of tourists here and they said they, you know, they experienced a little bit of bump, but they all agreed that it was mostly around the big conventions that influenced their numbers more so than a big sporting event for a few days.
Yeah, that makes sense.
And so I think that we're on to something that we really need to stay tuned with the convention center data.
Yeah, I think we talk a little bit.
About summer travels is down. Yes. And some of it now we're experiencing at the, at the, at the gas station, if you will. But it's also for other reasons and our reputations down. So people don't travel here like they used to.
And I think the reputation.
They all talked about.
That is going to, it's going to be a trailing indicator in both cases, but it's going to be more. The trail will be longer for events, but we will see it manifest more quickly in people who might be in spokane and choosing or somewhere, you know, broader regionally and might be choosing whether to spend a weekend in seattle or a weekend here or weekend in san francisco, that kind of thing. Which is why I think that that separation of meeting space versus not. And it's interesting that you mentioned the sports piece because that that might be a sort of third category that otherwise gets lost in the sauce with with the things that with the larger events, because often if a sports team's coming here, they'll book a meeting room to do a group meal or something. Even though the primary purpose of their visit is not to do an event in the hotel, but instead that's just a secondary thing before they go to the arena or something. So I think those are whatever we can do there would be helpful. The other thing I read the opb article that I think you were referencing about canadian tourists, which by the way, is three and a half times the second biggest chunk of our international visitors by dollars, up 29%, I believe was the stat. And I also know that maybe more than any other location, there's a component of of exchange rates. To this. And so I'd love to understand not only not only in the context of other, the sort of new and emerging terrible things that might affect our relationships with the rest of the world. But the, the existing ongoing things that might be good or bad on a given day. Obviously, if the canadian dollar is stronger than they will have more purchasing power to come here or wherever they might go in the united states. So I would love to understand that a little bit better. I don't know if that's something that that falls into your shop in the slightest, or if it's something that might be. And part of the reason I'm asking you this question is I have yet to get a straight answer as to who owns the tourism portion, because I keep getting prosper travel Portland, or who in the city owns. This is a question I don't get a straight answer to ever. And that's not on you at all. That's that's more this box. But I'd love to understand if that data exists anywhere or who would be the person responsible for that.
My interaction would be with how that impacted our tlt revenues. But beyond that, I, I don't know. And I would say that in it would be very, very hard to pull out that specifically from the broader tlt conversation. Separate of the tourism question you asked.
Okay, that that's super helpful. Can I just either the mayor, the city administrator may have any information on who should I be going to in the administration to talk about tourism?
Sure.
Council president, I sit on the visitor's development fund and it's primarily a travel Portland generated table. And it has county, metro and the city. And we're talking about how do we bring into our attract conventions and other tourists and such. So there is that table. It's just I think councilor Ryan hit it, you know, reputationally we're in that sort of doldrums. And then also nationally, we're just not a destination for international travelers right now. But we're working at it. I mean, we, we are definitely talking about it often.
I, I appreciate that that's all good news. But who, who in the administration owns it because that's travel. Portland. That's the, that's the mayor's office. That's maybe there's council involvement that I'm not aware of, but I'd love to be a part of that. And that's my background has a lot of that. So if so. But yeah.
I know mostly it'll be in our community and economic development portfolio under danny olivero, who would be responsible for that information, since there is a group of combination of different entities that are housing that information, he would be the main point person for us to gather that. I'm not for sure if we have a main focal point in our city as a person or a division within our city that is tracking that type of information. Typically, that's more in your economic development arm of your organization that is with, in our case is with prosper.
Yeah. So that's, that's something that I'd like to see an in-house conversation with because it's, I don't want to be in situations where it's counting on someone who happens to agree or putting a request into the void. And often in the conversation around tourism, I've been, this is over a year long set of questions that I've been having there. I don't want to get too far afield. We'll have the committee of the whole to talk about all this stuff later. But there was a thread leading off from the tlt here. I guess what I'm trying to say is, and I'm grateful for having a mayor who speaks positively about our city, something that we have not always had that to help with the reputational piece, by the way. But I am looking forward to that being a larger percentage of our revenue stream in the future, and want to have that conversation in the appropriate place. Thank you, council president.
Thank you, councilor Kanal councilor Green.
Mitch Green: Thank you, mr. President. Because we're on the transient lodging tax line item. Peter, I do have to ask and I'm not trying to make your job any more difficult than it already is, but how do you go about forecasting that? Like what's your general methodology?
Yeah, it's it's relatively I say it's relatively simple where you just take the number of rooms that you expect the average occupancy rate. And this is I use publicly available travel, Portland travel, Oregon data to, to track and kind of come up with an estimate of our occupancy rate. And they also provide average room rate. And I know our tax rate, you can just multiply all those together by the number of days in a year, and you get a pretty close estimate. I generally speaking, true it up to what we actually receive. And where the forecasting component comes in is changing average room rate. I we're not building a lot of hotels, so I don't really change the number of rooms available, but it's really changing average room rate and average occupancy rate. And right after COVID, for example, we saw a big spike in the average room rate. Even though the occupancy rate wasn't there, that died relatively quickly. And both have been up and down, but relatively flat for the last three years.
Thank you. So I think I've got a pretty good handle on that. So you you're not trying to sort of like do a hedonic pricing like forward looking. Oh, the cost of fuel affects flights and then affects the vacancy or the occupancy rates and that sort of thing.
The you could, you, you could get to that level of detail when forecasting the specific average room rate or occupancy rate. And I will look at that sort of thing. But I don't have any built out model, in part because the actual data themselves are modeling assumptions.
I appreciate that because this is a work session, I am going to request to share my screen because I think it's important for us to think through because it's a non trivial share of our income. So I'm just going to just try to do this. I hope it works. There we go. This will work. Can you guys see that. Yes. Okay. So what I've got on the screen here is platts. S&p global energy platts has an index for jet fuel price. And you know where I'm going with this is since the since the oil war that the president has pulled us into by for unknown reasons, the the price of jet fuel has spiked extraordinarily. And this every day I read a new article that says airlines are now raising a baggage fee or they are now going out and trying to secure contracts in the forward market futures market to try to lock in based on expectations that this is going to continue to go up. And so I guess I'm really concerned, and I don't know if there's much we can do about it because these are external global impacts. This is a global energy market. But I am concerned that we're going to have a leading indicator from this that's going to put a serious drag on our lodging, transportation, lodging line item. So if you have a heuristic method that sort of is a scenario based that says, well, let's suppose there's some bad case that we need to think about and plan for that. You don't necessarily explicitly model at the level of a hedonic pricing approach. I would encourage us to maybe consider that because I think that's coming our way.
I think that's a great point. Councilor I this ties very well in with, again, that economic uncertainty slide because not only all the things you mentioned, but they're cutting flights. And that's the probably the bigger concern because we're not a major hub or anything along those lines. So yeah, I it's certainly a risk. It's not necessarily a risk I want to put into the forecast until. It continues on a little bit longer. And we have time and we see how it plays out over the summer, which is again, the biggest time for revenue. But yeah, great comments.
And I appreciate that. And I think that's kind of more for this body to think through. And it's more for, you know, jonas, when we do this financial get well plan working group and we're thinking through the five year plan is. When we make decisions that draw down reserves or we make decisions that sort of draw down contingencies, and those contingencies are based upon risk assessments. I hope that we're thinking about some very difficult to model risks that affect probably directly this lodging revenue structure, but maybe indirectly, some of the others through the blt. So I'll stop lecturing and I'll yield at this point.
Thank you, professor Green. Councilor Smith.
Loretta Smith: Thank you. And you may have talked about this before I was here. Just curious, where is the line item for the 7.8 million that our Portland housing bureau receive is receiving or going to receive from the ritz agreement?
I do not believe that's going to the general fund. I believe it's going.
I see michael here. I know he signed it. I saw his name on it. Is that in this year's. The 7.8. Excuse me. I'll let you come up.
Council president councilors michael bowen, interim director for the Portland housing bureau councilor the the negotiation process is ongoing. So it would be if we come to an agreement and the money is sort of finalized and secured, it would be added in a towel, I would imagine.
So are we going to do a budget modification once we get the 7.8 or. I thought.
Depending on.
What was already a done deal. I thought you signed off on it in March.
No, they're ongoing negotiations.
Okay. So that would be really good to know because that's not something that we're really expecting. And that's a nice piece of general fund money. A one time I look at it as one time only money. So can we go ahead, ruth.
Just to clarify again, it's not general fund.
It's not general fund.
Yeah.
It's is it housing? It's it's it's for the rental. It's inclusionary because they were supposed to be having affordable units over there and they had to pay us in lieu of having those units. Am I correct?
That's correct.
Okay. Okay. So I should have explained that in the beginning. I know people are wondering what is she talking about. That's good. But I do want to know and I'll and I'll ask occasionally over the budget cycle, if we've gotten that 7.8 million in yet, because I want to make sure that we account for it in this coming up, fiscal year 2627, we have a gap. So I'm just I know it's housing money, but it's still can offset our budget in some kind of way to pay for those things.
It will definitely be known when we come to an agreement.
Okay, I appreciate you. Thank you.
Thank you, councilor Smith. Colleagues, very quickly, time is currently 330. We have a hard stop at 5:00, and we still have to move to the second half of our item this afternoon, which is discussing council priorities through the budget. Councilor pirtle-guiney.
Elana Pirtle-Guiney: Very briefly, I just wanted to chime in on the conversation that councilor Kanal had with the mayor about who is point on conversations about tourism in the city. I believe that is part of the. Very broad charge for our city life committee. And if there are conversations that you'd like to make sure we are having that are not currently being had, let me know. I'd be happy to make sure that we dig in on the topic more this year. Thank you, council president.
Thank you very much. Thank you councilor. Okay. Seeing no one else. Thank you gentlemen. Colleagues, the format for the rest of this afternoon. First, I'm going to turn it to the mayor to see if he has any updates about budget process or anything he'd like to share with the council first, and then the the remainder of our afternoon is in response to resolution 37732, which was when we adopted our budget calendar, there was an amendment specifically explicitly requiring council to hold a work session in front of the mayor in order for us to be able to express our what cuts we find acceptable and what cuts we find unacceptable. I'm going to turn it over to mayor wilson to start.
Council president, thank you so much. A few words. Thank you for having me. Council colleagues, as you all know, we are in challenging financial position, far more challenging than last year. We have hard and important work ahead to close a looming funding gap. Virtually every program will take at least some cuts in order to lessen the pain. For crucial core services, other programs will need to take a far more painful reduction. I know many of these programs are important to you and they benefit our community. I'm sorry for that. This is a reset moment for the city of Portland and how we show up for each other matters. We can't just tell each other what we want to hold harmless. That isn't a realistic option in our current situation. Instead, we need to come to each other with open hearts, creativity, compromise, and most of all, with the willingness to put forth meaningful and specific sacrifices. Those specific cuts must include program areas that are important to us personally. I promise we'll get through this and that we have far brighter days ahead. We see signs of a renewed and resurgent Portland everywhere. We may have less funding to work with, but we have the same underlying obligation to foster a safe, activated, prosperous community. Thank you, and thank you for all that you do for Portland.
Thank you mayor. So, colleagues, we're now going to enter into an opportunity just where folks can have. I'm I would love it if. Let's see, we have 90 about 90 minutes left and about nine of us on the dais. So let's try to aim for ten minutes apiece. As folks can tell the mayor specifically what your priorities might be, what cuts you find acceptable and what cuts you find unacceptable. As the mayor said, this is a cut year. Nothing is going to be held back, held harmless. But and while I'm sure much of the mayor's budget has already sort of proposed and ready to go with some futzing on the margins, I think this is also a good opportunity for us to preview what those red lines are going to be for us each, what amendments might be coming forward from each of your offices if it's not reflected in the mayor's budget and a general discussion about prioritization. So feel free to jump in the queue. And I'll start with councilor Zimmermann.
Thanks, mr. President. And to the mayor and and city administrator, it's it's no easy task to propose a budget, a balanced budget in a year like this. And so I, I recognize the position you all are in. So it's, it's an interesting time to weigh in on the cuts when we don't know what the cuts are, but I, I think it is helpful. And I've always believed this in my career. I've kind of outlined where those priorities are. So I think this is a valuable exercise so that you have all the decisions or information to make decisions. Mayor, I think one of the challenges that governments often face are do we make across the board cuts or do we make targeted cuts? I'm not a particular fan of across the board cuts, usually because in the time of doing that, there is a crisis or a part of our of our civic life that is not going well. And so if you do across the board cuts, I believe them to be kind of erroneous in terms of what our focus is or our improvement area or our, you know, key indicator of success. So there have been times where I've seen that occur. And I'd say those were the they were good times. But for the budget situation, I don't think that's where we're at. Meaning I'm very comfortable with targeted cuts because the targeted cut or a greater targeted cut versus everybody cut, that's equal means that you're highlighting the key areas that you want to prioritize. And I actually think that that's important for portlanders. I think it's important for this council. So I'll be more favorable to a plan that says, here's what I'm prioritizing. And because I'm doing that, I'm recognizing that I'm putting a larger cut in other areas versus an across the board percentage. So if that's what we see, I think I will respond to that favorably, even though I admit there will be some areas that that either will not exist or they will take such significant cuts that it's going to be a significant emotional event for some folks. But I think I think we still are in crisis time. In those conversations we had last year about what do we focus on in crisis time, I think we're still present with a lot of that. And so for me, those areas that I hope you are preserving wherever possible, mayor, of course, are in the livability and cleanliness areas. Anything we can do that we think will increase the amount of capacity, the capacity of units available for people to live in. So housing capacity, which really gets at that affordability matrix. I think a year or two ago, I think people were talking a lot more about public safety. But I think affordability is front of mind for so many people in a way, because I do see some significant improvements that have happened in the public safety and livability realm because of your efforts, because of all of our efforts. And then, of course, protecting those the public safety areas. I I'm looking for, I'll say, slight system improvements in how our neighborhood associations get to participate and weigh in and work with us. But I don't I don't foresee significant budgetary changes. I just see more of a direct recognition of the role in which they play in the community that you might be able to articulate. So I, I say that because I'm going to be I'm going to take seriously all system type approaches. When I put those in the category of. None of those will be easy decisions, I'm sure I'm not going to. I'm not going to. Or perhaps it's a red flag to use or a red line to use. The council president's. The cute headline type of cuts or kind of the silliness cuts of, you know, proposing. You know, I want to, you know, if we if we see those types of things get put up, I'm going to react a little differently because I'm not sure that they really fall into a fixing of the system approach. And if you look at that forecast, we just looked acute. Headlines aren't going to save us. We've got to have a system of like, what are we reducing? What do we no longer investing in? Because we've changed what our core lines of business are, those lines of effort where we spend our time, they matter. And I think that safe roads, safe public space, livable public space, public safety apparatus that actually picks up the phone when you call 911 that actually gets there when they when they dispatch that is building homes that isn't isn't stopping you at the permit line. Those are our core functions and everything else kind of falls in the extra category, making this new government work is a core function, right? Setting up this government to work was a big part of our duty in this first year. Steps backwards in that realm will not be met favorably. And then lastly, I just will say. I, I, I guess looking at, I'm approaching this budget differently than I've ever approached any budget in my career, which is I am not bringing a list of things I want to fund because I think the system is so dire and our number is so dire, but I am coming with a list of things I want to protect that are, I think, going to be in the areas based on what I've seen you portray to the public. So that's very different than a. Normally I think the way district counselor thinks about stuff, but I am putting that guardrail on myself and I. And I'm hoping to have those be considered core functions by you and your administration. I welcome the opportunity. If you see it, if there's something that's not working, instead of leaving it on life support, pull the plug. Meaning if we see a cut of some program at a 50% or more, I'm really going to actually have the question in my head, not how to restore it, but does it need to exist? So I share that very publicly because I want to give that opportunity of if there's something that's not working, we're keeping it there for the sake of tradition or the sake of previous councils try to do it. And it's just been languishing for a long time, but it's not producing results. If you are seeing that from the administration, I hope you'll share that with us so that we can take significant change there, because in order to preserve the lines of business that are core, we may have to fully abandon some lines of business that are not. And I don't know what that looks like from your chair. What I'm giving you is an invitation that if that opportunity exists, I will listen to it without being reactionary on how to restore it. Right. And I think that that's a real change. And I want to share with my colleagues, based on the last steering and oversight committee that I went to with Multnomah county, we got a pretty good and in-depth report on quite by the numbers on how's h, how medicaid funding, how our system works with permanent supportive housing versus Oregon hospital, state hospital and the mentally ill and the co-occurring and. Et cetera. Et cetera, et cetera. And most of my career in government has been based upon or governments have generally said, what are we not doing really well at? And we have tried to put resources on how to be better at that thing. But that last assessment by healthcare and by the county, I think, has solidified me in the position of I'm interested in funding the things we're good at at a higher level, meaning we can we are doing well by members of our community who are who are facing homelessness from a poverty only position. And we shouldn't have anybody who from that perspective isn't supported. I think we can do better there. But what we were also seeing is that our our system in this community of permanent supportive housing is probably obscuring the numbers for what of people who the Oregon state hospital probably is the most responsible entity to be caring for. And so if we are not, if we're putting a lot of money at an area we're having a really bad outcome for, I want I'm going to look to be supportive of stopping that until we figure out what the problem is, because right now it ain't working. And that was that really jumped off the page. And after a year of plus of that, I think I'm to that position of money after what works, recognizing that someone's not going to be at the table, but I'm not going to do things at a lower quality to ensure that something that we're really bad at is at least at the table, for the sake of saying it's at the table, I think that we've got to get serious about what we're good at. So I just share that. Mayor, you have a tough job coming up. Colleagues. I know we're all going to come about this from 12 different perspectives. I know I'm approaching this budget in a very different manner. There's your nine minutes, mr. President.
Thank you. Councilor Zimmerman. Councilor pirtle-guiney.
Elana Pirtle-Guiney: Thank you, council president. I don't think I will need more than half my time. Mr. Mayor, this is not a surprise to you. Number one red line for me. We made a promise to voters last summer. We said we are referring a parks levy. And if you support this, we will make sure that certain services within our parks are maintained. Bottom line, we cannot come in less than a year later and break that promise. I understand everybody's going to take cuts, and there will be some things within parks that need to see some reductions, but those things that we promised to voters would be funded if they passed a parks levy must be funded. Otherwise, we all lose credibility with the people who supported us. When we asked them to dig a little bit deeper. I want to talk about long term impacts of cuts. I agree with my colleague that we should be looking at targeted cuts, but I want to make sure that where we are making cuts doesn't have a first year cost savings at the expense of a second and third year cost growth. I will I'll be using that lens when I look at the budget you bring to us, I'll flag two things that I will look at critically because of that lens, but it's a broader lens for me than just these two things. The first is our community violence prevention programs. We know that many of the things within that category, perhaps not all, but many of them reduce costs in the long run. And to take short term cost savings there, knowing the cost growth, we will see when violence increases. That's not a one year cost savings that I can support. Similarly, we know that there is often pressure to reduce internal costs and then contract out work to make sure we can still do the same things. Sometimes we can do that in the short term, at a lesser rate. Often, cost savings come from offloading assets or from one time cost savings for not having to upgrade assets, and those things almost always end up costing more in the long run. I want to make sure that we are not devastating our own workforce to try to save costs in ways that will then not only. Leave more portlanders unemployed, which has a cost to us, but leave us with costs to make up for that. As contract costs grow in the future. So that principle, what are the long term impacts? Do we have a year one cost savings, but a year two, three, four cost growth is a critical one for me. Those are two examples where I've seen public entities go awry on that principle. In the past, we were asked to look at both cuts and revenue, and I'm not going to propose revenue increases, but I just want to talk about some principles there. I am concerned that there are a lot of places where we are looking at revenue needs that end up shifting costs from a broader to a narrower base, and I am concerned that we are becoming more and more reliant on fees that generally have a flat rate, maybe with some exceptions. But that our tax system is not as progressive as we like to think it is. I don't think I can say we have to hold a bottom line on those two things right now. But I do want us to look holistically at the changes that we are asking portlanders for in the fee and tax and other revenue space, and make sure that the collective impact of our decisions doesn't end up putting continuously more and more pressure on working families in our community at the expense of broader and more progressive revenue raising measures. I think I'll end there so as not to dilute the impact of those things. Thank you, council president.
Thank you, councilor Pirtle-guiney councilor Smith.
Elana Pirtle-Guiney: Thank you, council president. I thought we were going to have a conversation. So I haven't heard you respond to any of the things that you've heard. Okay. I don't have any just outstanding things that I need other than things just to maintain what's already been in the budget. I'm always going to fight for putting resources in, in our underserved youth for summer jobs, period. That's a given. And I'm really concerned about the apprenticeship programs in the pre-apprenticeship programs that are expected to be reduced. I've gotten lots of text messages from andrew mcgoff and from work systems that they've received letters already, and I thought that was odd. The other thing that is that is really brewing under the, you know, surface are the the neighborhood associations and the district coalition offices and that they're currently being asked to send back RFP that will include other non-profits to be able to, to manage with, manage the relationships with the neighborhood associations and how they do their work. They basically pay for all of the festivals and their insurance and those kinds of things. And they're behind in getting their resources. I met with them this past Saturday, and they wanted to sit down with the city administrator to to go over it, and I told them that I would ask you about it this week, and this is what I'm doing, because I think we need to sit down first before we talk to the mayor, so that we understand clearly what it is that that's different and how we do business. The way they're being asked to do business, they they reduce the district coalition's from 7 or 8 now down to four. And that's in the community engagement, the interaction that they've been having with our community engagement officer has not been a positive one. They're not getting the answers that they consistent answers about how they go about. And why are they being asked to do it this way? Is there a possibility to change? There's a lot of institutional information on how they do the business that they do with within the neighborhood association. So that has always been an issue. I've watched it over 30 years, but with this new change, there are new ways for them to get their money. They're getting their money late. And as a result, if district one coalition had not put some money in reserves, they wouldn't be able to put on all the festivals and get the insurance for this spring and this summer. So that's a problem. And I know it feels like it's minute, but it's important to them. And there is a kind of a rift between what they consider. White home owners and diverse renters, and who and how they run the neighborhood associations. And so there has been countless, you know, meetings in the past about being inclusive. And I, I pointed out to them on Saturday that I was the only me and my staff were the only diverse folks that were sitting around the table and that we can't have renters and homeowners fighting. We need to get you all information so that you can make the best decisions about what we're doing as a city, so that there's an undercurrent there that I wanted you to know about. And I'll work with you, city administrator, about getting a a round table meeting with them. The other piece that's really concerning is. The overnight shelters. I'm just so concerned that we're not going to be able to pay the full freight for the overnight shelters, because we don't have the money. And I know you've been working hard talking to other counties to try to get additional resources, but everybody's talking about the homeless infrastructure. It is no question that our city has been beautified as a result of the work that we've done over this last year. It has changed. It has changed in a big way. Even in my neighborhood, it's changed and everybody recognizes that. And so, oh yeah, the district coalition folks said they wanted me to tell you thank you for cleaning up because the streets do look better. They did tell me to tell you that too. So and I agree with that. But I think we have a we have an issue around how we're going to pay for those one time resources. And I don't know. I'm glad I don't have the first. I don't have the first look at it. And to make those very important cuts. And you're going to have to make some cuts. And I would rather try to live with some of the cuts that you're going to make. Now, instead of saying that during the year, we're going to we're going to make those cuts and we're going to realign during the year. It just puts us so behind. I just wanted to let you know that that that's that's a problem. Thank you.
Thank you, councilor Smith. Councilor Green.
Mitch Green: Thank you, mr. President. Thank you, mr. Mayor, for being here. This is an important set of conversations. I'm going to do some dittos. Wait, let me set my timer here. Okay. I'm going to start with a ditto on councilor Smith. You talked about the need to make sure we're supporting those neighborhood associations on their insurance and sort of their they have a minimum viable money that they need, that if they lose that they cease to exist. You know, we can have our critique of that model. That's a that's an interesting philosophical discussion to have, but I know a lot of good things happens out of those neighborhood associations. So I'm going to want to not cut that deeper into the bone. I'm going to ditto everything that councilor Pirtle-guiney said. I think that you hit. I think the core of my top lines just want to reaffirm very directly that we did make a promise to voters. I knocked doors for the levy personally, and I told them at the doors that we were going to we were not going to lose a service delivery on that. And I'm not going to go back on that in the budget. I'm not going to support closing fire stations. I'm not going to support cutting public safety specialists. I'm not going to support cutting Portland street response. Those are things that are going to yield long term savings in our public safety investments. And if we cut those now, we're going to lose a lot of progress. I I'm not going to support using the Portland clean energy fund as an ad hoc budget plug. We've seen some glimpse of how that might work. I'm a hard no on that at this point. We just amended the climate investment plan. We just went through a robust community process. And so to come in in the budget and add in some other stuff there, that's that's not going to work for me. I'm not going to support cutting the auditors budget beyond 3%, which is what she's agreed to, because I understand that we're all we all need to share the load in this thing. There's no magic money tree out there, but that's an independent branch of this government with a duly elected official that needs to carry out her her charge. And I worry about the city council and the mayor bringing forward cuts to undermine her ability to execute as the auditor. That that startles me. So I won't support a cut beyond 3%. Things I will support because I know that we've got to find the money. I will support pulling forward in time our expectations on what the business license tax revenue is going to be from the transaction of the trailblazers, which is 40 to $50 million. I know jonas couldn't say it, but I can because I've seen it in the press. I will I will support using that money to backfill the things that we know are one time costs, because that's a one time revenue. I'm not going to support the same level of the shelter model that you proposed last time. You know, we can we have to have further conversations about what the right size is. But I think it's too expensive. And I don't think we need that 1500 bed capacity in terms of the impact reduction program. You know, I'm going to take some heat for saying this, but I think we need to cut deeply into that too. We have a legal requirement to do a minimum amount of sidewalk campsite clearances. We have we have a creek settlement. I think it's the creek settlement, ADA settlement. We've had a lot of settlements, so I'm mixing my stuff up. But I know that there is a mandated minimum level of that work that we need to do. Whether I like it or not, we need to execute to that. What I worry about is that that's just a a cost basis in our budget that continues to grow because, you know, you might, you might clear some folks out of downtown, but you're continuing to throw away their stuff over and over and over again. And it's, it just burns cash. So I think that there's, there is a right level of spending there. Whatever we approve in the budget, I want to make sure that we are spreading that resource across the entire year. So we don't come in later in a fall towel and say, we need we need to approve some encumbrance carryovers to pay for more of it. I'm also deeply worried that if we continue down that same path, we're going to push people into forest park because they're driven out of downtown. This is what I've heard from some folks who are thinking about going deeper because they're worried. And that introduces a very unacceptable fire risk to me and my my constituents. I do, I do support, I do support looking at the number of senior executives that we have in the city, the deputy directors, the directors. You know, deputy city administrators, and asking the question of whether we need to continue funding those at that same level. I know you guys are doing span of control work right now. I know you guys are already thinking about that, but it's going to be really hard for me to accept the budget that cuts into our rank and file. If we have just allowed and validate validated sort of bloat at the top, that's going to be a red line for me. Councilor Kanal you've raised this many times in many different settings, but I don't think that we've really done a satisfactory deep dive on the ems contracts that we have. I know that we've done some little stuff here and there, but if there are planned for consultancy, external contracts that are buried in some contingency funds that are waiting to be sent spent over the course of five years, let's do an evaluation on what can wait, what doesn't need to happen next year, and let's cut into those. I think there's probably a lot to be gained there. And again, you know, similar to what councilor Zimmerman was laying out, there's there's nothing comfortable about this budget and everyone's going to hate it in some way, shape or form. So I sympathize with you. Even though I'm pushing back on your shelter plan, I really do. I think that various times in this council, we've adopted budgets that have five year plans in them or have long run plans in them. And so our bureaus have planned through contingency balances, resources to execute on some of those plans. And if there's not work that's already started, or if there's work that can be pivoted at a big cost savings, let's have that discussion and let's see if there's something that we don't spin up that already hasn't spun up. I know you're looking under the hood. I've said I've said sort of my broad strokes here. I'm still digesting what we saw last week, and I'll try to do my part in offering more specific suggestions as we get further down the road, so I'll leave it there for now.
Thank you, councilor Green. Councilor Ryan.
Dan Ryan: Thank you, councilor Dunphy or president Dunphy. Mr. Mayor, let me start this thing. Mr. Mayor kelly, I am counting on you. And as has been mentioned, something I have said in my career for decades, no targeted cuts. I think across the board,
Cuts are actually lazy and please be strategic. I expect to see bold restructuring to find efficiencies, the efficiencies in this new form of government. We were all expecting. The voters didn't expect to pay more for the new form of government, but that's exactly what we're currently experiencing. I started asking in 2024 for a plan to make the operational efficiencies that the voters asked for in the change of government, and thought that would happen after they voted for it. I asked for that in 2024. It didn't materialize. I said, let's give it a year. As you recall, I asked for it last year at this time. So this is my third year hoping for a reasonable request to make more efficiencies in our enterprises. Finally. Granted, as such, for the third budget season, please make it a priority to evaluate this. We built out the dca level of the city and didn't take offsetting reductions in the bureaus at the same time. Again, I brought this up in the old council. I brought it up last year. I'm bringing it up again. There are some efficiencies in there. They're not going to feel good, but it's why we're here to make these bold decisions now. Since this work was not done by the former administration, I am counting on the two of you. I want to see this restructuring for efficiencies in the operations as part of this proposed budget. The expected decylamine. And that means that the dc level dca level was as promised to voters. Again in the charter, the right sizing of a new structure. That's really complicated. But but people have done this in the past when they when they restructure and they make these efficiencies. And yes, it turns out to be cuts usually at the upper management level. And please, while you do it. Don't let don't let perfect be the enemy of the good. Give us something. Another priority for the mayor's proposed budget that I hope to see is that we change our practice about how we give out money through grants to nonprofits. That takes needed resources from every bureau and office in the city's enterprise. This is a service organization. Our customer service must always go well beyond the bottom line, and I'm proud of that. And we are not a foundation. I think the public would be shocked to know how much of their tax dollars that we are giving to non-profits, rather than using them to directly fund our city services and keeping those funds to keep front line workers on our payroll. I will call out some exceptions to this. The voters approved the Portland children's levy, the voters approved pdf, the voters approved an arts fund. Those were created specifically to fund programs often run by the nonprofits, to deliver specific community focused services like councilor Kanal repeated point about stop spending, stop sending out money for professional contracts. We need that same challenge on the money going out to the general funds of the nonprofits. Now, let's talk about the federal funding we received during COVID, that big infusion of one time federal funds created a system of passing dollars from the city to the nonprofits. That's when this exploded. The system is now entrenched, although the money is no longer there. The federal dollars to our city coffers have dried up. In fact, much of the earlier conversation about rent vouchers were financed by that COVID windfall. I don't want to reopen the debate, but had to mention that. And we all knew they were they were not sustainable. After the COVID windfalls, we need to use our city operational dollars to fund city operations, and I want to scrub the agreements we have that are funded by the city's general fund. Those who are paying taxes rightly expect that we have responsiveness to our city services. There were some agreements on this actually, when we met as as an elected body doing our priorities. You'll find those there. There, we got to some basics as a group of 12 who don't always agree with each other. But there were some similarities on some. I need to see these bold and rational decisions. When you deliver your proposed budget. Thank you, mayor wilson and city administrator lee, you are the dynamic duo that we have been waiting for. Please impress me and all portlanders. Thanks.
Thank you. Councilor. Ryan. Councilor. Novick.
Thank you, mr. President. I wanted to follow up on one of the things that councilor Ryan just said about how we've added a new level of administration with the dcas and haven't made countervailing cuts. And I talked a while ago to a former bureau director who said that, you know, it used to be under the commission form of government, that the bureau director was sort of the public facing person and the person who dealt with the commissioner, and the deputy sort of ran the bureau day to day. Now that the individual directors have a different role, do they still need deputies? I'm not going to target any particular bureau, but I just think that's a that's a reasonable question to ask. The public needs to know that the vast majority of the general fund goes to police, fire parks and other public safety entities, such as the community violence prevention folks that councilor Pirtle-guiney was talking about, Portland street response, etc. I do not want to cut any of those things, but we probably are going to have to cut them in terms of. One thing I want to do is. Second, what councilor Pirtle-guiney said about. I do not want to cut the community. Violence prevention entities such as ceasefire. When it comes to the police, I hope that we can avoid cutting out the special missions to address particular types of crime, which the public really values. The special missions to address street racing, human trafficking, stolen vehicles, retail theft. One thing that the police do that I'm on record as saying I question is drug interdiction not breaking up open air drug markets, which I think they should be doing, but trying to interrupt the overall international flow of drugs, which I think we're pretty bad at when it comes to parks. As councilor Pirtle-guiney said, we made a promise to voters that if they pass the levy, we maintain the parks. I am not going to say right now that I'd support closing fire stations in order to preserve that promise. I suspect there will be some cuts to parks. One thing I will say is that in some circumstances, raising recreation fees, although unpleasant, might be a reasonable option when it comes to fire. All of the choices are incredibly unpleasant. There are. I wouldn't be surprised if the mayor comes out saying that some. There's some fire stations got a lot fewer calls than others, so wouldn't be surprised if the mayor comes out with a budget that says, we're going to close down the fire stations to get the fewest calls. The problem with that is that then you're saying to a neighborhood, if your house catches fire, it's going to burn to the ground. And I don't want to say that anybody. On the other hand, another possible cut to fire is cutting the two person medical vehicles. And we could say that that's not as core as fighting fires, but those medical vehicles save lives. So I have no brilliant suggestions as to what as to how to cut fire. I think that it's harder than anything else. So. Do I have anything else to say? No. That's about it. Thank you.
Thank you. Councilor Novick mayor. I put myself in the queue. It is easy to list off things that I don't support cutting. I'm going to list some of those, but I'm going to start by saying things I do support cutting, and some of these are going to make me deeply unpopular. But I will start by quickly saying I had a meeting with the district one coalition office and almost every neighborhood association in district one, plus an additional 15 non-profits or ngos that are serving specifically serving populations in east Portland. And I said explicitly to them, we have to cut the general fund that is police, that is fire. That is Portland solutions, homeless services and parks. What are your red lines in this room? What are the things that you absolutely need me to not cut? And over and over and over again, the only thing I heard in the entire meeting was do not cut parks. Honestly, I was genuinely surprised. One person who is particularly mad about the fire department suggested we cut the fire department. I don't I'm not advocating for that, but I was surprised that the folks in east Portland who are most on the ground in the neighborhoods are advocating so strongly for parks as a public safety tool that when we let things when we let them the grass get over mowed, if we are overgrown and we don't mow it, if we let we plant trees and we let them die because we don't water them. If we allow these public spaces to rot, they become attractive nuisances for bad behavior that degrades the the broader neighborhood. The example of ventura park was brought up to me where the. For over three years the bathroom was chained shut. When the bathroom was chained shut because it was broken and we weren't fixing it. Parents stopped bringing their kids to the parks. When the kids stopped coming to the parks, tents started showing up. When the tents started showing up, more tents started showing up. At some point, drug dealing and violence showed up in the park and it became unusable. When we fixed the bathroom, most of those problems went away. So my community is telling me very clearly, please keep parks as whole as possible. That that said, I think that there are some really thoughtful reductions and discreet reductions within the cut packages that are proposed here around community centers, around tightening the margins. I understand that we you know, I think the community centers are vital community public safety. But I think that there are some thoughtful ways we can reduce some of the hours. And I really identify who we are saving and who we are serving. I'm going to say something unpopular that my council colleagues in district two will not appreciate. I'm going to talk about the pool center. I'm going to talk about the aquatic center, because in a moment where no, in a moment where we are talking about which of our our precious public assets we have to get rid of, I can't I don't know, it doesn't make sense to me, for us to this year in a moment where we are in a tough spot to prioritize new items. So I would be supportive of delaying the opening of the north aquatic north Portland aquatic center. And I apologize to the three of you. You can fight me later. I think that there are some really thoughtful proposals in this package around public safety, overtime reductions, some staffing models, some efficient use of available technology. Some some cuts around material purchases for playgrounds and pools makes sense to me. I have some questions around a proposal in here. It's actually an ad package and I have no idea if it's a real thing, but there's a $350,000 set aside for an analyst for position around the transition of the p5 venues. I want the p5 venues to transfer. I'm not sure why that position would cost $350,000. Additionally, I. I'm hoping that you would consider looking at at if. Additions to the revenue collection staff. I spoke with the revenue division director who told me that if they were to hire additional revenue collectors, they would bring in more money than they are they cost. So there is an opportunity there, especially around around arts tax and around some of the other taxes that we are having a harder time collecting additional capacity will actually lead to further collection. I don't know how to materially do that, but that is a thought. And I will say I cannot myself justify voting for supporting the overnight shelters. If we are cut, we are laying off a single public employee in order to do that. I know that you are working hard to find ways to support this and rightsize this overnight shelter system right now, but it cannot be my priority. Saving what we have here as a city and our employees has to be my priority. Cuts that I don't support. I am still vaguely disturbed by a piece of information I learned from the bureau of transportation that they add a cost multiplier for maintenance in east Portland, because it is further away from the maintenance facility. I want to make sure that as we are doing thoughtful reductions, the the aggregate effect is not disproportionate to reducing east Portland. When we add nice things, sometimes east Portland still gets the less benefit. And when we start cutting. For example, last year when there was a proposal around parks maintenance, half of the parks that were being proposed, I don't believe by you, but half the parks that were being proposed for cut maintenance were east of i2o5. We have very little and we need as much as we can get. I want to add my support to what councilor Smith and Green were saying with regard to neighborhood support programs like the neighborhood associations and the coalition offices. I care a lot about what happens to children from the hours of 3:00 until 8:00 at night. I started my career working in middle schools, and I saw explicitly how. Teenagers who don't have something to do in the afternoon will find something to do, and they often get themselves into trouble and set themselves onto lifelong paths that they cannot correct. Programs like teen force, sun school summer free for all. They literally save lives. I have kids who are alive today because of teen force. Similarly, I think that we've made a lot of really thoughtful progress with regard to some of the non-police public safety responses. The police are our most expensive, most highly trained, most specialized tool in our toolbox, and items like chat, psr, ps3's are able to reduce the burden ultimately over time on them so that they can go do the jobs that only cops can do, and we don't need them stopping traffic for car accidents and things like that. As the economy is collapsing around us, workforce development programs feel obviously very important. And as part of that, similarly, I'm urging this body to think think broadly about the office of arts and culture as a tool for economic development. It needs to be considered an extension of our economic development work. If we treat art as something precious and something that just fulfills our soul, then of course it's the thing you want to cut out of the budget because it's disconnected, but with diminishing dollars for prosper Portland to invest in economic development, we're not going to build a new, you know, building anytime soon. Light economic development through the existing music and arts scene are a way that we can get people safely out of their homes and into the public square, public square, and spending money and going to restaurants and going to shopping and all the things. Lastly, I will say we need to make sure that we do not. Accidentally spite our our future efforts by cutting ppe and by cutting, permitting and development staff. Where I know that's not general fund, it is obviously revenue division. Their revenue is dependent on their own collections. But we got to make sure that all the good work that this body is doing to encourage and demonstrate to the private sector that we are ready for an open for business, that there's somebody there to take their business when they come. So very quickly, going through my list of other things. Oh, one other additional cut that I saw proposed in here was a grant that the city gives to the Multnomah county district attorney's office. It's a nice to have, but we are not a nice to have years. And so I would encourage us to to cut that. And additionally, I also voiced my support. The the cuts to the auditor's office beyond 3%. I want to make sure we are doing what we can to respect our fellow elected official and execution of her duties. So those are my very brief lists of things that I care about. Thank you very much, councilor Clark.
Olivia Clark: Thank you. Council president, can you hear me okay?
Yep.
I want to thank the mayor and the administration for creating this opportunity for us to share our thoughts about the budget, not just with you, but with each other. It's been valuable for me to hear all of you, what you have to say about your priorities, about your thinking about things. So I really appreciate that. I want to circle back to the issue of the city's core functions. That's what drives me. And that's really that back to basics theme. I talk about it all the time. I talked about it during the campaign. I think that we in Portland have had a our desires really don't match our pocketbook. And and now we really do have to get back to basics. And for me, one of those basics is really keeping us safe. Improving 911 response times, keeping the streets safe with more eyes on the streets. And and that happens in lots of different ways. But if I had a red line, mine would be no cuts to the number of police officers that we have. We're already understaffed and we're experiencing retirements that we can barely keep up with. I would offer a counterpoint to my colleague councilor Green. I'm very a strong supporter of the impact reduction program. It's very important to me and to the neighborhoods in district four. I would offer a thought that I think in this process, we need to do everything we can to improve our systems management, whether that's span of control, whether that's looking at asset management differently, and also tracking what it is that we own and what can we dispose of? What can we offload as a city as well. And we've talked about that in my committee in regards to to some of our streets. I think the core alignment process is good. It's one of those system improvements that you really expect to come out of charter change. I'd like to echo the support for neighborhood associations. I'm really happy to hear many of my colleagues saying the same thing, that we need to support the neighborhood associations through the district coalition. I think they're vital. They provide services, they bring value, whether it's a neighborhood emergency team, festivals or whatever it is. They bring a lot of value to us. And I would echo councilor Smith's comments regarding their dissatisfaction with their relationship with civic life. I think it's important to leverage their efforts and really to support volunteerism across the city. And I've been an advocate for looking for opportunities for public private partnerships, not just offloading assets, but as the mayor likes to say, how can we make our assets sweat? I think that as a city, we need to be looking to making the parks sweat more, and we need to be more entrepreneurial when it comes to our parks and our assets. And I know that in the past, I've heard councilor Zimmerman talk about programs that used to be in the parks that engage neighborhoods more, maybe looking out for their their parks, more eyes on the parks. I don't remember what that was called, but not exactly park rangers, but some sort of neighbors that really have a sense of ownership of their parks and protecting their parks. Lastly, I would just say, I know that councilor Zimmerman brought up or mentioned behavioral health. That's not in our bailiwick, but we certainly experience the downstream problems with having people on the street that don't have services that don't have a place to go. I know that whatever we can do, working with the county or whoever to address behavioral health and the impact on our streets, it's not a line item budget item, but I think it needs to be it needs to be really focused, maybe our legislative agenda or whatever. But those are just my high level comments. I know there has to be cuts, but I hope we can be really strategic and more entrepreneurial about the assets that we do have. Thank you.
Angelita Morillo: Thank you, councilor Clarke. Vice president clarke, I keep doing that. I'm sorry, councilor Morillo.
Angelita Morillo: Thanks, everyone. Mayor, thank you so much for being here today. And I want to say I'm sorry that you are we're all having to make these budget decisions. I think it's an incredibly difficult time to be governing, and I appreciate everything that people have brought forward so far. I agree with a lot of what my colleagues have said, so I'll just be fairly brief. I agree with councilor Pirtle-guiney that we told the voters that we would be passing a parks levy so that we could preserve these services for the public, and I think that we have to keep our word and we have to do that. I also agree with her comments about preserving, making sure that we are not doing temporary cuts to public public safety prevention work in order to do temporary savings that are actually going to cost us down the line. I'm specifically thinking about programs like the office of violence prevention and everything that falls under that umbrella, because ceasefire and programs like that are what allow us to have a more diminished police force so that we can actually do some of that preventative work. And we know that when it comes to gun violence, when it comes to sex trafficking, when it comes to all of those types of issues, if we don't do that preventative work, it's not actually going to be resolved on later down the line. So I think anything that we can do to preserve our public safety prevention work is absolutely critical. I am also not going to be supportive of using PCEF dollars to backfill other parts of the budget that are not applicable to PCEF dollars, and I'm going to guard that fairly carefully. I think that we have a lot of things that it has been flagged for its use, and we cannot use PCEF to address poor budgeting in other areas. I don't think that's healthy for our budget or for the expectations of the voters. The areas that I am comfortable cutting into. I agree with councilor Dunphy and I apologize to my colleagues in district two. I do think the aquatic center needs to be removed. We should not be focusing on new assets while we are struggling to maintain the ones that we currently have. I also think we need to cut. I got really crucified last year for offering to cut part of the Portland solutions package. Even a small part of it. And the reality is, we're probably going to have to have cuts to all of those things, including sweeps. We were promised that you would find additional funding for your shelter program that had one time funding before. I hope that that comes into fruition, but I am not sure that it will. And if that is the case, I agree. I don't think we should be cutting into our city infrastructure to support these temporary shelter programs, because that's not really in our bucket to be working on. And I think the further we entrench ourselves in the system, the more concerns I have about its long term viability. I also believe we need to be cutting back on the grants that go to the district attorney's office. These are dollars that we desperately need, and we need to beef up our infrastructure so they can't be going to a different form of government. The last thing I'll say is that I think we really need to maintain ps three. They are an inexpensive part of our public safety system and expensive part of police, and we need to do everything we can to maintain that. Overall, I also think we need to take a look at when we are cutting departments. I think that we need to make sure we are not too management and top heavy, because we have a lot of people that do carry out the day to day work of the city and actually interface with portlanders. And if we remove too many of those people, then we are going to lose the ability to give proper service to portlanders and to get their questions and things answered in an expedient manner. So my focus is really going to be on making sure that we're reducing how many contracts we are contracting out for, and instead building state and staff capacity for the city of Portland. These are all really tough decisions that have to be made, and I do not envy the task of having to per present the first package, but we are ready to to help in that venture. So thank you.
Thank you. Councilor. Morillo. Councilor Smith you've spoken one time, right? So far. Okay. Gotcha. Councilor Avalos. We cannot hear you. Still nothing.
I think she said she'll be back.
Sameer Kanal: Okay. Councilor Avalos we'll come right back to you. Councilor Green, you you have spoken. So I'm going to go to councilor Kanal. Come back to you. Councilor Kanal.
Sameer Kanal: Thank you, council president. So yeah, I appreciate everything that's been said before. I think what's what I'm hearing, I'm feeling, and I hope we're all feeling a little validated by the fact that our colleagues have clearly listened to each other over the course of this last year and a half together, because I'm hearing stuff from people that I've heard from other people before, and I like that big picture. I love the idea of of recommitting. I think one of the challenges that we have is that the, the core services, the things that people largely view outside of our core services are often funded through a restricted pot of money anyway. So it's not as though that's going to alleviate a concern with the general fund. But I do really appreciate the theme of prevention and avoid being penny wise and pound foolish, to use councilor Clarke's phrase. First, let me say I agree with the broad philosophical approaches of both councilor Zimmermann and pirtle-guiney. I agree with the critique from councilor Smith that our investments in the office of community engagement are not currently yielding what we hope they would. I agree with councilor Ryan as well around grants, especially as it relates to non-restricted general funds and reducing the part of the city that acts as a foundation. I have some acceptable cuts and some red flag cuts, but I want to start with the completely unacceptable cuts, meaning the ones that would change my vote on a budget. And these can easily be simplified down to the will of the voters. I believe we owe it to voters to do what they told us to do. This holds true for the parks levy. I also knocked doors for that, and I know a lot of us did. And I agree 100% with councilor Pirtle-guiney here. It also applies to the cpa and of course sph. Sph is not for sweeps. We cannot lose the fragile trust we are rebuilding with our community and our new form of government by taking a fund designed to help communities in need, and instead use it to harm an overlapping list of communities in need. And I also want to stress the will of council. There are a few things that have been voted on last year that would have saved money that have not been implemented, and I want to really talk through that, because that's an important thing to talk about. I have some lists of acceptable cuts and unacceptable cuts. I also have some acceptable revenue options and unacceptable revenue options, but I want to lead off with an investment that I think will save us money in the long run, which is awards for employees who find savings. This is something that the secretary of state's office in Washington state does. This is something that there's chief savings officers in new york now. I think if an employee comes up with a way to without losing any quality of service, save $400,000 a giant check for $1,000 to reward them in a photo op is a good use of our time and money. Acceptable cuts. I do think we need to have a conversation about overnight shelters and the conversation around that. In particular, I noted the ombudsman's report today about how the number of complaints about Portland solutions, which includes but is not limited to that. And I don't want to pin this on the shelter program. It's the broader strokes had it at 27% and transportation at 28%. Anyone who has followed along with the ombuds reports knows that transportation generally gets the most complaints because they do the most different things. But specifically, I'm talking about sweeps and the impact reduction program. I want to double down on everything councilor Green and councilor, Morillo said. I do think that it's time to find the the small amounts of cost savings, but still real ones that we will have from incorporating Portland solutions into the regular flow of the administration. Either make it a service area or put it into the existing service areas. I want to look at going into overtime. I think we've done a really good job, and I want to commend both you as well as pb and fire leadership. I also know that they've both done a good job in hiring, so we should expect to see some overtime reductions as a result of that. And this is where I think the the council direction on how to spend overtime dollars is a conversation that I'll be looking at. If they're spending it in line with council priorities, that helps me justify why they should continue to get it. If not, it doesn't contracts. Grateful that many people brought this up, I'll note that new york city just canceled a contract with mckinsey that they found they'd already paid $4 million to assess if trash cans were better than leaving trash bags in the street. That's absurd. Mayor found that money. Let's see if we're doing anything like that, too. Even that's scaled to portland's budget size. I think it'd be worth saving the money. And I'm looking forward to the the administrator's report, including that so we can dig deep into it. Contracted employees who could be converted to city employees for cheaper projects. 17 sent a letter, I cosign it and then span of control has already been mentioned as well. Cuts. I'd like to avoid prevention programs under funding prevention at the expense of intervention only makes our future budget woes worse. There's value to balancing those out. Violence prevention like ovp and ceasefire, crime prevention like safe blocks, rose city self-defense interventions that keep people from becoming houseless, such as affordable and social housing and rent assistance, and cutting an unacceptable cut would be cutting the alternative shelter to fund overnight shelter, community safety programs programs in the process of building out a holistic community and public safety system, we need to rethink how we evaluate what parts of those systems are core. We need to maintain momentum in building out that system. They obviously, armed officers and firefighters are essential, and I'm not suggesting cutting there, but I really want to make sure we're talking about Portland street response chat. Ps three, park rangers pbem, and I'll just highlight two specific programs, victim advocates at PPB, which are force multipliers for work in a particular sector of pb's work, and the rescues, those two person response vehicles at fire. I really want to make sure that we're not cutting those those save money in the long run as well. Equity. We cut over down to the bone last year, so I want to see no more cuts. I also want to point out that my attempt to save, to cut deputy directors last year included that I was trying to save positions in ehr with that money. I do want to look at the efficiencies we can find out of deputy directors, but I will be opposing any cuts to ehr, including a cut to deputy directors and that space if we don't add back positions there. And then the last two categories democracy, small donor elections, the auditor's office, council operations and offices, security for the spaces portlanders come to to take part in their government. And I agree on the neighborhood associations conversation as well. And then finally, the people that help us raise money and save save costs, volunteerism, work, and people who help achieve private investment in public goods, in particular within the parks bureau. On the revenue side, I just want to continue pushing back on regressive fee structures. I think councilor Pirtle-guiney basically hit everything there. So we'll save some time and I won't go back through it. And then I want to talk about five revenue options that I don't think have been brought up much, one of which will require a small upfront investment and start yielding a growing savings over time, which is fpd. And I want to be clear, for those who whose hackles are raised already, I do not want to change a single part of the benefit structure. I want people to get what they are entitled to, what they've earned and what they've agreed to. However, I want to make sure that the way we pay for it is also includes an investment component, and that might involve a small capitalization upfront to start yielding some investment returns that can help defray those costs over time. It's not going to cost. It's not going to save us a lot of money now, but it's something that I think is worth doing to save money in the long run. And again, it wouldn't it wouldn't affect a single thing of what our retired firefighters or police officers are receiving. The package delivery fee conversation. I'm excited to get back into that. Both of the budget notes on commercial and residential vacancy fees were delayed. Coming out of those were supposed to be back on February 28th. The reason people haven't heard back is that they're now delayed to February 20th, I believe might be 30th, but that's cutting it close for this year's budget, and that's why I picked February 28th. Unfortunately, we also saw that sansa spent $62,000 contracting out that work, which is deeply disappointing and not part of the conversation at all. But if it works out and we are able to raise some money, I think primarily on the commercial side, if this works out, that's something that can help not only pay for the 62,000, but start defraying some costs and finally cost recovery. So I brought this up a few times. These are all pretty small things, but I think collectively they can do a lot. I know you're already committed to most of this, by the way, mayor in particular on the cost recovery side. But when we hire out police officers to staff to block a road or something like that, it has impacts on wellness, it has impacts on overtime and things like that. But it also we want to make sure we're getting paid the amount that that it costs us to do. I think a bigger issue is the fire alarms we send out. Commercial fire alarms often go off. We have firefighters responding to that or fire responds to that. And boec obviously has to dispatch as well. They're often false alarms and we don't charge for that. We've already explored this a little bit with the transportation side on the street repair side, I love it. I want to build off of that and do more. And so any time we are, because really what we're not, when we don't do cost recovery, what we're doing is subsidizing an activity. So if you don't charge enough for repairing the roads, you're subsidizing the utility to cut up the road. If you don't charge enough for cost recovery, for a fire alarm, you are subsidizing someone, not having to worry about whether or not their fire alarm is working. So these are the sorts of things I want to talk about on the revenue side too. I don't envy your job doing it. I appreciate that you're always willing to listen. And thanks for the time. I'm just before my window. Councilor president.
Thank you. Councilor Kanal. Councilor Avalos coming back to you to see if it works now.
Yeah. Does it work now?
We can hear you.
Perfect. Thank you. And sorry, I'm off center. It's just very bright here. So thanks everybody. Really appreciate what I've heard so far. I'll start with my dittos. I love a lot of what I heard from Kanal just now and Morillo earlier from council president. You know, I'm going to second a lot of what you said for east Portland and agree to with, you know, Green Morillo I think Kanal as well who said do not touch PCEF. I've said enough. You already know how I feel. Overall, we need to protect the will of the voters and use their dollars appropriately. I want to also echo the need to protect parks and in particular, as I've already shared with you, mayor, you got to fix the boiler at the east Portland community center. It is unacceptable that that pool is closed indefinitely right now, and we are the only district that only has one community center, and we have the largest share of the city's children. So you got to fix that at a bare minimum. But like everyone else said, parks is what we hear the most about, especially in east Portland. That's also what rose to the top at my what is it? My my budget survey agree with councilor Pirtle-guiney as it relates to protecting jobs. You know, we don't want to hurt our workforce long term to fix short term problems. And frankly, in this economy that is really fragile. We really need to do everything in our power to keep high quality jobs. That's going to protect the stability of the city overall. Reflecting on what I heard from councilor Zimmermann, I definitely agree to an extent as it relates to making hard decisions to cut things that aren't working, but I don't think that all things that aren't working need to be cut. And what I mean by that is I want to understand how we're measuring what's working. I think that's, you know, so far from what I can tell in my year plus at the city is variable. And often the programs that are failing are due to not only a lack of resources, but also a lack of political will to make them work. So and historically, those kinds of programs are the ones that most impact vulnerable communities. So, you know, this is why I keep saying that I want to understand how we're measuring the services that we deliver as a city. And particularly, I expect bureau directors to explain their vision and how they plan to execute it. And, you know, by better for us as legislators, by better understanding that we can weigh those outcomes that we're fighting for, for our communities, against what our city is already doing, what they're good at doing. Like councilor Zimmerman said, I agree that we should like, really invest more in what we're good at doing, but also where are we falling short for communities? And obviously, I want to I want to be able to participate in a discussion about making those hard decisions with the benefit of that kind of vision and more, more measurable outcomes that we can, we can use to judge what's working and what's not, and therefore where we need to make hard decisions to cut things. As far as broader priorities go, housing stability is the foundation for everything else, and we cannot afford to fall short here. I think that my priorities are pretty clear based on how I've approached the investments with the unbudgeted housing funds, for example, right now, tenants, renters, they desperately need our intervention to prevent deepening the crisis on our streets. So we have to keep investing in eviction prevention and rental assistance type things, and all the kinds of wraparound services that keep people housed for transportation. You know, we need to ensure that our streets are safe and maintained at an equitable rate. Again, that's something that east Portland and district one councilors are always going to harp on, but we really just can't continue to take on projects and investments in order of price, but rather in order of least to most invested and communities that have historically been underinvested in like east Portland, they cannot continue to sit at the bottom of that list. This was something that was very much at the top of the east Portland budget survey as well, that I did, and particularly east portlanders shared that they believe that the traffic and transportation inequities are a big contributor. Contributor to their lack of community safety and feeling safe in east Portland. They fear just walking around, right? If you can't even just walk around. It's not just about crime. Of course that can come up came up as well. East portlanders, you know, had shared in the budget survey that they struggle with walking around at night. But it's not just because of their fear of somebody hurting them. It's also their fear of a car hitting them. It's their fear of just not having the infrastructure to get from a to b. And so I just want to elevate how important transportation justice is for community safety in east Portland. Speaking of community safety, I think that we need to continue to invest in solutions that meet people where they are. When we continue to put the burden on law enforcement to continually expand and push outside of their scope and work overtime, that is unfair. We need to do our part to invest in the proven preventative measures like safe streets and clean parks, modern community spaces, and accessible health services. Speaking of health, I really would like to see chat increased to a higher frequency, ideally 24 over seven, if not this year due to obvious need for budget cuts, then I want to see a scaling up plan for what that looks like in the coming years, because chat is becoming more and more of an urgent need in east Portland. Lastly, as it relates to just protecting our communities overall from the racial and social injustices that we're seeing, especially from the white house. I did an interview this week with noticias noroeste, which, by the way, is the only spanish language news station right now because univision closed down at the end of 2024. And I say that because people are really struggling to get information. And one of the things that he said to me was that, you know, we were talking about the unbudgeted housing funds, and he was like, okay, well, how are you going to get that information out to communities that don't speak english because they are struggling to get access to resources? So I just want to flag that as a continued need. And as I said earlier, we now also are seeing that HUD is going to be denying a bunch of rental services to mixed status families. So again, putting yet another barrier in front of these communities that are already under attack. And this particularly impacts children, often children who are citizens, by the way. And so I think that and the other thing, the last thing he said to me was, you know, they they were talking about like just broadly, you know, everything around immigration enforcement. And the thing that he hears the most, though, is that people need food and a roof over their head. That is the most urgent need right now. So these are the basics for survival. So I just want us to continue to think about how not only are we investing in those basics and investing and working in partnership with other governments, with organizations to reach communities, to share our resources so we can make the best use of them, but also to get that information out to people in a way that that they can reach. Right. And we are just seeing these attacks on our communities becoming more violent, and their lasting impact is going to be really detrimental to our society and to our community's health. And so we have to look at it from a health perspective. I'm really concerned about a lot of families who are losing their breadwinners. They're about to be homeless. They have less resources because federal government is shutting them out. It is our job as a city to step in where the federal government is clearly trying to hurt them. So those are my priorities. I know you have a tough job ahead, and I know I didn't give you a perfect answers of all the things that you should cut. I think it is kind of hard, as I shared with you in the meeting as well, to say, what is the exact thing I should cut, because I feel like I will continue to say, I would love for us to improve the kind of information that councilors are getting ahead of time. I don't think that I have the tools right now to be able to assess all of the city's bureaus and their services, and make thoughtful suggestions for things to cut, so I know we're still in a growth year as far as trying to work out the system for how we do budgeting and how we legislate. But I will continue to urge that we invest in our ability to have this information at our fingertips, to follow along while you're making your hard decisions, so that by the time it comes to us, we are informed and we aren't just shooting in the dark. We are able to be a partner to you in making those hard decisions instead of just a, you know, a barrier because we are uninformed, right? That's going to make your job harder. So the more that your office, the city administrator, the budget office can do to give us more information, I think the better outcome for this entire process. That's all.
Thanks. Thank you, councilor Avalos. Councilor Kanal, just ping me that. He forgot one thing before I turn it to him. And then councilor Green, you'll have the last word. And then mayor. City administrator, I'll turn it to you for the final councilor Kanal.
Sameer Kanal: Yeah. Thanks. First, I forgot to mention that I categorically oppose any pause to the north Portland aquatic center. Sorry, council president, but we did give up on the columbia pool. I want to be clear, the city did give that up. Not not we we the city at this moment is trying to give up on it. So I want to to really focus on on ensuring that that we're, we're investing in the places that have these, these inequities and try to make sure that we're, we're cleaning those up. Thanks.
Thank you. Councilor Kanal councilor Green.
Mitch Green: Perfect segue for me, council president, I, I got back in the queue because I want to acknowledge that, you know, there is a difference of opinion among councilors in district four on some issues with all the due love and respect to councilor Clarke. We'll get we'll get along just fine. No matter how we show up in this budget. I suspect we won't be united like we are on the district two north Portland aquatics center united front as oppositional to the council president on things like impact reduction plan. That's okay. Reasonable people can disagree. I, I am standing for constituents that we have though, that have asked specifically for me to take this position. So they're out there. They may not be your town halls, but they're at mine. I will say this you surfaced up something councilor Kanal that I forgot to to motivate a little bit when I when I think about portland's solutions, it's not it's not that I don't like a lot of the things that happen from Portland solutions. I think they're doing great work. I just worry there's some stuff I don't, I don't agree with it, but I think I don't throw the baby out with the bathwater bathwater. But I think what I'm really worried about is during the pandemic years, we created this ad hoc, stand apart organization that was designed to actually operate outside of the bureau structures, and I have yet to see that get integrated into our we've had this conversation. City administrator lee. I've yet to see that get integrated into a way that's matrixed with our service areas. So I don't want five service areas I want. I want four service areas in it sort of way to have a span of control and a direct accountability that flows through the dca. If we're going to have dca. So there are things in Portland solutions budget that I support and I like, and it's not a wholesale rejection of the of the group as a whole. Thanks.
Thank you. Councilor Green city administrator. Mr. Mayor, any final parting words for us?
Yes. First off, I want to just thank the councilors for providing their feedback today as it relates to the things that are resonating with them as they have a very important decision point coming up as the mayor's proposed budget is will be released to the city council and the public as a whole. I would also like to say in this as well, just a thank you to the staff that helped prepare the information that helped formulate it. The budget that the mayor is still working on and tweaking on, but will potentially be developed and presented to the city council as a way for us to be able to move this organization in this community forward, you know? But I would like to level set in this as well. You know, some of the things that I hear the councilors talk about, every city I've been in have talked about similar things as it relates to how we make decisions, how information is being disseminated, how we're tracking the performance of how we're growing and developing and improving as an organization. Those are all things we all strive to do. But I just want to remind us we're still at the infant stages of where we are as an organization and figuring out whether our rhythm is as an organization. We will get there, no doubt. I have no question in my mind in that. But as we go through this budget process, we're learning to trial by error as we go through this and really work with councilors as it relates to the information that you're going to need to make, the important decisions that you have to make. As you look forward to adopting the city's budget in the coming year, you have the full commitment of the administration staff to get you the information that you need to make those decisions. But we have a lot of tough decisions ahead of us, a lot of tough decisions that were going to be made in the mayor's proposed budget. And nothing is easy in these type of cuts when you're looking at roughly $169 million of general fund operations and services. So as we continue to go through it, we're open to the suggestions and bringing back information that will help make thoughtful and deliberate and intentional decisions as it relates to how the city moves forward.
Thank you, mister mayor.
Council president, colleagues, thank you for this opportunity. I thought it was very thoughtful. I thought it was a great conversation to hear from you. I think there's a lot of alignment. I want to thank jonas, ruth and your teams. We've spent weekends, weeknights, an awful lot of work, and I've told others this is, frankly, professionally, the hardest thing I've ever done. To councilor Zimmerman's point at the very beginning of this, he said he doesn't want to see cute cuts. There's nothing cute about this budget in the sense that these are always humans we're talking about. These are teammates, these are coworkers, these are families, these are friends. And so everything that we're going to provide to you has been thoughtful, has been built with a scaffolding sort of approach because it's about shared partnership, collaboration that our city's bureaus have got to work and collaborate together because not one can stand alone anymore with the new org that we put together. So I just thought that this was a great opportunity to hear from you and want to thank you for that gratitude. Thank you for the grace of this conversation. And we're almost there.
Thank you. Thank you much, mayor. Councilor Ryan.
Dan Ryan: Thank you, president Dunphy. One thing that wasn't listed in when we have conversations with the county on trying to get to role clarity and efficiency with housing and homelessness. When are we going to do that with public safety? Half of the public safety services are at the county, but most portlanders don't realize that. And so our first responders struggle with where they're supposed to take people. When many of the corrections have been closed, when treatment centers have been closed, when the d a s office has been defunded for about a decade, when we don't have enough district, we don't have enough defenders, public defenders, so court cases can move. And then we're told that we just catch and release people quickly. That's on the county and the city gets blamed for that. And we've never, in my opinion, I've been asking for this for five years. When are we going to have that conversation with the county?
Council? Sure.
You know, I'm glad you brought that up. Councilor. We have been having ongoing meetings with the judges, the sheriff, pbb, and our public safety officials on an ongoing basis, because how we integrate together, it has to be a seamless system. And when they have bottlenecks, we need to know, and we're actually integrating that communication with real time information back and forth. Now, I agree with you. It is something that's hurting our community writ large. And so we're really started that conversation. I'm happy to say it's going well. Plenty of room for improvement.
I hope in this budget process we hear how that's being actualized. And since I'm on the public record and wanting to merge the city and the county, I'm very comfortable to push on this issue. Thank you.
Thank you. Councilor councilor Kanal. Last word. We got one minute.
I just wanted to agree on having the conversation and say when we say we, I'd love it if we included somebody, you know, include council in that because I'm sure the county commission has at least some, some insight into it. It's sometimes frustrating not feeling like we have as much insight into the relationship building, at least in the public safety space, as maybe our colleagues on the commission over there do. So I'd love to be part of that conversation or have someone on council be.
Thank you. Councilor Kanal councilor Smith. 30s.
Who is our counselor on leipzig know. So he's the person that you need to take those concerns. Novick oh, because we have a leipzig person that handles all of the law enforcement, public safety stuff.
You a lot of stakeholders. I used to sit on it, but that's what you need to take out of it, sir.
Okay. Thank you very much, colleagues. With that, we are adjourned.