The record · Transcript
Council session — 2026-04-01
Transcript from the session's official auto-captions (16,768 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.
Welcome back. We are now calling to order the work session for the afternoon of April 1st. Welcome back to the to the dais. It feels like you all have a full time job sitting in front of us. Cfo jonas biery budget director ruth levine, please take it away.
Great. Thank you. Council president, thank you, council president. I will start to kick us off and just note the laptop is choosing right now to restart. So we're going to get the presentation pulled up one way or another. But I'll go ahead and start teeing up so we can make good use of our time here. So just quickly wanted to talk a little bit about expectations for today's update and today's conversation about the spring. Tao. I'll start with a quick reminder of where we're at from a timeline perspective and from a revenue forecast perspective. And then second kind of piece is we presented info at a work session on March 5th about the proposed solutions for the current current fiscal year general fund gap that we are solving for in the spring. Tao. So ruth will review updates to the current numbers as filed in the technical adjustment ordinance or tao for council consideration on April 8th and then the spring. Tao also includes a number of troop changes to remain in technical balance at year end. So ruth will describe those and highlight a few other key items that are included in the ordinance as filed. The full packet of information, including the presentation that we're working on getting up for you, the ordinance itself, and other supporting materials. Those are all sent to council inboxes yesterday afternoon. Recognize that this doesn't allow as much time for review and advance as we would typically prefer. Appreciate your patience and understanding as numbers were literally still being finalized and worked out right up through yesterday, and that information was provided as soon as it became available to us. And ergo to you, there's a lot of technical detail in that full packet. We certainly don't anticipate that anyone will have read it thoroughly. But never fear, ruth is going to frame the key content that we think is of greatest relevance and interest here today. And then lastly, we'll have plenty of space. We probably only take 20 minutes or so to go through the material, maybe 30 max, and then we can attempt to answer any questions that you have today. Help prepare and support for council action next week. If there's anything we're not able to answer today, we'll come back either either next week or at the or in the meantime, with follow up and good looks like the presentation's up. If we can skip forward a couple of slides, please. Yes. Agenda. Yeah. Perfect. Thank you. So just wanted to quick very quickly we showed you a slide like this previously reviewed the summary of prior actions and conversations about the current fiscal year that have led us to here. We had the March 5th work session. We've now added another another box to to show that we are here today to continue that conversation and have a little more refined detail around what will be in the the actual technical adjustment ordinance next week. Next slide please. Very quickly, I think you saw slide, maybe the same slide or very similar to the prior for prior presentation. We do have a more robust conversation about the forecast at next week's work session on which is more related to 2627, but we did want to highlight the forecast related to 2526 current fiscal year previously previewed. We anticipated a revenue shortfall of 17.1 million shortfall relative to prior expectations. That number was in fact confirmed in the formal interim general fund forecast that was updated last week. Published and distributed on March 24th. As previously previewed, the key takeaways here are that business license taxes came in aligned with expectations for the for the year and utility license fee revenues were lower than expected due to a milder than expected winter that resulted in reduced energy usage. Those are kind of the couple of big, big takeaways. Next slide. And again we'll have more more conversation about this the forecast broadly next week but relevant relevant to this year to 2526, the fiscal year. We're currently in. This slide sort of zooms in a little bit on the various slices of general fund revenue, and I'll draw your attention to kind of the two highlighted boxes, the, the kind of middle highlighted box is the current forecast. So as of the March 24th updated forecast document, that's where we believe we are today. And that's the revenue revenues that we're working from. And then the right hand box is sort of the comparison of this March forecast relative to the prior forecast, which was kind of April last year, where the kind of starting point for looking at 2526, you can see the change within each of those line item revenue items and the net result at the bottom being that that 17.1 delta. I will note that the downward revenue that we're experiencing is not unique to the city of Portland. Many of the same factors that are driving these declines are occurring elsewhere, certainly in the region and in some cases, other, other places in the country. And while that's not exactly comforting information, I think it is important to acknowledge that many of the underlying factors driving these revenue declines are indicative of broader economic realities, and not things that are necessarily specific directly to to city actions. So that's just a quick snapshot reminder. We have peter hoffman's in the room, city economist peter holtzman, but a reminder that we do have a full work session. Anticipate another work session, a big portion of which we'll be talking about the forecast next week. With that, I'll hand to ruth to talk about, I think with the key information is today, which is what's actually in the spring. Tao. That'll be before you next week.
Great. Thank you. And for the record, ruth levine, budget director and you can go to the next slide. And then one more after that. So these next few slides should look somewhat familiar based on what we presented to you back in March. But we're going to highlight where there are some differences. And then and also give you the overall picture of what is going to be in the spring. Tao, just so everyone's clear, we've filed documents for the spring. Tao they're in e council. They should appear because it's going to be heard next Wednesday the eighth. So changes from this will come as amendments. So the first line, the 17.1 million jonas just spoke to. And that is aligned with what we presented to you back in March. The next line is it's revenue that we already recognized in the fall, tao, but is only now reflected in the March forecast. And so that shows up as a negative. And then the third line is the general fund overspending without compensation set aside. So it's just the projected general fund expenditures, less the revised budget as of the fall. And that does not include compensation set aside. Although I will talk on the next slide about the remaining compensation set aside contingency that we're using. So when you add those together, we're at 21.9 million in terms of gaap. We have to solve that looks a little bit different than the number we showed you back in the beginning of March. It's actually not as different. And the reason is I we've pulled out some of the we've we've shown the general fund overspending without the general fund. Underspending. And that's on the next slide. So I'll show that to you in in a second here. And just as a reminder quickly on the right. Again, this is unchanged. But some of the drivers of that overspending are not showing and not having compensation set aside in the budgets. And then also the 10% placeholder for the enterprise efficiencies, the core services realignment reductions. Okay, you can go to the next slide. All right. And so here's a little bit more detail on how we're proposing to close the gap. So this slide and the next slide compare what's in the spring. Tao as filed to what we showed you back at the beginning of March. And I'll just kind of go through it. We projected or we expected we might take about $2 million of the 3 million total unrestricted general fund contingency. We're proposing now to take 2.5 million of that. The council operations underspending amount of 800,000 is unchanged. That's just council operations. The remaining compensation set aside contingency is is still 3.3 million. That was just of the total amount of about 17 million that was there in the fall. The 3.3 is what was remaining after that. So we're using that to kind of offset the the 3.6 of projected overspending, if that makes sense. The technology replacement reserve excess amount was a little bit higher than what we originally thought it was going to be. It's now 2.3. The bancroft bond fund available amount is $2 million, and that's unchanged since March. And then the pbb asset forfeiture being used for event over time is also unchanged since March at $1.4 million. You can go to the next slide. This continues on the same as the previous slide. The housing investment fund. There's the bucket in short term rental that comes from transient lodging taxes, which is unrestricted except for by resolution by a prior council. There's oops, that should say 8.6, not 11 apologies, 8.6 million available in that fund. And we're proposing to use 4.3. That is up slightly. It's actually 4.25. That is up slightly from what we presented back in March. The next line is council under spending. This was based on that prior work session that we had. Staff returned and had conversations with offices that were interested in returning under spending. And this reflects only those offices that are interested in returning under spending. It totals to $495,000. The. We had discussed using the city wide obligations reserve fund, the Portland harbor reserve. There's about seven. There's $7 million in there that is discretionary in that reserve. We're not drawing. We're not proposing to draw that in the spring. Tao as filed because we didn't need it. And then the. Bureau general fund returns and some sort of targeted reductions to encumbrances, which we can talk more about. Total $4.8 million, which is an increase of $3 million over what we ended back in March. That's mostly due to the. I netted a number so that it was clear what was happening. I. Yeah. So the next slide, you can go to the next slide, please. Puts all of that together and just shows you. At the top is the projected balance of -21.9. And then it goes through each of the different buckets in the spring tao as filed that are the different types of sort of gap closing strategies. So the, the, the first line there that's returns from bureaus that can be thought of more as kind of natural underspending I say that with a small asterisk because it also reflects like hiring freeze and other kind of reductions to expenditures. So it's not sort of business as usual, but it's not it's not making any additional reductions beyond that. The next line is the encumbrance reductions. That would be kind of proactively reducing encumbrances by 800,000. And then the next two I spoke to on the previous slide, and the others, I've just kind of bucketed as contingency and reserve draws or other resource shifts from other funds. So I will pause there and take questions.
Councilor Green.
Mitch Green: Thank you, mr. President. Thank you, ruth, for the presentation. Can you go back to slide seven, please?
One more back.
It's just it's the I've got the pdf version. It's a seven page. It's the projected overspend that that. Thank you. That one. Okay, so help me understand this a little bit. So I'm trying to kind of follow along with the bullet point narratives on the side. So this is projected overspend. So that's right. We haven't we're not like deficit spending right now. Correct. We're saying that if we don't change our budget.
Yes.
Then we will be overspending our authority.
Correct.
That's right. And so then I understand the compensation set aside driver because I talked about that last fall. So that's I don't need to understand that anymore. But I do need to understand. So what is what is what is 10% placeholder reduction, enterprise efficiencies and offset? Does that say that? So an enterprise efficiency would be a savings. But is it driving the deficit because we didn't realize the savings.
Correct. Yeah. In the current year. So this is the where we put in a 10% placeholder assumption with the expectation of making those reductions in the fall. Tao. And we only made the reductions for communications. We didn't we haven't yet made them for the other functions because it's taken longer to, to get those decisions in line than was expected. And so for the current year, that just becomes a liability.
Yeah. Right. Okay. Thank you. Thanks for clarifying that. And then offset by vacancy savings, does that bullet suggest that the projected overspend would be larger if not for the offsets? Or is is the offset contributing to the deficit? I don't really understand.
That piece. It's working. It's it's it's saving us money. It's working the way you would expect. So the vacancy savings is basically. Yeah, if we didn't, if we hadn't done the vacancy freeze it, we would presumably be spending more on personnel. And that would drive the overspending higher. I mostly put that bullet point on there to show like we've included it already. It's not a separate item somewhere else. Okay.
That's helpful. And so these are deltas relative to some previous forecasts or some previous budget. And that's the fault for that.
For that third line. Yes, it is the fault for it's a little confusing because we don't typically update our revenue in the fall. Yeah. And so the expenditures were updated in the fall per all the decisions made by council in the fall, the revenue has not been changed since we adopted the budget last spring. And so that's where it gets a little confusing.
Okay, so there were certain vacancy savings that we didn't like pre code or pre assume in default. Now that we're realizing now that then mitigates that, that that -21.9 would be a larger number. It'd be about 25 million. If not for.
Yes. That's right.
All right. I had just very specific technical questions. So thanks for now.
Yeah thank you. Councilor Green councilor Ryan.
Mitch Green: Thank you so much, council president. I just have a quick question. I was kind of surprised to see the council under spending is only 0.5. Is that correct? Yeah. Have you heard from every office.
I don't know, I, I wasn't in those conversations directly, so I we'd have to get back to you on, you know, who they spoke with.
Yeah. My understanding councilor is that biz ops, the person in biz ops who works with your offices on your council budgets reached out to each individual council office and had that discussion directly with each council office.
Okay, my chief of staff is out, so I can't verify the number, but I think our office is most of that. So I'm just kind of surprised. I thought that'd be a higher number. And I, you know, that's in line with I was somebody that thought we were spending too much money in each council office when we way back when. So anyway, I'm just kind of surprised that that number being so low. Thanks.
Thank you. Councilor. Ryan. Councilor. Pirtle-guiney.
Thank you, council president, can we go forward? One slide. I just want to make sure that I'm looking at these new numbers correctly. So the original proposal on this first line unrestricted contingency was to take two of the 3 million. And you had a note when we first talked about this that there was a recommendation to leave a million. There's now a recommendation to take 2.5 of the 3 million. Is that because your assessment of what we need to keep available for the e o, if needed, has decreased? Or is that because we are in such hard times that you feel like we need to move past your original recommendation because there just aren't other options?
Yeah, good. Good question. Councilor I think it's a little bit of both, frankly. I mean, I think maybe as we're getting a little clearer vision on what the risks might be for the remainder of the fiscal year, you know, increasingly more comfort that we're able to, you know, manage that with with lower amount of contingency and recognizing the options that were available to, to solve that. That was a, a trade off worth making that, that additional 500,000 amount.
Okay. And then on the next page, can you just give us a little bit more detail about the additional 3 million in the last line there?
Yeah, sorry, this was a little confusing.
It sounded like there were a lot of different things there. And I just want to make sure that we're hearing on the record what that those those targeted reductions.
Yes.
How we got the targeted reductions up pretty significantly.
Yeah. So it's really the sorry, if you go forward one slide. So really it's 4 million of that 4.8 is the general fund returns. I had previously netted the overspending with that number. So it the overspending looked smaller in March. But really. But then now I've separated them out to try to make it a little clearer what's going on. So that number has not changed very much. That $4 million figure of the returns and then the 800,000 that's below it is new.
So the 1.8 to 4.8 is not really that we found 3 million additional in targeted reductions. It's that we're accounting for it differently.
Correct. The 800,000 is the additional and targeted reductions. And we can speak more to what those are. They're mostly in the public safety service area.
But okay, great. Thank you for that clarification. And thank you also for zeroing out the transfer from the corf. That was something that I was really going to struggle to vote for. And I appreciate that you've brought us a proposal that doesn't require it.
Thank you. Councilor. Pirtle-guiney. Councilor Smith.
Loretta Smith: Thank you, council president. Thank you for putting this together. I just wanted to go back. To the question that was asked. If you all had talked to council about our budgets. I sent. Cbo director ruth levine, benjamin Smith, jonas biery and c, a raymond lee. A email, and I sent it to the budget team and I said, please take my office budget out of your projection to fill the gap to pay for 2526. We will be spending our budget. You should assume that we will spend all of our budget. And I suggested that you investigate the materials and services budget in the city administrator's budget to fill the gaps, and I didn't get a response. But just for the record. You all's office do not have any control over legislative budgets. Only the executive and the city administrator and those bureaus. So you should never, ever, ever put our budgets as a part of your way to fill a gap. Secondly, you need to go line by line and tell me which bureaus are overspending, and you need to go send them a note via the city administrator and say to them, you are out of money. You cannot spend any more to bring this forward to us in this kind of manner is irresponsible and disrespectful, and it is a relentless pursuit into always telling us that we are in a gap when we're not. There is lots of money that was rolled over from last year that we were not even told what the exact budget numbers were, and I suggest that you go back and do that instead of always giving us a blanket. Oh, we're in trouble. We're in trouble. You did that at the last tile. And yes, I am so irritated, irritated with this tile, irritated that we were not given the final number. You play games with the numbers because you think you can make it back up by the time we get new numbers and then tell us we didn't take enough property taxes or we didn't take enough blt, which is not true, and I'm getting sick and tired of it. Go tell those bureaus to stop spending. Don't come back to me and give me a towel and say, I got to pay 32 million, 21 million and don't disaggregate where where the overspending is coming from. Because it's irritating to us to look at this and make sure that you keep our budgets out of your balancing act, because this is not fair and it's not right.
Thank you. Councilor Smith. Councilor Kanal.
Sameer Kanal: Thank you, council president. Thanks for the the presentation, the information here. I, I want to start by following up on a question that councilor Pirtle-guiney asked in the preceding slide about the 2.5 million out of general fund contingency, when previously the idea was to leave a million in there. And my question effectively is cfo biery, you mentioned trade offs, and I understand that. Why is it less risky to take an additional half million beyond what was originally the the max you wanted to take? Why is that less risky than taking even a single dollar out of the harbor fund? The corf.
Councilor I think it's a different level of risk. It's the same level of risk that would drive that decision. The delta is the difference in those two buckets. Is that the core. Ultimately, we'd have to find a way to refill that at some point down the road. General fund contingency we do too, but it's already embedded in the in the forecast. So the difference is just that the general fund contingency is sort of naturally flowing through the forecast, whereas the core is a separate bucket that we would have to come back and have a separate conversation about how do we put that 500,000 back in to make that fund whole at some point?
Okay, I, I am disappointed to not see anything coming out of that fund, especially given that we are disinvesting in democracy through taking money out of council budgets in this democracy requires investment. And I understand that there's an optional returns here, but I. And but there's also the operations piece. So I'd prefer to see that money be kept in the council and council operations budget and instead taken from the harbor fund personally. But my broader question is, if we don't, is the expectation that that's going to get zeroed out in the in next year's budget? Will this $7 million be used for other gaps in next year's next fiscal year's budget?
That hasn't been determined yet. We're still going through that analysis now of what the mayor's proposed budget will be.
Okay, so there's no assumption built in as of right now that that money is going to be used for something else. As of right now, the penciling in is that it will remain $7 million or I mean, it's actually more in there, but the that this 7 million will remain as of this moment.
It's hard for me to answer that right now because we still have a gap. So as we were looking at trade offs of what the budget would be moving forward from the mayor, it could be, but we haven't finalized that yet.
Okay, I guess maybe instead of framing this as a question that I don't want to make it difficult for, for you all to answer. By the way, I'm very appreciative that you were here, mayor, as well. I think that it's I'm a little concerned that we might be protecting this money for a different usage that is also non harbor related by not taking it out here and instead taking money out of things that might be harder to take money out of in the full budget, including not only council offices, but but I think some of the money in the contingency funds, some of that sort of conversation. So just just wanting to to flag that. But in particular the housing dollars, because if we were able to take money from the 7 million in the harbor fund today, we might be able to not take $4.3 million out of the currently unbudgeted housing money and use that, or at least a lesser amount of it, and use the delta there to pay to keep people in their homes. Does that make sense? There's a there's a supplementation thing for all dollars in some sense. So I understand that there's. Technically speaking, this is kind of everywhere, but but in the context of this, hypothetically, if instead of being 4.3 million in the housing investment fund, short term rental, the zero 60. The first line of the next slide here, if that was still 4 million, and instead of being zero out of the harbor fund, it was 0.3 million. And that would when we get to the housing dollars conversation, mean that there's $300,000 remaining there to do debt, buy downs or whatever else may be in that conversation. So that's kind of my concern here, especially if the 7 million is going to get zeroed out anyway in the full budget. So it's a little hard because no matter what one of these decisions has to happen first, and there are three of them, right? Or two and a half, depending on how the housing conversation gets combined. But I just wanted to daylight that concern to to kind of get us. Started here. Can I ask a clarification around the 3.6 and 3.3 for the the the overspending without compensation set aside is the 3.6. And then the 3.3 is the remaining compensation set aside available to draw. You said those are not are those the comparable numbers like. So we left 3.3 million in it after the fall tor.
Correct.
What is the need as of this moment of for compensation set aside? And I imagine most, if not all of that is fire and police overtime, right?
Yeah. I mean, you can think about it as 3.6 being the need.
Okay. So and that that is less than I think that we had projected. Is that because we already paid for some of it somewhere else, or is it because less overtime was actually used?
We didn't already pay for it, I don't think I'm not sure. I'm not 100% sure I understand that question, but I think it's a combination. So, you know, as we said in the fall, we don't anticipate needing 100% of compensation set aside in any normal year. Right. So some of it is we just didn't need as much. Some of it is the vacancy savings are baked in there, and some of it probably is that fire and police overtime are down from what they probably projected. So I think it's a little bit of of all of those things.
Okay. So the, the, I would say that the use of vacancy savings and maybe the additional amount of vacancy savings caused by the hiring freeze or any other policies is what I meant by paying for it some other way. Got it. And then to the degree that it is a reduction in overtime, commendations to everybody involved in doing that, because I know that's been a policy goal for for many years to do it. And including by filling vacancies at both bureaus. So commending those, those two chiefs as well. The other question I had can. Yeah, I think it can wait. So yeah. Thank you.
Thank you. Councilor Kanal. Councilor Smith again, thank you.
So I have a question. A couple questions. There are some expected rollover money that each bureau has given to the mayor's office. Correct. Like would they expect that they'll have left at the end of 25, 26.
That's all reflected here. So it's the $4 million of the general fund returns on the next slide.
So all we're expected to have left is $4 million.
Yeah. Roughly speaking.
Out of all the the four of the general fund money budgets, that's all we're expected to have left is 4 million.
So the way so the way to think about this is. The total overspending in the general fund is projected to be $3.6 million. That is mostly driven by, in fact, exclusively driven by public safety bureaus. The other bureaus were told, come up with projections. How much do you think you'll either overspend or underspend by the end of this fiscal year compared to your revised budget? Everybody else who wasn't overspending was projected to underspend by a total of 4 million. That's based off of their, you know, personnel projections there, you know, where their contracts are and the like. And, and any external revenues that come into the general fund, like fee revenues and things like that, that's 4 million.
So they just gave you a verbal and said, we're not some of these because we're talking about parks, we're talking about water, we're talking about fire, we're talking about police. And so out of all of those folks who get hundreds of millions of dollars, they're saying that they are not going to have anything left. And they've told you that and you believe them.
Well, we collected a spreadsheet. We have the full projections, and we shared a version of that spreadsheet as of, I think it was like the week after our last work session. So March 12th or so, we shared that out and you should all have received that. That has the full, detailed projections at the major object level for every general fund bureau. Water doesn't receive any general fund, just to be clear. And so all of them made those projections and, and we, you know, did some vetting to try to make sure they made some sense and try to understand what was in them. So there was quite a bit of work that went into doing that exercise citywide to try to come up with the number that we expected.
And so generally, we have a general fund reserve, right?
We do.
So it would seem to me, if we're overspending, that the city administrator or the mayor would say, then we need to get it out of the general fund reserve, or we need to stop folks from spending money. If the money is coming from operations, that's one thing. But if the money, the overspending is coming from bureaus, wouldn't it be wise to ask these bureaus to stop spending? I'm asking you a question.
So councilor, it's a good question. I know we've had this discussion in various forms in this room before, dating back to, I think, around November or December. There was direction given by the city administrator to do exactly that to reduce spending. The we've talked a lot about the vacancy. The hiring freeze was one tool that was was identified to drive that. We did ask bureaus and service areas to look at all contracts and whether work could be paused or not. All other material and service spending. So that work has occurred over the last six plus months or five plus months, and is reflected in the underspending overspending number reflected here.
These numbers are minus the constraints that the mayor has put on all the bureaus to date. This is after they have taken the constraint off that the mayor required them to take off. That's what it appears to be, a overspending.
I think. Let me say it another way and you tell me if this is what you if this is what you mean, that the. The net overspending underspending number reflects the outcomes of those.
Constraints.
Those constraints. Correct.
Well, then he needs to take the constraints off. And you guys need to pay for the bills that you need to pay for, because it is disingenuous to come here and say that we're overspending. If that overspending is happening as a result of the mayor asking to take a 2% or 5% or 10% constraint, it means that he can't take the constraint right now. And then you come back to us and say that we're overspending.
So we just to be clear, there was no direction to take money out of bureaus budgets to fund any of the mayor's priorities this year.
I'm not talking about the mayor's priorities. The mayor can put a constraint on a budget and then say he puts a 10% constraint on the budget, and then you say to a bureau, okay, with the 10% constraint taken that was asked, how much will you have left over? After that 10% constraint is taken. And then you look at the way that they're spending and you'll say, oh, we're overspending, we don't have enough. Well, I'm saying take the constraint off and maybe you can pay the bills.
There is no additional constraint on their budget. The only constraints that were put were operationally to reduce spending. So there was no the revised budget. Like I guess another way to put it is if if council does nothing, if they change no budgets, right. And we continue to staff all of the fire stations and have police on the streets and keep our parks open for the rest of the fiscal year, at some point before the end of the fiscal year, say in June, sometime there will not be enough money to do that.
So I guess what I'm trying to understand help me understand this, ruth, help me understand how is it that we so woefully underestimated how much money was going to be coming in to our budgets? We we kind of fixed this in December in the in the fall style. And now we have we have another unexpected. Property tax or blt that came through. I don't understand how you guys forecasted so wrong. I tell me how you did that, I don't know. I mean, we know exactly how much money is coming in and we should of course correct this in the fall. Tao so now we're coming back to the spring tao and saying that okay, we're still under budget. Is it because we under x, we we underestimated how much revenue was going to come in? Or is it because the, the budgets of the bureaus that they put forward, they're overspending those budgets? Or did we underestimate the revenue that we were expecting to come through the door?
Yeah. Councilor it's the it's the latter. And I know I'm not sure who who all was in the room, but we did, if you'll recall, have conversation in January and February identifying that there was that that unexpected revenue delta that occurred subsequent to the fall. Tao, and that we wanted to highlight that we were going to have to take some actions to address that. That also led into the work session we had a month ago talking about what those solutions might be. So we could come back with this bucket of solutions today for additional council consideration in advance of the vote on next week. So I just we have identified that as soon as we became aware of that revenue shortfall and had and had dialog with council about that.
I remember peter telling us that we had an extra $15 million that we didn't know that we were going to have from the blt that was going to be used. And I said, why can't we use that for the fall towel? And that was supposed to be turned over for the spring towel. So I'm not understanding all this mix up in, in, in forecasting. I mean, who is responsible for this? I, I thought we only dealt with real numbers once. The, once the fall towel is, is in, we can only deal with real numbers of what is expected to come in for 2526. But yet we're still forecasting. Why are we still forecasting in December?
Well, we're we're always forecasting the revenue for that fiscal year, right? Because we won't know what the revenue was for 25, 26 until after 25. 26 is complete in a normal fiscal year, our revenues for that fiscal year do fluctuate from the forecast. That's normal because we have to make a forecast based on the best knowledge at the time of the forecast, and they usually fluctuate. We typically come in 1 to 2% off, and we try to forecast conservatively so that that one 2% has us to the good. This was just an unusual year. And our. And it is principally driven by the less than expected blt revenue, which is a very volatile revenue source.
No blt was more. We got more blt than we expected. That is not true. So the question that I'm asking you right now, go take the money. How much money do we have in our general fund reserve?
About $80 million.
Okay, you got it.
Council would have to appropriate that as didn't.
Put that up there as an option. So why don't you put that up there as an option? Because that's what's supposed to happen.
My question would be to the budget team. What are we required by charter to keep in our reserve? Because there is a certain percentage you just can't empty out reserves.
So we have a general fund reserve. Do you want to take it? That is set by policy at 10% of the general fund. And there are two triggers in policy that would allow us to that will really allow council. It's a separate fund, so it has to be transferred to access those reserve dollars. One is for an emergency like a large earthquake. The other is for a recession type emergency. And there's detailed language in the policy. I think we circulated that policy back in March, and I think we're on the cusp of whether that would be warranted based on our economic conditions. There are some quirks of how the policy is written, so that is a choice for city council for for you all to make, if you would, if you want to draw a portion of this from the reserve, that's an option.
I would just add to that. Thank you, ruth and councilor for the conversation. I would just add to that that, you know, the city administrator just noted at council this morning that our ratings were just affirmed at the highest rating levels. That existence of that reserve is a critical piece of that assessment. And so just acknowledge if that's a path that council chooses to take fully your discretion, just recognize there are other risks and trade offs that come with that kind of a decision.
Well, the trade off is that we have to deal with staff that are not giving us a proper forecast. And this has been going on for three, three times. We've done a towel in a budget and the forecast has been wrong. It has been woefully wrong. And so for me, if you want to continue to to have this facade that we're doing so well, well, I would say no because we keep forecasting wrong and we keep having to come back to this.
I don't believe I'm talking.
To ruth.
Council president. I don't believe these are the staff who do the forecast. And I'm a bit worried that we're veering into.
Some some impugning of our staff that is not allowed under our rules.
I didn't call a staffer. I said, we're getting our forecasts wrong and we're having to fill a gap because we're getting wrong information. Thank you. I was talking and you can raise your hand. So I was asking a.
Point of order to the council president.
I didn't hear you say point of order.
She did. She did.
I didn't hear you say it. But I'm sorry that this is getting under your skin. But I'm tired of them coming back here with this every single three months with the wrong information. We tried. We had a Morillo one, we had a Smith. One said, don't take the money from there. And we did councilor.
I will ask that we make sure we don't cross that line. But I do appreciate.
What you're saying, but it seems like I'm the only one that is really upset about this. And to ask the question about the general fund and to try to persuade me not to do the the general fund, but yet continue to take your bad advice on a forecast that is just unconscionable to me.
Thank you. Councilor. Councilor. Kanal.
Thank you, council president. So I will say that I there are many things that were just said that I agree with, and I don't put them at the forecasting piece. So I want to be clear about that. I do think that there are a lot of what we discussed might happen in. We've talked about the things that were brought up at the fall. Tao in the context of those two amendments, some of that not as much as maybe we feared, but maybe more than we hoped, has come to pass in a negative way from the fall till now. I think that's a fair assessment in terms of our financial situation. The other thing that I wanted to mention is actually something that came up not in the fall, but in last year's budget, when it was brought up that the 20% reduction over two years in these lines of business would not be easily achievable in a draw sort of a blanket line, here's the goal 9.5% in the first year, 10.5 in the second year. And that passed. And now we're here. And part of the reason, the third thing that councilor Smith didn't, I don't think, got to in the last round of questioning was around that particular reason for the overspending. And it's what councilor Green brought up the 10% placeholder reduction for enterprise efficiencies. I am not suggesting the course of action I'm asking about. I want to be super clear about that to anybody listening here, media employees. But I want to understand from a process perspective why it is that if council authorized a 9.5% reduction in these lines of business and we're not on track to make that reduction, why? The answer is not exactly as you said, councilor Why the answer is not an operational direction to go out and make that happen. Why is the answer come back and give us and ask for more of an appropriation? Because we're on a trend line that does not achieve a 10% reduction in enterprise efficiencies in this year, we still have three full months of this year left. Ostensibly, we have not overspent. Now we're simply on trend to do so. Is that accurate?
Yes. That's accurate.
So we are still in a place where that could be met. It might require some particularly aggressive action to do so. And again, to be clear, that is the thing I'm not suggesting. My question is why isn't that the path we're on? Why isn't it that that you would and I don't actually think this is anyone on the budgeting side. I think this is more of a question for the mayor and administrator. Why is it that right now, given council has previously authorized only the amount of money that was authorized last year, why is it that we are not on track to take more aggressive action to ensure that we achieve that number? Does that make sense as a question, I want to make sure and again, this is a process question. I don't want to lay people off here. I'm just trying to understand it.
You know, we can do that. And some of these questions came up earlier when we came forward with the first towel, not the first time when we first had this conversation back in March that would cause some of the cuts that we're talking about now, and some of the councils brought it up. Now, do we start making some of the significant cuts now to the budget that we'll be making next year? And some of those cuts? We were just not at a point yet to start making some of those cuts to our budget as it relates to some of the impacts it will have in the upcoming year. So as we look through some of these potential cuts now, all this still has carryover to next year as well, and the impacts that will be in the proposed budget moving forward. So it's things that we're constantly looking at, and there's always things that we could say we could cut services now, but some of that will require council's direction as well. If we were looking at truly reducing or no longer providing a certain service to the community.
So I understand that in the context of things that we anticipate needing to cut for next year, anything, what I'm what I'm asking about is the things that are in this fiscal year, because the council voted on a budget that was that was inclusive of a 10% reduction for enterprise efficiencies. I should note with the explanation on that, that there would not be a drop in service to achieve those cuts. And although I am one of the people that was very skeptical about this, I was against this particular piece of it, I'll note, but council did pass it. And so my question is remains from a process perspective, why is it not the case? Why are we not trying to achieve that council direction on the administrative side, as opposed to coming here and saying, we're just going to keep doing what it is and assuming that we're going to find money somewhere? And again, I understand that at this stage of the year, that would involve layoffs. And I get why it's not happening right now. And again, not advocating for it, but when we brought this up in the fall, it might not have because this did come up as a sort of secondary conversation. And during the fall towel and there was now there's only three months left in the year. Then there were many more months in the year we could have gotten our way. There were there are positions that have been, I assume, filled in this time. Subsequently, there are other decisions that could have been made that would not be like, let's lay off 20 people altogether today. That could have been made earlier. And I'm unclear as to why, because it it feels like it is not technically by the letter of anything, a violation of the council authorized budget, but it is a path that we are on that will that will absolutely get there in three months. If we don't find a new source of money or another place to cut, and we already decided where the cut was going to happen, it was going to happen by achieving the 10% reduction. So I'm trying to understand the process, and I'm still not getting that answer.
Councilor president, may I just from a historical standpoint, mike jordan and I put together that target the enterprise efficiency target of 10% in fy 26 with 20% into the fy 27. Those are targets because I'm going to use this word a couple times because we're in a dynamic situation. We really needed that efficiencies. How we reorganized the city was designed to deliver on it. Yes. As we start to see the spending, jonas and ruth and cia, for only being a few months, started looking at underspends, hiring freezes, overtime reduction, looking at contracts. And so those are all the things that we were really looking at hard in January. And we employed those tactics. But in the same regards, working with tracy warren at city operations, she started talking about the effectiveness of our cuts. And if we continue down the path, we would start to degrade service. So that's why we really looked at those challenging changes and cuts. But I also want to go back to councilor Smith, what you were talking about. Budgets are dynamic, but their budgets, the only time we true up the fiscal year is in the fall. Tao, which looks back at the previous year. We're just truing up the budgets any time. Peter and peter, you do a great job and I just want to highlight that right now. He's only bringing a barometer at that moment. It is a prognostication, is it not a diagnosis of the exact dollars that we have at that time to spend, and we only have those numbers. We are, by all rights, running a dynamic, a dynamic, and then we have revenue challenges as a city. And those revenues have not been going up, which is the tradition. They're going down. Commissioner Ryan can attest to that. There is few circumstances where he said on this commission where he had to do cut exercises. They're usually called the fall bump because it was going up, not down. We're in a unique situation right now, and I want us to all just focus on the process. Ruth and jonas and peter are doing their level best. I promise. They're putting the work in to provide the best information they can. At the moment. They have to try and allow you to make the best decision you can at the moment that you have.
So I appreciate that information. And to be clear, I don't think anything that I'm personally discussing has anything to do with any of the three people you just mentioned. I have no concern here or about any of the information, including peter, by the way, I appreciate the shout out there because as any, any economist, I'm sure will tell you, like it's you're never going to be 100% accurate. Things are going to change. I get it. I'm asking about the expenses side though. And so I, I, what I'm kind of if I'm hearing you correctly, mayor, what I'm hearing you say is it was harder than we thought it would be. And tracy warren's work is in part to, to tell us that. And I, you know, and that's great. I think maybe what might be helpful in the future is outside the context of the budget conversation, to have a check in where we're talking about it from the operational and the policy side, if something like this would happen in the future, if we don't achieve next year's target, for example, early enough that we can adjust course and not be not be feeling like we got stuck with the bill in the in a year or even in the fall because I that that is, I'll just speak for myself a little bit of how it's feeling right now, because in the conversation around not only the budget, but the fall, the fall tore and it was sort of a secondary thing because we actually spent pretty much the entire time discussing the other amendment. But one of the in the questions period on that, we did talk about we're not currently on track to hit the 10%. And it was I don't want to say that anybody promised, oh, we're actually going to hit it. That's not my intention here. But to say that we needed to maybe have a broader conversation around what is the correction to the course in the fall so that we maybe weren't we're not looking at it as an overspend. Now. We're looking at it as we thought one thing a year or nine months ago. We revised that six months ago, and now we're in line with six months ago, as opposed to we're not in line with either 6 or 9 months ago now. So that's that's the only point I'm trying to make. And I think I understand that at this moment, maybe there isn't any way to do it besides laying off a bunch of people. So I'm not. Again, I want to be super clear to the cfpb folks in particular listening. I'm not advocating for that. What I am saying is, is that I would like to not have to vote on things twice, because if it happens, and then we're basically having to recommit to something or adjust course without any ability to affect it in the meantime. So thanks, council president.
Thank you. Councilor ruth, I just want to check, do you still have more slides to go through? We have four more in the queue right now, folks, and we still have more to go through. So I just want to make sure we keep that in mind. Councilor Green.
Mitch Green: Thank you. Councilor Kanal you got on to a line of questioning that now I'm very locked in on because you had made this. You you connected the dots on the expense side that said, look, if we if we made a different set of choices in the fall, you have nine months to solve x dollar problem. And if you punt that decision to the spring, now you have three months to solve the same dollar amount problem. That's exactly what I said in this seat in the fall. And I told you so.
Thank you, councilor Green. Councilor Smith, you have spoken twice on this. I'm going to move to I'll come back to you. Councilor. Pirtle-guiney.
Thank you, council president. You know, my colleague councilor Smith said that when this happens, either the projections were off or the cuts weren't made that needed to be made. But I want to name because I think councilor Kanal alluded to this, but I want to name it. There's a third possibility, which is that the reductions we tried to take didn't work. And mister city administrator, it's our job, all of us, to make hard calls to do the things that nobody wants to do, because we have a more bad option and a less bad option and no good options in a budget like this, I expect that we have to do that, but either we're on the same team and council makes a hard call and you all stand with us and implement that hard call, or you are per councilor Kanal point, asking us to make that hard call twice to cut for the same amount twice. Once by looking our employees in the eye who do an amazing job and saying, while we value your work, we need you to do it more efficiently. And we can say we don't want that to mean layoffs. But at the end of the day, that will sometimes mean layoffs. If I'm going to look our city employees whose work I value in the eye and say, I recognize this decision may lead to layoffs, I don't want to have to do that again. And, and I understand we did get the briefing earlier this year saying, hey, we're not going to hit the reductions. Right? We did get that outside of the budget process. And we're now looking at some one time program cuts, which I appreciate. But I asked about this the last time we had an update. I need to reiterate it right now. What we're looking at doing as a solution for the most part, is not ongoing cuts. And what we're doing is moving money in to fill holes that we otherwise would have had at the beginning of the next budget cycle to help start us out, not so far in debt, next budget cycle. So I'm asking you as the city administrator, and I'm asking the mayor to be our partner next year as we go into the budget cycle. And if we say we are making this really hard call and we are saying we are going to take cuts in this area in this way, we expect that to happen because you all are causing us to have to vote to make the same reductions twice. That's not our staff's fault. And I understand that this is a hard budget year, and I appreciate that. We did get the heads up about a month ago. But we've got to do better next year. I want to have to do this again where we're making the same cuts more than once next year. So as we go into the budget cycle, I know this is tor not budget cycle, but we're going to be having these same conversations. If you think something can't happen, please tell us that not in the fall, but in may when we are having the conversations, tell us honestly, let's have an honest conversation about it so that we can make good decisions then. Thank you. Thank you, council president.
Thank you, councilor Pirtle-guiney councilor Morillo.
Angelita Morillo: Absolutely.
Completely agree with everything that councilor Pirtle-guiney just said. And I really hope that you will take that to heart because she's correct. It's not staff's fault. It's the fact that we are funding things that we cannot fund, and that there are not dollars to be found for. In the fall, when my office tried to close the budget gap by reducing appropriations to the general fund, encumbrance encumbrance carryovers utilizing the city budget office's own policy for what should or should not be funded through that process, as well as a reduction to sweeps above and beyond their own original targets, we were told absolutely not. We should not complicate or contemplate any service reductions whatsoever. We warned that the compensation set aside would be needed. We warned that revenue was likely to come in reduced again. And as councilor Kanal had pointed out, we have no evidence that there has ever been an effort to meaningfully manage spending beyond a hiring freeze, so it gives me a lot of pause about the budget that we are facing. If we cannot manage spending to the tune of 20 million, how are we going to actualize next year's cuts? We are now put in the position based on timing, where in order to actualize this level of savings through savings this year through underspending, we would have to lay off dozens of employees, something that is untenable to all of us here and to our constituents who are receiving services from the city. So we very much have our hands forced in this situation, and I am going to bring it up again for my colleagues and for folks listening that I feel like, as an elected official who hired a financial analyst to help me go through all of this, when we have brought up concerns, we have been proven right every single time. And I have now gotten to the point where I actually will be annoying and a little bit petty about it, and I'll bring it up every time. Because if we had made some of these decisions in prior tau sessions, we wouldn't be in this position today. So there are a lot of things that we need to take a look at moving forward. And I hope that when the elected officials here who manage the power of the purse and the budget, that we're going to be taken with the seriousness that we deserve.
Thank you. Councilor Morillo ruth, turning back to you.
Great, thanks. Can you go forward a slide, please? So the spring tau includes we've just reviewed kind of the general fund and the position we're in. There are also other regular actions that occur in the spring too. So I'm going to step through those a little bit. And we'll also have time for questions on those. Next slide please. So this is a summary of some of the other actions in in the spring tau as filed. And these are pretty typical types of things that happen in the spring supplemental budget. The first is to true up ending fund balances to match the excuse me, budgeted beginning fund balance to match the prior year's ending fund balance. This often happens in the spring due to the timing of the occur. Technical adjustments to align spending. Again, this is pretty typical. Things change throughout the course of the year, and the budgets are usually updated to reflect those changes. Operationally, we typically recognize or adjust revenue, including things related to grants, interagency agreements that change, and intergovernment intergovernmental revenue, and then make draws on non-general fund contingency accounts based on current year spending. There's quite a bit of that. In a normal spring supplemental budget. You can go to the next slide. So just because we've talked a lot about fund balances in recent months, I thought it would be helpful to kind of show the flow of how this works. So the act for ending fund balance comes out towards the end of a calendar year, typically. And in the ending fund balance, it calculates the actual ending fund balance from 2425. In this case, as of June 30th of that year, we then have to update the beginning fund balance for the next year, because whatever is left unspent in the previous year translates into beginning fund balance for the next year. So in the fall tau we typically do that for the general fund. And that's done typically before the aquifer is released. But because it's the general fund we sort of have to true it up then. And we did that this year. And we adjusted to lower than anticipated fund balance in the in 2425 in the general fund. Then in the spring, other funds typically do their beginning fund balance through ups to the act for ending fund balance. And so you will see that in this spring tau. And there's there's true ups again, because fund balance is a projection. You know, you're budgeting the next year's beginning fund balance in, you know, some for some funds, they're doing it as early as February. And so they don't know what they're ending fund balance is going to be. So it's pretty normal that there's a difference between what they thought it was going to be and what it in fact was. And some of that is due to timing things. You know, they might have thought they were going to issue a bond that year and they issue it the next year. Things like that will really affect the fund balance. And so it's generally a pretty typical and technical exercise relating to timing primarily. Next slide please. There are a couple of other relatively small changes to call out that are on this slide to related to arts and the office of arts and culture, and one related to PBOT that are here. Next slide please. You've seen this slide several times. Now, just a reminder, there is an interfund loan ordinance that is traveling with the spring tao. So separate item, but you will vote on them both next. Well, you'll hear them first both next Wednesday, but they're traveling together. But there's no changes to that from what we have previously presented. Next slide. Okay. And this is just the calendar. And then I sent out in the slides, you should have there are various appendix slides that walk through more detail of some of those other types of adjustments. And so we're happy to answer questions on those at this point.
Thank you very much. A couple more counselors in the q councilor Green.
Mitch Green: Thank you. I put my hand up there just on the first slide. In this second part of the session where you describe true ups. Does the spring tow include the true ups for the occ for Portland housing bureau money? And where would I find that to verify for my own self?
Yes. So it does. And in the exhibits. Sorry. Actually I'm going to have anthony, can you come up and speak to the which exhibits and thanks.
Exhibit one.
For the record. Anthony lock cbo analyst supplemental budget coordinator you can find much of that information in exhibit two, the fund change memo, and you can see kind of the corresponding adjustments in the contingency line. So for example, if you're in exhibit two and you look at. Let's see, which one should we do like 213, which would be the housing investment fund. You'll see that there's an increase there of $37.7 million. So that means that that previously an recognized beginning fund balance is now in the system.
Okay. So it is accounted for. It is budgeted for in this fall, the spring tow action.
That's right.
Yes. It's budgeted as beginning fund balance, which is a revenue, but it's not like fully allocated. There's no proposal about how to allocate those funds. Yeah.
Thank you. Councilor Green councilor Kanal.
Mitch Green: Thanks. Two questions. The slide. The first slide on here makes sense to me and I appreciate that clarification. The one that has the other proposed changes, the third of those. It was there a does the spring towel realign that hundred and $72,000 in line with a previous action? Or is the tao the itself the act, the policy choice to add, allocate general fund under council. General fund underspending to PBOT. Like that's not something that we've done before, right?
I, I actually have a direct response to this because that comes from my office.
Okay, good enough for me. Question withdrawn. My other my other question is about the next slide with the graph. My understanding is we have two items which are coming up tomorrow which are going to replenish this fund in part, not not completely replenish the health fund because the 11 or 12 ish percent increases in the health. The inflation effectively on the on the health plans, the two health plans is less than the 15% budgeted thanks to councilor Avalos budget note last year, and that the difference is going to go into the health funds. Is that reflected on here. Is that not reflected. How does that.
Yeah yeah. Good question. So. That it's all sort of taken into account. Basically the way we're treating the sort of health fund reserve is in a couple of different pieces. This piece right here is for the is just to address the current fiscal year is to ensure that we're able to pay for the health benefits out of that fund through the end of this fiscal year. What we've done is because we we were aware of this earlier in the year. We did briefings. We talked to council about it. We we assumed that would be true going in. And in the forecast and expected those expenses for repaying this fund to hit next year. So there's a sort of loan repayment already budgeted in or already planned for in next year's in the 2627 budget. And in addition, there is the the delta, as you just said, between the renewal amount and the 15% also going towards those reserves. So the total increase year over year in health benefits that we're going to experience in 2627 is, is about 22% 20, a little more than 22%. That includes both the loan repayment amount and that reserve rebuilding moving forward so that we don't end up in this situation anymore. What I believe what you're getting tomorrow is just the renewal contracts for for the health plans.
Okay.
That makes sense.
I think. So the would I be correct in saying that the, the, the deltas are replenishing from 4.3 to 5.2, but that we will then need to pay off 15 million to go from 5.2 to -9.8 to next year to repay this year's loan, which is why it's projected as actual reserves -9.8.
So the delta you're talking about the delta between the renewal cost and the and the 15%. That's not impacting this year at all. It will hit only in next year just because of the timing.
Right. But but there's a if you look from four from 4.3 to 5.2, what causes that increase.
The loan. Just the loan revenue.
Okay. So so nothing related to that. Delta is showing up on this graph in any way.
That is correct.
Okay. And so at some point, if and when we take legislative action to appropriate the delta to the fund.
Yes.
That would increase both the 5.2 and -9.8 by that amount.
That is right. Yes. So so this doesn't this yes. This graph here doesn't show you anything about like those future forecasted like reserve rebuilding plan. It just shows you what has happened. And then what's the effect of the loan itself? Does that clarify it at all?
Yeah yeah yeah yeah. But what I'm getting at with that question is effectively that there will be a. There is room for this to get better, but not room for it to get worse based on that, correct?
Yes.
Yeah.
And if you would like a graph kind of showing the projections, including that delta and the other planned reserve rebuilding amounts, we're happy to provide that.
Okay. In the ordinances tomorrow just to close this up, it says in the the council fines part, the sort of whereases, it says that there's a recommendation to use the 3.9% in the ppa side and use the 4.2%. Those are the deltas to replenish the the self-funded medical plan reserve fund. It's just that that's not actually happening. That's just acknowledging the recommendation.
Correct. The action for that to happen is in the budget.
Okay, copy. Thank you.
Thank you. Councilor Kanal. Councilor Smith.
Loretta Smith: Thank you, council president. I'm looking at the transportation operating fund earlier. Well, earlier last month, I was trying to get meetings with all the bureau heads so that I could be prepared to come and talk to you, ruth and, and jonas today, because I wanted to have a look at this fund. And it says there's half $1 billion in the transportation operating fund. That includes the 677,000. But I have no clue as to what that $506 million is scheduled to be used for. There is no database. There is nothing that anyone can go to to show. Some of this money was put in 3 or 4 councils ago for projects that they wanted to do. Whoever was over the transportation department. Now we don't know. And c.a. Lee asked me to hold off because he wanted to find out as well. So I'm not prepared today to really refute any of the stuff that you're saying, because I have no idea what these dollars are expected to be used for in the future, and I wish I could have a better understanding of everybody's fund, all those 70 funds, when are we expected to use those dollars and for which projects? So I am just assuming, administrator lee, that you are checking into this. I wanted to give you an opportunity to do this first, because I wanted to find out what this is, because saying that you're $677,000 to the bad in the in the transportation operating fund, that really doesn't mean a whole lot to me when you already have a half $1 billion in there that I have no idea where it is expected to be spent in what year it's expected to be spent. And why is it important for us to put another $677,000 in that particular fund? So that is troublesome to me, and it's perplexing probably to you all too, because you're the budget folks. And so there is an assumption from where I'm sitting is that you should know where every penny is expected to go. And you all don't. You just know when you're down some money, or that you loan some money from a fund and you want to put it back. I want to know what's in this money. I've been asking for desegregation of every penny in every fund. I want to know when it's expected to use, because we can make some other choices with those funds. And if some of those funds can offset some general fund, that would be all to the better. So I'm, I'm really having a tough time saying that I support this towel because I don't know where all the other money is expected to go. So for me, putting 677 back to a place, it doesn't give me solace in knowing that that it's going back to something that I know that we need to pay for immediately. So my question, I guess it's for administrator lee. When can we expect a breakdown of these funds and when there's expected to be used and what they were originally put in these funds for?
As we go through the budget process, we'll have something for related for each of these service areas where we have these different funds, where we can have that broken down for you.
So are we are they going to be new uses or are they going to be the original uses that they were put into the fund for? Because I know we were. You were going to call for an independent audit and an investigation. Is that still going on?
That's still going on.
Okay. Thank you.
Thank you, councilor Smith. Colleagues, I put myself in the queue. Can we go to the other true up slide? Ruth or sorry, the the the one that has my name on it. It's about it says art on it. And there we go. I just wanted to explain to my colleagues what this these two top art requests are specifically. Number two, I'm going to start with number two. Request number two is related to reporting that we had about a reserved balance for the arts tax. Working with the revenue office, my office has asked to reallocate $1.6 million from that pot of dollar, that reserve fund in this budget to backfill the amount of dollars that were cut from grants, grant or current arts grants recipients. Additionally, there will be an. In the new. In the next year's budget, an additional 1.6 million from that reserve fund to continue to fill that in the next year. And art request number one relates to a an amendment that we all passed last year. Again, thank you for that. We had allocated about $300,000 for storefront activation to put artists into some of the vacant storefronts that we have downtown. And then we immediately ran into the hiring freeze. And so we've been unable to hire the person who is going to go ahead and do that. This effort, working with the arts and culture office, redirects the dollars that we would have been using to hire somebody and redirects it towards our ability to contract those dollars out and get some storefronts activated, especially explicitly. We've been in conversation with the folks over at the halperin sequence, which have an amazing opportunity to activate that, the storefronts that are over there, but they've been sitting fallow for a long time. So those are what those two are. And I just wanted to give everybody an explanation, and I'm happy to answer any questions,
If anyone has anything about that, but otherwise councilor.
I had a question.
Oh, councilor Smith. I'm sorry.
So this is very interesting. This happened the last time with the tao. And so council Avalos asked the question and I'm going to ask the same question again. How did you know that you could put something in this towel instead of waiting for the budget to put earmarks into a towel that we're supposed to shore up? Supposedly our bureaus, but yet you got individual earmarks that were put in there specifically like we did in the fall towel and councilor Avalos asked, how did you know about that? And so no one else had the opportunity to put any of their requested earmarks in there as well. So now here you go. You did the same thing. So how did we know? Ruth and jonas, that there was an opportunity for us to shoot you, some opportunities to put things that we wanted outside of the budget into the tao. When did that conversation happen? Because I sure didn't see an email of you sending us a note saying, if you have anything you want in the towel, put it in. I thought that these kind of requests would go in to the budget as a budget amendment or something that you wanted the mayor to put in. So this is very, very new stuff to me. Did I miss something? Was there an email that went out to the councilors that said that if you had any things that you wanted to go in our tao.
It was certainly not from the budget. This was my office has been working both with the revenue office and the arts and culture office for the last year to try and implement Dunphy two. And also working directly. I've been working since I got into office on the reforms for the arts tax.
Oh, I understand.
When we knew about that at the time and heard the reporting specifically to the arts tax. Worked with the revenue office to find out whether there is a solution for us to do it in this year. And this was the proposal of moving items from one side of a column to the other, in the tao being the most appropriate thing.
I have been trying to make sure people are getting ready to lose their housing, got rent assistance, but yet you somehow got into the tao. When people are getting ready to be evicted from their homes.
These are. These are simply dollars that had been previously. Well, two Dunphy, two specifically. These were dollars that we had previously allocated. This is about changing it from personnel to ems. It is a it's a color of money amendment.
Yeah, I know, I know what it is. I know, and there are some things, some other things. So I thought that these things had to be changed in our in our budget cycle. I did not know that you could do all things under this tao. That's all I'm saying. That. And that's why people feel like some counselors have more information, whether it be the council president or others who are chairs of committees. They're getting more access to be able to put things into a towel than all of us instead of us. I thought I had to amend the tao to get something put into the tao. I didn't know I could put something in the tao. So this is this is process. And I guess we're all getting used to the rhythm of how we all do this kind of work, and I appreciated the the budget note conversation that city attorney taylor put in on how we do that. I just didn't see another kind of memo that gives us the range of things that we could do by putting things in the tao. And I know that it's tough from the budget office to you got you got to respond to a lot of people. And I'm going to tell you right now, mayor, if you do not put no new money for budget office staff in this. I'm not voting for your for your budget because I'm not I'm not going to deal with this same problem next year. There's not enough people. People don't know what's going on. You better take care of the people who take care of the money, because if you don't, you're always going to have this conversation with this level of intensity of disapproval and non-belief, of what the budget office says, until you sure that up, that's what you need to sure up. I understand that we have a homeless problem, but we have an infrastructure problem right now and we need to take care of our infrastructure first. Thank you.
Thank you. Councilor Smith. Councilor pirtle-guiney.
Elana Pirtle-Guiney: Thank you, council president. I do have a question about the art request. One yeah, you said that this was money that was going to go to hiring a person to do the work of finding the right spaces to coordinate, to get art in, in windows, basically. And now instead we are contracting for that work. You understand why that made me pause?
Absolutely.
So I have no problem with a direct appropriation to fund the work, right? We know that this is a good location. This money is going directly to the artists to make it happen. I have no problem with this is a one time thing. So rather than a limited duration position for two months, we're going to contract for somebody for two months because it's such a short period of time. I'm trying to understand if what you meant when you said were contracting for the work is one of those two things, or if what you meant is we are actually contracting out for six or 10 or 12 months, somebody to do the work we would have hired somebody for because under a hiring freeze, we are allowed to hire contractors and not employees, because that would be something that I would have a fundamental concern about.
Yeah. My understanding is that this aligns well with an existing contract that the city is already doing on some of that public space activation through the office of arts. But you are right, in an ideal situation, we've been working for the last nine months to try and get this hired as an employee, and we're essentially told that this was our last opportunity to get these dollars used without them being returned back. So, so but you're not wrong.
So that I understand though, is the money going and maybe this is a question for the city administrator. Is the money here going to fund somebody on contract to do work? Because under our hiring freeze, we are allowed to fund somebody under contract and not hire somebody, which I have a fundamental philosophical problem with. If we're in a hiring freeze, we're not doing new work. Or do we have a contract where the money is going to pay for the actual artists time, and we are adding money to that to pay for more artists time?
I'm not.
I'm not 100% sure. I have to follow up on that to see, could.
You answer for me?
Yeah, I.
Can't, thank you. Thank you, council president.
Thank you, councilor Pirtle-guiney councilor Kanal.
Elana Pirtle-Guiney: Thank you for that line of questioning. Councilor pirtle-guiney, I appreciate it, and I'd like that info too. I think maybe the whole council might be interested. I, I think maybe one of the things that's coming up that we haven't really acknowledged is that a lot of what's in this ordinance isn't an adjustment, but isn't technical. You know, there are things in here that are potentially a little bit more policy conversation adjacent or overlapping. And this has come up since the, the, the brand of this action changed. It was a bump before, as the mayor pointed out, budget monitoring process was the the acronym. And as it changed to technical adjustment ordinance, I think that that has maybe undersold the impact of it a little bit in terms of this is just a technical adjustment would be moving something from last fiscal year to next fiscal year in in the context of the fall bump, those encumbrance carryovers, those are technical, I get that. But I think there are some things in here that are that are policy conversations too. I don't think necessarily that the arts piece falls into that. I think because we already discussed it in the context of the budget. Dunphy to that, what we're just doing is making it happen. And I think that's maybe helpful. We have done supplemental budgets before as their own standalone ordinances. And so I have no I'm not saying anything about this year's spring tao, but in the future, I think it might be helpful to allow for that separate conversation through a supplemental budget and, and allow for us to, to be more transparent, not only with the public, but actually with the folks up on the side of the dais. Thanks.
Thank you. Councilor Kanal councilor Smith.
Loretta Smith: Yes, council president. And so I want to go back to the other proposed changes. The springtown realigns 172,000 of council general fund underspending to PBOT for projects located in district four. There's 100 k signage for the new brooklyn bridge. There's two k and then there's the sheridan street safety project. And so it is my understanding it's not just council general fund underspending that specific councilors have asked to use their specific budgets to pay for this. And I think that those specific councilors budgets need to be identified. Instead of generally saying council, general fund underspending. This is it should be said that xyz is coming out of councilor Green's office. Xyz is coming out of council murillo's office for the new brooklyn bridge and the sheridan safety project. It should be the actual counselor's name, not just a general, because that's not the truth. It's not coming out of council general fund underspending. It is coming out of specific councilors budgets, and that should be identified. Is there a problem with that?
Ruth or anthony can jump in? I don't think there's a problem with describing it that way, councilor. I think that's a valid and fair point. I think that nuance here and just acknowledging that I believe council offices are in one fund. And so that's the reason it's referred to just as a collective, but just.
Happens to you all today. And somebody else has to take the place. They have to do what's in writing, and they'll just take it out of whatever the big pot is of underspending. So you need to be very clear on what this is and what this looks like and who it's coming from.
Yeah, that's.
Fair because I'm sure they would probably want to get credit for doing the brooklyn bridge and, and doing the other things out of their district offices instead of just being called council.
That's totally fair. And again, this is sort of focused on the budget.
Council can consider that a technical change in how we do this, not changing it, but it's just giving credit to who's actually giving those resources.
Understood and happy to make space for councilors to take that credit if they if they choose to, at their discretion.
I don't think.
They have a choice in it. I'm just saying that you need to identify. So I know when I go back and look in a book what people spent money for specifically.
Thank you, councilor Smith. Councilor Green.
Mitch Green: I just put my hand up to say, full disclosure, 100 grand coming from councilor Green's office for PBOT stuff. 75 of it came from our last eo from last budget. And then we have some underspend there. So we just were trying to roll it. We're just trying to allocate it here. And then we got we had some conversation with PBOT about taking another 25 and just topping that up to make it an even 100. I agree with you 100% on your substantive point, which is like, because don't make it feel like it's coming from your budget or your budget or your budget. It is coming from my budget and I'm in the future. I understand you probably are hesitant to put my name on it without asking in that sort of thing. You have my permission in these sorts of things.
Thank you, thank you councilor. I do just want to note to both those comments. I mean, this is a unique council obviously has a unique role at the city. Absolutely. And each there's individual conversations with each council office. And so really those decisions are absolutely 100% based upon those individual council office directives, which might include requests for credit or requests otherwise. So we're merely being responsive to that. If individual councilors want to approach that in a different way in the future, we're certainly happy to accommodate that.
Thank you. Councilor Green councilor Morillo.
Angelita Morillo: Yeah, full disclosure, my office paid $2,000 to get the brooklyn bridge up late. So, you know, the brooklyn bridge is actually mine now. And I would like that reflected in the budget. But yeah, I know, right. Two k for a bridge and it's all yours. Just kidding. It belongs to the city. Oh, olivia's telling me I have to maintain it now. I don't know how I feel about this. No, I think I think that's fine. I feel fine having that if it is helpful to people having it. Line item whose office it came out of. I think the way I frankly went into a lot of our budgeting for our office was knowing that our bureaus are going to be taking really difficult cuts at this time, and everyone's going to be sort of pitching in and doing their part. So we have some money left over to give back to the general fund. And I think that's a good thing, or that was our intended way of spending our office funds. So I will leave it at that.
Thank you. Councilor. Morillo. Councilor Green, are you in the queue again? K? Take us home. Anything further from you all?
Great. So there, there are a couple of follow ups from today and we will get those out to you as soon as possible. And I do want to note there are are the. We'll be circulating the full list of the decision packages in the spring. So there's a little bit more narrative detail in there than what we posted and sent to you already. So you will get that this afternoon. Are there were there other things? Oh, and the fund, the description of the funds that were updated to reflect the acfr. You'll get an exhibit with that. And we also have additional descriptions about the encumbrances that we will also circulate to you. So you will get all of that information. And feel free to reach out to us with any questions before Wednesday of next week when when we have the first reading of this. Additionally, we don't have a formal process set up for amendments for the spring, although we should probably have a conversation about that moving forward for supplemental budgets. But oh, and see who's worked with you all and is working with you for for the 2627 budget process is also available for any amendments that you would like to put in for the spring. Tao. So just go ahead and shoot him or us an email, and he's happy to help you ensure that those amendments, you know, have the correct technical language and, and information included in them for before Wednesday of next week. And if you'd like to post them, you know, we can make sure they get posted ahead of time.
Excellent.
Councilor Kanal just.
Sameer Kanal: A question on that are two questions. One is, will that include the decision packages that are not part of this? I'm seeing a couple in an exhibit for I want to say, yeah, that are proposed packages that are zeroed out. So it's actually the, you know, these are the things that I'm assuming means that somebody asked for a change and was not that was not included. Will there be will that be included in here? I'm looking at the very last line on page two, for example, of exhibit four.
So some of the. Dollar amounts that have zero represent like net neutral adjustments made in the general fund. And then there are a couple and we can provide follow up where kind of on a technical basis were not not advanced forward. So it just became clear in conversations internal to the bureau that those should be withdrawn. And so.
Yeah, this one just happens to say proposed package. So I, I know there was a proposal in that scenario. The other thing is will these dollar amounts in the immediately preceding section, such as the bulk of part two, the general fund return, will those be disaggregated further? Because I'm seeing one, you know, the 1.3 million we've talked about, the 1.4 million we've talked about. But the 2 million from the office of the public safety dca, I imagine, has a bunch of sub information there. And I would love to see that particular one.
We can provide information that maps what we presented to specific decision packages. I do recognize in the general fund return category, there are a couple of things that are related to general fund spending. And then there are some related to like, for example, the special revenue fund adjustment for the pbb for police. So yeah, we can, we can make sure that the information you see here is across walked properly.
Yeah.
I assume I have faith that it's been cross walked. I want to be clear on that. I just want to know $2 million is not one position. It's probably from several parts of that office. It's a big office. I'd love to have an understanding of of that. I think if it's, you know, $30,000 from the office of equity, that's probably a single source. We can figure that out. But for those larger dollar amounts, having that transparency would be helpful.
Yeah.
And that information will be in the decision package. So you can see like what major object money is taken from. When you see the, when you see all of the discrete items in the tab.
We can provide it for the office of public safety. It sounds like that one. And then we'll look if there are any other significant size ones. Sometimes it is just like sort of personnel underspending. And so it's not disaggregated to specific programs, but to the extent there are large ones where there are multiple things happening in the bureau, we can certainly provide that detail.
Yeah. And I think a good example is if you go up to the top of that section, the second through fourth line, they're all bs, but it tells me one is graffiti abatement. You know, that level of understanding. And it's I understand that's how the, the bureau or the office requests it is probably how you have it. So it's a little bit subjective in terms of your evaluation. I just that's one that I happen to be.
Yeah. We'll do our best to get as much detail in there as possible.
Thank you. Councilor Kanal colleagues are our, our friends from the office of arts and culture are here to answer some of councilor Pirtle-guiney questions that she asked earlier about the Dunphy two. Tor carryover or true up.
Hello.
Good afternoon. For the record, my name is charity montez. I'm the director of the office of arts and culture. My understanding is there are questions about the. The second bullet on the previous slide or the first bullet. I'm sorry.
Council president, is it helpful if I repeat the question? Okay. And, miss montez, thank you for rushing over. I know that it's hard when you're in the middle of other projects, and we suddenly have questions that weren't anticipated. What's listed as art request? One was described as reallocating funds that were originally meant to hire somebody to connect artists with space. We couldn't hire that person because of a hiring freeze. So we're adding the funding to a contract to contract out the work. What I'm trying to understand is whether we are putting this $190,000 toward, for example, paying for artists through this contract to activate spaces that have been identified as good spaces, or whether we are putting this money toward hiring somebody to do the work that the individual we were going to hire would have done. But for the hiring freeze.
Got it. Thank you for that question.
And just so that you understand the motivation, if it's the latter, if we are essentially hiring somebody, but through contract and the hiring freeze is changing how we bring somebody on to do the work, but not actually limiting our spending on people doing the work. I have concerns both from a, a relationship with our labor unions and an effectiveness of our constraints.
Thank you for the question. I understand the concern we would look at. This would be a very short term fix. We would not spend the full $190,000 on a contract for a person to help us do the work. I do believe that we would probably spend up to 25,000 to contract with an existing artist slash arts administrator to help us do some of the work to put art into vacant storefronts. The original Dunphy two had a collection of things. Some of it is grants, some of it was a space finder, and some of it was storefront activation through art. And we would use the rest of the 190,000 towards more art and paying more artists.
So this is using 25,000 ish to pay for a person doing the same work. We would have paid for a person internally to do, but we're not doing it internally because of the hiring freeze.
Not all of the same work. A portion of the work.
Okay. Thank you for the explanation. I really appreciate it. It's not what I was hoping you would say, but I think knowing that is really helpful. And council president, I think it's a small amount of money. I don't want to pick a big issue over something small that is important, but I, I do have some concerns about our policy here. I want to think about what I do with that.
Fair enough.
Thank you.
Colleagues. Seeing no one else in the queue. Pause for dramatic effect. I believe that concludes our work session on the spring. Tao, thank you all for your thoughtful questions and debate. Thank you, staff, for everybody, for your thoughtful answers. And we will be back in this building, this exact space. 9 a.m. Tomorrow. Nine 39 3925 people. With that, I'm adjourning the work session. Thank you. We're adjourned.