The record · Transcript
Council Session — 2026-05-14
Transcript from the session's official auto-captions (22,554 words), shown in readable case and split into speaker turns. Speakers are not yet identified (colors just separate consecutive turns). Auto-captions can contain errors — check the recording for anything that matters.
Session summaryEditor-reviewed
The Portland City Council held a work session on Thursday, May 14 (recorded as 2026-05-14), described as the final budget-season work session of the cycle. The Auditor's Office presented its requested budget, totaling 45 FTE and approximately $14.6 million, outlining divisions covering public records, elections, complaint resolution, and performance/financial audits. Proposed reductions included eliminating a field performance auditor position and an administrative specialist position, along with cuts to materials, services, and equity-training contracts, alongside additions for a labor agreement and voter education funding. Discussion covered the process by which reduction targets were set, campaign finance enforcement responsibilities, voter education contracting safeguards, and interest in restoring cut positions. The Public Works service area then presented budgets for the Deputy City Administrator's office, Bureau of Environmental Services, and Water Bureau, including position realignments, reductions concentrated in vacant positions, and proposed utility rate increases, with figures on future rate trajectories discussed inconsistently across speakers. PBOT presented rate and fee schedules, including new development-related fees and parking rates. Council members raised questions about rate design, long-term affordability, service impacts, and organizational restructuring. Votes, if any occurred, are recorded in the vote ledger.
AI-drafted from the session's auto-captions, reviewed by an editor — describes the discussion only; recorded votes live in the vote ledger. Captions contain errors.
0 Yeah! Good morning everybody. Calling to order this work session of the Portland city council. It is Thursday, may 14th. Congratulations, friends. This is our final work session of this budget season. I think it's our 13th. This morning we're going to be hearing from the auditor's office. We'll be hearing from a public works service area. And we will also be having a presentation on solid waste rates. I believe I am turning it over to madam auditor. Good morning. Welcome. Apologies to everybody for us starting a little bit late this morning.
1 I think diana is going to advance my slides. Good morning. It is the morning. President Dunphy and councilors. Thank you for having me today. I'm city auditor simone rede and today I'm joined virtually by chief deputy city auditor reed broderson. We're here to present my office's budget, which I've requested, and the mayor has included in his proposed budget for next fiscal year. I'm going to start by providing an overview of the auditor's office and our functions, as well as our budget. And I will share with you the approach that I took to developing this request. Then I'll hand it over to chief deputy broderson to get into the details about the cuts and changes that we're making. Before we answer your questions. As a reminder, our city charter requires the auditor to submit a requested budget to the mayor and city council, who are required to consider the auditor's priorities and duties. Mayor wilson, out of respect for my independence and the outcomes that my office ensures, has incorporated my requested budget into his proposed budget without modification. And I ask that you adopt my budget without making further cuts beyond those I've consented to, which I'm going to go over with you today. So thank you for your consideration. Two more slides. One more. Thank you. So the auditor's office mission, which I know you're all familiar with, is to ensure open and accountable city government so that all people in Portland experience a sense of belonging. Our requested budget for next fiscal year totals 45 fte and about $14.6 million. Next slide. The auditor's office is organized into seven divisions that are directly overseen by myself or chief deputy broderson. Our divisions help portlanders access public records, participate in elections and council business, challenge city decisions, resolve complaints, and understand whether city programs are operating effectively, efficiently and equitably. We also maintain administrative independence, which allows our office to do all of that work without depending on the systems and officials that we are responsible for holding accountable. Next slide. So my approach for developing this requested budget was really to prioritize legally required work and services and make reductions where possible. It uses reserves strategically to avoid deeper disruption and to help the office retain as much of its skilled workforce as it can. The result is a budget that makes cuts and changes responsibly, and reflects our shared responsibility to respond to the city's fiscal crisis. Next slide. The auditor's office is greatest asset is our capable staff, and so it's no surprise that personnel is our largest expense, at about 9.3 million or 64% of our budget. Therefore, most divisions which are depicted on this slide are driven primarily by staffing levels. The exceptions are archives and records management and operations management, which carry facility costs for the Portland archives and records center and city hall office space, and those costs total about 2.5 million, or 17% of our budget. Next slide. As you can see, the office is funded primarily through overhead general funds at about 14.1 million. About 250,000 comes from interagency agreements for services provided by our hearings office. And we have about 220,000 in reserves. We also receive a small amount of intermittent miscellaneous revenue from sources like reimbursements from prosper Portland for performance and financial audit work, candidate filing fees, enforcement penalties and interest earned on the auditor's reserve fund. Next slide. My requested budget includes roughly 300 000 in additions and 800 000 in reductions from from the general fund at current service level, and reed is going to walk us through those details shortly. Next slide. As I mentioned, my requested budget includes 45 fte. And if you adopt the proposed budget as is two divisions audit services and operations management would each lose one field position. Next slide. While my requested budget includes cuts, it protects services and outcomes that portlanders expect from my office. Those that build access, trust and participation in our government. That includes administering municipal elections, providing voter education, and enforcing the city's campaign finance laws, preserving the city's history and making it available to city employees and the public. Administering city council business and maintaining records of council action, building trust and city spending and programs through financial and performance audits, as well as ombudsman and fraud hotline investigations, and providing fast, fair and impartial adjudication of alleged city code violations. Next slide. Before I hand it over to deputy broderson to highlight the significant cuts and changes, I want to acknowledge that budget reductions for government accountability offices are not a trend that we like to see, but one that we humbly accept. We recognize that our independence, which raises the standard for conduct in our office, does not make us immune to changes that are facing our jurisdiction. We must be responsive to them. And now I would like read to go over the details with you.
2 Thank you everybody. Good morning, council president councilors. Appreciate the time. My name is reed broderson. I use he and him pronouns and I'm chief deputy city auditor. Before I get into the weeds, I'd be remiss to not at least acknowledge the human impact of this requested budget. We are, like auditor rede mentioned, we do propose to lay off two existing staff, and while we're not suggesting this is avoidable and I don't envy council's job in decision making, I at least wanted to start with the people behind the numbers. Before we get into the details. If we could move to the next slide, please. Okay. Our first cut eliminates a field performance auditor two position, which would result in fewer performance audits completed as a reminder, authority for the selection of audit areas resides solely with the auditor, and the loss of a performance auditor means adding less to the annual audit plan, which is published each June. Next slide please. Our second cut eliminates a field administrative specialist two position within operations management. This position provides human resources and finance support, and its loss will slow our processes in both of these areas. Next slide please. Our third and final set of cuts reduces external materials and services budgets. This includes eliminating budgets for equity training and facilitation, and other office wide strategic initiatives, reducing budgets for advertising as well as nonessential software, and finally bringing operating budgets into alignment with historic spending levels. Next slide please. Our requested budget also does include two additional packages, the first, totaling about $106,000, is required to implement the labor agreement that council ratified on April 29th. This increase to personnel budgets ensures the office can meet its obligations to represent its staff, of which there are 30 in the office. The second adds 190 zero zero 0 in 1 time funding to elections for our contracted voter education services provided by community based organizations. Though election cycles span two years, most voter education, of course, occurs in the summer and fall of election years. So with that in mind, the office planned to underspend these funds in fiscal year 2526, the current fiscal year, and carry them forward into fiscal year 2627. Since it's our understanding that the encumbrance carry forward tool may not be available through the fall bump this year, we were asked to request this previously budgeted but unspent funds as an add package for next year's budget. Next slide please. Finally, our requested budget draws from the auditor's reserve fund to mitigate deeper service impacts to portlanders. The reserve fund was established through a fiscal year 2019 2020 budget note and is replenished through auditor's office under spend up to a cap of $500,000. Our use of the fund demonstrates its purpose, which is to allow the auditor to independently manage urgent or emergent budget needs, such as the current fiscal crisis. Our draw next fiscal year would deplete the fund by 44%, leaving enough, we believe, to help us manage what is expected to be a multiyear crisis. Next slide please. So I'd like to thank you all for your consideration of auditor's priorities and duties and reiterate her ask to adopt the requested budget without further cuts. And with that, auditor rede and I are available to answer your questions. And we're also joined by our business operations manager, rose mcgowan, who can help us get into the weeds if we need to. Thank you.
3 Thank you very much, colleagues. We're now going to move into a discussion and conversation. We have about 20 minutes or so for this section, so I'm going to try and hold councilors to five minutes again as normal. Councilor Koyama Lane. Take us away.
4 Thanks. Council president, I want to start by saying how proud I am that Portland has an elected independent auditor. Not all cities do. Councilor Kanal and I, we recently met an elected independent auditor in new york state, and he was very excited to hear that we have one in Portland. The structure is very important. Portlanders voted themselves to reinforce this importance when they approve stronger independence for the auditor's office. You know, portlanders have made it clear that accountability, transparency, independence, oversight, those are really core democratic values in our city. So, auditor, first, I want to ask candidly, can you explain what do you see efficiencies or reductions that you believe can be reasonably made in the office, in your office, without materially impacting the mission? Like, is there a fat to trim, as people often say, or these proposed reductions really going to meaningfully affect the office's ability to do things like audits, investigations, oversight, accountability work? Can you outline that a little bit?
5 So I think I'm not sure which side where we outline some of those cuts, but we are trying to get rid of any non-essential software. There are certain materials and internal services charges that we can't avoid, particularly associated with maintaining the the archives and records center on wsu's campus. There's very specialized costs and needs associated with preserving and documenting our city's history. So I think we have done our finest job of looking for efficiencies outside of the personnel costs, which again, make up the majority of our expenses. And I would invite my deputy to add any more to that response.
6 Yeah. Thank you for the question, councilor and auditor. I would tend to agree. Our ems cuts, I think, are pretty minimally impact services to to portlanders. I think we eventually would would want to rebuild some funds there to support staff development, particularly around anti-racism equity and facilitation in that space. In terms of personnel, you know, I do think we are looking at a multiyear rebuild plan, particularly for the auditor position, that that is a material loss of a service, right? That that is an auditor of a few who deliver that work. So so that is that would be a temporary loss as we look to rebuild in the future.
7 Thank you. With those positions, those fte fte proposed to be cut, what work could be, could we expect to be delayed or minimized or have to be set aside if those proposed cuts happen?
8 Thanks for that question. So with the elimination of the performance audit position that that role is responsible for completing performance audits from the annual schedule, we publish that schedule every June. So it essentially means adding less to that because we probably, I would guess, complete one less audit every two years with the loss of that position, it would not affect our ability to continue our chartered charter mandated responsibility of the annual financial audits. That results that I've presented to you each year.
9 Thank you. And can you or, mr. Mayor, explain how the reduction scenarios came about? Was this similar to the other bureaus, other service areas that were asked to make reductions? Or did this come from the auditor's office?
10 Yeah. Councilor, I appreciate this conversation. I think auditor rede would agree. It was very difficult conversations we've had for probably four months. The good thing is that she came forward with the hard and important work already done. And so she came into my office and said, we recognize the difficulties that the city is facing. Here's what I think my department could reasonably expect, and that at that point, I couldn't accept it because the guidance was 10%. And so she went and did hard work and explained that it was going to have a material effect on her department. If she took a cut that deep, we held off. We worked on the budget, and in the end we ended up with about a 4%, which certainly wasn't something she wanted. But in the end, she recognizes that being a part of the jurisdiction is a partnership. So.
11 Okay, just just to be really crystal clear, the auditor came to the executive branch saying, we'd like to show you the 10% cuts, or that's something that you asked of the auditor's office.
12 Yeah, the guidance was a three and a seven ostensibly would be a ten.
13 On your office.
14 And she proactively came with the three and said, I can deliver. With all due respect, auditor, I don't want to put words in your your mouth at all. But she said, you know, I can deliver my charter mandate at this level. And then at that point, I had to say, I can't accept it because of the challenges we were facing writ large. And then we went to work to try and get as close to that as possible. And I think we I think we achieved that.
15 Mr. Mayor, I would love for you to talk a little bit more, because I do have some structural concerns, because I believe the independence of all the different bodies are important, because I believe you did not ask council to prepare reduction scenarios for our offices, but it was asked of the independently elected auditor's office. Can you explain a little bit the difference there?
16 Yeah, the you're right. As far as council, I trust the 12 councilors as the budget writing committee to be responsible to their own budgets. The auditor is under the mayor's purview as far as setting the budget and the auditor, I have a close relationship and we work together over the last year. Certainly in the trenches this last four months in particular. On her budget.
17 Okay. Well, I just want to note, while public trust is in the government is fragile these days, I do think it's very important that we have strong independent oversight. I'm especially concerned about the cut of those fte, and I'm looking to see about how is the council. We can make sure that we can restore those at some point, hopefully in this budget. I think they're really important to the integrity of our form of government. And just to be clear, this is not something that anyone from the auditor's office is directly asking of me. From the beginning, when I saw that they were being asked to provide these cuts scenarios, but council wasn't. I had those concerns coming up for months. Thank you.
18 Thank you. Councilor Koyama Lane, councilor Zimmerman, thanks.
19 This is this is a tough one for some of those those audit cuts and performance. So I appreciate you coming forward and and helping us kind of see how this goes. I share some some concerns. Councilor. Koyama Lane. In terms of, you know, an independent elected office, I wanted to talk a little bit about the the elections office with the changes that are going on. And it remains a little fuzzy for me. Right. Secretary of state conducts elections, then the county elections offices conduct elections. I don't think any of the other cities inside Multnomah county and a lot of cities outside of of Portland don't have their own elections office. So can we talk a little bit? Is it a is it a core service when the county also does elections or. What is the reason other cities don't have an elections office? I'm trying to understand what what happens at our level that is different than if we were to just pay Multnomah county to to do elections on our behalf, which I think is how other cities and water bureaus and and school districts do it. I was hoping to talk a little bit about that.
20 Yeah, thanks for that. I think what's unique, I guess, going back to this point that councilor Koyama Lane made about accountability and oversight, a big part of our muscle is our ability to enforce the city's campaign finance laws. And that is a specific regime that portlanders voted in to law that we are uniquely responsible for overseeing. I can't speak to the other jurisdictions, but for the city of Portland, that is a unique function that is city wide. And our response is our responsibility in the auditor's office to oversee those. So where we have. Increased our budget and and filled vacancies is to make sure that we have enough staff to oversee elections, including implementing ranked choice voting and educating voters about how that system works, as well as making sure that we have enough staff to enforce the laws. With a larger number of elected officials in the new form of government and the number of candidates that are vying for those positions.
21 So Multnomah county has an election finance limit as well. Do you know who enforces their campaign finance laws? I actually don't.
22 I don't know. I don't know if chief deputy broderson has the answer to that question.
23 I think I think our elections manager, deborah scroggin, is in the audience. And maybe the best answer that.
24 Good morning councilors. Good question. Multnomah county elections enforces that law for the county. I will note, and I think that they would agree that they have not seen a lot of complaints or action compared with the city.
25 Yeah, I think it's because there's this more straightforward. It's you just can't take more than $603. Right? Maybe that's.
26 Actually a very similar law. Okay. Passed and proposed by some of the same folks.
27 Okay. Thanks. So if we didn't do it, who would do it? Does it fall because elections fall under the secretary of state's purview? Does that then trickle down or do we pay for like, almost like a contracted service? I'm not sure how that would work. Or is it incumbent upon any jurisdiction that puts a campaign limit on themselves that they then have to create an enforcement division? I don't actually.
28 Know that one.
29 That one. Okay.
30 We are in charge of our enforcing our own laws. And in fact, the city charter states that the city auditor will enforce that campaign finance law that voters passed.
31 Got it. So the school district, who has unlimited giving, if they were to limit their contributions, for instance, they'd have to create a similar type of of structure then. Okay, that's really helpful. My next question was around, it looks like about a $200,000 increase for voter education. Correct. Now I'm all for it, right? 24 was challenging for everybody to learn. And I think it's really good. I'm trying to just put some comparison tools in place, but unfortunately, this open book program doesn't give me squat when it comes to what did that program look like in 24, and how much did we spend in the 24 cycle? And, and how's this look? Because 200 is right now just a, a number with no context. And since the elections are about to be half the size, I'm just kind of curious, what's that program look like moving forward and how do we use it?
32 I think we have a mandate in city charter to conduct voter education campaigns to educate portlanders on ranked choice voting. And so this is approximately the same, a little less than we did in 2024. We know that the second year after the second election, after implementing a reform like ranked choice, voting is an incredibly important year because you don't get as much media attention and it's not as much in the news. And so you can see a drop off in voter participation and understanding. And so our goal is to make sure that all portlanders feel comfortable voting their ballot. And the money that is requested is actually an underspend of this year's because we did budget it.
33 Got it. So is that to say that in 24 cycle, we had about 200,000 that went out to community groups to do education, or is this correct? Okay, so.
34 There was actually a larger contracted process overseen by united way and a coalition of folks that did voter education on behalf of in partnership with the city.
35 Okay. All right. So again, just in context, this is the same amount of money as we used in 24, though.
36 It is a little less because we brought the project manager project management in-house. We are managing all of that process and the oversight of it ourselves, instead of contracting that out like the city did in 2024.
37 Got it. Thanks. And then a lot of organizations have like multiple branches, but we'll say they're all part of the same organization. How will the auditor's office ensure that the voters education funding that goes on remains, I'll say nonpartisan or not connected to groups who then also do endorsements, right? Because there's the education piece that should be, you know, sacred in terms of how to fill out a ballot. And then there's the advocacy piece. Sometimes in our community, our, our, our community partners do both of those things. How do we is there a firewall there or is it kind of loosey goosey?
38 No, absolutely. Our staff are working really closely with these organizations. We have only contracted with proposed contracting with 500 threes, and there is strong language in our contracts that that force cannot be engaged in this work. We also have meetings and work with them very frequently, so we know what they're what they're doing. And we have oversight monitoring built into our contract operations that we expect to meeting, be meeting with them. They have benchmarks. We know who they're reaching and how they're reaching folks.
39 That's awesome. I think they did a great job, frankly, the education, I mean, it was a challenge. You guys, you guys really put it out there between you guys and Multnomah county. I think did a good job. There's a little bit of confusion, though. When the c3c4 issue, but it's let's say 75% of the same board members and all the names are exactly the same, except they put the pac at the end of one of them and not at the other. And so you everybody knows this doesn't pass the smell test. So in that situation, would that be something where the auditor's office would feel, hey, we've got to go in deeper or do we just accept if you're c3 or c4, we just don't. We see no evil. We know no evil. Or is it like this is getting a little too close for comfort of being an advocacy versus. You know, education focused.
40 And councilor You're at eight minutes. Thanks.
41 I will say that issue has not come up. We were very closely working with the the folks that did the transition in 2024. And there was nonprofit contracting, and that just never became an issue. We did not hear about the issue. We were closely involved and we didn't see that become a problem. But we're very aware of it. We've provided trainings to them and we're in constant communication with them about that very strict firewall.
42 Got it. Thanks for these answers. It was really great. I think the firewall is important, so I appreciate it. Are you the director now? No.
43 Division manager.
44 Division division manager. Okay. I think that's a promotion. Maybe since last time we talked. But congratulations. It's nice to see you in the seat. And thank you, madam. I appreciate your your time today.
45 Thank you. Councilor Zimmerman. Councilor Kanal.
46 Thank you, council president. Thanks, everybody for being here. It's always a pleasure to have the auditor here. I see a lot of the team back there as well. And thanks. Reed also agreed with everything councilor Koyama Lane said about how nice it is to have an elected auditor. Shout out to sam fein and albany, new york, who's who we met earlier. I appreciate the framing of the independence and the comment you made before passing it to read earlier. I also really support the decision to propose the budget as you've proposed it, and I in terms of budget decisions, for the same reason, I think my starting point is to support it as is, although I am actually interested in restoring a position, if not both. Slide eight. There's a there's a point about interagency revenue that got added this current fiscal year and would be continued to next year, but wasn't there before that. Can you speak to what that is and what it's for?
47 Well, it's nearly invisible on this slide because it's so small. That's miscellaneous revenue. The interagency revenue, I think you see growing because of our. Becoming home to the hearings office again. Okay. I believe that's the primary driver there.
48 Okay. I think you've given information on one of the two positions pretty significantly. Can you just give a little more on the audit services? One, you're saying that each position is effectively one audit every two years. Is that an accurate.
49 It's a rough. Yeah. If I could respond to that. So our audit schedule as is, we can only take on a handful of new topics every year because our work is so in-depth and thorough and follows the government standards for performance audits. Our audit service team also responds to reports through the fraud hotline. So those are projects that land in our lap. Depending on what concerns are coming from either city employees or the public that are are brave and bold enough to bring their concerns to us. That work is also on the plate of audit services. We also spend time following up on recommendations that we've issued in the last five years. So that audit impact report that I present to you annually is a way that we are able to hold the city accountable for recommendations that we've made in our audits. So as a rough estimate, to say that the reduction of one one staff person would mean one less audit every two years, and again, that is one area, unlike the city elections division, where we are responsible for enforcing the campaign finance laws on strict timelines as well as our hearings office, which also delivers on strict timelines. Performance audits are at my discretion, so we can choose which topics, how in-depth to go, and which areas of the service we're going, or the city we're going to be looking at in any given year.
50 Great for the slide on the ems reductions. It's a two part question. How much of the $215,000 is equity training specifically? And was the decision on reducing equity training framed by the executive order, or was it an independent decision of your office?
51 That was an independent decision of my office. We have strong commitments at every division and at the office wide level for advancing results based, results based accountability initiatives. I don't know if we have an exact figure for that. If reid or rosie could help me with that. But the 215,000 is the sum of all of these cuts.
52 Yeah. Thank you, councilor Reid. Again. I, rosie, may be able to answer a little more specifically. I think it was in the ballpark of $50,000, but maybe a little off there.
53 Yeah. Rosie mcgowan, business operations manager. We had a couple contracts that were ending, so it is about $25,000 in specific ones that we had finished, some work we would have liked to have been able to continue, but decided to not continue that training for this next fiscal year.
54 Great. Thank you. And then I my last two questions, the kind of it's the same question, but it's about two different things. It's two parter. One is, do you think that this is the role of the auditor's office and. Or can you let us know that it's not so that we might be able to do it somewhere else in the city? And I'm just basing this off of previous auditors had said our discretion as to whether or not this falls into our office's purview and when they didn't want to do it, do a function. They said, you have to the rest of the city has to find a place to put it. I'm thinking of ipr specifically. So given that context, I'm asking for two different ideas. Do you think each of them is something that's within the auditor's office or not? And based on that, whether or not we could pursue it somewhere else? And if you do believe it's the auditor's function, this is the second part. Can you help me set it up? And I'm raising these here because I don't think we haven't really have a space had a space to do it. And I can't really until we get back to committee the whole meetings. But the first idea is I'd like a way for city employees rank and file to anonymously and directly get or one layer indirectly get information or suggestions to the mayor and city council without having, especially in the whistleblower context, without having to go through their manager, manager, manager level to get up through nine layers. This is something that I've seen done in independent offices, or at least through contractors, where the contract is held by an independent office in other jurisdictions. The second idea is I'd like to have rank and file city employees be able to suggest a way to reduce spending without reduction of service level and be rewarded for it. We have two examples. One is the chief savings officers in new york city. The other is the Washington state secretary of state, which has a Washington state productivity board that has rewarded state employees with up to $10,000 for coming up with ideas. It has led to a savings of over $11 million and revenue increases of $727,000 from 163 proposals for that, just shy of $12 million of net budget improvement. They've paid in excess of $120,000. That's slightly over 1%. Is the cost for getting that much of a budget improvement. In each case, anonymous feedback and suggestions and budget saving ideas. Do you believe that this is something that the auditor's office does, should do, can do, or would you let us say that we can do it somewhere else, is the first question. And if you do believe it's the auditor's office, would you be willing to assist me in developing the legislation, budget and all that stuff to be able to implement that?
55 Councilor you're at seven minutes.
56 Just that's my last question.
57 Great. Thank you for that question. So there's a few different ways I would approach this. I think the first is just to emphasize that my office is a performance audit shop in terms of the performance improvement services that we provide the city. That means we're not necessarily looking for budget savings. When we take on a topic, we might recommend make recommendations for efficiency, but that's not the primary driver because I report directly to the public. I'm looking at issues that portlanders care about, things they voted on, issues where promises might not be kept, and that is a much broader scope than looking for cost savings. I would look to my colleague, the city administrator, who's chartered responsibilities are the financial condition of the city for housing a function like that, so that my office is not in a position to be making management decisions around the city's finances.
58 And just that thank you for that. So that I'm going to interpret that as saying there would be no opposition from the auditor's office. And I'm asking this because of previous auditors, not because of anything you've done. I want to be clear to us doing something in the other branches of the government.
59 As long as it wouldn't compete with our gold standard of performance auditing in my office, and I wouldn't have an issue with it.
60 Great. And then the other question was about the anonymous feedback portion, which has nothing to do with budget, but just the ability to provide information to council and mayor without having to go through managers.
61 Well, our other jurisdictions in our region have fraud hotlines. They're branded differently as good and good governance or ethics hotlines. I think we use that tool as an anonymous intake point. We protect folks confidentiality that make reports through that channel, and we're able to refer people elsewhere if they're concerned. Doesn't have to do with fraud. That's often the service that we're providing often with the ombudsman as well is. Thank you for this. Let us tell you where you can get your need addressed. I don't know what the demand for the service that you're proposing would be. I know that our the demand for our services are pretty high right now with complaints to the ombudsman. In particular.
62 We are at 930. So thank you very much, councilor Colleagues. We are already over time for this section. So councilor Clarke, Ryan and pirtle-guiney and then we will move to the next topic. Councilor Clark.
63 Thank you, councilor President, most of my questions have already been answered, but I just want to express my appreciation to the auditor and her office for your support with the clerk, and especially for the audits. I have used your audits repeatedly in my work from day one, and I really appreciate that. If my colleagues have ideas on how to restore an auditor, I'm interested in learning about that and potentially supporting that. I just want to make clear that you said we're going to lose one audit per every two years. How many audits are we expected to perform?
64 Our our audit schedule generally adds three topics per year. I want to say that we we aim to publish about that in addition to our audit impact report and the fraud hotline investigations that pop up. So we might add one last topic for the next biennium.
65 So from 3 to 2.
66 That's new topics.
67 New topics. All right. I think that's unfortunate. And colleagues I'm interested in any ideas on how to restore position. Thank you so much. Auditor. Read and staff.
68 Thank you. Councilor Clark, vice president Clark, councilor Ryan.
69 Yes, thank you, council president. Good morning, madam auditor. It's good to see you and your staff. Councilor Clark just asked the question about how many per year. Three. And it looks like you'll go to two for performance audits.
70 Yeah, that would just be new topics that we're adding to the schedule.
71 Okay. Do you ever do performance audits? And I think the ones that you do on tax measures in particular and tracking the performance is really, really helpful. Do you ever do joint audits with the county and neighboring counties? I'm thinking of SHS because that could come to the ballot sooner than we think. And so I wanted to know, is that one being discussed among auditors in the metro area?
72 Yes. Thanks for that question. So my audit colleagues in other jurisdictions have been very busy auditing housing and homeless services over the last few years. It's in our audit standards that we coordinate when taking on topics that have a similar scope. And so we meet regularly with the metro auditor, Multnomah county auditor, and sometimes even auditors in other counties. On the topic of housing and homelessness, it has not I've not seen a joint audit conducted in my audit lifetime. But the purpose of the of that coordination is really to make sure we're not duplicating effort and we're sharing information so that we're saving the city and our jurisdictions time as well as our own audit resources.
73 So thinking out loud with you, then I think that this is one where, you know, metro could be the point since it's a metro audit, it's a metro performance collection, even though our revenue division collects the money, which people think it's just coming to the city because of that. But my point is, I really do think that's an important one to have as a focus, and I will be very supportive of that journey that you'll be on because it'll be complex. It'll be more challenging than some because of that coordination. But the voters are all in 1 in 1 space for this. So it's important that we do that. And I look forward to making sure that that's a priority in terms of performance audits. Does that make sense?
74 Yeah. And I would like to add that the influx of those dollars did increase audit resources for my colleagues at metro. I think that is a point that I'm trying to make here about being sensitive to the changes in our environment that we audit as the city grows and its complexity and its responsibility. I hope that my office too, would would reflect those changes.
75 Yeah, I think it's important that a city gets in on that one, because that's one of the challenges of, of the performance of the funds is that the cities don't have access. It's all through the county, and it's a model that's frustrating for cities throughout the metro area. So I think it's really important that we have a voice at the table. The other question councilor Zimmerman asked that was good. It was about elections and just making sure we have that firewall. Have you considered you working with community groups that don't have c4's and that weren't part of the coalition that brought us the charter that we voted on in 2022?
76 I'm going to ask my deputy or or deborah to answer that.
77 Hi, deborah.
78 Thank you councilor. Yeah, that sounds great.
79 Thank you councilor. Well, I will note that we didn't we just noticed awards of contracts recently. And not all of them are c3 or c4. Sorry, have a component c4. So we do that regularly. We're looking at service providers. We're looking at folks that work with Oregon food bank that are providing service daily to different groups and can reach folks in a way that they are trusted in their communities where we aren't always. And so sometimes those are c3's with the c4, and sometimes those are just c3, but we have that information up on our website. If you're interested in learning more and we can follow up as well.
80 Okay. I just, I'm happy to hear that there are some that aren't connected to that network, the political nonprofit network, because then the firewall is a lot easier to manage than the firewall is taken care of because they don't have that arm. The coordination with the small donors office continues to make me think, how does that work? I think that when you're actively campaigning, there was a time where you looked at the elections office as your go to, but increasingly the real experience day to day is the small donors office. How do you coordinate? How do you overlap? Where does the buck stop? And I think the lawsuit that occurred was one of those examples where it got messy. So.
81 We enforce the city charter based campaign finance laws and small donor elections, enforces their city code and rules. That does require close coordination. And so we do meet with the director there, especially during an election season, more frequently to coordinate and make sure we both both offices know what's going on. We recognize this is not an ideal situation for the public, but try to work as closely and as best we can in the system that we have.
82 I thought the the what we passed out of governance was better legislation in terms of those firewalls between the two of you, if you will. And I was disappointed that the final version that we came to the full council, I thought, weakened that, and I thought I was basing mine on what we could have learned from the lawsuit. So I just wanted to put that on the public record. Thank you.
83 Thank you, councilor Ryan. Councilor Green.
84 Thank you, council president. I'm going to be brief because we're already over time. Thank you for the presentation today and explaining sort of the process of how this proposed cut came to be. Mr. Mayor, thanks for explaining how that sort of interaction worked with the auditor's office. I think from my part, if there's any councilor Who's working on an amendment that's looking to restore at least one of these positions, that's cut, I'm willing to support that amendment. And it's not because I don't think you had good conversations to sort of find the shared sacrifice. I just think that just as a matter of principle, I don't think that we should be cutting into the other independent branches of the elected officials, governments beyond what they would prefer, because they're the sort of duly elected officials that steward, that steward those those charter obligations. So I understand that you made this negotiation, but I think your preferred cut level was 3%. And so I'm willing to work with anyone who's working on that amendment. There's other places in the city of Portland that we can find these cuts. And I think it's really, really important that we preserve as much capability of the audit function as possible so portlanders can can find their trust in the city of Portland. And it's just a it's just all I wanted to say. So thanks.
85 Thank you, councilor Green. Councilor pirtle-guiney.
86 Thank you, council president. I'm sorry. I was hoping I could not say anything to buy us time or save us time, but. Auditor rede because it has come up a few times that some of my colleagues are interested in restoring cuts. Can you explain to us what the difference between the 3% and the 4% is? And I'll just editorialize first and say, I really appreciate you digging deep and thinking about at a time when we are having to cut core services, frontline services that portlanders depend on day to day, how do we make sure that we also have the oversight that we need, that your office provides us without having to dig more deeply into those core services that portlanders also rely on, right? Both are so critical. And as we're thinking about that balance, if we are looking at any restorations, I want to make sure that they are the restorations of the things that you were most concerned about cutting, and not just based on what what we think that might be.
87 Thank you councilor. I'm interested in working with council in the long term on getting the appropriate resources for my office to provide the commensurate level of oversight that our city needs. I've been very thorough in the proposal that I've made, which was accepted by the mayor. Just to clarify, it did not go further than what I asked for. I'm interested in working on a longer term solution because I'm. I'm worried that a short term solution to today's problem could put my office in a worse position. A few years from now, when we're still working our way out of this fiscal crisis.
88 Thanks for that clarity. I really appreciate that. I am a firm believer that when we have independent elected leaders running other portions of the government, we need to defer to you on what cuts to take and and not go in on our own, but also that we need to have that shared sacrifice. And I appreciate you stepping up for that. And I appreciate your clarity today about some of those long term conversations that we need to have. Thank you.
89 Thank you, councilor Pirtle-guiney. Checking councilor Zimmerman and clerk, are those legacy hands. Okay. Thank you very much for your presentation today. I think we're ready to move to the next one.
90 Thanks.
91 It wasn't talked about as part of the budget. So next we're welcoming up our friends from the public works bureau. I believe I'm turning it over to dca. Donna paul, is that correct? Yeah. Welcome. It feels like we were all just here just moments ago. Thank you for spending your entire life in this chamber.
92 We live here, councilor. Good evening council.
93 Good morning.
94 For the record, my name is priya paul. I'm the deputy city administrator for public works. I'm joined by our public utilities director, who oversees both bureau of environmental services and the Portland water bureau. Today, ting liu will go through the proposed budgets for both bureaus, and our finance leads are also in the audience and are available to answer any questions. We will aim to move through our presentations quickly to allow ample time for your questions. Next slide please. Thank you for the discussion regarding the proposed parks and PBOT budget. During the April 30th work session. Today, we will focus on the proposed budgets for the office of the deputy city administrator and the utility bureaus. And following those presentations, we'll. The proposed public works and community economic development rates, fees and charges. Ordinances scheduled for council consideration next week will be presented to you. Next slide please. We provided an overview of the public works service area during the previous budget work session on April 30th, so I will not repeat those details today. I'll fly through the next few slides. As a brief reminder, the proposed budget includes approximately 3000 staff and roughly $4.8 billion in total resources. Next slide please. Public works includes four primary bureaus parks, transportation and the utility bureaus, which includes water and bts. Next slide please. The public works service area is facing rising costs that are outpacing available revenues, and this budget prioritizes maintaining essential infrastructure and meeting regulatory requirements while aligning service levels with available resources. You'll see those trade offs reflected in the proposals we discussed today. Next slide please. This provides a financial overview by each public works bureau and the funds for all of the public works bureaus as well. We've seen this at the previous work session, so I'm not going to go into the details of this. If there are questions, we're happy to answer that. Next slide please. This slide summarizes the position changes within public works as a part of the core services realignment effort. Overall, the positions decreased from 229 to 156 ftes, which is driven by 62 reductions and limited editions and realignments. The negative realignments reflect positions shifting out of public works to centralized city wide functions rather than being eliminated appointed, and I will transition to the next slide as this information was covered in detail during the next during the core services realignment work session on may 8th. Next slide please. So I want to provide a high level overview of the proposed budget for the office of the deputy city administrator for public works. This office provides executive leadership, strategic oversight, and policy coordination across the public works bureaus to support organizational alignment, infrastructure stewardship, and reliable public service delivery. The proposed budget includes approximately 131 staff and $26.6 million in total resources. I want to make sure we understand that there are no additions or reductions to the dcs office, a significant portion of the staffing level that you see in this slide, which is about 121 fte of the total ftes, reflects the realignment of the embedded teams into the from the core services realignment and the into the public works service area. They're not new positions or additions to the dca's office. They are embedded core services team in hr, it procurement, equity and engagement that provide coordinated support across the public works bureaus. Next slide please. This slide summarizes the proposed budget for the office of the dca for public works. The proposed budget totals approximately 26.6 million. As I mentioned earlier, there are no significant additions proposed within the dcs office budget itself. There's a small reduction that is reflected in the table, and it's associated with the citywide interagency reductions applied across bureaus. The increase from the current service level primarily is the realignment of the embedded core services teams into the public works service area as a part of the citywide core services realignment. And these are existing positions, not new staffing. Next slide please. This table shows a high level overview of the changes to the dc office positions, including additions, reductions and realignment. There are no proposed staffing additions reductions within the dcs office. The increase from 10 to 131 reflects the realignment from the core services realignment efforts, and with that, I will pass it on to director liu to provide an overview overview of the proposed budget for water and bts.
95 Thank you so much, dc donna paul. Good morning council. My name is jing liu. I'm the public utilities director for the bureau of environmental services, is responsible for protecting public health and the environment for over 650,000 customers. We achieved this by management of Portland wastewater and stormwater infrastructure infrastructure, including thousands of miles of sewer and storm water pipes, Green infrastructure, close to 100 pump stations and seven watersheds. We also operate two treatment plants, including one of the largest in Oregon. This vital work is carried out by over 600 dedicated employees and is supported by a 1.55 billion budget. Next slide please. This slide provides a summary of our proposed budget. Compared to the current service level, the proposed budget is approximately 1.55 billion, which is about 6 million below the current service level. This reflects a 1.1 million addition supported by congressional earmark funding, offset by 3.3 million in reductions and $4 million in realignment. The changes, specific to the 3.3 million reductions, will be discussed in the upcoming slides. Next slide please. This is the overview of all the changes to the bureau's position counts, including additions, reductions and realignment. I want to note there was a slight data error in the fte count. So the amount in this table and elsewhere in the proposed budget shows a reduction of 3.3 fte, and it should reflect 6.3 positions or above about 1% change. This brings our total proposed budget to 605.7 fte. This will be corrected in the next iteration of the budget. I also want to note that this 6.3 position is being proposed for. Reductions are vacant positions. We'll dive into the specifics of this positions in the upcoming slides. Next slide please. Our sewer and stormwater system operate 24 over seven and essential to our public health, livability and environmental protection. Our goal is in this budget cycle was to prioritize four core areas. First, we maintain the service necessary for federal and state regulations. Regulatory compliance. Second, we preserve the financial assistance programs that support affordability. Third, we continue to preserve capital investment in critical sewer and stormwater infrastructure using a risk based asset management approach focused on high risk treatment and pumping systems. Currently. Finally, we continue to maintain the core operational resources necessary to provide reliable wastewater and stormwater services and minimize service disruptions. The reductions you will hear about today were developed through a system wide review focused on identifying efficiencies, prioritizing core functions, and minimizing impacts where possible. Next slide please. We bundled our reductions into five categories. The first one is a business support program. This category eliminates two vacant internal support services position and 200 0 or 5% of janitorial service contract. This changes total 430 000 in reductions. The staff reductions may lead to reduced capacity for engineering support and internal administrative support. Work will be reprioritized with existing resources to maintain core engineering and administrative support functions. Janitorial services will continue to prioritize sanitation, sanitation and high touch areas with reduced focus on lower priority cosmetic cosmetic cleaning. Next slide please. This category reflects reductions within the project management office program. The proposal eliminates one vacant project delivery support position and reduces the bureau's transitory budget for urgent and unforeseen work by 1 million, from 6.9 million to 5.9 million. This changes totals 1,198,000. In reductions. The transitory budget provides contingency funding for urgent and unforeseen non-capital operations and repairs needs. This reductions decrease contingency resource available for unexpected needs. The bureau will continue prioritizing emergency response, operational resilience and minimizing impact to the community through reprioritization of existing resources as needed. Next slide please. The third category is the strategy and integrated planning program. This category includes reductions of 230,000, or roughly 50% of a professional service contract. Funding for integrated planning support. It also includes a partial reduction of one fte that supports project communication coordination for non-urgent planning support work. This changes totals 296,600. In reductions, the bureau will continue prioritizing planning work related to essential infrastructure, regulatory compliance and high priority risk analysis within existing resources. Next slide please. Our fourth category is the leadership program and security services. This category eliminates two vacant positions and reduces contracted security services by 491,000, which is a 16% of the contract. This changes totals one 1,120,000 for 436 in reductions. The reductions of the management position will increase the span of control for the remaining manager, from five direct reports to seven direct reports, the reduction of an analyst position will reduce internal capacity for strategy analysis and operational support. I would like to note that we are continuing to strengthening coordination across the top leadership teams between water and bts to continue to to improve coordination, efficiency and the long term system planning roles and responsibilities associated with these functions will continue to be evaluated as part of that effort. In addition, security services will be scaled to focus on priority locations and higher risk facilities with increased reliance, reliance, reliance on alarms, cameras and as needed responses. Next slide please. And finally, our fifth category is the technical services environmental compliance program. This category reflects a reduction of over 223,000, which includes elimination of one vacant analyst position and one seasonal support position for illicit discharge investigations. This changes may reduce capacity to selected planned code updates and development related update activities. We're refining our workflows to ensure that we prioritize our specialized expertise for critical environmental needs and code development support, as well as the outfall screening and urgent spill responses. Overall bureau's reduction packages reflect our thoughtful approach to ensure we prioritize on high impact, risk based, high impact, risk based approach to align with our financial and resource capabilities. This concludes the presentation for the bureau of environmental services. With that, I'll now move to the water bureau budget presentation. Next slide please. Now we'll dive into the water bureau. Water bureau provides safe, reliable drinking water for nearly 1 million customers and not only support public health, but also economic vitality of our region. This essential work is supported by over 550 dedicated staff and totals 2.1 billion budget. Next slide please. This slide provides a summary of our proposed budget. Compared to the current service level, the proposed budget includes a total adjustment of 19.2 million since the initial requested budget. This is driven by three main factors the removal of 0.8 million facilities integrate facilities into interagency agreement, a 15 million adjustment to lower our ending fund balance, and a 3.3 million reduction in decision packages, which I will discuss in more detail in the upcoming slides. Next slide please. This is the overview of all changes to the bureau's position counts, including additions, reductions, and realignment. I want to note there was a slight data entry error in the fte count. So the amounts in the table and elsewhere in the proposed budget shows a reduction of 15 fte and should reflect 14 positions instead. This will be corrected in the next iteration of the budget. I also want to note that this 14 positions being proposed for reductions are vacant positions. We will dive into the specifics of these positions in the upcoming slides. Next slide please. Similar to bts, we're prioritizing prioritizing core services to protect public health and maintain regulatory compliance. Our approach focuses on four core priorities. First, we are preserving services necessary to meet regulatory and permit compliance. Second, we remain committed to support financial assistance programs to support affordability. Third, we are preserving capital investment in drinking water infrastructure, including treatment, water pumps and distribution system to support the long term system reliability, we have prioritized the key cip projects and strategically delayed other investment to avoid high peak risk to our customers. Finally, we are preserving resources to maintain reliable services for safe and reliable drinking water. 24 over seven the reductions you will hear from us today were developed with a deliberate, system wide approach through reviewing services and identifying efficiencies, with a focus on prioritizing core functions and minimizing impact where possible. Next slide please. We have 20 budget reduction packages totaling 3.3 million. That includes 14 vacant position reductions. And we are we have bundled them into four categories. And I'll start with the drinking water operations. The package reduces operational capacity through the elimination of four vacant positions across lab services, backflow inspection system, flushing and water quality functions. This changes totals 632,000 in reductions. This reductions reduce the capacity for selected non-regulatory sampling, inspection and system flushing, regulatory compliance and core drinking water operations will continue to be prioritized through strategic reprioritization. We're confident in our ability to continue performing our regulatory and essential work, ensuring our system remains safe, reliable, and in full compliance. Next slide please. This package reflects reductions within system maintenance. It reduces staff capacity for system maintenance, facility management, and water loss prevention activities. It also includes a streamlined street opening permit process to achieve cost savings. These changes totals 781,000 in reductions. This category eliminates for vacant positions across equipment maintenance, construction, field support, facilities management and water loss prevention. Work will be reprioritized within existing resources, with the priority maintained for urgent repairs, regulatory maintenance and continuity of critical services. Non-urgent facility support requests in some water loss reduction activities may experience longer timelines. However, the state mandated annual water loss audit will remain prioritized. We'll continue exploring shared opportunities between water and bts to improve coordination, optimize staff resources, and support operational efficiencies. Next slide please. This package reflects reductions in engineering, planning and coordination category. In this bundle, we are eliminating four vacant positions that supports engineering planning, intergovernmental coordination. This changes totals 910,000 in reductions. This changes reduces the capacity for early project planning, project implementation, support for permitting and land use review, development and maintenance of engineering standard and coordination with regulatory and partner agencies. However, consistent with our approach to other impacted work, we have prioritized key resources to ensure continuity of critical services and regulatory requirements. Additionally, we'll continue to explore and implement shared opportunities between water and bts to maximize our efficiencies and impact across both bureaus. Next slide. The final category is the customer services, with adjustment to customer engagement, billing approaches, and security operations and logistics. This changes totals 990,000 in reductions. To achieve this, we are eliminating two vacant positions with our customer contact center and customer billing teams, along with reducing printing and mailing costs by 200,000 by expanding paperless billing, shifting to an opt out model, customer service levels will remain consistent, supported by expanded use of online self-service option and strengthened by increased adoption of paperless billing and electronic correspondence. We also anticipate cost avoidance with reduction to permitting payment processing fees when Portland permitting and development shifts credit card processing fees to developers, the water bureau expects to save 200,000 annually. Additional reductions in consulting, sponsorship and contracted security services will be focused on aligning resources with immediate operational priorities and city wide coordination effort. This concludes the presentation for the operating budget of water bureau. With that, I'll now transition to the proposed rate projections for both bureaus. Both water and bts rely on utility rate revenues to support day to day operations and to finance major capital investments through long term bonds. The proposed budget includes 8.1 increase in water rates and a 5.15% increase in base rates, resulting in combined rate increase of 6.36% for the upcoming fiscal year. Over the next four years, water rates are projected to increase by 9.8% annually through 2031. To fund essential health and safety projections, the protections for base rates will increase to 5.5% before decreasing by 0.5% each year. We project that this annual percent increases will stabilize for both bureaus around or under 5% in five years. As of current forecast. The forecasted assumptions include 30 year term bonds and is really a base projection and is updated each year as part of a budget process and adjusted with updated assumptions and budget decisions. Next slide please. This slide illustrates the impact of this investment on our single family residential customers. Currently, the average single family customer using 500 cubic feet five ccf for water pays 160.29 per month for combined water, sewer and storm water rates. Services with the proposed combined rate increase of 6.36%, this customers will experience an increase of $10.20 per month to their total bill. I also want to note that many households consumes less than five ccf due to the conservation and water efficiency alliance, which further lowers individual bills. We are continuing to invest in financial system programs including bill discounts, crisis vouchers, flexible payment plans and stormwater discounts to help every customer, regardless of their financial situation. Next slide please. Also want to share about the Portland bill, how we compare with other utilities. A common misconception is that Portland has some of the highest utility rates in the region, or even the country. Despite the cost pressures, Portland utilities continue to keep costs to customers within range of comparable national peer utilities that have similar scale of water, sewer and storm water systems. The chart on this slide includes two types of utilities neighboring utilities, which are geographically, geographically close to Portland. And here for reference, and peer utilities, which are which share similar system characteristics such as combined sewer overflow infrastructures and a drinking water filtration requirement. The most apples to apples comparison is made between peer utilities. Utility costs vary based on geographic infrastructure, age and regulatory requirement, but this chart provides important context. Portland's rates are not an outlier. They reflect the real cost of maintaining a safe, reliable and modern system. Many of our peers have completed filtration but haven't addressed combined sewer overflows, which bts did with the big pipes many years ago. So we expect to remain in the middle of the pack of comparable comparable peer utilities. As filtration is completed in Portland and other cities. Address csos, as this capital investment represents similar magnitude of the cost. This slide shows a holistic overview of our financial assistance programs, with dedicated 40 million funding support for. For example, we provide view discounts of up to 80% based on income for the low income assistance program. Household earning up to 60% of the state median family income are eligible for tier one assistance. 50% of a typical bill household earning up to 30% of the mfi are eligible for tier two assistance, which is 80% of the typical 80% of the typical bill. Programs like ramp and clean river rewards are also support renters, affordable housing properties and customers who manage storm water on site. Our ramp program specifically supports regulated, affordable multifamily properties, ensuring these benefits reach renters and the nonprofit housing providers. The water bureau's water efficiency team works closely with the business and residential residents to help reduce water use and save money on their utility bills. We have also simplified the application process and partnered with the bureau of planning and sustainability to reduce administrative burden on residents seeking help with a garbage and recycling bills, so there is a comprehensive program. Details are available on the website. Customer can also contact us by calling 503 8237770. To learn more about our programs and confirm their eligibility. Next slide please. This concludes our presentation on water and bts proposed budget will now discuss utility fees and charges that will be coming to council next week for consideration. Next slide please. This chart shows the primary revenue categories for bills and water bureau associated with the annual rates, fees and charges ordinances that will be before council next week. Utility rates revenues account for approximately 90% of total revenues for both bureaus, while permitting development and other fees and charges account for the remaining approximately 10%. Next slide please. This slide summarized proposed utility rates, fees, and charges associated with the customer account development and permitting activities. First, customer account related fees, including late fees, disconnection fees for nonpayment and water service restoration fees are proposed to remain unchanged. Second, the bureau is proposing adjustment to development and permitting fees, including system development charges and other permitting related fees, generally at the cost of service and not to exceed 9%. Some development, development and permitting fees currently do not fully recover the cost of providing those services. The proposed adjustment are intended to better align fees with service delivery costs and reduce reliance on utility rates. Revenues to support those activities. Next slide.
96 That concludes our presentation for the utility bureaus. And I would like to call jeremy patton from PBOT to talk about PBOT rates, fees and charges.
97 Good morning council. Jeremy patton, public works, enterprise services. Can we jump to the next slide, please? So the PBOT fee ordinance that will be discussed next week is going to include eight separate schedules and over 500 fees. These fees account for about $152.2 million of the total PBOT resources, or 26% of our overall budget. Most of the fees within the various schedules are either set to inflationary increases or cost recovery targets. Next slide please. So stated in the previous slide, most fees are increasing by the bureau's weighted inflation factor, which covers cost increases for things like personnel, central services, office and building supplies, and vendor contracts. Other factors that drive rate changes include construction cost increases, market conditions, cost recovery targets, and regulatory or contractual constraints. Next slide. Bit of an eye chart, but this is the $152 million in fee resources that cover costs within 14 of our 20 programs across the bureau. These fees support services like permitted uses of the right of way, such as block parties and street parking reservations, regulation of private for hire vehicles and towing companies, street openings to access utilities, and the use of parking garages and parking permits and meter charges, which support all transportation needs. Next slide please. I know I'm flying through these a little, but come back for questions. This is a list of all the general transportation revenue fees. These are fees that can support any transportation related need. And they include things like parking meter fees, parking permits, parking citations, temporary street use permits, and transportation network company fees. The table includes some examples of the expected increases for these fees over the five year forecast period. Based on current projected inflationary factors, these fees are. Increases are necessary to maintain the current revenue forecast as presented to council during the budget development process. These are the fees that are tied to what we mostly call the gt-r. And when we're talking about our forecast, it's heavily reliant on these fees and then the state highway funds. Next slide please. So just as a point of comparison, this is the parking meter rate for downtown and how it compares to other cities. And you can see that we kind of land right in the middle of the pack compared to those cities. Next slide. And then finally, the proposed budget includes 3.1 million of fee
98 You revenue related to the creation of new fees for development related work and eliminates the interagency with the Portland permitting and development that funded this work in previous years. There are 44 new fees, ranging from $151 for an additional sidewalk or driveway inspection to $7,631 for street lighting. Public works permit just as a few. And this concludes our presentation of the PBOT fees, and I'll now pass it over to dca olivera. He is here.
99 Thank you. Jeremy. Good morning. Council. Donnie oliveira for the record, deputy city administrator for community and economic development. I want to just take a moment to thank the council president, vice president, and dca, donna paul, for letting bts sneak into this presentation to cover the bts waste rates and have a quick note on the on the piece of interest, I believe. Next slide please. So real quick, councilors, I'm joined by director engstrom from bts. We covered some of this information at the work session related to bts, but just to package this with the rate content that you're contemplating today, we just thought we'd bring back the waste and recycling rates just as a reminder. And as we shared last week, the waste and recycling utility is divided into two primary systems residential and commercial. The residential waste system generates about one third of the waste in the city, and the commercial system generates about two thirds of the waste. The city has a rate setting authority over the residential system, but not the commercial system. The residential system is franchise system, where private companies provide service on behalf of the city to assign geographies, and the city sets the rules governing the types of service that must be provided through franchise agreements. And as a reminder, the formulas are set by franchise agreements that are negotiated every 5 to 7 years. Council reviews the rates annually, but there is not much discretion in annual rate setting. The expectation, of course, is that we honor the agreed to formulas so that we maintain services across the city. Per the franchise agreements, residential rates are set based on a cost of service, plus an allowance for target operating margin and incorporation of the city's franchise fee. In contrast, the commercial system is a free market system where the city sets rules and establishes a per ton tipping fee. But customers may choose their hauler. And again, we don't set those rates. Excuse me. Next slide please. Real quick, this slide just encapsulates some of the things that we're solving for as a part of the rate setting. Of course, you have the typical things like fuel wage benefits, maintenance and repairs that, you know, contribute to increasing costs, not just the waste system, but across the board in our, in our economy. But this year, we're also calibrating against investments from recycling modernization act related to glass incentives and recycling process costs that are continuing to evolve with the state's legislation. So that's some good news for our future as well. Next slide please. And this is intended to give a snapshot of what this looks like for our customers, for the residential rate setting. So just for backdrop, the review process begins in January when we have a detailed cost report from each hauler sent to us. We send those to a certified public accountant to vet those costs. We then adjust costs with the cpa and work with economists to prepare the rate model. In early April, we meet with the haulers and host public information sessions, and included in that cost, of course, is the metro disposal fees, which they set annually. In prior years, we would have used the actual proposed metro fees, which don't become available until may. But in order to create more time for council to absorb those proposed rates and act on them, this year, we are shifting to use an assumed metro rate based on the prior year's cost escalator. If metro's actual rates increase more than forecasted, and then we'll we'll have to catch up with our system. That appears to be the case this year, as metro is considering a 10% increases for waste and organics disposal, which would continue the trend of disposal increases well above inflation because proposed rates include a modest increase this year. Driving higher costs include wages benefits. As I alluded to, we'll have to calibrate that. We are not proposing any increase to the commercial tonnage fee this year. And if you adjust our rates for inflation, weights waste rates overall have been flat over the past two decades, rising slightly less than the overall rate of inflation. That means your garbage bill today is similar to what it was in 2012, adjusted for inflation. Last thing a reminder that in 2025, we implemented a financial assistance program for qualified homeowners that comes with a discount of about $22 per month at the $35 gallon service level. Since launch in November, we have 900 customers enrolled. We're now working on ways to expand eligibility to low income renters, and we. We also launched standardized rates for bulk items this year. I also want to thank the director of bts and water for their. Their support in getting that launched. And thanks, team, for your collaboration there. And next slide please. Next slide please. And the last thing we'll touch on, as has been adopted the last two years and the proposed fiscal year 2627 budget, there's a proposal to transfer interest accrued in this case fiscal year 2425 from the pdf interest into the general fund. That amount is, as you see on the screen, is just a little over 26 million. This is a one time effort. So each each year council contemplates it. We will have to come back to amend the code to make that adjustment. And that will be a part of this year's. It's built into this year's budget, proposed budget. And that's that wraps for our content.
100 Okay. Thank you all very much, colleagues. It's 11:00. It is time for a quick restroom break. I'd like everybody back here at 1115. See you in a few minutes.
101 Thanks for.
102 Hi, everybody. Welcome back to this. And we're gonna jump into questions. And since most of my colleagues are not here, I'm going to lead us off. I wanted to briefly sort of connect our conversation yesterday about the water bonds and talk about the rate increases that we are projecting and how that what that really sort of means for people. You know, in my district in east Portland, like most communities, people are, are feeling really stretched at the same time, the combined one water bureau has a $3.6 billion budget. And from what I can tell from the slides, we're cutting about $6.6 million between bts and water, largely by eliminating vacancies and some sort of smaller cuts like custodial services and security. But if my math adds up correctly, while 6.6 million is a big number empirically in comparison to the total budget, it's like 0.02% of the total budget that is being cut, while% this year, outpacing incomes. Why are these two bureaus not taking deeper cuts proportionate to what the other city bureaus are taking, rather than raising rates?
103 Thank you so much for the question. We also recognize balancing affordability and the long term investment for the utility bureaus. I want to say, even though you see there is a over $1.5 billion and two point $2.0 billion for both bts and the water bureau, but that's actually the operating budget of those billion dollars are much smaller than the billion dollars there. So for bts, about $700 million, less than $700 million are operating. A lot of them are already obligated for different pers and other other payments. And then we also have about one third of that is capital program. We are very committed for the cip project and making sure we don't defer any of the risk to the future generations to. And then another third of that is to the debt payment and other fund management. And it's really fun moving within the between the city construction and cip. So the two. Operating budget that bts can adjust the a little bit over $200 million. So it's not the water bureau. The operating budget is around $100 million on the operating side that we can adjust.
104 Okay.
105 That makes some sense. So on slide 28, I think it was our model combined the water and sewer bill on. The sorry, I'm reading my notes. Funny, it looks like the model shows that the combined water sewer bill will double to about $300 a month by 2035. And if we held a conservative steady 4% increase after that to 2060 to pay our covenanted water bonds, today's young people, when they're looking at retirement, will be looking at a bill of almost $800 a month if we adjusted for if we accounted for inflation based on today's median retirement income, that bill would still be roughly 50% of monthly income. I feel like we should be doing a lot about this right now. So my question is what what are we doing to prevent future rising costs that we know a lot of these costs are out of our control, but what are we doing now to correct this course for those folks in 2060?
106 Yeah, I look at it as how we are adjusting right now for operational efficiencies, as well as looking to the long term financial planning, to making sure we have a sustained financial health for both bureaus. There are multiple ways we are looking to this holistically. First, we are looking to, like I mentioned, based on the risk based asset management approach to prioritizing our cip project, we know we won't be able to address all the capital investment, capital asset. So combined for both water and bts, we have over $50 billion for the asset underground or above ground. So there is a lot of the investment and aging infrastructure we still have to maintain. So we are really prioritizing and using risk based approach for that. The second is making sure we are continuing to explore business opportunities and diversify our revenues. So how we can attract more business and the commercial partners, just with other bureaus together within the city. I truly believe we have the great water source, and we are here and we want to support folks coming to Portland. The last piece is, I will say, is we are continuing to seek external funding opportunities, including low interest loans and grants. And for bts, we are already looking to find additional grants. And this is going to be also for water bureau. We are actively looking to different ways. Incentives to lower the cost. The last piece, the operational efficiency between the two bureaus. I'm very confident with the one water effort. We can look into additional shared services and cost savings moving forward, and I'm happy to provide more update on that effort in the future.
107 Great. I would love to make sure that we do have that. I think that this is a narrative that the community wants to have. We want to hear if we are investing this much money into our infrastructure, that also it's not going to bankrupt us in the future. And there are a number of terrifying cautionary tales that we've seen around the country where municipalities getting into infrastructure and then end up declaring bankruptcy and we privatize systems. And I'm honestly really worried about this. So I hope that is the, you know, this great chapter of these bureaus is about the filtration plant and getting the two to combine. I hope that the next chapter is about affordability, and that we look at every area that we can start cutting pennies and trying to make this system more efficient.
108 So if councilor, if I may add, one additional thing that the bureau is focusing on is rate design, and we look forward to working in the next couple of years and how we can streamline that as well. And that will play a huge role affordability, as well as how we can make it better for different customer classes. So that's something that's upcoming as well.
109 Thank you very much. My time is up. I'm at five minutes. Councilor Koyama Lane.
110 Thank you, council president. I want to build off of where council president just left off and where you were kind of starting to head. I know my office has been in discussions, starting to talk with your team about rate design and what it would look like to engage in a significant rate structure review process. This is something that councilor Green and I, I know is at the top of our list. And when we're talking about public works, and I do believe there's a strong need to undertake a comprehensive redesign of our rate system, I'd like to invite you, director or dca, donna paul, or combination of you both, to speak a little bit more about that effort and what what you're thinking.
111 I'm going to have a director loo talk to talk about the different strategies. We are looking at rate design, and we are looking forward to partnering with you all on this too. And thanks to councilor Green and you councilor Koyama Lane as well. On the interest in rate design.
112 Yeah, I think this is a really building to the, the holistic rate strategy and how we want to make sure we have affordable, equitable rate for everyone. So right now the water bureau, we have the rate is the everyone have the same, the base rate and things. So I think there is a different ways we can look into is really looking to what the outcomes we are looking for. So for some of the cities they are looking for conservation. And then you'll want to incentivize people conserving the water. And others are looking for economic development. And then you want to look into how do you build the policy and rate design to, to support the outcomes you are looking for? So we would love to get the council's feedback. And before we get into this next stage and making sure we are continue having that engagement with the council members and communities and moving forward on this very important initiative.
113 Thank you. Are there resources or funds I did to get this plan moving as soon as possible? And how soon could we be starting these conversations? In this work?
114 We have already started the conversation within the bureau. So it's really getting this outcomes and the policy guidance first. And then we can already kind of starting to put some of the information and data on where we are. So we can follow up on that after the budget here.
115 Great.
116 So specifically, we do have a budgeted amount in this fiscal year to account for rate study.
117 So great. I look forward to exploring this more in the public works committee. Thanks.
118 Thank you.
119 Thank you, councilor Koyama Lane councilor Green.
120 Thank you, council.
121 President.
122 Director liu.
123 You have a very difficult job, but I have the full confidence in you that you can do this job. I've been impressed by your leadership. You bring a level of industry standard, leading edge expertise to the to the table. And I just wanted to say that first, because we've had a lot of discussion coming out of my office in particular about calling the question on certain projects and rate proposals. So I don't want my skepticism to be construed as a lack of faith in the current leadership. I think you've made a great choice, dc donna paul so my question, though, is to sort of speak to. I don't understand though, on the rate slide, how we get from 9.8% in the 2030, 2031 rate proposal and then down to 6.2, because my understanding is that we have constant debt service that's going to happen through 2060 at like $168 million. And then also, I think the wifi loans start to be in repayment. So help me understand a little bit. And maybe, you know, if I see well, I see, I see mr. Barry approaching. I, I don't really get how we get that drop. And so help me understand. Thanks.
124 Yeah. Thank you councilor and apologies because I don't have a detailed set of numbers in front of me. But for the record, jonas biery city chief financial officer. As we kind of mentioned during the council session last night, there's a lot of dynamic things changing up and changing down. Right. And so the bureau's forecast considers all of those, right. The operational costs. And a big piece of that is the debt service costs, because we have, in the context of the slide that I think is still up on the screen because of the capital investment happening right now in the project, we're sort of adding debt, right? As we're doing additional issues over the next few years to meet the obligation that debt service is increasing over time. And then you get to, I think, in this in this slide around 2930, we stop those increases in debt service and it levels out. I'm oversimplifying a little bit, but that's where you start to see that ability to drop because we're gaining other things in the forecast, customers, etc. But you don't need that incremental increase to meet new additional incremental debt service.
125 I want to go back to a thing you just said, which I don't think has been obvious to everyone else in the public, which is there's other stuff in the forecast. We're gaining projected increases in revenues. Okay. That's really important to emphasize here because there's two pieces of the ledger. And so thanks for saying that. So so what I'm reading here is the incremental difference between 6.2 and 9.8 is driven largely by just adding these new debt obligations in the short run. But because we'll stop adding the new debt obligations. And at the same time, we're going to we're projecting a growth in revenue through, you know, population growth, economic, whatever our forecasts are, that helps bring it down. That's that's right.
126 Yeah. That's correct. I mean, essentially it's, it's, it's stopping that, you know, no longer needing those incremental, significant incremental increases in debt service as that project gets, gets completed.
127 That's helpful. So what happens? And if we, if we don't plan this far out, but what happens after 25, 2036 director. Do we have a long run rates forecast that goes like 30 years out, or do we is it just is it just through 25, 35?
128 We do have the historical as well. Okay. Yeah. And I will also add councilor Green. This is also typical for large infrastructure investment. So you know, for bts when we are building the big pipes, so the rate for a certain year is getting to the double digit. And because we also have get the 25 year loans and we are just getting paid off on that. So that's typical when you have this large infrastructure is getting to the double digit and getting down, and now it's really stabilized and focus on other day to day maintenance part.
129 And sorry if I if I may jump in. I think your question was also what happens beyond 3536?
130 Does it stay at 5.7?
131 And I think there's probably bureau staff in the in the room who know the answer to that. The bureau does forecast. Beyond that, the one thing I'll note is, you know, you know, as you go further out in the chain, those forecasts become a lot more unpredictable.
132 Jaws of uncertainty.
133 That's exactly right. And I would just would use that example. You just made the jaws example. What I would love to be able to do, not just for the utilities, but but for all citywide forecasts is develop the bandwidth and rigor so that when we prepare forecasts, we're not just preparing that straight line forecast, but being able to prepare those, those more gradient levels of outcomes. We're not there yet, but I just will plant that seed today that that's something that that I would really like to be able to achieve in the coming years.
134 I'd like to support that. I'm going to move on because I only have a minute and a half left. But thanks for that clarification. As I've worked through the budget amendments, as we've all worked through budget amendments, we've had to deal with the general fund, discretionary versus general fund, overhead type of costing problem. And my understanding is the general fund overhead is an overhead cost that needs to go back to. And it's built by things like rate fund and bureaus, as well as other parts of the agency. And so this might be too complicated of a question for the time I have, but how much how much of the management or the staff outside of the bureaus are being funded by rates through this overhead model? And I can take an answer in writing later, but I'm starting to kind of see that a little bit as I'm looking through this. And it's I see I see director levine getting antsy back there as well. So that's a, that's a question that I think we do need to get a handle on at this council. Thanks.
135 Yeah. For the record, ruth levine, budget director just real quick and then we can get you the exact numbers. It fluctuates based on the fiscal year and how big each of the respective bureaus is. But water, sewer and transportation are each roughly 10 to 13% of the sort of. If you think about the revenue paying for those overhead costs in the city depends on the year and the specific bureau, we can get you those. So that's that's the the percentage of the overhead cost pool that is paid by each of those bureaus.
136 Thank you. I think I just want to flag one of the things I'm concerned about, and it's not just about the bureau, the rate funded bureau model contributing to the overhead, but when we grow our city and the billable parts that are overhead of our city, we start to put a cost on our rate funded bureaus as well. As, you know, when we grow our costs in the internal services fund model, it's this indirect way of also putting costs on the general fund. And I just that gives me a lot of anxiety. And I hope that as we develop these budgets going forward, we start to really make that very clear earlier on. And we think about what we can do to sort of ring fence a little bit. The impact, particularly to ratepayers, because I, I think at some point you get outside of what's an allowable rate, cost, cost of service thing. And so I don't have a I'm not asking for an answer right now, but it's something I've noticed when we've gotten into this. I'm starting to get a little worried about it. Thanks. I think I'm out of time. You are? Yeah.
137 Thank you, councilor Green. Councilor pirtle-guiney.
138 Thanks, council president. I'm going to stick with the water bureau water and bes questions here. You know, some of my colleagues have asked questions about those increases. And I want to note that on that graph that was just up it. Cfo biery you used language about things coming down. What we're talking about is the rate of increase coming down, but we still have increases through those out years. When we're finished paying off the bonds rates don't come down. They just go up less every year. Under these projections. And so I'm wondering, director lou, if you can help us understand what service would look like if we asked you. Not for this year, not for this budget, but it's budget season. So we get to talk about this. What would it take to not have rates increasing at the doubling rate that they are to not see nine and a half or 9.8 on top of 9.8 on top of 9.8, and then that dropping to between 4 and 6% a year. But to, I don't know, maybe cut by 25%, that rate of increase, what would that mean in terms of changes in service level, changes in customer service, changes in at where would you go if we said that it was a priority of council to not have rates increase at that rate?
139 Thank you so much for the question. I want to recognize this is where we are looking for the long term financial strategy here. Like I mentioned earlier, one is really growing our customer base rate base for both the utility bureaus and for the Portland city as a whole. I think we have a great infrastructure. We have a great city. I'm very confident for the future people coming here and the business and commercial partners that will really help spread the rates in the future. At the same time, I also want to say it's a trade off. It's a risk based approach, and this is something we would love to also provide more information from an asset management perspective to getting council's the policy decisions to because some of our infrastructure is 50 to 100 years old. So we are looking to a risk based approach and understanding the condition and what is the most likely to fail for this infrastructure. And then we're going to do that investment first. So that's really help us to be more prioritizing based on risk model and minimizing the customer impact. And then there is a trade off and risk on that. Anything that if we don't address emergency repair, that's always expensive just because, you know, you have to pay that right away and it really doesn't support your infrastructure overall. So it is a trade off discussion and how we are growing our customer base together. But I'm very hopeful how we are getting more consistent and projecting our rates and getting better in the future.
140 And councilor, I would like to add to that as well. What you see in most cities, when they go through this type of conversation or have this type of conversation, this is when you start getting to the situation of deferred maintenance and just putting off things that you had routinely scheduled for now to a later date. And that number just starts to grow over time. That number does not go away. It just starts to increase.
141 I appreciate that, and I think there's maybe a broader conversation that I'm not on the committee, but vice president Clark, maybe your committee could have on on council's behalf before next budget season. Because if the answer truly is the only things we can cut are maintenance costs or service costs, then I think we need to have that honest conversation with portlanders and be really clear about the fact that rates are going up. We are in line with comparable cities, and if we don't do this, we'll pay later. And if there are places where we could provide service differently, really do the the hard work to make sure we're identifying those. We only talk about rates in the middle of budget season for the most part, when it's kind of a yes no, as opposed to these longer conversations. And I'm very uncomfortable hearing that our our only solution right now is to shift who pays how much, which I don't think always actually works out well for consumers, or to assume that growth will take care of this for us by spreading the ratepayer base, which I assume Portland will grow. But the extent we would need to grow to do that makes me a bit nervous. So I hope that we can have some broader conversations with the bureau and the service area, either about whether there's anything else we can do to provide relief for portlanders, or about how we have that honest conversation with portlanders in a more substantive way outside of the budget cycle in the future? Thank you.
142 Mr. President. Can I just respond to that?
143 Absolutely.
144 I just I appreciate that, councilwoman Pirtle-guiney, we have already talked about great restructuring that that's on our agenda. But in September, we are scheduled to receive the asset management report, which will give us an idea of where we're behind as well. And that might also be an opportunity to kick off this conversation, but I really appreciate your input.
145 Thank you, vice president. And as you know, I'm a big supporter of that asset management work. And maybe that's a place where we can not necessarily lower costs, but pay for things in a different way so that that rate structure isn't quite as impacted.
146 Right on.
147 Thank you. Thanks, council president.
148 Thank you, councilor Smith.
149 Thank you so much. I just want to piggyback on what councilor Pirtle-guiney was talking about. I think a more appropriate place would be at the committee of the whole in the finance section, because we're talking about money. And those are the things that we need to talk about, not just in our specific public utility. I mean, public works committee. And I'll talk to councilor Kanal about that. The only question. Thank you all for the thank you for the presentation, I appreciate it. It's tough when you have to talk about ratepayers and that they have to pay increased costs. It's just, you know, one of those things that you hate to really talk about. But I want to go back to the budget in your in your service area. Dca priya, what is the projected ending balance for the water bureau, parks and transportation?
150 Jeremy. Are you able to answer that?
151 And if that projected end, if in the second piece to it and if that projected ending balance is going forward to pay for 2627.
152 That's a great question, councilor Smith. We will work on it and get back to you on that question.
153 Okay. So you don't know that it's if it's rolling over to the new year to be to to fill the gap.
154 I can I can answer from a PBOT perspective. Yes. Some of those balances are rolling into 26, 27 to pay for projects in 2627. So those balances, if that's your question.
155 Not some of the balances. What is the ending balance? What is the projected ending balance of PBOT? And if that ending balance is being rolled over into the 2627 to be used to balance the budget.
156 She's basically asking, are we encumbering funds for projects that we're going to be doing next year? Yes.
157 Okay, I'll try that next time. Those nice $2,000 words. Thank you so much.
158 Thank you.
159 Thank you, councilor Smith. Councilor Kanal is not here. Councilor Ryan.
160 Thank you, council president. It's good to see you all, especially the two that were here late last night. Dca paul and director liu. I thought that was a really good conversation. It was necessary. We had dialog as opposed to just us giving speeches and hoping that you will justify what we just said. I thought there was a lot of listening to understand what what the heck's going on, because it is a really big project. I really enjoy councilor Zimmerman's use of language about the fact that basically I was asking questions that, you know, can we really pivot to do something different because there has been new people at the table now joining opposition that were never around before. So it's become more political. And I thought you handled all of the questions really well. We don't want a big hole to nowhere and we don't want trump water. If I could summarize, I thought that was really a great language last night. So thank you. That said, it reminds me as a taxpayer, as a ratepayer, the big pipe was it was hard. I remember getting those bills from bts. I didn't realize there were two bureaus at the time. Before I go any further, this feels more like one water than any other presentation. So it was that by design?
161 Yes. We have a joint utility director now overseeing both bureaus, and we are looking at both bureaus together.
162 Director luke is overseeing the one water. Yes. Okay. Congratulations. Yeah. So I got a little distracted because of that. But I just want to acknowledge that's a milestone moment. I think when the the the rates did go down, I recall that. But I also think that when you're visually showing that it might be good to use that as an exhibit a on what happened with our bills during big pipe is that in the late aughts that that went up. And anyway, that that visual could help. I think one of the challenges with a group of employees that are engineers, god love you engineers, you're smarter than I'll ever be, but you're not the best. Let's see, not the best communicators on making information digestible. So work with some really smart comms people to help you make it digestible and visuals help. And we need to see, I think we don't tell the story very well. So that's why I'm trying to help you with you have an example of exhibit a with with what happened with the big pipe. So that was just offering some suggestions because sometimes when I read your information, I, I get becoming more familiar, but I keep thinking how important it is to make it so it is digestible to your average taxpayer in Portland. Does that make sense?
163 Yes, councilor. Thank you.
164 Yeah. You're welcome. Big picture. Because most of my questions have been asked. Thank you colleagues, I know, I know you're listening. So I hope that you also can explain this of all of the work areas. I think with public service, we experience some of this as well, the transition to how we're organizing the city with dcas is taking some dramatic pivots right now. And so a lot of your movement seems to be, from what I can see from bureaus into the dca world. And so I'm going to bring in city administrator lee as well. I think that also saw some of that with economic development donnie oliveira group. So I think as a council member, I'd like to understand this transition of how we're structurally organizing the city at this moment. And I don't need I don't need a lot of time because I'll be told I'm over five minutes. But just your vision on where this is, is this a better practice you experienced in other positions that you're seeing nationwide with cities? Are we moving towards a more efficient model of how we do our organization chart in general, because this is a big shift from last year's budget?
165 Yeah, I think it's unique. I think public safety was the first service area to kind of move to this model of a kind of an enterprise method of pulling the hr, performance management, finance, all under one consolidated area to, to provide those services for that whole service area, public safety, a large service area. Public works is the largest service area that we have that is looking to do the same. I think historically through the city, they've seen some success through that model and really trying to establish that in another service area. Is it something that I've seen throughout my career as it relates to large cities and how they have functioned? Not necessarily, but that doesn't mean that it's not a model that can work for Portland. If we're seeing success in one service area altogether, I think it's something that I will continue to evaluate to see if we're seeing the efficiencies that we would want to see, and having this type of organizational structure for the organization and see if it's reaping the benefits that are best for portlanders as it relates to service delivery.
166 Okay. And I think that that helped me understand that this is fluid.
167 It is it's always fluid. As we look at this, we're always looking at how do we do business better as an organization? How can we be more efficient and effective and economical in the services we provide?
168 And it's it's never black and white and easy to understand, but in some worlds, you think it's a pyramid with. And so what I'm seeing with this is that it goes down into positions that could be very close to the ground within the dc office. And I think for councilors, it's important for us to try to understand the evolution of this change to the org chart.
169 Most definitely.
170 And I think that it needs to be a current conversation that we have throughout this year, because I imagine now that you'll be here more than a half hour, but you'll have more of a year under your belt, you'll have a chance to work with the dcas to keep refining this as we go into the next budget year.
171 Most definitely.
172 And I think that's where we'll also see opportunities in our restructuring to look at some of that pruning and efficiency that we've been trying to get at.
173 Correct.
174 Okay. So thank you for your your visuals made it more clear to me that that shift was taking place. But I'm going to be curious as time goes on to understand if we're delivering better services, because that's what people complain about. They complain about two things all the time. Everyone up here knows that they're spending more money to live here, and they can't understand why the services aren't as good as they used to be when they paid less money. That's it. And so we're trying to get an organization chart that will allow us to provide better service. Thanks.
175 Thank you, councilor Ryan councilor Novick.
176 Thank you, mr. President. Thank you, mr. President. On the filtration plant, one thing I wanted to say is that to me, and I suspect a lot of other people, the the argument that, well, this is legally required isn't very compelling because frankly, my response is, okay, let them go ahead and sue us. The penalties we pay won't be anywhere near as costly as building this filtration plant. The argument that I do find compelling is if there's a wildfire or an earthquake, the water will be contaminated and people will get sick. And I'm wondering, do you have access to a public health expert who can explain that to us and to other people? What would happen health wise if the water is contaminated?
177 Yeah, we can we can definitely follow up on the public health. We have worked with the county, the public health, and then they have been saying the benefit of filtration. So we can follow up on that.
178 I really think that I wish I'd thought about this a few weeks ago, but I think it would have really benefited if in these discussions, we'd had the public health person here to say that. The other question is, I think I want to find out how long can we use? I think you might have said director loo yesterday, that we can rely on the groundwater backup supply for up to 180 days. Or I might have heard the number wrong.
179 That's what I heard.
180 Okay, I can take the question. Councilor Novick if that's okay with you. What? I can take the question. That's okay with you. So, you know, the our columbia shore well field is designed as an emergency and supplemental supply, not a full term replacement for our system. So based on our current modeling and assuming there's no, well failures, the groundwater system could provide approximately, you know, 78 mgd million gallons per day for about 30 days, for. 30 days, for 30 days. So if 78 million gallons per for 30 days, for context, portland's average annual demand is about 90 million gallons so that it doesn't meet the demand. And so and someone demands can be 120 days. So in plain speak, it will not meet the demand that we need. And so 30 days is where we are at right now.
181 Okay. That's very helpful because if it was 180 days and I think people would think, well, by then all of the stuff would have settled anyway, and you could just restart the old system. But 30 days does not sound like very much.
182 And then if bull run was unavailable during the summer season, during peak hot weather season, the city will likely have to implement like 30 curtailment measures in less than one month to reduce the demand and preserve. And so so we can preserve groundwater supply. So that's that's the estimate that we can provide.
183 I think that in the aftermath of the earthquake, people would be okay with some water rationing. But if it's going to run out in 30 days, then that's a problem. I also wanted to note, I mean, we're all concerned about the financial impact on people and it's huge. This is not really going.
184 To be.
185 Very helpful. But I mean, I should note that the city of ashland in 1993 adopted a 5% tax on restaurant meals that they use largely to offset the utilities costs. And I actually polled on a 5% restaurant tax in like 2015 and for something else. And it was disastrous. But I mean, that's the I think that's the kind of option that we might at some point want to want to consider. I also had a couple of more specific questions about the presentation. I was curious about the cut to the staff person. That cut to non-regulatory required water sampling, and I just want to know what kind of sampling is that and is cutting that going to make the water less safe, even if we're still meeting regulatory requirements?
186 For the non-regulatory sampling? We do definitely. This is going to be in full compliance. We will be prioritizing everything, but it's really some of the things that we could kind of hold the sampling a little bit longer. So instead of analyzing instead of analyzing, like for a few days, we're going to take it a little bit longer, but it's still within the within the whole time. So there's no compromise for the water quality for our communities.
187 Okay. If it doesn't matter, why do we have that position to begin with?
188 We, we do having that position and we want to expedite a lot of the sampling and the results and things. But this is the things we can reprioritize and making sure existing staff have done that.
189 Okay.
190 And the regulatory requirements is like the minimum guidance. We tend to do more so that we can be better with operational the way we operate a system. So it is something that, you know, we wanted to do more than minimum. So that's what the non-regulatory is about. Non-mandatory is about the.
191 The other thing I want to add is that, you know, for water quality sampling, there is a regulatory compliance and things. There's also internal process optimization. We use sampling and data analysis to inform our operation optimization. So some of this we can adjust and optimize. Those are the things we're reprioritizing. So it's not about the end quality but it's about operational optimization and sampling and how we optimize that.
192 Okay. Another position that you talked about cutting was for engineering standards review. And since I'm not an engineer, that sort of scared me. It's like, wait a minute. Does that mean that we'll be doing things, don't meet engineering standards and things will fall apart?
193 No, we'll continue having the engineering standard that on the design standard and things, but it's really looking to more consistent engineering standard and also looking to more one year, looking to the project planning and things, a more standard approach. So we have been getting that information, getting that work load prioritized with the existing engineering staff. But this is a part of where the one water effort we're looking both bureaus from water and bts, how we can have that consistent engineering standard across the utility bureaus. So this is a type of a position where evaluating, making sure we have that consistent standard. So it's a strategic priority for us.
194 Okay. But how does cutting this position affect that work.
195 It it's not going to affect that work. So we are looking to both from a project level, rely on existing engineering engineering staff to focus comply with the standard, but across the bureaus will look for shared services and resources to support the developing some more consistent standard.
196 Okay. Thank you.
197 Thank you, councilor Novick. I have myself back in the queue. I got a couple questions I wanted to follow up on from councilor Ryan about realignment. First. Of the positions that are being cut, do we do you have a sense of which ones are managerial versus administrative versus service level? It seemed like a lot of them were vacancies. But and I saw the, you know, you are cutting a vacant supervisor position that's going to lead to a broader span of control, but just sort of generally, do you have a number to say like frontline versus admin versus managerial?
198 I know that for the utilities, all positions that are being cut are vacant. Do you have the breakdown of.
199 We don't have the exact breakdown for the managerial frontline, so we can definitely follow up on that. There's a few managers and there's the different positions there. I will also see the vacancies. Those are for the last six or a year time frame. So there's that's a time frame for the vacancy reduction here.
200 I'm just getting an update from the water bureau for the water bureau. Two of the cuts is non-represented, whereas the rest are non-represented. I think we have a total of how many cuts in the water bureau. 1616 yeah.
201 Okay. Thank you. Similar question with realignment, I'm seeing, you know, we're noticing a lot of the positions moving from the the rate bureaus into the dcas office. And that means that we are now your your office is now both general funded and ratepayer funded. How are we differentiating between the staff in those positions? How are we are we braiding those fundings? Are we keeping them very separate? How are you approaching that budgeting challenge?
202 Thank you, councilor Dunphy. I'm going to call director levine to talk about the rate model for the realignment.
203 Okay.
204 All cfo biery if.
205 My apologies, counselor, would you kindly repeat the question?
206 Yeah, well, in the dcas office, she's now going to have a ratepayer funded positions and general fund funded positions. How are we are we braiding those funds into one one fte? Are we keeping them totally separate? How are we maintaining faith with the.
207 Yeah, yeah, no, it's a great, great question. And I do know there was a question earlier about sort of management of the concern about the ratepayer funds. And so we are very, very mindful of monitoring and managing that. Ruth can probably follow up separately with sort of the technical, technically accurate answer, but I'll sort of say generally there will be multiple years of sort of transitioning to this different model, right. And so we have both the flow through of general fund overhead, right? We kind of generally know how that works. And then within the dca's office, you know, be carefully monitoring to make sure that we're allocating those appropriately within the service area and making sure that that's tying back to a supportable. Nexus to the work that's being done. You know, as we realign the work citywide, we know that there are lots of things that we do that we typically did and thought of very vertically, right, that this service only serves this bureau. And in fact, much of those services reach across the organization. And we weren't able to sort of track and see that in the prior iteration. So so we'll do that work. The last thing I'll say is, as we implement that this year, we'll also be continuing to look and say, where is it not quite right? And where do we refine that in future year budget adjustments?
208 Okay, great.
209 Glad. I'm glad I asked, moving to. I have a specific question about the transportation development review fees. Slide 42. I believe you know, one of my main priorities in my time in office has been supporting the streamlining efforts that we are doing to drive more development activity and to rightsize cost recovery without simply relying on fee increases. That is the focus of cap two. So I'd like to better understand how we're estimating the revenue impacts here and what the net effect of the changes to the transportation development review fees will actually look like for parameters. People who are applying for permits, do we have, you know, what is how are things going to be different?
210 So at a highest level, the there will be new fees coming from transportation within the fee schedule that those developers will have to pay. Those revenues were coming from existing fees and pad, but those existing fees and pad are not cost recovery. They are not enough to provide the program. So there was basically two choices to be made. You either increase those fees and pad and continue to transfer funds to PBOT, or you just make up that difference by creating those kind of similar fees and PBOT to collect those revenues. And so we chose the latter.
211 Gotcha. Can we talk? I want to talk about that actually, specifically the the interagency agreement with p and d and the historic relationship. And then I guess how this is sort of moving forward. I understand that the the iga between PBOT and ppd is no longer in place or no longer going to be in place. What is that actually going to mean in practice beyond the fee recovery component of it? What do we know what how that will be operationalized?
212 Yeah. The only thing that it means in practice is rather than charging pad d for those services, from a policy perspective, we will collect our own revenues to to provide those services.
213 Okay. And just so just one last thing. You know, we're adding some fees in the PBOT side. Are any fees being retired? Are we getting rid of any fees? Are we reducing anything?
214 There are not related specifically to development fees. No.
215 Okay. Thank you very much, councilor Green.
216 I just got back in the queue. If we had time, because I wanted to make one point on the sort of the broad conversation on the sustainability of our water rates. I've said this before, but I think it's really important that we're doing everything we can to unlock housing development in the city of Portland. And I know that I know this effort is underway because the more meters that we can add to our system, the more that we can spread the spread, the fixed costs of that of that project over a larger rate base. So that's part of the rate design question. But it's also part of this idea that there's a positive interaction effect by promoting densification. I know that that's going to require some upgrades and some system assets that are downstream of the plant. But if that provides more ratepayers at a pace that's faster than the cost of the upgrade to those, those pipes, then we're going to be able to get ourselves on a trajectory where you actually can lower those rates. As councilor Pirtle-guiney had sort of suggested, rather than saying, we're going to reduce the rate of increase, we might get to a place where we can actually just lower rates. And I think that's what we should be striving towards. So it's it's part of your vision, mr. Mayor of economic development. Just want to reaffirm that I think this council should be supporting that with every tool that we have. Thanks.
217 Thank you, councilor Green.
218 And I'll add something to that. Councilor Green, I think, in any rate based utility like this, you need those large users from an industrial and from a commercial standpoint, that's the only way to truly have a financially sustainable system. So I think that's something as administration I know the mayor is keen on as well, is how do we recruit and retain those large industrial commercial users to help balance the system?
219 Thank you, councilor Ryan.
220 Thank you, council president jeremy. I don't have any plan questions. I just want to have a conversation with you about the lovely topic of parking meters. I think after like gas prices, parking meters, like really hit home for portlanders. And so there's a lot of nuances on this one. I was surprised that we were in the middle of the pack, to be honest with you. And I think it's because I maybe have the unfortunate circumstances of meeting somebody for a meal and why there's a blazer game going on, and so it's higher. So we have we have prices that are situational, correct, correct. And how do.
221 We certain districts pardon me, in certain districts.
222 In certain districts, of course. And so I assume the data that you compiled is quite a collection of all those different. Okay. And so that's why someone could feel like they're paying a lot more than that. If they show up at those places at peak times. Right? Correct. Okay. Stay with me. And so I know a lot of people have never gotten over the Sunday, the Sunday free sundays were quite popular. Just that's not a question. And then I'm also would say that how can I hear this often from storefronts and restaurants that their employees, they want some relief. And so when we think about the program, the storefront program support, I hope that we think creatively about something like this. So restaurants where the people who work there are doing working class wages, and when they get off their shift and they didn't have a great night, and then they have a parking ticket, they're really upset and they want to quit. And so I've heard from people explain these stories that it's a it's an angst from many of their employees. Is there a program where that we could come up with? Maybe a counselor could do a resolution or an ordinance on this that, but I, I don't want to get that micro. I'd rather work with you to have some sort of adaptable program that works with the restaurants, works so they can have some access to some free parking for their working class employees.
223 And there are existing programs for reduced levels of parking in the garages. So if those employees work in garages and say on night shifts, there are reduced rates for those particular employees, but we can explore more. Absolutely.
224 When you say parking lot, you're talking about smart park, correct. Because we have jurisdiction over that.
225 Correct.
226 Okay. I knew that that was one of those rhetorical questions. So how do I get back to some folks that would like to tap into that program? Not where there aren't big parking lots where they're in like, say, the pearl that doesn't have as many parking lots or they're in the area that don't have those, and no one can park in those empty parking lots at lloyd center for some reason. So how do I work with PBOT to to try to provide some relief to the to the storefronts who are suffering and their employees who are angry about parking fees.
227 Yeah. Happy to work with you. We actually have erica in the room and that's who you'd be working with. She's in the back over here, but she'd be happy to reach out to your office. Oh.
228 Thank you. Erica. Hi, erica. Erica just stood up. Thank you. Erica. Staff, remind me that we're gonna have a meeting with. Do you want to be in that meeting?
229 Absolutely.
230 All right. Okay. It's really just. I think we have to have some parking meter solutions as we. And adaptability across the city on that. How do we study though, if it's working? So what's the what's the impact of the rate increases? And if it's in fact hurt the businesses that might therefore, we might have another business go out of go out and we have another for lease sign up. So how, how can we look at the trade off of that data? Like, are we bringing in more money because of the parking fee? Are we bringing in less money because the parking fee might be hurting businesses and then we have less business taxes for them?
231 I would say that the revenue from the fee increases is bringing in more, more money because of the fee increases themselves. There are usually with any fee increase, slight downticks in the number of transactions that people utilizing parking. But usually the fee increases are more than covering those particular downward trends in transactions. As far as hurting businesses and turnover. That's a question I actually don't know the answer to. I would say businesses typically like turnover, so they want to make sure that those parking rates are at a at a rate high enough to make sure that people aren't parking there all day in front of their business, because they do.
232 They like the 15 minute ones. Yeah. Especially in the, in the, in the neighborhood business, the main street areas. Okay. I think we haven't figured out what that economic analysis is on when the, when the, when it hurts businesses and, and that hurts us because then we have less revenue coming from them. Or if we just get more from the fee. And so I keep trying to figure that out. That's what I'm doing with you in real time without any prepared questions. So that's the kind of conversation I do think, one that would allow us to provide some a win is that some of these we've had a lot of restaurants close, and some of the issues is that they can't keep staff, and it's really become rough for them. So I think anything we can do to provide some help for them, that would be that would be something I look forward to working with you on. And mayor, maybe in the storefront support program, we can look as this is one of the ideas. So the point is that ann hill or who's the point? Okay. All right. Victor, victor's the point. And ann, those people, that's who I talk to about this. All right. Thank you.
233 Thank you, councilor Ryan, councilor Smith.
234 Thank you.
235 Okay. I just forgot my question. Right? Right. And I think I actually asked the question. Thank you.
236 Yourself too. Seriously.
237 Okay. Councilor. Councilor. Novick.
238 Thank you, mr. President. I think that there's a lot of reasons to make sure that we're charging appropriate prices for parking. There's a value to turnover. There's a value to reducing traffic. But I'm struck by councilor Ryan's question about employees. And I was just wondering, have we ever come up with a concept like we're in a metered district? There's people who work there that have like, you know, monthly permits where they pay less than they would if they were parking, paying a meter.
239 The question. Yeah, I'm gonna bring Eric out to maybe answer that.
240 Hello, councilors. I'm sorry, commissioner Novick or councilor Novick, I apologize. Can you repeat the question for me, please?
241 I was just this is an incredibly vague question, but have in the parking context, have we ever come up with a a special employee permit where they would pay less than people than they otherwise would on the street or in another context, or like in one of our garages, where if an employee works in a particular place, there's some sort of discount for them.
242 Yes. I'm sorry. For the record, my name is erica and I'm the division manager that oversees parking operations and regulatory operations at PBOT. We do have a business permits in some of the districts. Downtown is not one of them for central city reasons. Yeah, smart park would be a great space for that, especially since the garages have capacity right now and they have been for the last few years. However, zoning does not allow us to sell monthlies at, I believe, three of our core garages, which would be 10th and yamhill, third and alder and fourth in yamhill.
243 Zoning doesn't allow us.
244 I believe so, yes. Yeah, that's.
245 How would. I wonder why that would be? I can follow up on that afterwards. But that's that's interesting.
246 Yeah. And there are other garages that also cannot sell monthlies because of that reason. But I'm happy to follow up.
247 Okay. And also, I think that I read recently that by rolling back the extension of, of meters to 10 p.m. We lost about $5 million a year. Is that right?
248 I'm going to switch over to jeremy.
249 Okay.
250 We've never actually fully collected a full year's worth of revenue, but based on some of the revenues that we saw coming in when we first initiated that, until we stopped it in the fall, if you projected that out, it would probably be close to about 5 million, but we'd actually only built into the budget was about $1 million for the current year that we then paused.
251 But it would. But it would have been. But we think it would have been close to 5 million a year.
252 If you extrapolate out what we saw earlier, that just depends on. Yeah. If if that was a spike in parking in those particular. There's just a very, very small data set that we'd have to use for that. Yeah.
253 Thank you.
254 Thank you, councilor Novick. Pausing for dramatic effect, seeing no one else in the queue to discuss. Thank you all so much for being here for your presentation. This is going to conclude our final work session of this budget season. Colleagues, just and for the folks watching at home, just so we know what next steps are with the budget on Monday, this coming Monday, we will be hearing all public testimony for the budget, both for the city's budget and for the prosper Portland budget that will be happening, right, you know, starting on the day in this chamber. So everyone plan to get comfy. Tuesday. We will be hearing the Portland city of Portland budget and the prosper Portland budget. And then on Wednesday, we will be hearing our rate bureau, our rates and our utility ordinances, followed by final work on our amendments. Councilor Ryan, last word for you.
255 Oh, sure. I just want to thank ca lee and all of the dca's and bureau directors that have shown up for these budget sessions, work sessions. I think these are the most important sessions we have because this is our chance to understand, ask questions, understand how to run a city. And when we jump too quickly into policy without having the context of what's really going on and how we operate a city, I don't think we're behaving in a way that will move our city forward. So I just know this has taken up a lot of time, but please know it's so helpful to the public and to those of us that represent the public. And I, I think that we should always lean in to such sessions each year. I actually think we could have them earlier, and we could be in a more relaxed environment where we're doing dialog. This isn't about gotcha. It's to understand how to run the city. And I really appreciate the openness that's occurred as these have taken place. Thank you.
256 Yeah thank you, councilor Ryan. Thank you all for your patience. Thank you all for your participation. And with that, we are adjourned.