The record · Transcript
Council Session — 2025-11-17
Transcript from the session's official auto-captions (12,187 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 Finance Committee met on Monday, November 17, 2025, with roll call reflecting attendance before proceeding to two agenda items. The first item covered an update on the state emergency transportation package, with presenters describing estimated funding of $10.6 million this fiscal year and figures for future years that were stated inconsistently across the discussion, alongside inflation projections of approximately 7% per year eating into new revenue. Discussion covered how the funding would prevent additional position reductions this year, the pending ballot referral effort against the state bill, differences between general transportation revenue and grant-funded capital projects, maintenance backlogs, and district-level engagement on transportation projects. The second item addressed financing options for the sidewalk improvement and pavement program tied to a resolution passed in May 2025, including comparisons between cash funding and bond issuance, bonding capacity, potential debt service estimates at various funding levels, and possible use of summer works and apprenticeship program resources. The committee discussed forming a smaller working group to develop funding proposals ahead of the upcoming budget cycle, with plans to revisit the topic in January or February. No votes were described as occurring during this session, and the meeting adjourned with a preview of items for the next Finance Committee meeting on December 8.
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 All right. Good afternoon. I'm going to call the meeting of the finance committee to order. It's Monday, November 17th at 12:03 p.m. Diana, can you please call the roll?
1 Good afternoon.
2 Green here.
3 Avalos. Present. Pirtle-guiney here. Novick.
4 Zimmerman here. Christopher, if you could read the statement of conduct. Thank you.
5 Welcome to the meeting of the finance committee to testify before this committee in person or virtually. You must sign up in advance in the committee agenda at wwe, Portland city council agenda, finance committee, or by calling 311. Information on engaging with the committee can be found at this link. Registration for virtual testimony closes one hour prior to the meeting. In person. Testifiers must sign up before the agenda item is heard. If public testimony will be taken on an item, individuals may testify for three minutes unless the chair states otherwise. Your microphone will be muted when your time is over. The chair preserves order disruptive conduct such as shouting, refusing to conclude your testimony when your time is up, or interrupting others testimony or committee deliberations will not be allowed. If you cause a disruption, a warning will be given. Further disruption will result in ejection from the meeting. Anyone who fails to leave once ejected is subject to arrest for trespass. Additionally, the committee may take a short recess and reconvene virtually. Thank you.
6 Okay, colleagues, today we're going to have an update from the the transportation package from the state level. And then also a discussion regarding the sidewalk improvement, improvement and pavement plan and the options that exist with regards to financing of that work moving forward. So with that clerk, if we could call item number one, please.
7 Item number one, update on the state emergency transportation package.
8 All right. Good afternoon. Welcome. And go ahead and kick it off.
9 Good afternoon, chair Zimmerman and members of the finance committee. I'm priya paul, the dca for public works. Thank you for inviting us to talk about the recently passed state transportation package. We're very thankful to all of you who have helped us advocate for this funding and for the Portland delegation who helped us get it over the finish line. While this funding is incredibly good news and it will help stabilize transportation operations in Portland, for now, it is still just unfortunately, just a stopgap. The transportation system has been chronically underinvested for years, and our needs are many. I look forward to working with this committee and all of council as we think about how to continue to stabilize and invest in our transportation system. And with that, I'll turn it over to director williams to talk about the funding.
10 Thank you, paul, and good morning, chair Zimmerman and members of the finance committee. I am millicent williams, director of the Portland bureau of transportation. For the record. Next slide please. I'm pleased to be here to discuss the state transportation package. I know one of the central questions we've received is how will this benefit Portland? As you see here, we are estimating that in this fiscal year, PBOT will receive about $10.6 million. In future years, the amount will fluctuate a bit, but was estimated to be around $24 million ongoing from the new package increases during the spring and summer. Updates from ODOT and Multnomah county reduced the base state highway fund revenues by $4.5 million. So the net increase with the new state package is only 19.5 million. Starting in fiscal year 2627, or about 8.5 million over what we have budgeted this year and forecasted for future years. Unlike versions of the state package that did not ultimately pass, the amount will not go up again in future years to keep up with inflation. This funding is very welcome news, but we will be we will very quickly likely lose ground again. It's important to note that there are other ways that this package will benefit the city of Portland. Our partners at ODOT, TriMet and Multnomah county will also receive funding that will help them provide critical services to portlanders. Next slide please. The most immediate impact of this funding is that it covers the approximately $11 million that was already assumed in our fiscal year, 2526 budget. This is critical funding, which eliminates the need for any additional position reductions this fiscal year, given multiple shifting revenue forecasts. We are not expecting excess revenue this year, especially given the extreme budget pressures over the last seven years. We have eliminated or borrowed against some future reserves and set asides. For example, we currently do not have any reserves for landslide mitigation. Any extra resources this year can help pay back those set asides. We need to mention to the. The important caveat that there is an effort to refer this bill to the voters. Petitioners will have 90 days from when the legislature adjourned on October 1st to get the signatures needed to send the bill to the ballot. Longer term impacts on PBOT budget will be an approximate 7% per year inflation.
11 The next slide for the long term. Yes.
12 Thank you. Approximately 7% per year inflation over forecast period means transportation package increase will barely cover the cost of inflation for one year of the five year forecast. Additional basic maintenance and operations needs considerations for fiscal year 2627 include commitments like continued expansion of street sweeping. We would be able to restore cuts in contract paving and micro surfacing. There would be significant liabilities and risks that we are currently experiencing, like for street lights and signs and pothole response. Significant asset backlogs, which we have discussed extensively, and then rising severe weather response recovery costs like riverine flooding, landslide abatement and snow and ice. Next slide please. Even in the longer term, this funding is just a drop in the bucket. It will prevent us from facing another potential major cut next year, but will not do much more than that. Our forecasts are showing approximately 7% average year inflation average per year inflation over our five year forecast, which means that the additional revenue we will receive in 25, 20, 26, 27 will be completely taken up by the inflated costs of covering our current service levels. I'm sorry, we have ongoing commitments and this is actually from the last slide. We have ongoing commitments like the plan to fully restore residential street sweeping after having it cut from the bureau's budget in 2023. Doing so will require increased funding. Over the last seven years, we've had to make a number of other cuts. Painful cuts like significantly decreasing our contract paving work. Micro surfacing, small safety projects, and even things like funds to replace parking meters. We also have significant liabilities that we have been unable to take care of. We have street light poles that we cannot maintain or replace, signs that need replacing, and we face risk if we cannot keep up with the reasonable timing of filling potholes. Of course, we would like to be able to make more significant progress on our major asset backlogs and address unmet maintenance needs for paving, bridges, paving and bridges. We also continue to see increased severe weather and with that, increased costs to address flooding and landslide abatement and to keep the streets clear during snow and ice events. For instance, already this fiscal year, we have unexpected expenses associated with addressing damage brought on by the landslide. So unfortunately, this list is quite long. But again, this state funding is very welcome, but it will not get us very far towards meeting all of these needs.
13 Thank you. In the last slide about what's next in Salem, office of government relationships was could not join us today, but we work closely with them and we are happy to speak to the next steps in Salem. Of course, the most immediate issue is that we are all waiting to see what happens with the referral, and we don't expect significant funding activity in the 2026 short session. But the transportation bill left substantial unfinished business, and so discussions for a 2027 package will likely begin soon. We also want to note that ODOT faces severe operational and revenue pressures similar to similar to the city of Portland, and that means the city must continue defending the current practice of sharing state highway fund revenues between the state, the counties and the cities. The recent transit increase sunsets in 2027 and making the continued transit funding critical. And while PBOT uses basic operations and maintenance funds for smaller safety improvements, major safety investments went unfunded this session, including the safe routes to school and the great streets program and major transportation projects will also need continued funding, and there are ongoing considerations around modernizing oregon's transportation funding structure to reduce resilience on fuel taxes. And with that, we conclude our update and we are open for any questions.
14 Thank you. We'll go to vice chair first.
15 Thank you. Chair, for those of you who followed along with those numbers, I apologize. I need to make sure I understood them correctly. So with the funding currently coming out of Salem, we meet the $11 million in this year's budget, plus an additional 8.5 million. Is that correct?
16 11 million? Yeah.
17 The 11 million.
18 So in the presentation where it said that this gives us 8.5 million over our current budget, what does that mean? I'm trying to figure out there was the 11 million number. The 8.5 million number you said were at even essentially for next year. We're backfilling revenue at some point from some pot of money. But I need to see a line that says, this year we budgeted this much, and with the revenue coming in from Salem, we will have this much, this much, this much. If it's up here, are we using that to backfill those funds or is there something else we're using it for next year? Maybe we're at even we think. And then going down, I, I need this line to follow. Clearly for me.
19 We have jeremy from the finance team who can answer to that.
20 Good afternoon. So the 11 million budget german patent with PBOT finance, the $11 million budgeted this year is what we expect to get from the state package this year, because it's only a partial year next year we were expecting about 23 million, but then that dropped by about four and a half. So that gets us to that. 19.5 million is what we expected for next year. If you back out the 11 from that which is already budgeted, leaves us with about eight and a half of new resources starting in 26, 27.
21 And we expect 7% inflation.
22 Which is going to eat up that eight and a half. Yeah.
23 We'll eat up seven of that eight and a half or something like that.
24 A little over seven. Yeah.
25 Of the eight and a half. So next year we expect to have an additional 1 million that presumably we need to use to backfill the millions that we have taken out of reserves. And then we're in a deficit again. So even with this plan that looks on the surface like it's additional dollars, what we are talking about is cuts, budgets moving forward, with the exception of one year when we actually ought to be having a cuts budget so that we can backfill all of the reserves that we've taken from over the past few years. Is that an accurate statement of our financial position in PBOT right now?
26 Yes.
27 Okay. All of my follow up questions then are moot. Thank you.
28 Funny how it does that right. Councilor Green.
29 Thanks for clarifying. I had similar questions and that's really important as we think about next spring. But my question is, just given the utter failure of our state government to adequately provide the resources that we need to operate. And I'm sorry, I'm not gentle in my words because I'm frankly disappointed. I know that we're going to receive a report about a month from now recommending a series of potential revenue options that the city has some control over it. Given this context, do those options, to the extent that you can telegraph this at this time, do they do they take into context this state challenge? Are they are they are they sort of like assuming for granted that the revenue options that we're going to be presented build upon historic norms for, for state grants? Or is it to say we can't really count on that anymore? Here's what we need for Portland. Does my question make sense?
30 Your question makes sense. Thank you for asking. I don't want to get out ahead of the report being presented to council, but there are a number of considerations that are being brought to bear as a series of options are being collected to be able to provide for your consideration.
31 I appreciate that, and I look forward to that, that conversation. And I'll just say, when we talk a lot about doom loops at this dais and in this community, to me, there's no greater threat to making that a reality than having the Oregon state legislature pass through cuts from the federal government to our own coffers. That then ends up starving our municipalities of the funds that we need to operate upon which the private sector sits. So I just wanted to use this little space I have here to say that, and I am done talking.
32 Thanks, councilor Green. I want to go just a little bit into it. Sounds like the way that you're talking about these revenues very much in the maintenance category. Okay. So we seem to continually be in this conversation of like, okay, we've got this, this maintenance backlog. We want to keep the light poles safe. We want to update things. We want to fill potholes. So if we're using this state money for the maintenance, I have a tough time squaring it with our new projects and how we tackle that. Right. We're sitting on fourth avenue that's going through a huge project. It is hard to listen to the bureau talk about maintenance concerns. When a road that was working is being redone, when there are other roads with massive potholes or with failures. And so. Where do we I'd like to understand better your your decision making apparatus in terms of how you deploy different pots of money, where you make choices about new assets or new improvements on roads. And while they might be great improvements, it's hard to be supportive of that when on the other, the next conversation is, boy, we can't maintain anything in terms of wouldn't. Would it have been better to spend whatever amount is getting spent on roads that are already working on the potholes, who are already open? How does how do we square this? What pots of money are we talking about? Do we use a totally different pot for these specialty projects? And can we discuss that a little bit? Because otherwise I think today's presentation will leave folks wanting for an understanding of how PBOT deploys its resources.
33 Absolutely. And thanks for the question, councilor. The bureau has the opportunity to do projects that are funded from a series of different sources. And right now, the general transportation revenue is what funds maintenance and operations. So the money that comes from parking, the money that comes from permit fees and all of those things, that's what funds maintenance and operations, the projects like fourth avenue and several other major capital projects that people will see all over town that look like they're focusing on a future and not maintaining what's currently here. That is what it actually is, what's happening. It's looking at the future of what corridors can look like, and it's funded by sources outside of that gtr pot. So there are a number of grant funds that come to us. We get federal funding. We do get state funding for very specific types of projects. And in the case of the project on fourth avenue, it started out as a fixing or fixing our streets project, which was basically going to repair the pavement and the curbs and some of the sidewalk issues that might have existed along fourth avenue. But we saw an opportunity to bring in other funding sources, and that's what made it a really big project, with contributions from TriMet and other sources, to ensure that we have the transformational opportunity on fourth avenue. So that's what happens. And it is very frustrating for people who don't have the opportunity to sit down and say, well, this is for that and this is for that. But that is really what it is. We have segregation of funds that some are specifically dedicated to the maintenance and operations functions. The majority of of all of the gt-r goes to that maintenance and operations funding, as well as the very small general fund that we receive that does go towards maintenance and operations. But the the other capital projects, which is about $250 million of of project value, that is from other sources of funds. And so I share in needing to find ways to better express to community the the ways that we're funded and why a project became a project and how a project became a project. I know there was a presentation before this body on the transportation system plan, which is a 20 year look ahead about what we will be doing and how we'll prioritize which projects will be doing. A number of assessments go into helping to make the choice around where we will make investments. We have an opportunity to provide to this body a listing of the projects that we've done over the course of the past 20 years, how we've improved communities or sought to improve communities, but where we also see gaps and in some instances, the problems are so great that we're not able to address them based on the funding that we've received, the funding from the state, if, in fact, we didn't have to account for some of the things that were discussed that councilor Pirtle-guiney wrote raised would have been an opportunity for us to really dig in on that maintenance and operations. That's what every community advocated for. But unfortunately, as we all know, it costs a little bit more to do what we do than meets the eye. And so it doesn't go as far as we would like for it to. But that's that's the segregation of the funding.
34 So I. Am cautioned by some experience in other governments where we really had to keep a fairly watchful eye on the lines of business that our organization pursued from a grant perspective, because every now and then it gets you into a line of business that maybe the governing body didn't fully bless off on us being in for maybe the next 5 or 10 years. Right. And this happens in grants. So it's always we talk about it as a good thing to go after grant funding. In this case. Are we giving up anything by pursuing certain grants in terms of our ability to either execute resources or keep employees on what we would call maintenance side of our operation? And I, I say that from a you've got a certain number of employees, a certain amount of contracts. Is there any money that could have gone to maintenance of our transportation system that went into and I'm just using fourth avenue because we're sitting on fourth avenue, but there are many across the community where we can evaluate that balance. And I and I say that also with a, an understanding that I'm sure the fourth avenue plan was well in the mix before this council was seated. I would like to better understand when the bureau is going to start working with the council offices for what is coming in their district to start giving a an initial yay or nay so that we can apply our goals as a city with a district lens to them. And I and I expect that those are years out projects, but I don't I don't really know. Like what's in the mix next for district four. And how can I shape that with respect to the balance of maintenance needs versus going after new shiny things? I'd like to be able to engage in that conversation, and I don't feel that aside from the transportation committee, that that that topic is happening. So there's two questions. When will we start engaging on district projects and how to put that lens on it? And then also, are we though giving up anything in our maintenance world when we take on grant funded projects?
35 Ideally, I'll start with the last question first, because you asked it first when you started to pose the question. Ideally, we're not giving up anything from the maintenance perspective, and in fact, our projects build into them to the budget's maintenance on the back end, or they should be building that in. We should not be building anything that we cannot going forward, maintain. That is something that we are thoughtful and intentional around and actually impacts the overall scope of the project in that if, in fact, we say we want to do a ten block project, but we know that it will take $1 million to maintain over the course of the next five, ten years. We then have an $8 million or $7 million project to ensure that we can maintain the project. So that's how we are working to back out the maintenance and make sure that we're not shortchanging ourselves. But we don't swap out maintenance work for capital work to answer that question, I think in a in as few words as possible, there are instances when we do have our maintenance crews do some of that capital work, and I'll use northeast broadway as an example of that. Our maintenance crews delivered that. That was something that we would have normally had a contractor to deliver based on the amount of effort, the complexity of the project. But I am pleased to state that our team does an amazing job, and in fact, they are our contractor of choice. So when we're able to use maintenance crews to do the work, we do that. So there are a number of smaller projects that we have that are in our quick build category, that we choose maintenance to do that work. But again, that is new work. It's not always just maintenance work that they're doing. To answer your second question, we'd love to engage council on the projects that are happening in your districts. We can provide for you. Even today, the list of projects that are slated to happen over the course of the next several years in each of the districts so that you're well informed about that.
36 We want to I want to clarify. I'd like to be engaged when there's an opportunity to make adjustments.
37 Absolutely.
38 If they hey, by the way, we're going to shut down a road. We want to tell your. Neighbors very different engagement.
39 I was going to get to that. I wanted to let you know that today we can let you know what is currently planned. And even in that, there are opportunities to review what's currently planned, to be able to make adjustments. And then a second part of that is, as we're looking at our five year look ahead, our ten year look ahead, our capital investment plan, how can we make sure that we are better engaging council so that we are not just looking at what's historically been our role in terms of using the tsp to decide what we were going to do. This is a new opportunity for us to really engage council with that district representation, to ensure that the projects that are proposed, not just meet the purpose and need of what we think is important, but also what you are voicing as needs in the community that you're representing.
40 I look forward to that. It it doesn't feel like that is an area that is welcome yet, and I think it's part of us getting used to the new form and what we're doing and how we're going to do it. But I really look forward to it because I think it's one of the powers and the benefits of the district representation model. And I think about vision zero as an overarching city goal. How we achieve that in district one and parts of district four, I think are going to be quite different than how we achieve it at, you know, 32nd in belmont. And that is the I think, the strength of our district model. And that's how we can utilize the councilors to help put each of our little micro communities stamp on the overarching goal. And so I'm really looking forward to it. I know we're in our first year of figuring out how to do this, and most anything that went into the dirt this year was, well, preplanned before us. But I think for me, that's the model going forward to see how do we engage, how do we kind of means test things and make sure that we've got we've got the the district representation on board for the projects that are coming in a few years. So it's a welcome invitation. I'm looking forward to it. I'm not sure what form it will take yet, but thank you.
41 Yeah, we'll be figuring that out, I think. And I keep I'll keep harping on forth because again, it's right here before we even started in earnest on design, we engaged the systems that were available to us at that time. So there were committees. There were councils, not city councils, but other councils of groups. There were neighborhood associations. And so the desire is to make sure that we are engaging appropriately. And when we talk about deep engagement, when we talk about effective, comprehensive, that's what we mean. And it's certainly and will definitely need to include council leadership in the spaces as we move forward.
42 Yeah, I think we're transitioning from stakeholder engagement, meaning you are a group of people who love this thing and you're going to weigh in on it across the city and usually getting your way to getting to an engagement based on districts that will have some of that stakeholder in it. But but not not being an echo chamber. That is only the one thing. And that's, I think, what I was coming into this role and looking at the way that our, our various committees were engaging, it was it seemed like a very loud microphone on a few key constituencies that advised PBOT instead of neighborhoods that advise PBOT. And I'm looking for the districts to get some weight there. So appreciate those answers. I hope that as the public is watching, that they're understanding that sometimes a new project is going in the ground, and we're also lacking in maintenance funds, and those may not be the same pots of money. The question we have to ask ourselves is, are we willing to not do the new project just because we can't fill the pothole? And I think that sharing that has been helpful today. So thank you.
43 And that's a question around our values as a city as well. You know, do we just to keep the wheels on the bus, do we go after the funding. Sing the song? You know, I do karaoke.
44 So I'm aware.
45 Yeah. Do do we want to do that or do we want to forego funding if it doesn't align really well with what we are stating? Is our priority as a city? That's a great question to ask, and something that we ask ourselves often. I am not interested in us just chasing the shiny objects. I'm interested in us making sure that we're doing things that are aligned with our city values, our core values where we need to move and ensures that we are providing the services and and the types of projects that people actually want to see, not just the ones that because of popularity or the ability to find access that get priority.
46 So thank you, director williams. Thank you. I'm going to go back to vice chair.
47 Thank you. I'm going to go back to one of the follow up questions that I had previously, and I apologize to the chair of our transportation and infrastructure committee, because this question starts to veer into policy and away from finance. But I think it's important to ask today. We are facing shrinking budgets, essentially. And we may have options for additional local revenue. We may be able to negotiate a better package at the state, but we don't know that for sure. So while we sit here thinking already about next year's budget, where we will at least break even, are there things that we should be considering investing in in different ways, because it could save us money in the long term? Are there things where we have said before? If we could spend a little more on this project, it would last a little longer. If we could do all of these things at once, it would cost less moving forward. But we have not been in a position to do that. And next year, when we have a full budget, but know that we will have cuts the year after, we should consider tightening our belts a little in advance to be able to make those investments that will leave us better off in the out years of this transportation package.
48 There are certainly ways that we should be looking at the future of our funding and identifying ways to maximize efficiencies. I think the unified cip process is one of those opportunities. As we look at again, I'll use fourth as we look at fourth avenue. That really is a project that could have been a part of what it will be a unified cip project or program, because the water bureau was a partner in that bureau of environmental services invested in that, the parks bureau invested in it, as well as PBOT. So that's a way for us to figure out how to better streamline and use our resources. That's some months down the road before we're able to to actually see the benefits of that type of work. But that is one of the spaces where we can maximize efficiencies as it relates to which part of the balloon we're squeezing. I think that that's the exercise that our team will be going through over the course of the next several months to determine how we might be able to find some efficiencies, invest in other places. To your point, if we invest now $10 million in pavement on a corridor, it'll last 30 years versus doing potholing. So that's the type of thing that we're talking about doing and actually doing this year. We can, at the appropriate time, speak to the reduction in the number of pothole calls and claims we've received over the course of the past year, because we've shifted our strategy and we're not just going $300, $300, $300, $300, $300 pothole replacement, but rather doing a full block and trying to do a grind and pave and finding efficiencies there may spend a little bit more on the front end, but it will last longer in on the back end. So that's that's the work that we're working on that we're doing now.
49 Can you come forward to us with a budget proposal for fiscal year 2627? I'd be very interested in having a conversation about how we use the state dollars that we have, knowing that they will stretch less and less far every year to take on that type of thinking about how we how we keep our assets up.
50 To do that. Thank you.
51 Doctor. Counselor Green.
52 Thank you, mister chair. I want to talk about the inflation assumption in the slides. 7% over the forecast period. Is that three and a half and three and a half, or is it is it 7% annualized per year? Per year? And is that is that developed using like sort of. Is that a is that a PBOT forecast or is it like the state? It's a.
53 Inflation factors that we get from the city. Economists for health benefits, pers benefits, external personnel changes, etc. It's a it's a combined.
54 So it is a function of our own internal kind of cost structure in some sense. Okay. I only raise it because, you know, I'm looking at the producer price index indices for the relevant sectors where we do this type of work. And we've we've come way down from the pandemic highs. And you know, I think the most expensive that I'm looking at here is, is is special special index for construction materials. But the point being is I hope that our we align with where the rest of the industrial sectors have normalized in terms of inflation forecasts. I know some of this. A lot of it's driven by our own contracts, bargaining unit contracts. And that's, you know, we make decisions around that. So I was just trying to better understand where the where the inflation numbers come from.
55 I would say our external mass is much closer to those cpi numbers that you're looking at. It's the personnel side of things with pers, with health benefits, etcetera, union contracts, those are higher than those rates. Obviously there's other internal costs that we pay for our internal services within the bureau that are going to be higher than those cpi costs.
56 And those internal services are.
57 Everything from fleet facilities, technology, etc.
58 Okay. Got it. Thanks.
59 Okay. I'm not seeing any other questions or discussions in the queue. So with that I think I'm going to say thank you. Any closing thoughts at all from director dca?
60 I just want to say thank you for the opportunity to present. We recognize that this continues to be a space of great interest across the full council, which I actually appreciate. The introspection, the intentionality around the questions, the curiosity to understand the what and the why is really appreciated in giving us the opportunity to provide those answers and give voice to both the concerns as well as the opportunities and the future of partnership is well appreciated. So thank you.
61 Thank you. And before I go back to dca, I have one that I you did mention that there is a. Potential election referral. I did regarding this. Does that potential factor into your plan for expenditures in terms of when and how or do we hold for 90 days? Do we hold if it goes to the ballot, do we hold for a year? What's your what's your thought process around that.
62 We will hold necessarily. We don't want to have budget insufficiency right now. We have not reduced force with the exception of a couple of positions. We are being quite conservative in terms of how we are spending. We are, as a city currently in a hiring freeze. So and the bureau has quite a number of vacancies. We've had a number of vacancies. I mean, we we've had a number of vacancies for a number of years based on the last two years of 30 million plus budget gaps that we needed to address. So we've been holding on to that. But come what is the date of the beginning of January? Come January, we'll know for sure what we'll need to do, and it's likely that we'll need to come before this body again and have a conversation about what the future of the bureau looks like.
63 Okay. Thank you. Okay. Any closing comments?
64 Thank you for your interest in this topic. And I'm.
65 Like money. So yeah, we're in this topic. Yep.
66 We are excited. You know, there's a number of opportunities to engage with PBOT and our other infrastructure bureaus as well. And I'm excited about unified cip and asset management strategies that are coming up. And we look forward to engaging with all of you in this committee and the full council, as well, on how we can do infrastructure investment moving forward.
67 Thank you so much. Thank you. Okay. I think we're going to move to item number two, somewhat related.
68 Item number.
69 Two, transportation with your feet. Anyway.
70 Leaving item number two updates on sidewalk improvement and pavement program.
71 Okay. So colleagues, I've invited our cfo here. You know, some months ago we passed the resolution and it has been a challenging topic to figure out a financing package for how much work is reasonable to expect that we can fund, and also the various mechanisms that we can use to fund. Right. There are a variety of topics that I think that our cfo will will address. My intent as a chair of this is to bring this committee into that discussion phase so that we can start providing some direction to the finance team for bringing forward various courses of action, and to be able to realize that resolution and to provide us some, some decision making instead of being in a position where the first thought process to bring forward a funding package is the one that gets attention. I'd like to have a deliberate like here, kind of the things at play. Here's the here's the leverages and the pinch points. And so that's the intent for today. So I hope that you will ask questions. You'll get an idea for where you stand as a member of finance, where you're at in terms of cash payments versus loan. Et cetera. Et cetera. So with that I'll turn it over to mr. Berry.
72 Great. Thank you, chair and committee. For the record, jonas berry, the city's chief financial officer. Yeah. And back again to acknowledge that we haven't forgotten about the sidewalk improvement and paving project resolution cip resolution that was passed in may 2025. That resolution aimed to address sidewalk and pavement deficiencies, with emphasis on historically underserved areas and district one and district four. On June 23rd, this committee received a presentation on borrowing options with an outstanding question posed and still pending about the revenue stream to be identified as the dedicated payment source for a potential bond issue to fund cip projects. And again, that question does still remain outstanding towards that end. As a reminder, prior presentation identified two primary bond repayment sources, first being just general fund and the second being general transportation revenue. As was just discussed in the last item, allocating either of those funding streams to a new payment, a new annual payment for a new bond issue requires trade offs, by which I mean those funds would no longer be available to pay for existing uses, as those might be currently projected or programed. The city's technical debt capacity remains essentially the same as was communicated a few months ago. The only thing really that's changed materially in that time is the state transportation package just discussed. So again, here for a quick touch point check in, look to the chair to identify how you'd like the conversation to go forward. But certainly happy to address any any questions. Thank you.
73 So with respect to. There, there are various ways in which sidewalks are coming out in our in our community. So right. Pcf is funding some projects relative to safe routes to schools. Some of the questions have been how much how much money can be deployed reasonably by PBOT in a given year, in terms of how much, how much work can actually be accomplished in a given year that that comes up so that we have a reasonable number to to understand what's executable. The other sides are that we're curious about hearing from. Are is it better to look at $10 million worth of sidewalk projects and find cash, $10 million in cash to do that? Or is it better and more preferred that we figure out what would be the yearly bond payment on $10 million of work? And those are the questions that I'm hoping that councilors can bounce around a little, have some discussions with our cfo and weigh that against, since we have PBOT here, weigh that against like if you if you were instructed to accomplish this, this mission, how how much would you and how would you go about accomplishing it? Is it our own teams? Is it contract teams? That gives us a sense of where we want to take this? Because I think at this point we need to provide the city administration some temperature checks for where we might be able to bring cip into realization. We'll go to vice chair.
74 I think you're looking for us to ask some questions down these paths right now. Is that correct, chair? Okay, I'll start with a couple and hopefully that will inspire deeper questions from some of my colleagues. The first is, jonas. I'm hoping you can ground us when we're thinking about the path of bonding capacity. And I know the chair laid out a few potential paths. We know from our team at PBOT that they are often looking years out for projects. As you think about the city's bonding capacity and what we have coming off the books, what bonds will be fully paid off over the next, let's say, two years? Let's give ourselves a two year time frame. Do we have projects in the works from bureaus already that will fully commit if we don't make any changes in terms of priorities, any new bonding capacity that would open up? Or do we have potential for excess bonding capacity? And what I'm trying to get at is if we go down the bonding path, are we weighing the prioritization of sidewalk construction over other new projects council might put forward, or are we weighing the potential for increased sidewalk construction against projects that are already in the planning process and underway within our bureaus, so that we can understand the trade offs that we would be talking about?
75 It's a good, good question. It's not a it's not as binary of an answer because obviously there's a lot of moving parts. But as of the most recent calculation I have, I think it's changed a little bit or will change a little bit with issuance of the cutter garage bonds that council just authorized, but roughly. Well, let me back up. I would expect that this bond issue would be what we call self-supporting limited tax bonds, meaning it's a limited tax security ultimately secured by the city's general fund, but self-supporting, and that it's paid for by a specific revenue stream. Let's assume that's gt-r. In this scenario, the debt capacity, the policy debt capacity for that flavor of debt, the limited tax, self-supporting is just is around 200 million rounded to the nearest hundred million. And as you indicated, we we pay off debt. So as we pay off debt, that capacity starts to go up. And we have a few things on the radar too. So mostly those are a wash in this moment. Again, details are devil's in the details. But so that's the number we should be sort of thinking about as a couple hundred million. If we said we want to issue 100% of the $200 million that was recommended in the cip, we're going to do all that up front right now. We would be at our limit, our policy limit for this issuance. I don't think that's what's been ultimately proposed because we've that's a four year time frame and we wouldn't borrow for four years at a time. We'd only probably borrow 60 to 100 million maximum. So we would still a long answer to your question, but in that scenario specific to cip, we would still have some amount of capacity available to address other future needs. We know there are other needs out there, potentially some very big ones, but those will all have to come to council as as those evolving and get closer to fruition. There aren't any. I don't think the debt managers here in the room, but I don't think there's any very, very large borrowings that are on the radar for the next couple of years other than really big projects that we know are out there that could evolve into into a borrowing request.
76 So what I'm hearing is that the capacity currently does exist. Asterisk, knowing that there are some large projects that we are talking about as a city also. But as of today, the capacity does exist to do a portion of this. If we are willing to dedicate the gt-r moving forward to pay those bonds off over the next period of time.
77 That would be correct.
78 Okay. I'll give somebody else a turn.
79 And yeah, councilor Green, why don't you go ahead?
80 Yeah. Thank you. Jonas, that's that's helpful. I just kind of want to ground us a little bit. So I think when we first were talking about this in the context of the resolution, and I see director williams is still in the room, but I think at an upper bound limit on what we could potentially absorb in terms of work and capacity inside the bureaus. It was, I think, at most $50 million in a given year is I'll wait for director williams to come to the dais and answer that question herself.
81 The question is, how much could we deliver in a.
82 Yeah, like, let's just assume money was no object, which I know is a wild thing to assume at this time and place. But just from the understanding what the technical and like implementation limit is, is $50 million of work still.
83 That we could achieve $50 million of work? It would be a combination. This kind of addresses one of the points that you were making at the beginning of the of the this item. It would be a combination of our maintenance crews as well as contract crews delivering, and it would be a combination of internal design as well as consultant design for the more complex projects. So and there is the opportunity for us to based on the expertise that we have on in our on our staff right now, do what's called field fitting so they essentially could go out into a neighborhood, see what the conditions were, very quickly, go back to the office, develop a set of plans, and within x number of days or weeks, have crews out working to make the repairs. What we would propose to do is have a dedicated team to address the needs regarding cip, especially those, I hate to say low hanging fruit, but there's so many opportunities, but especially the ones that are easier for us to be able to make a quick assessment and propose a plan so we could deliver roughly $50 million of work. I will tell you that on a corridor, and I'll use 122nd as the example where there's an $11 million investment in sidewalk alone that's only a little over a mile of sidewalk. So that's not, in our view, how we are anticipating cip would be manifested. It really is a block by block, neighborhood by neighborhood, seeing how we can address things, careful to not design a program that eliminates or keeps union represented staff from being able to take advantage of the opportunities. There are thresholds that we have to be mindful of, but there is the ability and capacity for us to be able to deliver that.
84 And I appreciate that. And then reinforcing this concept of field fitting and and making, being cognizant that you can burn through $10 million like, like that. Easily and not really make much of a material impact on the broader problem. I did some calculations, jonas, and I wonder if you can maybe give me a ballpark if these are reasonable, based upon the cutter garage issuance, that was $40 million. In those terms, it was about $3.3 million of annual debt service maintenance. I calculated at 50 million same terms. It's be $3.6 million in debt service and then 10 million, which was the first number the chair kind of threw out would be $727,000 in annual service. So just wanted to provide, for the sake of the discussion, what the range of annual debt service looks like. Between $1,050 million and a $50 million is important because I, I wouldn't want us to try to go out and imagine a financial strategy that was like more than what we could achieve inside the bureau. So I think that you can respond to if you want. Jonas, I know that the treasury manager's debt manager is not here, but. And then I'll just. I'll yield for now.
85 Yeah. Councilor. I would say based upon the cutter garage results, that's accurate typically. So I had some similar kind of math here. I'm just taking a peek at at the 50 million level, we would estimate probably just over 4 million. And largely that's because we want to have some conservative cushion. We know we got very favorable results when we issued the cutter garage, but we don't want to plan for those results until we get them. So just to be clear, for the record, at that 50 million level, we would probably be assuming annual payment expectation of just north of 4 million. And then obviously, if we get better results than that, that's that's great. And we accept those lower results.
86 Thanks. I don't think I've got any more at this time. We can just kind of keep keep conversation going.
87 This is great. So I appreciate kind of hearing a little bit from the director regarding what sounds like a fitting of different types of sidewalks to the neighborhood of the geography that we're talking about, right? I love hearing that. It's important to me as a district four person. So given given that part of the conversation and knowing that it is within the realm of what we we can do is great to hear, because my mindset is how when it comes to cip, which I take cip as sidewalks that would not have otherwise been built, how do we maximize the the frontage, meaning some things are not going to be ten feet wide, some things are not going to be. Maybe well drained, some things are not going to be maybe more than just a slab of asphalt. In some places. I see a variety of situations because I'll say back in the resolution, anything was better than mud. It was my mindset in this. So I think that for me is is a parallel track. But I say that so that I can kind of frame up from a financing track where. Where we might develop a finance plan. I wonder if it is from the cfo's office in these first few years. If it is. A better assessment to go after some low hanging fruit, some projects who are we can execute them maybe in the first few and use cash payments. Or if it would be better to set up a so that we're in a debt payment situation and where we should be looking at trying to identify revenue for this project. I think the way that PCEF is helping pay for sidewalks, it's been cash payments, but I don't know that for a fact. If maybe, perhaps they're using that money for a debt payment. But I'd like to hear what your opinions are from your professional seat on, at least in the first few years, as we kind of ramp up and know what this looks like, because I do believe that there is probably somebody dedicated who's going to have to be the cip czar to really put a lens on how we're going to deploy these projects in the in the out years. But I'm just curious, jonas, what how those questions land with you and what your thoughts might be.
88 Yeah. Great questions. I appreciate the line of thought for sure. So from a generally from a best practice perspective, we would not prefer to issue debt until we have pretty strong clarity about the scope of the projects that are being funded by that debt being financed. And that's both the the body of work and the timeline. And so I say that because it's very common approach to start that work with cash. And so you get through some of that planning phase and you get through some of that initial scoping to identify what is the bigger than a breadbox, and then you identify, okay, now we know it's 80 million that we can do in the next two years, or it's 60 million or it's 140 million, and then start to scale that in comparison to revenues that are available and what trade offs may exist. So we're having that conversation. We're sort of inching our way into that conversation a little bit here. But I do think that's an a valid approach to sort of start that with, with that cash approach. Now the trade off is you don't get as much bang for your buck, right? Because if we imagine councilor Green used an example of 3.6 million, or let's say 4 million for a $50 million bond issue, if you have one year at that amount, you're only going to have three and a half, $4 million to play with. So you're not going to get a lot of in the ground work done, but you're sort of using that revenue stream as cash up front and then and then funding the kind of bigger family of of capital work down the road. The other thing I'd acknowledge, which maybe hasn't come up in this discussion, is also best practice, that typically a debt funded project would also have a cash contributed element. So so meaning we wouldn't just have debt funding, but we'd have a mix of cash and debt. Now, that's often true when you're looking at one very, very large project Portland building versus sort of a bucket of of disparate projects that all have sort of a similar, similar surname, let's say. So it's again, it's not exactly linear, but but I do think that the, the crux of your point about using some cash up front to instigate and start that project is, is consistent with best practice.
89 Thank you, mr. Barry. Let's go back to vice chair.
90 I actually wanted to take us into thinking about paying up front and where we might be able to find funds for that. I know we just talked a little bit about the benefits of it, but I'd like to dig a little deeper. Director williams, if we can. And given what we know about the finances of the bureau, we just talked a little bit about that. I'll ask a parallel question to my previous question about bond capacity coming offline. Are there places where we are paying for projects upfront right now, where there might be a little bit of funding freed up in the future because they are one time costs, not ongoing maintenance, but not not grant funded projects that we should be thinking about as low hanging dollars for funding cip? Or are we really looking at hard trade off conversations? If we want to fund some of this work up front?
91 There may be some excess on projects that is not a common occurrence, but it does happen. Right now, there are a number of projects that have, as we've gone out to bid, come in under the engineer's estimate, roughly several hundred thousand dollars, not massive amounts of money, however, enough to do a block of work, perhaps to do an alternative pathway in southwest. Perhaps. So there are there are some opportunities. I wouldn't bank on that as being a real true source that we could. Forecast delivering work against. The other alternative would be, yes, needing to potentially cut other services to provide the opportunity to do this work. The challenge that we have is if we were to cut what, what would the other services be? Because again, as we've discussed, the state package, the expectation of investment that's coming from the state would be in maintenance and operations. While cip funded, while cip projects would ultimately be maintenance. Right now they to start, they are they are new projects. And so that would be something that we would need to be really, really careful about in terms of how we account for it and how we tell the story around what we did with the investment.
92 Understood. And I don't want us chasing 100,000 here and 100,000 there for this when we you know, one of the benefits of bonding is that then you have to pay. This suddenly becomes a priority payment. So if we bond for this, the general transportation revenues are are locked in. We have to spend them on these sidewalk projects. We also know if we're willing to make that commitment without bonding. We can sometimes do the work more affordably. What are the trying to think of the best way to to word this? We could bond for this today and have a. $4 million cost to gtr next year. That would be pit against something. There's something we wouldn't be paying for. What is that something we wouldn't be paying for? And what would it mean for us to decide not to bond, but to equally prioritize that $4 million in gtr to sidewalk construction without an interest rate attached?
93 I well, I could answer the question at a 10,000 foot level. I prefer to ask that jeremy patton provide the insight he's been working on developing.
94 I would say, again, jeremy, with PBOT finance, unfortunately, we do have quite a list of potential reduction options that we had to use for last year. So we would be coming back to council and working through those options. As far as reductions, looking to the future year to to fund that 4 million. If we were looking at gtr, internal gtr funding, and we do have prioritized lists of those as well. So we have a, we have like a list of about $11 million just in case the state package didn't come through. So that would probably be the first list we would look at.
95 Okay. And if I don't think we need to go through the whole list right now, but part of what I'm trying to get us to think about is, do we need to bond to prioritize this, or can we be disciplined and prioritize this without bonding? And I think it's I have seen too many public bodies say, let's just bond for it. It's fake money. We pay for it later. It sounds to me like we have the same trade offs in gtr, whether it's paying for bonds or whether it's paying outright upfront for the sidewalk construction. If we're going to be having the same trade off conversation no matter what, then I hope what we can do as the finance committee is focus on whether it's a better financial path to bond or to pay upfront, and to not worry that we have to bond to prioritize the funding, but to just say we want to prioritize x amount, we know we will have to make trade offs and which is the better financial decision, bonding or not.
96 Let's go to councilor Green.
97 Thank you. You mentioned that that was interesting to me, which is that it's generally a good practice to identify the list of projects that you want the bonding to pay for is that I'm sure there's a number of reasons for that. But, but but is a primary reason. Because how well you place the bonds. And at what price does that? Does that matter on market.
98 That is not councilor is as important to the market. I mean, we want to know for a couple of reasons. I'd say it's good, good practice, best practice for a couple reasons. One is we do need to identify upfront that we expect to spend the proceeds down within a certain time frame, and that is a requirement of the bond issue. So having clarity about the projects makes it easier to make that determination. So that's sort of piece one. Piece two is it's not great practice to just be sitting on a pool of cash and then say, well, gee, we hope to spend this down over the next year or two. And so that's really why it's sort of the best, best practice is to have clarity around those specifics and details. You know, ultimately, the market just cares about whether we have the resource to pay it back.
99 I can appreciate that. And I do think if I recall from the text of the resolution, there was some intentionality to study a list of projects that we might want to do with this bond finance. So there's a bit of a sort of who's on first aspect of this conversation, but I but I kind of got my wheels turning a little bit when you mentioned that because I, I think and I wasn't here for this, of course, but but the build Portland bonds that we issued back in I think 2017, 2018, around that time period that ted wheeler had created an initiative around. I don't think that that identified all the projects that we would do with those bonds, if I'm not mistaken.
100 It did. It did.
101 It did. Okay. All right. Well that's good. Okay. So I think I'm hearing my colleagues talk about maybe figuring out how we might prioritize even with small money. I do think bonding is important to do this type of work, because you have to do this work at scale, and bonding provides the resources for the scale. And I also see councilor Smith out there who has a lot of ideas about cip, and I wonder if we're going to get an opportunity to hear from her today.
102 I'm happy if councilor Smith wants to join the the staff at the table. You're welcome. Councilor.
103 Thank you.
104 Don't go away. Thank you. Chair Zimmerman and vice chair pirtle-guiney and the rest of the finance committee. As I was listening to this, there was a piece of this that was left out. We we also passed a resolution for summer works and apprenticeship programs. And I think where we may find some savings is through using our summer works program and using some of our already committed dollars that we use for apprenticeships. And so I want to make clear that we have an opportunity to hire folks from district one that would work on this project, and that we could help folks to begin to get their go from apprenticeship to a journeyman. And that piece was kind of left out of the conversation. I do like to to have an overlay. I think the important thing that you said, councilor, was, are these projects going to be projects that wouldn't have ordinarily been done? And there is a way that we can do that, because the resolution calls for PBOT to put together a four year plan that you can lay over what we're already doing, and then you can begin to prioritize some of those sidewalks and filling of the potholes and paving. And you're absolutely right. We won't need drainage for all of these places. It will just have enough room just to have some paving. But it keeps you away from the street. The the issue and around sidewalks is real. Everyone in this city needs neighborhoods that they can feel safe and secure walking to school and and to parks and those kinds of things. So I think the conversation that you're having today is important. It's critical. If we limit ourselves to the gt-r money, I think we're doing ourselves a disservice. I think there's a bigger conversation. We do have general fund money that also can back back a bond limited revenue bond project. I think the money is there. I think that we just have to manage the bigger $8.7 billion. So if we limit ourselves just to the money that's in transportation, I think we're going to be doing ourselves a disservice.
105 Thank you, councilor.
106 Thank you.
107 So, colleagues, I'm this is an open discussion in terms of where we want to go. So as we sit here, part of part of my thoughts are, you know, what does. What does it take to get some some proposals, packages put forward so that there can be consideration by the finance committee and ultimately by the budget committee, the whole council. And. With that, I think there comes some some PBOT work as well in terms of the scoping, what's available et-cetera so that we have, you know, a strong project body, body of the project and a timeline to jonas's point, if we're going to if we're going to bond and we want to have the meat on there so we know what we're talking about. So I'm kind of looking around and I think about, all right, we're coming up on the holiday season, which means right after that we are fully into the preparation of the budget season. And so my gut is telling me is that right now is the time for this work to take place, so that this is a major topic in next year's budget discussion. And this is an opportunity for us as a council to send a signal to the administration that we expect to see something on this topic, whether it be and that we're, I think, inviting an opportunity to get some counselors to work with the staff on crafting these courses of action. And I'm saying that kind of out into the void to see who shakes their head up and down and who shakes it side by side. And I'm mostly seeing some up and downs like this is we're going toward we want to have a budget ask in the next budget relative to implementing the cip project. Am I talking out of turn to any of my councilors or to the cfo? Okay, we're all we're all seeming like we're in agreement in terms of that's the direction we need to be going. Vice chair, do you have some comments?
108 I just want to say I think that's absolutely the policy direction we need to go. And how vigorously I shake my head. Yes, will depend on what funding sources come next. As you continue to lead us down this path.
109 Councilor Green.
110 Yeah, I appreciate the structured approach. I, I think about if we want an ordinance for funding to come before this body or the broader body in advance of the next budget cycle, it needs to start here. We need to start having these kind of deliberative conversations. It's in some sense, in the same spirit of like doing pre-work for the budget, the big budget, by having these conversations here, I'm signaling my appetite to do something, even if it's at the lower end of that bracket, just to start the work. I know that in well, in our district, there are some goat paths that could be reinforced and some shoulder widening that would that would connect some neighborhoods that are disconnected. And that's pretty cheap, relatively speaking. Nothing's cheap in this city. But so I think even at a smaller amount where we have like maybe $1 million a year in debt service, that that could be very meaningful to some of our communities. And so I'm willing to kind of put some work towards that and thought here in public.
111 Okay.
112 Any comments?
113 Okay. We're not going to take any actions. But I think what we're seeing here, director williams and cfo beary is, I think a willingness that it's it's probably time to put together a strike force, if you will, in terms of a few members of council, not a quorum of this committee, certainly. But let's start trying on some ideas and get an idea for appetite so that we can then bring back a a proposal that already has some roots in, in counselors, you know, decision making. And I think that it's reasonable to bring those back in January to, you know, to February as as the budget season really kicks off, if we can try on a variety of of different funding packages where we might make up debt, I think that a mixture of payments, a mixture of resources to pay for an overall debt payment are all things that that we're going to want to see this group work on. And so I think I'll work with my colleagues up here in terms of who wants to engage off of committee time. And then you and I can work on maybe who who helps round out this thought process, and we can set up a thing for the next quarter so that we can bring something back to this committee for for a larger discussion and hopefully eventually passage from here to the full council and, frankly, nomination to the administration for inclusion into the to the budget document come the new year. I'm going to pause in case there are any comments from my colleagues before I go back out to the table. Mr. Beary, anything else you want to round out or any other topics you'd like us to get into today?
114 Sticking just to this topic, chair. Thank you. No, I think that sounds like a great plan. And yeah, I'm happy to help take the lead in assembling that group and moving that conversation forward to come back. I think January February is great. We're going to be having budget conversations. And so I think that's a appropriate path forward.
115 I appreciate everybody participating in an open ended discussion. But on an important topic, this is one of those those items that got a lot of attention from this council. And for me, from where I sit, it's one of those items that is most representative of the district lens having an impact on our work. And so it may be a first for us in some areas. But now that we've got the value set, we have an idea of what the state transportation package did or did not provide. I thought it was appropriate that this would be the time that we start bringing together this course of action development for how to fund cip. So appreciate you all participating, giving your insights and bringing, you know, a variety of ideas in terms of how we can either cut costs, how we can think about the scope of projects and leverage money and the responsibility of leveraging or cash payments is all really helpful to get out there. So thank you, everybody, and thank you to my colleagues for participating. All right. Okay, colleagues, I'm looking down to make sure that I've got our dates right. Our next finance committee was going to be on Monday, December 8th. And just to preview some of that, I'm going to put it in. Some items are housekeeping or necessary and some items are more substantive. So we'll have a preschool for all iga. We have a reserve contingency policy discussion. The act for I won't even bore you with what that's all about. And our internal services fund and some assessments from PBOT looking to see there's no other closing comments. And with that, we are adjourned.