Budget Overview

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Breadcrumb: Budget Overview

Budget Overview Budget Overview

Budget Overview A Guide to the Budget Overview The City of Portland (the City) budget document for FY 2025-26 serves as a fiscal, programmatic, and policy information guide. The document is organized to provide Citywide information at levels of increasing detail. Within the budget document, the City’s budget decisions and financial information are presented from a variety of perspectives. There is special emphasis on the General Fund as it contains the discretionary resources available to the City, resources that can be allocated to any City program. Summary financial tables are located in the Financial Summaries section of this document. Strategic Goals and Strategies Council Vision, Vision Mission, Values, and We aspire to be a beautiful, safe, and clean city of choice for ourselves and future Goals generations - a city with a healthy and sustainable economy, strong businesses, vital neighborhoods, a diverse population, excellent schools, a vibrant downtown, an honest government that is open and participatory, extensive recreational and cultural opportunities, a healthy environment, and sufficient housing stock to meet our needs. Mission The City of Portland is a responsive and accessible local government that strives to continually identify and seize opportunities to improve the quality of life in our community. We work to support civic excellence and effective, responsive community and intergovernmental partnerships.  We provide urban services to meet the public health and safety, transportation, environmental, recreational, planning, and neighborhood livability needs of our residents and visitors. We are responsible for providing clean and safe drinking water and for the maintenance of the City’s water system. We are responsible stewards of our City’s fiscal health and resources. We utilize a diverse, skilled, and dedicated workforce to provide seamless service to our community members and visitors. We strive for excellence in all we do. Values The Portland City Council unanimously passed Resolution 37492 on June 17, 2020 adopting Anti-racism, Equity, Transparency, Communication, Collaboration, and Fiscal Responsibility as Core Values of the City of Portland. These values inform a unified workplace and city culture, systems, policies, practices, and procedures.  Anti-Racism: The City of Portland is committed to being an anti-racist institution. Addressing issues concerning anti-Blackness and anti- Indigenousness are a priority for the workforce and city. Actions to dismantle institutional and systemic racism are the responsibility of every employee and resident. Racism, discrimination, and bias are not tolerated within the workplace or our communities. Oppression, violence, and hate speech towards Blacks, Indigenous, and people of color, is condemned by the City of Portland. 18 City of Portland, Oregon - FY 2025-26 Proposed Budget

Budget Overview  Equity: The intersectional identities and lived experiences of our workforce and our residents are valued. We acknowledge Oregon’s history of exclusion and are dedicated to building trust through reconciliation and restorative justice. Solidarity and the preservation of diverse communities and their cultures enhances the livability and vibrancy of our beautiful city. Equity, access, and the removal of institutional and systemic barriers to resources and opportunities is essential in diversifying our workforce and the public good. We lead people, cultivate change, and develop a culture of innovation, inclusion, and inspiration to strengthen our city and communities. The sense of belonging, ownership, support, and safety are vital for a diverse, equitable, and inclusive city and workforce.  Transparency: Transparency is essential to upholding the principles of democracy, and reimagining political processes occurs through accountability. Portland, Oregon is the first city in the United States to adopt an Open Data policy and leads the nation in developing a culture of information sharing. Trust is established and maintained through integrity and inclusion.  Communication: Communication serves as a catalyst for transformative change, and knowledge sharing will impact our workplace and communities. The art of storytelling and narratives can promote a culture of inclusion, and the power of our collective voice will unify our city.  Collaboration: Our belief that we are Better Together promotes collaboration and the cocreation of knowledge. The nexus of politics and public service will connect our workforce and communities. Civic engagement and collective action will empower our employees and residents. Institutional knowledge and awareness are gained through inclusive outreach and public engagement. All behaviors, actions, decisions, and systems shall reflect a culture of accountability and commitment to the City’s core values.  Fiscal Responsibility: The City of Portland is dedicated to being fiscally accountable to the public. Fiscal resiliency, climate action, equity, and the needs of our most vulnerable populations will be the focus of every budget decision. Community values, addressing inequities, and transparent budgetary decisions are essential to developing trust. Rethinking budget processes will ensure the economic sustainability of our city. City of Portland, Oregon - FY 2025-26 Proposed Budget 19

Budget Overview Goals The City of Portland has for many years ascribed to and worked towards the following strategic goals. The City will be updating and aligning these goals with updated values per Resolution 37492.  Ensure a safe and peaceful community Protect life Preserve property Promote community responsibility, commitment, and preparedness  Promote economic vitality and opportunity Support quality education  Provide high quality, reasonably priced public utility services  Create an attractive location for businesses and jobs  Improve the quality of life in neighborhoods  Ensure growth and development are well managed  Provide access to transportation and recreation services  Provide affordable housing and reduce neighborhood nuisances  Protect and enhance the natural and built environment  Protect the city’s land, water, air, and open spaces  Provide safe drinking and wastewater services  Protect endangered species  Operate and maintain an effective and safe transportation system  Provide multi-modal transportation choices  Maintain and improve street conditions  Support economic development and neighborhood livability  Deliver efficient, effective, and accountable municipal services  Deliver responsive, competitive government services  Maintain healthy City financial condition  Manage government to achieve goals Total City Budget The total City budget is Total City Budget decreased by $452.0 million State of Oregon Local Budget Law requires the City to report its total legal budget. from the FY 2024-25 Revised This is defined to include total operating costs and the internal transactions Budget. between funds. The total Proposed Budget for FY 2025-26 is $8.5 billion, which reflects a $452.0 million (5.0%) decrease from the FY 2024-25 Revised Budget. Total Net Budget Although state budget law requires that all expenditures within and between funds are documented in the legal budget, this overstates actual expenditures for programs because it double counts internal transactions (internal materials and services and fund-level cash transfers). Such transactions occur between City funds, when one City agency provides services to another. Because this technically inflates the budget, the City usually references a net budget. After eliminating the intracity transfers, the City’s net Proposed Budget in FY 2025-26 is $6.4 billion. Table 1 of the Financial Summaries provides greater detail of the total and net City budget figures. 20 City of Portland, Oregon - FY 2025-26 Proposed Budget

Budget Overview General Fund Budget General Fund resources are categorized as either discretionary or nondiscretionary. Discretionary resources are those the City Council can allocate to programs and services in any area. In other words, these resources have few restrictions on how they can be allocated. General Fund discretionary resources are typically used to support such basic City services as police, fire, and parks. Discretionary resources total $803.7 million and include property taxes, utility license fees, business license fees, transient lodging taxes, state shared revenues (from cigarette taxes and liquor sales), interest income, miscellaneous revenues, and cash transfers into the General Fund. Non-discretionary resources include interagency revenues, service charges, permits and fees, and other revenues specifically dedicated to a particular purpose. All General Fund resources are also categorized as either one-time or ongoing. An example of a one-time resource is an increase in beginning fund balance. While available in the specific year, it is not a resource that can be relied on in future years. An example of an ongoing resource is an increase in property tax revenues that would be sustained over time. The City budget uses a combination of one-time and ongoing resources to fund programs and services. City financial policies state that one-time resources may not be used to fund ongoing expenses. Budget Process Local Budget Law Local government budgeting in Oregon is governed by Local Budget Law, Chapter 294 of the Oregon Revised Statutes. The law has two major objectives:  Provide standard procedures for preparing, presenting, and administering local budgets  Ensure citizen involvement in the preparation of the budget Budgeting in Oregon is an effort shared by residents and elected and appointed officials. Residents involved in the budget process work to ensure the services they require and want are adequately funded. City officials are responsible for building a budget that reflects the public interest and is structurally correct. The Tax Supervising and Conservation Commission (TSCC), a five-member citizen board appointed by the Governor, reviews the budgets of all governmental jurisdictions in Multnomah County. The TSCC, together with the State Department of Revenue, is responsible for ensuring the City budget complies with Local Budget Law. Budget Officer and To give the public ample opportunity to participate in the budget process, Local Budget Committee Budget Law requires that a Budget Officer be appointed and a Budget Committee formed. The Budget Officer prepares the Proposed Budget under direction of the Mayor. The Budget Committee then reviews and revises the Proposed Budget before it is formally adopted by the governing body. For the City, the Budget Officer is the City Budget Director, and the Budget Committee consists of the members of the City Council. City of Portland, Oregon - FY 2025-26 Proposed Budget 21

Budget Overview Notices are published, budgets are made available for public review, and opportunities for public comment are provided. Opportunities for public comment were offered online and via a public hearing on the Mayor’s Proposed Budget. These actions encourage public participation in the budget decision making process and give public exposure to budgeted programs and fiscal policies prior to adoption. Preparing the Bureaus prepare Requested Budgets in accordance with direction given by the Proposed Budget Mayor. These are submitted to the City Budget Office, which then analyzes the requests and provides recommendations to the Mayor and Council. Acting as the Budget Officer, the Budget Director is responsible for overseeing the preparation of the Mayor’s Proposed Budget for presentation to the City Council, sitting as the Budget Committee. The Proposed Budget is the culmination of an extensive process of budget development, analysis, and revision. Public Involvement The City engages in a proactive public outreach effort as part of the budget process. Process In the past, to ensure that all stakeholders were involved in the budget development process, bureaus were directed to utilize the Budget Advisory Committee (BAC) process that included management, labor, customers, and internal and external experts. These committees reviewed the bureaus’ draft budget requests, and provided input on proposed decision packages. BACs played a role in the City’s former government structure, where each bureau independently developed its own proposed budget. This siloed approach meant that BACs were primarily focused on a single bureau’s programs and needs, without considering the broader financial needs of other services and programs across the City. With the transition to the new government structure—where bureaus are now grouped into service areas and budget development is guided by Deputy City Administrators and the City Administrator—budgeting is now approached holistically, ensuring that financial planning reflects the City’s overall priorities and resources. As a result, the City is reevaluating how BACs may align with this new framework. Reviews conducted by the City’s Budget and Finance Staffing and Budget Process consultant and the Government Transition Advisory Committee (GTAC) found the effectiveness of BACs varied significantly. Both GTAC and the consultant recommended the City conduct a comprehensive assessment of all advisory bodies before making further changes. The City Budget Office is working with the City’s Engagement Officer to establish new committees that build on past lessons, ensuring their purpose and structure are clearly defined for long-term success. BACs will be replaced with committees better aligned with the City’s new structure and budget process, fostering more effective and inclusive community engagement. The City convened four hybrid town halls to allow community members to provide their input to the City Council. The City Budget Office continues to collect and make available the shared electronic public comments and testimony on the budget via a form provided on the CBO website (https://www.portland.gov/budget/ ↗ comment-and-testimony). Additionally, the City will convene a public hearing with open public comment on the Mayor’s Proposed Budget on May 7, 2025. 22 City of Portland, Oregon - FY 2025-26 Proposed Budget

Budget Overview Budget Web Site The City maintains a community budget web page: www.portlandoregon.gov/ ↗ budget. The site contains bureaus’ Requested Budgets, an interactive budget dashboard, financial analyses of the requests, current and historical budget documents, and other financial reports. Portland Utility On June 10, 2015, City Council adopted Ordinance 187174 creating a Portland Board (PUB) Utility Board (PUB). The PUB is an appointed body of 11 community members who advise the City Council on financial plans, capital improvements, annual budget development, and rate setting for the City’s water, sewer, and stormwater services. Direct Public Community members may directly contact the Mayor and Commissioners with Testimony input for the budget. In addition to participating in advisory committees like the PUB and community budget forums described above, community members also have several opportunities to personally testify on bureau budget requests: Annual Budget Hearings - the City Council, sitting as the Budget Committee, holds one or more public hearings before the budget is approved. The public may testify on any budget topic during these hearings or submit testimony via email. Tax Supervising and Conservation Commission Hearing - public testimony is taken during the TSCC hearing on the City’s Approved Budget. Adopted Budget Hearing - testimony is taken at the City Council session for the final adoption of the budget. Approving the In accordance with Local Budget Law, the City Council will convene as the Budget Budget Committee to consider the Proposed Budget. Announcements advertising the Budget Committee meetings are printed in local newspapers. The public is encouraged to attend and provide testimony on the Proposed Budget. The timing and frequency of the public notices are governed by Local Budget Law. The Budget Committee meets to accomplish the following four actions:  Receive the budget message and budget document  Hear and consider public testimony  Review and approve a balanced budget  Approve the rate for property taxes The Budget Officer may provide a copy of the Proposed Budget to each member of the Budget Committee at any time prior to the first Budget Committee meeting. The budget becomes a public record at this point. At the first Budget Committee meeting, the Mayor delivers the budget message, explaining the Proposed Budget and significant changes in the City’s financial position. After the initial meeting, the Budget Committee may meet as many times as needed to revise and approve the budget. The City Budget Office summarizes the changes from the Mayor’s Proposed Budget to the Approved Budget. This information and copies of the Proposed Budget are sent to TSCC for review and analysis. City of Portland, Oregon - FY 2025-26 Proposed Budget 23

Budget Overview Tax Supervising & Conservation Commission Hearing TSCC is responsible for reviewing, holding hearings, and producing a report on the budgets of every jurisdiction in Multnomah County. They hold a required public hearing, with Council in attendance, on the Approved Budget. The outcome of this hearing is a letter certifying that the budget is in compliance with Local Budget Law. The letter may contain recommendations and/or objections. The City is responsible for addressing any objections or recommendations. Adopting the Budget City Council votes to officially adopt the budget before the start of the new fiscal year on July 1st. Changes that are allowed between the time the budget is approved and final adoption are defined by Local Budget Law and are limited. Changes normally include technical adjustments and carryover amendments. Amending the Budget Changes after budget adoption are completed through the Technical Adjustment Ordinance (TAO), which includes a supplemental budget. During the TAO, bureaus can request to transfer appropriation. In supplemental budgets, bureaus may ask to increase appropriation. The TAO and other supplemental budgets provide Council the opportunity to change the budget three times a year. 24 City of Portland, Oregon - FY 2025-26 Proposed Budget

Parent: Portland FY 2025-26 Proposed Budget · PDF: pp. 21-28 ↗