City Operations -- Intro

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City of Portland Fiscal Year 2026-27 Proposed Budget City Operations City Operations Overview The City Operations Service Area delivers centralized operational, administrative, and support services that enable City bureaus to function effectively and provide core services to the City. This service area includes functions such as facilities and fleet management, internal service programs, performance and administrative support, community oversight, and citywide initiatives that support operational continuity, transparency, and accountability. City Operations plays a critical role in maintaining the City’s physical assets, supporting internal service delivery, and providing direct services to the public, including access to information and complaint resolution through programs such as PDX 311 and the Office of Community-based Police Accountability. The service area also supports enterprise priorities through emerging functions such as integrated security, data governance, and performance management. Drivers of the Forecasted Budget Gap As of the February submission, the City Operations Service Area faced a structural General Fund gap driven by a combination of factors: Rising personnel and operating costs outpacing available General Fund resources Limited flexibility in reducing costs without impacting service delivery Increasing demand for services, particularly in customer-facing and safety-related programs Structural imbalances in certain programs where ongoing costs exceeded sustainable revenue levels Additionally, several Internal Service Fund bureaus were required to develop reduction scenarios to align expenditures with projected cost recovery and demand. Consistent with citywide direction, bureaus developed reduction options at varying levels (3%, 10%, and 5% depending on fund type). Across the service area, there were no reduction options that avoided service impacts, and all proposals required tradeoffs affecting service levels, capacity, or operational risk. Summary of Proposed Budget Actions The FY 2026–27 Proposed Budget closes the service area gap through a combination of: Targeted expenditure reductions Programmatic and staffing adjustments Realignment of functions to improve coordination and efficiency Select investments in priority areas to address risks and policy decisions The approach prioritizes maintaining core services and major operational functions while implementing reductions in a manner intended to minimize disruption where possible. Expenditure Reductions and Service Impacts 416

City of Portland Fiscal Year 2026-27 Proposed Budget Reductions across the service area primarily focus on operational efficiencies, staffing adjustments, and scaling back service levels where necessary. The Bureau of Fleet and Facilities implemented a combination of reductions across facilities and fleet operations, including eliminating positions, reducing contracted services, and modifying service levels. While impacts are considered manageable in the near term, some reductions increase operational risk, including reduced preventive services and potential impacts to facility conditions. The PDX 311 program includes a mix of structural and service-level reductions to address a current service level imbalance. These actions reduce staffing and operating hours, resulting in decreased customer service capacity, longer wait times, and fewer annual contacts handled. At full implementation of reduction options, service capacity could be reduced significantly, with corresponding impacts on community access and workload shifts to other bureaus. Special Appropriations reductions decrease discretionary funding available for external partners, including reductions to competitive grant programs. While contractually or code-mandated programs are preserved, remaining funding is reduced proportionally, limiting the City’s ability to support community-based organizations. Additional reductions within the service area include targeted staffing adjustments and position reclassifications, which reduce internal capacity for program management, analysis, and administrative support. Strategic Investments and Priority Adds The Proposed Budget includes targeted investments to address critical operational needs, policy requirements, and emerging risks. Key investments include: Expansion of integrated security services to support a more proactive and comprehensive approach to protecting elected officials and City facilities Additional funding for the Office of Community-based Police Accountability to support required growth in staffing, space, and operations, consistent with code-mandated funding levels Funding to address the City’s participation in the Portland Metro Levee System, ensuring continued engagement in a major regional infrastructure and safety project Initial investments to support the development of a Data and Privacy Office and associated technology infrastructure These investments reflect areas where reductions were not feasible due to legal requirements, safety considerations, or high- priority policy direction. Realignment and Organizational Changes The Proposed Budget includes several realignment actions intended to improve coordination and strengthen enterprise service delivery. Key changes include: Realignment of PDX 311 staff to the City Administrator Performance Office to support enterprise performance management and continuous improvement Establishment of a Data and Privacy Office through the consolidation of existing and new resources Initial steps toward centralizing administrative and analytical functions within the service area These changes are designed to align resources with the City’s new organizational structure and governance model, improve accountability, and support more consistent service delivery across bureaus. 417

City of Portland Fiscal Year 2026-27 Proposed Budget Overhead and Service Delivery Model As part of the broader organizational transition, the service area is continuing to evolve its approach to administrative overhead and shared services. The emerging model is intended to: Centralize certain administrative and analytical functions Improve consistency in service delivery across bureaus Increase transparency in cost allocation and resource use Support enterprise-wide priorities through coordinated staffing and management structures Further details on the overhead model and resource allocation will be incorporated as citywide frameworks are finalized. The FY 2026–27 Proposed Budget for the City Operations Service Area reflects a balanced approach to addressing a significant structural gap while maintaining core operations. Reductions were implemented where necessary, with clear service impacts, while targeted investments were preserved or added in areas of critical need. The service area continues to navigate the challenges of limited resources, increasing demand, and organizational transition, and the Proposed Budget positions City Operations to sustain essential services while adapting to the City’s evolving governance and operational model. Budget Program Expenses 2024-25 Actuals 2023-24 Actuals 2025-26 Revised Budget 2026-27 Proposed Bureau of Fleet & Facilities $111,101,155 $91,094,785 $193,679,109 $153,483,456 Bureau of Human $204,021,005 $177,321,457 $210,858,119 $226,214,276 Resources Bureau of Technology $93,213,704 $89,910,131 $103,845,226 $102,689,424 Services City Budget Office $3,921,375 $4,033,938 $4,687,141 $4,362,705 Fire & Police Disability & $218,866,343 $205,009,802 $241,015,382 $258,672,645 Retirement Office of City Operations $34,755,880 $30,340,880 $48,946,842 $50,935,678 Office of Community-Based $62,414 $0 $2,104,114 $16,132,779 Police Accountability Special Appropriations $16,933,931 $15,510,756 $13,026,555 $9,536,481 Grand Total $682,875,808 $613,221,748 $818,162,488 $822,027,444 418

Parent: City Operations