Community & Economic Development -- Intro

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City of Portland Fiscal Year 2026-27 Proposed Budget Community & Economic Development Overview The Community and Economic Development Service Area (CEDSA) focuses on economic development, urban development, housing, climate, arts and culture, spectator venues, and children and families. The CEDSA bureaus rely on a variety of funding sources, including a relatively small portion of General Fund as well as dozens of additional sources, many of which are dedicated toward addressing specific City and community priorities. With over 70% of CEDSA's budget going directly to community via grants, loans and similar programs, we work to ensure Portland's future is resilient, sustainable, and prosperous. The Community and Economic Development bureaus have worked to build a fiscally responsible budget plan. In developing cut scenarios this year, bureaus prioritized realistic, implementable reductions that align with legal requirements, Council and Mayoral priorities, and community needs. This cover letter provides highlights of the Proposed budget decisions and high-level impacts on services. Please refer to bureau narratives or program offer narratives for additional and more specific budget information. Portland Permitting & Development Development permitting activity in Portland has been impacted by high interest rates, low investor confidence, negative public perception of Portland, and declining market value for existing buildings since the pandemic. PP&D revenues have declined substantially in recent years due to low development levels, which are expected to continue into FY 2026-27 and beyond. A portion of the tree permitting function transferred from Parks to PP&D on July 1, 2024 which was entirely funded by fees. Fees were set below cost recovery while they were at Parks and remain below cost recovery today. An interagency agreement was established with the expectation that the funding would supplement fee revenues to fully support the program. Parks is eliminating its interagency support for this work at PP&D. Additionally, in October 2025, the remaining tree permitting functions were transferred from Parks to PP&D. Since that time, PP&D has been working to understand the funding levels necessary to continue prior years’ service levels for the program and has identified an annual shortfall of approximately $3.2 million to achieve those service levels. To address these issues, this budget reduces the tree permitting functions by 14.0 FTE, bringing staffing to levels that can be supported by the program’s resources. The reduction will yield a programmatic shift resulting in changes to service expectations and policies. The program will likely experience significant delays to permitting and compliance timelines, an inability to effectively implement Title 11 (Tree Code) requirements, increased non-compliance with Title 11, and a loss of resiliency in the program’s responsibilities. Prosper Portland General Fund reductions in the FY 2025-26 budget and declining property values in several of the new TIF districts present decreases to the current year budget, as well as potential longer-term impacts to implementing the city’s economic development strategy, AdvancePortland, as well as future projects and programs. The General Fund allocation for FY 2025-26 resulted in a 22% decrease in ongoing General Fund. $2.1 million was added back as one-time funding, expiring on June 30, to maintain programming supporting multiple program staff and administration, as well as Workforce Development programming. The expiration of the $2.1 million one-time funding along with additional ongoing General Fund reductions included in the Mayor’s Proposed Budget will reduce current service levels for Prosper Portland staffing and administration across the agency in support of 264

City of Portland Fiscal Year 2026-27 Proposed Budget General Fund programs as well as reduce workforce partner funding and small business technical support through the Inclusive Business Resource Network. The Mayor’s budget decisions adds back $2.1 million in one-time funding partially restores the current year loss of Workforce Development funding. The one-time funding also supports program delivery of the Storefront program and workforce development, enabling Prosper to expand the Prosperity Investment Program grant, a matching funds program for tenant improvements, beyond TIF districts, including Downtown. This expansion is a key action item of the Supporting Portland’s Storefronts report that was brought to City Council in February 2026. This add-package supports action item D.4 of the report, expanding the Prosperity Investment Program. The combination of changes in ongoing and one-time funding, as well as changes in non-General Fund expiring one-time funding will result in an estimated reduction of 900 workforce participants (56% decrease from FY26) and 175 fewer small businesses served (31% decrease to IBRN from FY26). Portland Housing Bureau As previously disclosed to Council, approximately $106 million of PHB resources has been identified as unbudgeted housing funds. PHB looks forward to continuing to work with Council and supporting their deliberations and decision-making about these funds, which will have significant operational implications for the bureau once the final package of programs is decided upon. The City’s 10% cut scenario results in the elimination of two vacant Data Analyst positions which curtail PHB’s capacity to support policy analysis and development. This will slow the bureau’s ability to integrate work related to initiatives such as the Unified Housing Strategy, implementation of the social housing study, and the upcoming Inclusionary Housing calibration study. The elimination of a dedicated technology services position reduces the bureau’s ability to design software solutions, particularly related to its housing financing work. Other cuts will be absorbed by reducing expenses such as consultation, training and travel. Bureau of Planning & Sustainability The Bureau of Planning and Sustainability (BPS) will see 10% cuts in the Climate, Community Technology and Internal Services divisions, which are already facing current service level funding gaps. Planning will take a 5% cut. These cuts will have significant impacts to the Climate, Community Technology, and Planning divisions. The Climate Division will eliminate the Home Energy Score program, all professional/technical support for the Renewable Fuel Standard, all membership dues for peer city networks and organizations like Carbon Neutral Cities Alliance, Urban Sustainability Directors Network, Northwest Energy Coalition, Zero Energy Ready Oregon, Oregon Solar + Storage Industries Association, and the Community Energy Project. The Community Technology division will pause the Digital Inclusion Fund grant program, which will impact community organizations doing work to improve digital literacy and access. Community Technology’s Digital Inclusion Fund has been nationally recognized by the National Digital Inclusion Alliance for 10 consecutive years. Planning will need to eliminate two of five permanent planning staff assigned to Area/District Planning. These cuts will limit the division’s ability to take on new projects, and the Planning program overall will have less capacity to be responsive to evolving priorities, development trends, and the priorities of elected leaders. The BPS Graffiti Abatement program manages contracts with private firms to clean up graffiti impacting small businesses, coordinates dispatch of graffiti reports to other government agencies, coordinates with law enforcement and volunteer efforts, and supports mitigation of livability issues identified by Portland Solutions. The program has been operating with an elevated level of service in recent years with one-time money. The Mayor’s budget provides $970,000 in one-time resources to continue this level of service. These resources allow the program to clean up an estimated 565,000 square feet of graffiti annually. This translates into over 2,500 instances of graffiti abatement assistance to small businesses. 265

City of Portland Fiscal Year 2026-27 Proposed Budget On October 13, 2025, the Mt. Hood Cable Regulatory Commission (MHCRC) passed a resolution recommending that the member jurisdictions withdraw or dissolve the MHCRC by June 30, 2026. This decision is prompting a series of technical decision packages in BPS’s budget. Office of Arts & Culture During the FY25-26 budget process, bureaus were directed to take an 8% reduction to ongoing General Fund allocations. The Office of Arts and Culture’s General Fund allocation was double cut (16%) during the transfer from Vibrant Communities Service Area to CEDSA. The FY25-26 Fall TAO restored $357,184 in one-time resources. This rectifies the double cut and restores $357,184 in ongoing resources. Additionally, the Office will support a 10% ($373,384) reduction by reducing event sponsorships by 5-10 sponsorships for arts and culture events and cutting approximately 45-55 small grants to individual artists. Office of the DCA The Mayor has proposed $200,000 to support the Visit Downtown Campaign, a joint initiative between the City of Portland, Portland Metro Chamber, and Downtown Portland Clean & Safe. This funding directly supports marketing and programming that benefits downtown retailers. The Visit Downtown Campaign is essential in promoting businesses, driving foot traffic, and creating a more vibrant, thriving downtown. Metrics tracked include number of media placements about downtown Portland, website visits, digital ad impressions, social media followers, pedestrian counts, and earned media results. Budget Program Expenses Program expenses only include personnel, internal materials and services, external materials and services, and capital. 2024-25 Actuals 2023-24 Actuals 2025-26 Revised Budget 2026-27 Proposed Bureau of Planning & $82,262,506 $54,773,895 $542,096,685 $276,749,723 Sustainability Office of Community and $44,856,762 $8,533,739 $57,267,885 $42,803,781 Econ Development Portland Children's Levy $28,613,199 $27,665,306 $27,157,382 $29,307,902 Portland Housing Bureau $175,099,270 $169,470,731 $258,990,447 $187,158,625 Portland Permitting & $81,426,099 $77,429,190 $80,143,250 $86,192,033 Development Prosper Portland $22,294,913 $24,385,666 $20,819,160 $16,217,971 Grand Total $434,552,748 $362,258,526 $986,474,809 $638,430,035 266

Parent: Community & Economic Development