Water Bureau -- Intro

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City of Portland Fiscal Year 2026-27 Proposed Budget Public Works > Water Bureau Water Bureau Budget Revenues by Major Object 2023-24 Actuals 2024-25 Actuals 2025-26 Revised Budget 2026-27 Proposed External Revenues Bond & Note Proceeds $79,655,396 $426,181,397 $559,500,000 $591,000,000 Charges for Services $262,050,751 $278,353,886 $296,797,291 $296,951,851 Intergovernmental $891,530 $819,007 $920,000 $800,000 Licenses & Permits $0 $0 $0 $0 Miscellaneous $13,447,393 $12,963,940 $21,923,409 $27,908,946 Miscellaneous Fund $0 $0 $2,363,112 $2,440,000 Allocation Internal Revenues Beginning Fund Balance $264,945,411 $279,646,579 $354,176,282 $391,414,997 Fund Transfers - $275,440,090 $478,069,725 $940,794,278 $787,136,119 Revenue Interagency Revenue $5,210,620 $6,078,242 $7,035,227 $6,884,347 Miscellaneous Fund $0 $0 $0 $0 Allocation Grand Total $901,641,190 $1,482,112,776 $2,183,509,599 $2,104,536,260 Expenses Expenses by Major Object 2023-24 Actuals 2024-25 Actuals 2025-26 Revised Budget 2026-27 Proposed Bureau Expense $272,543,800 $515,501,380 $858,056,657 $748,052,425 Personnel $99,150,857 $103,501,190 $108,539,145 $106,630,454 External Materials and $49,682,458 $89,950,571 $85,929,921 $67,068,297 Services Internal Materials and $26,520,145 $33,503,071 $38,094,591 $43,065,889 Services Capital Outlay $97,190,340 $288,546,548 $625,493,000 $531,287,785 942

City of Portland Fiscal Year 2026-27 Proposed Budget 2023-24 Actuals 2024-25 Actuals 2025-26 Revised Budget 2026-27 Proposed Fund Expense $349,902,616 $737,926,605 $1,213,777,757 $1,088,346,741 Debt Service $66,884,884 $250,499,845 $92,692,542 $107,060,053 Contingency $0 $0 $170,809,044 $182,694,432 Fund Transfers - $283,017,732 $487,426,759 $950,118,820 $798,590,571 Expense Debt Service Reserves $0 $0 $157,351 $1,685 Unappropriated $279,646,579 $229,382,700 $111,675,185 $268,137,094 Ending Fund Balance $279,646,579 $229,382,700 $111,675,185 $268,137,094 Grand Total $902,092,994 $1,482,810,685 $2,183,509,599 $2,104,536,260 Expenses by Program Offer 2023-24 Actuals 2024-25 Actuals 2025-26 Revised Budget 2026-27 Proposed Bull Run Watershed $9,898,845 $8,612,281 $14,096,563 $12,058,689 Bureau Support $667,069,280 $1,002,522,746 $1,359,563,244 $1,391,216,054 Bureau Support Services $5 $0 $0 $0 Business Solutions $0 $0 $0 $0 Conduits/Transmission $23,351,107 $82,472,926 $104,413,137 $103,121,365 Customer Services $24,799,301 $26,989,460 $42,124,898 $43,739,390 Data Management $7,580,788 $9,183,730 $7,972,206 $5,825,169 Distribution Mains $33,650,339 $34,528,062 $42,670,720 $37,058,877 Employee Investment $4,118,069 $4,061,265 $4,397,017 $3,598,182 Field Support $12,365,402 $11,225,632 $8,969,476 $10,177,425 Fountains $1,513,740 $1,413,542 $2,242,763 $1,785,978 Grounds/Parks $812,119 $892,037 $646,081 $762,486 Groundwater $5,585,132 $4,526,898 $6,485,115 $9,375,219 Hydrants $5,669,874 $5,514,385 $3,602,016 $3,803,837 Hydroelectric Power $4,734,364 $5,300,873 $8,899,802 $8,624,853 Meters $3,181,826 $3,023,118 $3,309,157 $3,671,059 NA $0 $0 $0 $0 Planning ($20,437,429) ($17,062,198) $8,733,490 $9,041,016 Pump Stations/Tanks $10,120,874 $10,510,271 $16,652,956 $20,101,232 Security/Emergency $4,298,948 $3,178,029 $3,441,669 $3,570,183 Management Services $14,120,948 $14,382,233 $10,487,339 $11,872,427 Terminal Reservoirs $16,496,383 $28,827,292 $3,431,696 $1,068,472 Valves/Gates/Regulators $1,347,040 $1,745,353 $1,724,261 $1,960,220 Water Efficiency $774,775 $1,384,293 $1,758,628 $1,857,948 Water Program Treatment $61,807,873 $230,713,293 $517,057,225 $409,727,063 Water Quality & Regulatory $9,233,390 $8,865,164 $10,830,140 $10,519,116 Compliance 943

City of Portland Fiscal Year 2026-27 Proposed Budget 2023-24 Actuals 2024-25 Actuals 2025-26 Revised Budget 2026-27 Proposed Grand Total $902,092,994 $1,482,810,685 $2,183,509,599 $2,104,536,260 Positions - FY 2026-27 Proposed Budget FTE Accountant II 4.0 Accountant III 1.0 Administrative Specialist II 1.0 Administrative Specialist II - CPPW 5.0 Administrative Specialist III 3.0 Analyst I - CPPW 3.0 Analyst II - CPPW 8.0 Analyst III 2.0 Analyst III - CPPW 7.0 Analyst IV 3.0 Applications Analyst III-Generalist 3.0 Applications Analyst IV-Generalist 3.0 Automotive Equip Oper II: Sewer Vacuum 2.0 Automotive Equip Oper II: Tractor-Trailr 1.0 Automotive Equipment Oper I 11.0 Business Systems Analyst III 1.0 CAD Analyst 1.0 CAD Technician II 3.0 Capital Project Manager I 3.0 Capital Project Manager III 1.0 Carpenter 3.0 Concrete Finisher 3.0 Construction Equipment Operator 21.0 Coordinator I (E) - CPPW 3.0 Coordinator I (NE) - CPPW 6.0 Coordinator II - CPPW 10.0 Coordinator III 2.0 Coordinator III - CPPW 5.0 Coordinator IV 2.0 Customer Accounts Specialist I 36.0 Customer Accounts Specialist II 10.0 Electrical Inspector, Sr 1.0 Electrician 6.0 Engineer II 6.9 Engineer III 8.0 Engineer-Chemical/Environmental 1.0 944

City of Portland Fiscal Year 2026-27 Proposed Budget FTE Engineer-Civil 11.9 Engineer-Electrical 1.0 Engineer-Mechanical 1.0 Engineer, Chief 1.0 Engineering Associate-Civil 5.0 Engineering Associate-Mechanical 1.0 Engineering Associate, Sr-Civil 14.0 Engineering Manager 7.0 Engineering Supervisor 10.0 Engineering Technician II 4.0 Engineering Technician III 6.0 Enviro Regulatory Coordinator - CPPW 2.0 Environmental Program Coordinator 1.0 Environmental Regulatory Coordinator 3.0 Environmental Regulatory Manager 1.0 Environmental Specialist-Generalist 4.0 Environmental Supervisor 4.0 Environmental Technician II 7.0 Facilities Maintenance Technician 1.0 Facilities Worker 1.0 Financial Analyst I - CPPW 1.0 Financial Analyst II 1.0 Financial Analyst II - CPPW 4.0 Financial Analyst III 3.0 General Mechanic 1.0 GIS Technician III 1.0 Horticulturist 1.0 Hydrogeologist 1.0 Industrial Painter 3.0 Inf Syst Analyst, Principal-Gen 2.0 Information Systems Manager I 1.0 Instrument Technician 6.0 Laboratory Analyst II 1.0 Laboratory Analytical Specialist 6.0 Laboratory Coordinator 2.0 Laboratory Manager 1.0 Maintenance Supervisor I - E 1.0 Maintenance Supervisor I - NE 9.0 Maintenance Supervisor II 2.0 Maintenance Worker 1.0 Manager I 5.0 Manager II 5.0 945

City of Portland Fiscal Year 2026-27 Proposed Budget FTE Manager III 6.0 Mapping Data Technician II 1.0 Office Support Specialist Assistant 1.0 Office Support Specialist III 1.0 Operating Engineer II 4.0 Operating Engineer III 13.0 Parks Technician 5.0 Planner, Sr City-Water Resources - 1.0 Public Works Inspector 4.0 Public Works Inspector, Sr 2.0 Right of Way Agent III 1.0 Risk Specialist II 3.0 Service Dispatcher 2.0 Storekeeper/Acquisition Specialist I 1.0 Storekeeper/Acquisition Specialist II 2.0 Storekeeper/Acquisition Specialist III 2.0 Supervisor I - E 6.0 Supervisor II 7.0 Surveying Aide II 2.0 Surveying Manager 1.0 Surveying Supervisor 1.0 Surveyor I 2.0 Surveyor II 1.0 Technology Capital Project Manager 1.0 Utility Locator 7.0 Utility Worker I 7.0 Utility Worker II 5.0 Water Distribution Worker 21.0 Water Distribution Worker, Trainee 6.0 Water Meter Reader I 10.0 Water Meter Reader II 1.0 Water Meter Technician I 4.0 Water Meter Technician II 5.0 Water Meter Technician III 4.0 Water Meter Technician IV 2.0 Water Operations Mechanic 34.0 Water Operations Mechanic, Apprentice 2.0 Water Quality Inspector II 3.0 Water Quality Inspector III 1.0 Water Security Specialist 11.0 Water Service Inspector I 6.0 Water Service Inspector II 1.0 946

City of Portland Fiscal Year 2026-27 Proposed Budget FTE Water Treatment Operator I 4.0 Water Treatment Operator II 10.0 Water Utility Worker, Sr 1.0 Watershed Specialist I 2.0 Watershed Specialist II 2.0 Watershed Specialist III 3.0 Grand Total 553.8 Performance Performance Metrics - Fiscal Year FY 2022 - FY 2023 - FY 2024 - Program Offer Measure Polarity 23 24 25 Bull Run Watershed Percentage Bull Run stream culverts rated high Lower Is NA NA 25.0 or extreme risk to water quality, aquatic habitat, Better and infrastructure access. Bureau-wide DRINKING WATER QUALITY: Number of Higher Is 0 0 0 drinking water contaminant violations Better Bureau-wide WATER OUTAGE DUE TO SERVICE LINE Lower Is 0 0 0 INCIDENTS: Service line incidents that cause Better water users to not have service for more than 12 hours Bureau-wide WATER MAIN FAILURE RATE: Number of main Lower Is 7.80 7.21 7.21 leaks and breaks per 100 miles per year Better Bureau-wide HIGH VOLUME USER FLOW METER ACCURACY Higher Is 97.2% 90.9% 87.2% TESTING: Percentage of meters tested each Better year for accuracy 6+ inch meters and meters with consumption over 1000 CCF/month Bureau-wide UTILITY BILL AFFORDABILITY: Percent of Lower Is 2.43% 2.35% 2.43% median household income spent on utility bill Better Conduits/Transmission Number of unplanned conduit outages Lower Is 0 0 1 Better Conduits/Transmission Number of unplanned transmission outages Lower Is 1 1 0 Better Customer Services Customer accounts per customer service Do Not NA NA 1,739.0 employee Display Customer Services Financial assistance enrollment coverage (as a Higher Is 43.43 43.71 46.85 percentage of SNAP-eligible households ) Better Customer Services Hours of minimum wage to pay the median Target Range 7.42 7.45 7.41 monthly combined water utility bill. Customer Services Household burden indicator: Water cost as a Lower Is 4.08 4.29 NA percent of the upper limit of the lowest 20th Better percentile household income 947

City of Portland Fiscal Year 2026-27 Proposed Budget FY 2022 - FY 2023 - FY 2024 - Program Offer Measure Polarity 23 24 25 Distribution Mains Number of main leaks and breaks per 100 miles Lower Is 7.98 7.21 6.29 per year Better Distribution Mains Linear feet of pipe added or replaced Higher Is 32,616 30,160 28,172 Better Employee Investment OSHA incidence rate Lower Is 4.69 6.07 5.17 Better Field Support Emissions, metric tons CO2e; (2030 goal: below Higher Is NA NA 6,450.0 6948) Better Groundwater Groundwater capacity for 60 days of well use No Polarity 60 65 72 (in Million Gallons per Day) Hydrants Percentage of hydrants in service at any point Higher Is 99.70% 99.87% 99.70% Better Planning Percentage of budgeted CIP expended Do Not NA NA 70.0 Display Planning Percentage of capital projects completed on Higher Is NA NA 33.0 time and, scope, on budget. (Top 3 projects) Better Pump Stations/Tanks Days any pump station in service does not meet Lower Is 0 0 0 system demand Better Valves/Gates/Regulators Number of valves exercised/operated (large No Polarity 1,006 756 753 diameter) Water Quality & Regulatory Days in compliance with drinking water Higher Is NA NA 365.0 Compliance regulations Better Overview Mission The Portland Water Bureau’s mission is to serve excellent water every minute of every day. Bureau Overview, Services, and Assets The Portland Water Bureau serves nearly one million people in the Portland metropolitan region and manages approximately $24 billion in water system assets. The bureau operates and maintains drinking water sources, including the Bull Run Watershed and the Columbia South Shore Well Field, and provides water treatment, distribution, and system maintenance services. Infrastructure assets include water mains, dams, reservoirs, tanks, pump stations, valves, and hydrants. The bureau also provides customer service, billing, financial assistance programs, and long-term system planning to ensure reliable, safe, and sustainable water delivery. Financial Context The Water Bureau is primarily funded through utility rates, with minimal General Fund allocations for programs and services that are not directly related to provision of water service. Like BES, much of the current infrastructure was built over 50-100 years ago and is reaching or exceeding its replacement life cycle. In addition, several high-priority resiliency initiatives, including the Willamette River Crossing seismic main, have been deferred to accommodate the significant capital requirements of the federally mandated Bull Run Treatment Projects. These projects include the filtration facility and associated pipelines required for Cryptosporidium removal. 948

City of Portland Fiscal Year 2026-27 Proposed Budget The cost to operate and maintain the water system continues to rise at greater rate than inflation due to higher labor, chemical, power, and material costs. In addition, the bureau is experiencing a significant financial challenge with the $450 million of cost increases for the Bull Run Treatment Projects given last year’s land use appeal and complex permitting process which led to a delay in the construction schedule. To meet current service levels, the bureau requires a 9.8% rate of increase which is 1.7% higher than the previous forecast of 8.1%. With direction to keep rates of increase at the previous forecast of 8.1%, the bureau has identified $3.3 million of reductions to the FY 2026-27 budget. Budget Approach/Prioritization The Water Bureau prioritized public health and safety, employee safety, regulatory and financial obligations, affordability, and ensuring access to clean, safe drinking water when reviewing its budget reduction options for this year. This budget also continues to protect programs designed to support all customers, recognizing many customers face financial hardship or limitations that impact their ability to pay. The bureau assessed its current position vacancies to identify roles that were not essential for core operations and reviewed its materials and services expenditures to find savings. Reductions were focused on the areas with the least impact on core operations and lowest risk to regulatory compliance. Summary of Budget Decisions As previously forecasted, Water’s FY 2026-27 budget will support an 8.1% rate increase with 30-year term bonds. Bull Run Treatment Projects (filtration and pipelines) will require significant capital investment through issuance of Water Revenue Bonds. To support the additional 30-year bonds scheduled for annual issuance between FY28 through FY31 and meet debt obligations, a 9.8% rate increase will be required for each year through FY31. FY 2026-27 budget includes reductions of about $3.3 million and 14 FTE. The budget reductions would create moderate near-term operational risks and increased long-term risks to system reliability and financial sustainability. These reductions would affect preventive maintenance, customer services, water quality operations, and long-term system reliability. Specifically, it means less preventative system flushing and maintenance, fewer staff supporting billing and customer inquiries, and fewer resources available for regulatory compliance reporting, long-term planning, water quality and long-term infrastructure resilience. Reduced preventive maintenance typically results in higher emergency repair costs, increased service disruptions, and upward pressure on future rates. REDUCE BACKFLOW INSPECTION (-$167,000, -1.0 FTE) Eliminate one of 6 FTE for backflow and cross connection work. To be successful, this change will require streamlined backflow inspections and permitting operations and the implementation of a new technology platform to fulfill the Cross Connection Program requirement under the Safe Drinking Water Act, regulated through OHA’s Drinking Water Program. Efficiencies may result in decreased customer satisfaction due to longer permit review and approval times. If development rates increase, this reduction could result in increased backflow plan review times and forestall the customer-paid pilot testing program. REDUCE CONTRACTED SECURITY AT THE CUSTOMER SERVICE WALK- IN CENTER ON N TILLAMOOK AVE (-$150,000) Eliminate contracted armed security. The Water Bureau recently transitioned bureau security staff to the Interstate facility (644 N. Interstate) where customers may pay bills and get assistance with their accounts in person. With the relocation of PWB security staff, the PWB security staff will provide security support. REDUCE CONTRACTS SUPPORTING EMPLOYEES AND COMMUNITY (-$100,000) Eliminates External Material & Services budget for community partnerships, small grants, and targeted sponsorships and outreach, reduces funds for disability and language access, Eliminate employee and leadership workshops and trainings. Eliminates LinkedIn Learning subscription for all Water employees and community engagement partnership funding and grants by 100%. IMPLEMENT AUTOMATIC ENROLLMENT IN PAPERLESS BILLING WITH TRANSITION TO NEW CUSTOMER ENGAGEMENT PORTAL (-$200,000) 949

City of Portland Fiscal Year 2026-27 Proposed Budget Revises Customer Service paperless billing approach from “opt-in” to “opt-out” for all new customers as new Customer Engagement Portal is activated in late 2026. Accelerates a push for as many customers as possible to transition to paperless billing to reduce mailing and distribution costs. Currently, about 60% of customers receive paper bills at the cost of 75 cents per bill, adding up to about $500,000 a year in printing and mailing costs. REDUCE CUSTOMER SERVICE BILLING (-$130,000, -1.0 FTE) Eliminates one of 14 Customer Service positions for billing. Customers may experience longer processing times to resolve billing concerns and modifications including leak adjustments, understanding the charges, etc. Customers calling to resolve billing concerns may experience increased hold time. It is anticipated that this will further be exacerbated by additional workload related to annual rates and fees change on the utility bill including the new the Flood Safety Benefit fee. Increased inquiries are also with implementation of the new Customer Engagement Portal and Smart Metering (AMI). REDUCE CUSTOMER SERVICE CONTACT CENTER STAFFING (-$130,000, -1.0 FTE) Eliminates one of 29 FTE in the Customer Contact Center. Customer Service staffing reductions are already scheduled to occur at the end of FY25-26 with the discontinuation of five limited-term positions. This proposal further reduces staffing for the contact center. Customers inquiring about their water, sewer, and stormwater accounts will experience increased hold times. Hold times will be exacerbated by an increase in inquiries about changes to rates and fees and the implementation of Smart Metering (Advanced Metering Infrastructure/AMI). REDUCE STRATEGIC GUIDANCE ON CUSTOMER SERVICE IMPROVEMENTS (-$80,000) Eliminates consultant contract that provides customer service and technology industry insights and best practices. This resource has helped guide improvements to provide customer services and reduces the bureau’s ability to identify opportunities to strategically improve customer service efforts over time. REDUCE ENGINEERING DESIGN (-$185,000, -1.0 FTE) Eliminates one Engineering Planning Team of 11 FTE. This will reduce the oversight and leadership and limits capacity for more complex planning and drafting studies and project reviews. REDUCE ENGINEERING STANDARDS (-$198,000, -1.0 FTE) Eliminates one FTE position. The proposal will reduce the consistency of standards and equity policies for engineering documents, creating slower turnaround times. This FTE is the only staff resource responsible for updating and maintaining the engineering standards. REDUCE FACILITIES MANAGEMENT (-$198,000, -1.0 FTE) Eliminates one FTE facilities management position. This is FTE is the only staff resource responsible for managing Water Bureau facilities and properties including managing cell tower leases on tanks and the disposal of surplus properties. This proposal will reduce and slow capital improvement work to maintain operational Water Bureau facilities and properties. REDUCE GENERAL MECHANIC (-$160,000, -1.0 FTE) Eliminates one of four General Mechanic positions in Maintenance & Construction. This proposal will reduce capacity for the repair and maintenance of extensive equipment necessary to efficiently perform field operations in the Maintenance & Construction and Operations groups. Equipment includes pumps, generators, tapping equipment, traffic control, mowers, leaf blowers, concrete saws, pipe saws, trash pumps, shoring and other tools and equipment used to meet the operational and functional needs of over 200 field staff. REDUCE MAINTENANCE & CONSTRUCTION FIELD SUPPORT (-$125,000, -1.0 FTE) Eliminates one of 12 FTE in Maintenance & Construction’s Field Support division. This reduction will increase workload on current staff who perform concrete work, paving restoration, saw cutting, and crane truck operations and lead to reduced service levels. Customers may experience longer waits for street surface restoration and material delivery. REDUCE ENGINEERING PLANNING (-$265,000, -1.0 FTE) Eliminates a city planner position, only position assigned to be responsible to review projects in planning with the permitting and land use process, reducing advisement on early project needs and estimating permit time, pushing that work to project managers. This proposal will reduce Design group capacity to manage land use permitting processes and advise consultants on larger project 950

City of Portland Fiscal Year 2026-27 Proposed Budget scopes. REDUCE SPENDING ON PORTLAND PERMITTING & DEVELOPMENT CREDIT CARD FEES (-$200,000) The bureau currently covers credit card fees for all development project permit charges. This is true for all permits within Portland Permitting & Development and would need to be changed system wide. The proposed savings would require the customer to cover the credit card fee when paying for permits. REDUCE PROCESS IMPROVEMENT IN STREET OPENING PERMITS (-$100,000) This proposal improves operational efficiency by reducing costs associated with Street Opening Permit (SOP) permit renewal fees. By managing the SOP renewal process more proactively and coordinating more closely with PBOT, the Water Bureau can streamline permit tracking, reduce unnecessary renewals, and avoid avoidable fees. This approach optimizes staff time and inter- bureau coordination, resulting in more efficient use of resources and reduced operational costs. REDUCE SOURCE PROTECTION & INTERGOVERNMENTAL COORDINATION (-$262,000, -1.0 FTE) Eliminates one manager-level FTE for a team of 8 for oversight of the Portland Water Bureau’s Source Protection and Planning programs including for the Bull Run Watershed and the Columbia South Shore Well Field. It reduces the bureau’s capacity to engage on local, state, and federal policy issues and to provide oversight for legislative affairs. REDUCE UNIDIRECTIONAL FLUSHING (-$120,000, -1.0 FTE) Eliminates one position of a nine Unidirectional Flushing team in the Operations group. This team is responsible for systematically flushing water mains to remove sediment and biofilm, as well as operating and inspecting valves throughout the distribution system. Currently, the team flushes approximately 250–300 miles of pipeline annually and inspects 4,000–5,000 valves. Under the proposed staffing reduction, flushing will decrease to a year to 175–225 miles of pipeline flushing, with a corresponding reduction in valve inspections. This decrease would reduce the utility’s ability to proactively maintain water quality and system reliability, increasing the risk of sediment accumulation, water quality degradation, and delayed identification of valve operability issues. REDUCE WATER EFFICIENCY (-$198,000, -1.0 FTE) Eliminates one of six FTE within the Water Efficiency Program that is responsible for completing the City of Portland’s annual drinking water system Water Loss Audit and implementing the associated Water Loss Action Plan. Both the audit and Action Plan are required under state water resource and conservation regulations and are outlined in the City’s Water Management and Conservation Plan. In addition, this reduction significantly diminishes the City’s capacity to plan and coordinate emergency drinking water curtailment actions, including the development and implementation of public-facing and internal messaging during a potential curtailment event. The reduction will limit City’s ability to evaluate and analyze Advanced Metering Infrastructure (AMI) data used for water use efficiency programs, long-term demand planning, and water demand forecasting. REDUCE WATER LABORATORY (-$160,000, -1.0 FTE) Eliminate one of 12 staff in the accredited Drinking Water Laboratory. This lab is responsible for analyzing and testing drinking water and reporting lab results for compliance with drinking water quality regulations. As a result of this reduction, turnaround times are expected to increase for some samples. REDUCE WATER QUALITY TEAM STAFFING (-$185,000, -1.0 FTE) Eliminate one of 12 Water Quality team. Reduces reporting and responder capacity for preparation of the City’s drinking water compliance reports, backup staffing for Total Coliform Rule sampling, investigation system problems, and compilation of data for the annual Drinking Water Quality Report. 951

Parent: Water Bureau