Mayor Charlie Hales has unveiled his preferred draft of Portland's next operating budget this morning—counting on urban renewal clawbacks to further stretch a $9.3 million surplus up to $11.3 million and help him shower millions on the priorities he laid out last year, including homelessness and the city's ability to withstand a major earthquake.
(Hales and a slew of city staffers and bureau directors have promised to fill a room in city hall this afternoon and hash through the documents (pdf). We'll have another report later on, with added context and reaction from city commissioners.)
Homelessness and housing, in fact, appear to be the biggest winner. Hales has called for placing $1 million in into the housing bureau's housing investment fund as well as putting another $1 million into programs meant to ease bottlenecks in linking people on the streets with services. In all, he's called for $2.25 million in new money—a significant sum, but still less than the housing bureau expected.
The mayor's also answered a call from Commissioner Steve Novick, agreeing to spend $1.2 million on bringing the city's westside disaster operations center up to snuff. Without it, city trucks on the westside of the river won't have access to fuel in the event a major earthquake makes bridges and roads impassable.
And a handful of smaller projects also have been put in the queue for cash: the VOZ day worker's center, the city's Black Male Achievement Program, TriMet passes for students, a deputy chief of staff for the sometimes-overbooked mayor's office, the East Portland Action Plan, and a controversial study of traffic impacts in Southwest Portland.
But for all the good news, this budget may not be any less hard-fought and difficult than last year's, when the mayor and council had to close a $21.5 million spending gap. Bureaus and commissioners put in $32 million for requests, more than three times the $9 million they were told was available for new and onetime spending. That was contrary to Hales' request that bureau's seek stabilization budgets without major addbacks, in itself a luxury after years of cuts.
Expect firestorms and some haggling over a handful of decisions Hales' didn't make.
Among the most consequential? He's not recommended giving the fire bureau the $2.6 million it says it needs to keep from laying off 26 firefighters (and maybe closing a station) when a federal grant keeping those positions on the books expires after next year.
Hales also has seemingly snubbed the arts community, denying money to the Regional Arts & Culture Council—a group that had been a darling of his predecessor's administration. And he's not included money for a Chief Financial Officer position or articulated how much the city should spend on reconfiguring its Office of Management and Finance. He's also looking to cut off Last Thursday, as we first reported was in the offing.
Update 12:30 PM: It's equally worth mentioning that Hales didn't agree with Novick's call to spend $1 million of transportation money for "dramatic safety improvements," namely signalized crossings and islands in high-crash corridors, at several intersections. Novick's requested budget says that money will save lives.
And Hales maybe has picked a fight with the Portland Business Alliance, recommending the city stop spending nearly $1 million a year to prop up the Downtown Marketing Initiative. The PBA and city agreed years ago that the city would spend extra money to make up for potentially lost business over increased parking rates in city -owned garages downtown.
The mayor even suggested denying a major request from the police bureau, which he oversees, for a restored night shift in its traffic division—while at the same time putting up big money for social services and anti-sex-trafficking programs overseen by the bureau.
Street-sweeping—as in who pays for it—has long been a battle between the Bureau of Environmental Services and the Bureau of Transportation. This year, BES casually offered to nix $425,000 it pays into the street cleaning kitty, as part of a raft of cuts mandated by Commissioner Nick Fish. The mayor's accepted $180,000 of those cuts.
Is it ironic or fitting that the City Budget Office won't get $1 million it requested to replace its budget software?
The three-year-old Office of Equity and Human Rights has warned city council in the last year it's had difficulty getting widespread buy in for its chief mission—"promote equity and reduce disparities within City government"—in all the city's bureaus. Hales denied the office's request for a new staffer that would "enhance equity services."
Hales wants two more lobbyists to the city's Office of Government Relations, one more than was requested. It's probably not a coincidence that the city's signaled some ambitious policy goals it wants to achieve in Salem—including a revival of the controversial Sit-Lie law, and winning the ability for Portland to adjust its own minimum wage.
The mayor swatted aside 3.5 out of a requested 4.5 new positions at the Office of Neighborhood Involvement . The one job Hales approved? A staffer to help implement the East Portland Action Plan.
THURSDAY, MAY 1, 2014
MAYOR CHARLIE HALES’ PROPOSED BUDGET FOR 2014-15: FROM DAMAGE CONTROL TO GOOD GOVERNANCE
PORTLAND, OR – Portland Mayor Charlie Hales releases his proposed budget for 2014-15 today. This is the city’s first “stabilization” budget after years of cuts, and reflects the Mayor’s values, including long-range fiscal planning, transparency and other good-governance policies.
Having eradicated last year’s massive shortfall, and having set aside funds to pay off city debt in fall 2013, this year the Mayor’s proposed budget includes initiatives aimed at three investment priorities: homelessness and hunger; emergency preparedness; and complete neighborhoods. Investments also address critical needs regarding equity, youth services and the environment.
The budget introduces key performance indicators, designed so that city residents can measure the impact of funding decisions.
Last year, the city faced an historic, $21.5 million shortfall. The city had to cut 142 full-time equivalent positions in 2013-14, including cuts to the city’s largest bureaus such as Police and Parks. Having made the cuts, the city went on to retain its AAA bond rating, and in the fall the Council set aside funding to pay down millions of dollars in city debt, freeing up additional funds for years to come without having to go to voters for new taxes.
This year, the city has slightly more than $9 million in discretionary funds to allocate, including $4.6 million in ongoing funds, and $4.7 million in one-time funds.
“We’re in a much stronger position this year. But $9 million represents only a little more than 2 percent of the city’s budget,” Hales said. “Jobs are on the rise in Portland. Our economy is growing stronger. Our livability is the envy of the nation. But we can’t be satisfied. My budget drives all of these positive trends even further.”
The Mayor also has created $1.5 million in additional revenues from revamping urban renewal areas, plus $500,000 of contingency savings from Fiscal Year 2013-14. In total, the Fiscal Year 2014-15 budget will include $11.3 million in discretionary resources above current service level, about 2.7 percent of the budget.
Of the discretionary funds available, the Mayor proposes:
● $2.25 million for homelessness – including $1 million for more outreach, referral and permanent housing for those now homeless and programs for youth homelessness. An additional $1 million would go for the Housing Investment Fund, which leverages federal and other money to build more units of affordable housing.
● $1.27 million for emergency preparedness – including funds for improving the community emergency notification system and regional disaster preparedness. The budget calls for $1.2 million for the Jerome Sears Facility, to further develop the city-owned asset into a West Side emergency operations facility.
● $1.98 million to help make neighborhoods complete – including new and ongoing funding for the Schools Uniting Neighborhoods, or SUN, program. Additional SUN Schools under the Mayor’s proposal include adding 10 new schools to the 70 SUN schools operating now, and providing permanent funding for five sites that faced expiring grants. The proposed budget also includes funding for the East Portland Action Plan and key investments in livability programs in the Office of Neighborhood Involvement and the Bureau of Planning and Sustainability.
YOUTH AND EQUITY
Beyond SUN Schools, the budget includes a wide array of programs to support young Portlanders. These include continued funding for the TriMet Youth Pass for Portland Public School students, summer internships, funds to prevent sex trafficking, funds for Earl Boyles Early Learning Center, the Greenspaces Restoration & Urban Naturalist Team program for students, and the Mayor’s Black Male Achievement initiative.
The budget sets aside funds for strategic investments in equity, including Black Male Achievement; the Diversity and Civic Leadership Program within the Office of Neighborhood Involvement; funding for Southeast Works; a VOZ day laborers’ work center; and an equity position within Portland Police. That person will direct and manage the operations and activities designed to increase diversity, equity, empowerment, inclusion and cultural proficiency of the Police Bureau.
The budget also dramatically reduces the number of “one time, ongoing” funded projects – projects outside a city bureau, which received funding on a “one-time” basis for two or more years, over and over again. These generally were “good causes” that, once funded, tended to stay around due to budgetary inertia.
“That’s a particularly bad budget-writing habit,” Hales said. “As appropriate, we have turned those special appropriations from one-time to ongoing funds, and we have moved them into bureaus where professional managers can keep an eye on them and be accountable for them.”
Hales began that process last year, during his first budget.
A centerpiece of the Mayor’s budget is the city/county funding deal hammered out by Mayor Hales and Marissa Madrigal, chair of the Multnomah County Commission. “With the Chair’s leadership, we were able to create some true clarity in the respective roles of the city and county. This accord would not have been possible without the Chair’s strong support,” Hales said.
The details of the agreement were reached early, which provided clarity for budget-writers at both the city and the county.
“The city/county agreement helps move both governments into the appropriate lanes of focused responsibilities,” Hales said. “This starts work that has to be continued with the new Chair.”
RE-THINKING URBAN RENEWAL
From early on in his term, Hales began analyzing the use of urban renewal areas – sectors of the city set aside to address blight. Under Oregon law, a city may draw boundaries around urban renewal areas, temporarily freeze property taxes that go to other governments, and use any incremental property tax revenue growth to stimulate development and investment. When urban renewal areas expire, the property tax value of their enhanced developments then flow back to the city, county, schools and other taxing jurisdictions.
Next week, the Council is expected to take up Hales’ proposal, which would return an estimated $1.06 billion onto the tax rolls, and would provide approximately $5 million to the city, county and school budgets this year, growing to approximately $6 million in 2015-16.
That proposal breaks down to an immediate increase of an estimated $1.5 million into the city’s 2014-15 budget – almost 17 percent of the additional $9 million in discretionary funds, without raising taxes.
Multnomah County and Portland-area schools would receive immediate additional funds, thanks to the Mayor’s proposed URA changes.
Finally, the Mayor’s proposed budget will include key performance indicators, designed to track the outcomes of the priority funding. “City residents and the media should be able to come back to us in a year and ask the question: ‘You spent money on these priorities. How did you do?’” Hales said.
The City Council will hold a special budget hearing 6:30 p.m., Thursday, May 15, at City Hall, 1221 S.W. Fourth Ave. The City Council is expected to vote on the budget by the end of May. The 2014-15 fiscal year starts July 1.