Ryan Alexander-Tanner

IT WAS THE MOST overlooked squabble in Mayor Charlie Hales' controversial recent budget, but it could have had concerning repercussions.

Amid well-publicized angst over a proposed business tax increase and heated accusations of disingenuousness from the mayor's office about what was at stake, City Auditor Mary Hull Caballero quietly threatened to wash her hands of an entire office because of concerns with the budget.

In a May 4 memo to city commissioners, Hull Caballero said she was "withdrawing consent" to administer the city's hearings office.

"The mayor's proposed budget does not adequately address the perennial funding problems" with the office, the auditor wrote. "City council needs to develop a transition plan and assign someone to manage it."

The Portland Hearings Office is little known but important. It's an impartial place where citizens can turn when they have beefs with the city—for instance, when a utility bill is too high, or they don't like a land-use decision, or their car gets towed under shady circumstances.

The office has a natural home with the auditor, an independent elected official who has no oversight of the bureaus whose decisions are challenged in these hearings.

But for a while now, Hull Caballero's taken issue with how the city funds the office. It's reliant on fees paid by other bureaus and TriMet, which enlists its services. But since those payments are made after a hearing is held, the auditor says Portland should front her money for operating the office, and she'll pay back the city's general fund with fees she collects.

"It's become a real risk to the stability of the budget," says Deputy Auditor Sarah Landis. In particular, the office points to hearings over TriMet exclusion orders, where it says revenues have declined by 96 percent since 2012.

Hales wasn't convinced. In his 2016-17 budget, the mayor followed the recommendation of city budget staffers and declined to front the money, spurring Hull Caballero to make her threat.

But after early predictions that it wouldn't be hard to find a new home for the hearings office, it sort of was. The city attorney's office was a bad fit, since it sometimes represents the city in these hearings—not exactly a model of impartiality. And the Portland Office of Management and Finance apparently didn't want the added responsibility.

So now it looks like Hull Caballero is going to get at least a portion of the stability she's been looking for. Among a collection of last-minute budget amendments filed Friday, Hales' office has included $100,000 in general fund money to replace the money Hull Caballero's office has lost due to the TriMet hearings. The auditor plans to discontinue those hearings altogether when an agreement with the agency expires in November.

In exchange for the new general fund cash, Hull Caballero will agree to keep the hearings office, Landis says. And that'll extinguish the last smoldering disagreement of Hales' most-contentious budget in office.

It was fun while it lasted.