The Latest Estimate for Portland’s Latest Budget Surplus: $8.9 Million

For those of you following the money over at Portland City Hall—which could always use a little more, for top priorities including ramped-up street maintenance, parks fixes, an arts tax bailout, housing construction, investing in emergency preparedness, and police body cameras among so many more—here’s an interesting update.

Andrew Scott, the city’s budget director, has announced an official and nearly final total for the city’s expected budget surplus: It’ll be at least $8.9 million—although it may yet climb, probably by a few hundred thousand dollars, but maybe by a million or more.

The news was announced in an email to city commissioners and their staffers last Thursday. The Mercury obtained a copy Friday. Council staffs are gathering information and drawing up wish lists ahead of this fall’s regularly scheduled “budget adjustment process.”

In preparation for the Fall BMP, CBO has been working with OMF’s Accounting division to determine the level of excess (i.e., unbudgeted) General Fund balance from last fiscal year. When there is an excess balance, Council determines how to allocate the balance in the Fall BMP. City financial policy requires that at least 25% of any excess balance be spent on maintenance or replacement of existing assets and infrastructure. Any remainder can be spent on unanticipated needs or emergencies or set aside for the following fiscal year.

At this time, we are expecting the excess balance to total approximately $8.9 million. This number may be slightly higher once we have reviewed bureau requests to carryover contract encumbrances from last year. We will provide an updated figure in October following the bureau BMP submittals.

As a reminder, CBO is working with bureau asset managers to score projects related to maintenance and replacement of existing assets against a set of common criteria. We will provide Council with those scores during the Fall BMP process.

The $8.9 million will join the council’s contingency funds, which I’ve heard amount to another couple of million bucks. Surplus money is supposed to be spent on one-time projects, with a large chunk of that devoted to “major maintenance.” Contingency money can be spent a bit more freely.

Street money will likely dominate the fall budget discussion—thanks to promises, during public meetings of the work groups reassembling a street fee plan pushed this year by Mayor Charlie Hales and Commissioner Steve Novick, that the city would attempt to ease heartburn over new revenues by reducing its overall ask and investing more of its own funding. Surplus money could be a down payment on that promise. It’d also have the benefit of very directly following the city’s budgeting rules.

It’s also probably safe to expect more discussion about adding to the city’s housing investment fund, something that’s been a bit heated ever since Commissioners Dan Saltzman and Nick Fish backed a shelved plan to tap new tax revenues, starting next summer, from short-term rentals.

And it’s not clear, in part because the mayor’s spokesman has yet to return a message this morning seeking comment, whether Hales might attempt a clever budget maneuver that went over pretty well last year: using some of the surplus to pay off ongoing capital debts, thereby freeing up money in the city’s ongoing budget.