Like cities all over the US, Portland is facing a budget crisis. This morning, city council is meeting with the Office of Management and Finance (OMF) in council chambers to talk about covering a projected $7.15m shortfall in the city’s general fund, this year.
The projected shortfall is as a result of an unprecedented decline in business license fees. Last fall, the city set aside $9.7m in a rainy day fund, in anticipation of declining revenues from the fees, which fluctuate with the economy. Nevertheless, it looks like $9.7m isn’t going to cover the gap, and that the decline is going to be far worse than council first thought.
This morning, Andrew Scott from OMF said he thinks council should plan for a “worst case scenario.” Last April, OMF predicted $77m in business license fees. By fall, it was predicting $66m. Now, it’s looking at a potential income of just $56m, which is $18.7m less than expected a year ago. $18.7m minus $9.7m in the rainy day fund=$7.15m.
When the money runs out, people start arguing. As you’ll see:
To cope with what Mayor Sam Adams is describing as a “fiscal emergency,” City Commissioner Randy Leonard is suggesting a citywide hiring freeze, as he’s already instituted in the fire bureau. But police commissioner Dan Saltzman is suggesting that the police bureau, which currently has $1.2m in vacant, unfilled positions, shouldn’t necessarily be prevented from hiring new officers into those positions, which have been created by a wave of retiring baby boomer officers, like former public information officer, Brian Schmautz.
“I think we need to keep a consistent message out there that we are still recruiting sworn officers,” says Saltzman.
“I’m not sure I understand the equity of me telling the fire bureau to freeze its vacancies,” says Leonard, while Saltzman’s police bureau is still recruiting. “So the message then is that some bureaus freeze and some don’t,” says Leonard.
“I think we need a certain amount of flexibility, especially in positions that have life and death impacts,” says Adams.
Leonard’s frustrated.
“I guess, when I met with the fire chief and we looked at this budget problem, I personally felt it was irresponsible to tell him to go ahead and hire 12 people that would basically be laid off come July 1,” he says.
“I think it’s a different situation. I would have made the same decision in your situation,” says Adams. “But when you’re hiring to fill vacancies created by retirements [as is happening in the police bureau] it’s a different situation.”
“Anyone that we hire, that we recruit new, needs to understand that we’re operating under a fiscal challenge,” Adams says. “And that we may need to make cuts.”
Leonard disagrees. He thinks the council should make a decision now to do a hiring freeze, so that people don’t make “life changing” decisions to uproot and move to Portland, for example, to become cops, only to know that they might be laid off in six months.
“They’re going to be notified that they’re in a budget crisis, and in the end of the pipeline crisis, they might or might not have a job,” says Adams.
But Saltzman says he feels the bureau owes it to officers it’s recruiting to recruit them, regardless.
“I think we’ve had a good discussion on that, I’d like to move us forward,” says Adams. I have an inquiry in to Portland Police Association Boss Scott Westerman to see what he thinks.
Council is scheduled to make a decision on its general fund budget cuts on February 18, and vote on a resolution to “declare a fiscal emergency.”
But the City of Portland can still afford $85 million for a new Major League Soccer stadium and Minor League ballpark, right?
And we’re not going to quit building streetcars or couplets, right?
Left pocket/right pocket I’m sure.
I’m not sure how 18.7 million – 9.7 million = 7.1 million. Is this new math?
Let’s not forget the $300000 solar homeless toilet, and $6 million homeless daycare center
And don’t forget the dramatically overpaid council aides and the costs of the special election to replace Sam Adams. It could be an expensive year.
For clarification sgp: You’re right. In addition to the $9.7m rainy day fund, there’s an additional $1.9m in unanticipated pension obligation bond savings, which I forgot to include in the calculation.
rainy day fund 9.7+ pension obligation bond savings 1.9=11.6 in the black
business license fee deficit of 18.7-11.6=7.1 in the red.
So my guess is they’ll raise the biz license fees – which goes against Adam’s 100 point plan. I hope they don’t decide to drive even more entrepreneurs out of Portland.
So what happens if they declare an official fiscal emergency?
Dogs and cats, living together, mass hysteria …
tk, for clarification:
The draft “fiscal emergency” resolution says the city will do several things:
1.Authorize the director of Human Resources to bargain the provisions of the Employee Transition Services Program. [I think this means look at a hiring freeze.]
2.Authorize the director of HR to update the Employee Transition Services Program, bringing changes back to council by the end of March.
3.Direct the office of management and finance to take $2.9m of contingency funding that is earmarked for other projects and us it instead to cover the shortfall in the current fiscal year.
4.Direct the office of management and finance to reduce city bureau budgets by $4.25m in March’s “winter budget action”, and that bureaus will have the flexibility to make those cuts in the most prudent way.
5.Direct the commissioners and bureau directors to impose spending restrictions on their bureaus.
6.Suspend cost-of-living adjustments for non-represented [union?] employees that would otherwise have been received on July 1, 2009.
7.Suspend merit pay increases for its non-represnted employess for the period xx to xx.
Looking through the different bureaus, the $4.25m in cuts are expected to come from things like…take a deep breath…reducing police overtime, cutting travel budgets across the various bureaus, cell phones, cars, parks maintenance workers, irrigation of sports fields, using fewer seasonal workers at the city’s community centers, increasing the fees for city-provided arts classes, increasing the fees for community garden plots, closing the pool at the Metropolitan Learning Center, firing the odd park ranger and pest control manager, cutting elements of the planned One-Stop Domestic Violence program, reducing positions in various commissioners’ offices, slashing budgets for “external materials and services,” cutting programs at the office of communications and franchise management, reducing education and outreach in the bureau of sustainability and planning, and switching funding for various programs to grant funding, cutting positions from the office of emergency management, saving money in the office of human relations by delaying hires, a reduction in graffiti abatement in the office of neighborhood involvement, not to mention potentially cutting former mayor Tom Potter’s $125,000 Vision into Action program. Ouch.
“Let’s not forget the $300000 solar homeless toilet, and $6 million homeless daycare center”
I think it’s close to $46 million for the homeless daycare center. This city has it’s priorities up its ass.
What this town needs is a Monorail!
What’s that word again?
Monorail!
“firing the odd park ranger and pest control manager”
Bummer. Those two guys are great, just a little different.
Looks like somebody should have accepted that casino money from the tribes when they had the chance.
I’m okay with reducing some graffiti abatement, some of their work is pretty cool, one of the benefits of living near the train yard. As far as limiting travel budgets and overtime… shouldn’t they be doing that already?
It’s surprising to me just how much money comes from business fees. I guess that’s one way to make sure the city government is eager to support local business. Thanks for the info.
I imagine that homeless (or not: I’ve used it, it is a nice toilet) people going to to the bathroom in the bushes is probably deterring people (tourists, suburbanites, whatever,) from coming to town to shop/eat/drink/whatever, and so a public toilet here and there probably pays for itself in increased business taxes.
Of course, D is upset about the toilet because his mom doesn’t fit though the door. They were thinking about putting a garage door on it just for D’s mom, but they were worried that she’d try some more recipes from thisiswhyyourfat.com and they’d have to swap it out for a two car one instead, and since that would just add to the cost, (not to mention D’s mom’s turds would just clog the thing anyways, if she didn’t break the toilet by sitting on it in the fist place,) they skipped it.