Adopted Budget City of Portland, Oregon

Fiscal Year 2008-09 Volume One

Citywide Summaries and Bureau Budgets

Mayor Tom Potter Commissioner Sam Adams Commissioner Nick Fish Commissioner Randy Leonard Commissioner Dan Saltzman Auditor Gary Blackmer This document is printed on 100% post- consumer waste recycled paper. Table of Contents

User’s Guide...... 1 Mayor’s Message ...... 3 Overviews ...... 11 City Overview ...... 11 Budget Overview ...... 22 Financial Overview ...... 37 Budget Notes ...... 64 Financial Summaries...... 71 Guide to the Financial Summaries ...... 71 Total City Budget – Revenues and Expenses ...... 74 Appropriation Schedule – FY 2008–09 ...... 75 Summary of Bureau Expenses by Fund – FY 2008–09 ...... 78 Summary of Revenues by Fund – FY 2008–09 ...... 81 Total Revenues and Expenses by Fund by Fiscal Year ...... 84 Tax Levy Computation ...... 87 Urban Renewal Certification...... 88 Summary of Authorized Positions ...... 89 General Fund Revenues and Expenses ...... 90 Operating and Capital Budget by Service Area ...... 91 Historical Funds and Appropriations ...... 95 Summary of Indebtedness ...... 96 Summary of Indebtedness ...... 98 Principal Over the Life of the Debt...... 100 Interest Over the Life of the Debt ...... 101 Summary of Defeased Indebtedness ...... 102 Public Safety...... 105 Bureau of Emergency Communications ...... 109 Bureau of Fire & Police Disability & Retirement...... 119 Bureau of Police ...... 131 Portland Fire & Rescue ...... 155 Portland Office of Emergency Management...... 173 Parks, Recreation, and Culture ...... 185 Portland Parks & Recreation ...... 187

City of Portland, Oregon – FY 2008–09 Adopted Budget i Table of Contents

Portland Parks & Recreation ...... 205 Golf Program ...... 215 Parks Capital Improvement Program...... 220 Portland International Raceway ...... 224 Public Utilities...... 231 Bureau of Environmental Services ...... 235 Water Bureau ...... 275 Water Division ...... 292 Hydroelectric Power Division ...... 304 Community Development ...... 311 Bureau of Development Services ...... 315 Bureau of Housing and Community Development ...... 339 Bureau of Planning ...... 355 Office of Cable Communications & Franchise Management...... 377 Children's Investment Fund ...... 387 Office of Neighborhood Involvement ...... 393 Office of Sustainable Development ...... 411 Transportation and Parking ...... 429 Office of Transportation ...... 431 Legislative, Administrative, and Support...... 457 Bureau of Licenses ...... 461 Office of the City Attorney ...... 463 Office of the City Auditor...... 471 Office of Government Relations ...... 489 Office of Human Relations ...... 495 Office of Management & Finance...... 501 Business Operations...... 525 CityFleet Division ...... 531 Facilities Services Division ...... 539 Printing & Distribution Services Division ...... 554 Risk Management Division ...... 562 Bureau of Financial Services ...... 571 Bureau of Human Resources ...... 582 Health Administration ...... 592

ii City of Portland, Oregon – FY 2008–09 Adopted Budget Table of Contents

Bureau of Purchases ...... 597 Revenue Bureau ...... 603 Bureau of Technology Services ...... 610 Citywide Projects Division ...... 628 EBS Ongoing Support Division ...... 633 Office of the Mayor ...... 637 Commissioner of Public Affairs...... 643 Commissioner of Public Safety ...... 647 Commissioner of Public Utilities ...... 651 Commissioner of Public Works ...... 655 Special Appropriations...... 659 Glossary...... 668 Acronyms ...... 674

City of Portland, Oregon – FY 2008–09 Adopted Budget iii Budget Award

The Government Finance Officers Association of the United States and Canada (GFOA) presented an award for Distinguished Budget Presentation to the City of Portland, Oregon for its annual budget for the fiscal year beginning July 1, 2007. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. The award is valid for a period of one year only. We believe our current budget document continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.

President Executive Director User’s Guide

The FY 2008-09 Adopted Budget document consists of two volumes. Volume One contains general information and an overview of the Adopted Budget for the City of Portland, as well as the budgets for individual City bureaus and offices. Volume Two provides detailed information about the City's funds and capital projects.

VOLUME ONE - BUREAU BUDGETS

Mayor's Message A message from Mayor Tom Potter about the challenges, opportunities, and uncertainties he and the four City Commissioners faced in preparing the FY 2008-09 budget. The message highlights the Mayor’s budget priorities and the principles adhered to in crafting the budget.

Overviews City Overview The City Overview gives general information about the City of Portland, including its demographics and government management systems.

Budget Overview The Budget Overview presents the total City budget from a number of technical perspectives, discusses significant changes to funds, and outlines the City’s overall budget process. It also summarizes key budget decisions and delineates the links between those decisions and City Council goals and strategic issues.

Financial Overview The Financial Overview lays out the City’s financial planning process, fiscal structure, and related policies. This section also includes the five-year forecast, a discussion of City debt management, and highlights of key revenue and expenditure trends.

Budget Notes The Budget Notes section lists issues for which Council requires further analysis or action. The notes generally direct a bureau to undertake a particular assignment.

Financial Summaries These summaries show Citywide revenues and expenses in total and by service area, as well as General Fund revenues and expenses and authorized positions. Tables at the beginning of Volume One summarize the City budget across all funds, list bureau expenses and total City expenses by fund, and detail the City’s capital improvement plan. The Appropriation Schedule, tax levy computations, and urban renewal tax certifications are also included. This section concludes with tables related to the City’s debt obligations.

Service Area City bureaus are categorized into service areas based on the nature of their programs and Information services. Each service area section of the budget document begins with a description of the service area and budget highlights for bureaus in that service area. This is followed by the Adopted Budget for each bureau in the service area. The City’s six service areas are: Public Safety Community Development Parks, Recreation, and Culture Transportation and Parking Public Utilities Legislative, Administrative, and Support

City of Portland, Oregon – FY 2008–09 Adopted Budget 1 User’s Guide

VOLUME TWO - CITY FUNDS & CAPITAL PROJECTS

Fund Summaries by Presented in the same service area order as Volume One, these sections detail the resources Service Area and expenditures of each City fund. A brief description of each fund’s purpose and relevant trends and issues are incorporated with fund financial information. Figure 1 in the Volume Two User’s Guide lists the funds by managing agency, linking the Volume One bureau presentations with the Volume Two funds information.

Capital Projects by These sections describe each of the City’s capital projects by bureau. Project information is Service Area displayed by geographic location and includes funding sources, expenditure history, and five-year forecasts.

PORTLAND DEVELOPMENT COMMISSION (PDC) ADOPTED BUDGET As required by the City’s Charter, the PDC Adopted Budget is incorporated here by reference. See the PDC web site for PDC’s FY 2008-09 Adopted Budget: http:// www.pdc.us/pubs/.

QUESTIONS If you have any questions about the use of the budget document or the City’s budget, please call the Financial Planning Division in the Office of Management and Finance at (503) 823-5288.

2 City of Portland, Oregon – FY 2008–09 Adopted Budget Mayor’s Message

Office of Mayor Tom Potter City of Portland

INTRODUCTION

This is the fourth budget I have prepared as Mayor, and it is possible to look back at each and trace the arc of Portland's economic resurgence, as well as draw some cautionary lessons that may help inform a City Council that will have a new Mayor and two new Commissioners next year. My first budget was drafted at the end of a prolonged economic downturn, with the City facing a $15.7 million deficit and a sixth straight year of budget cuts. Since then, Portland's economy has become vibrant again, and our city is routinely—and rightly—hailed as one of the nation's most livable, sustainable, and special places to live. Our business license fee revenues showed a fourth straight year of growth this year, even as we implemented reforms that reduced fees paid by business. Crime continues to fall—down 23% since 2003. Portland's precincts are again open evenings, and more sworn officers are on the street. The City Council has pledged to reduce fossil fuel use by half over the next 25 years, and cut CO2 emissions by 80% by 2050. Our riverfront is more welcoming with the generous gift from Dr. Robert Pamplin and family of the beautiful part of Ross Island. And our efforts to end homelessness continue to help individuals and families leave life on the streets forever. My fourth budget reflects an economy that remains strong, with the City enjoying an additional $33 million in General Fund resources above what is required to maintain services at last year's levels. Our budget work teams, which pair Commissioners with community advisors to review budget proposals with a strategic eye toward the needs of our entire city, reviewed $116 million in new requests, and hundreds of citizens have directly participated in the development of this budget through work on bureau advisory committees and oral or written testimony. I want to thank the City Commissioners and City Auditor, our community budget advisors, the neighborhood participants who came to budget forums, City bureau staffs, and the Office of Management and Finance for their help in creating this final Mayor's Proposed Budget. I especially want to thank our community budget advisors, Mary Edmeades, Helena Huang, Jon Kruse, Martin Medeiros, and Ayoob Ramjan, for the countless hours they have volunteered to make our city better. Finally, I want to welcome new Commissioner Nick Fish and congratulate Sam Adams on his election to be our next mayor. I wish them both the best.

City of Portland, Oregon – FY 2008–09 Adopted Budget 3 Mayor’s Message

As I watched this process unfold for the last time, I believe there are lessons to be shared with the next Council:

The City must fix its aging infrastructure now. In 2010, the 800 MHz public safety radio system our emergency personnel depend on to protect our citizens will no longer be serviced by the company that manufactured it. One in four streets needs basic maintenance. The City's aging infrastructure needs an additional $84 million in repairs each year just to keep things from getting worse, and that number is growing. The next Council must develop a single, realistic process to assess the City's infrastructure needs, and then increase funding to pay for the necessary fixes. This means some new programs shouldn't be funded, and others delayed. To do otherwise means that the level of service residents currently expect of their City will decline.

Core services must come first. Not only the core services represented by public safety, roads, and parks, but also the human infrastructure we have built over the last four years to invite more members of the community—and more diverse members of the community—into the decision-making process. We will open the doors of City Hall to more people through such acts as the Council's funding of a Human Rights Commission. Now they must remain open.

In Portland, of all places, we should save for a rainy day. Every economy, no matter how strong, experiences up and downs. With the national economy slowing, the City is forecasting only $5 million in one-time funds for FY 2009-10, or $23 million less than for FY 2008-09. I am proposing that we use the fall budget monitoring process (BuMP) to capture any year-end surpluses and use them only for either capital needs to rebuild infrastructure, or as a resource for the next year. In recent years, due mostly to an improving local economy, the fall BuMP has turned into a mini budget process of its own. This has often resulted in funding new projects or programs that have not undergone scrutiny from the budget work teams and the community as part of the normal budget process. The Council recently adopted new financial policies that prescribe year-end surpluses be limited to the uses I suggested above. Council should abide by those policies.

Our entire budget must be more transparent. Even the most diligent Portlander will find it difficult to decode the City's budget and determine whether we are spending money wisely. Although our printed budget documents in detail the items that we currently are funding, it doesn't reflect other, unfunded obligations and intergovernmental agreements that the Council has approved or committed to and that come with their own price tags which eventually must be paid. These "shadow" ongoing obligations carry their own price tag: in an economic downturn, when one-time money fails to reappear, immediate and potentially deep budget cuts will be required. The Milwaukie light rail, for instance, comes with a $30 to $60 million matching requirement that future Councils will need to find money for. We should also make it easier for residents to understand how much we're investing in programs that are obviously ongoing but have no future funding in sight. General Fund bureaus asked to convert to permanent the positions of 29 employees who are being paid with "one-time" funds this year - money that is not expected to recur over the long-term - even though most of their programs are expected to continue. 13 such positions were indeed converted to permanent, but the rest continue as limited term. And 25 new limited term

4 City of Portland, Oregon – FY 2008–09 Adopted Budget Mayor’s Message

positions are being added, some of which should be considered permanent. Creating positions in the hope that they can become permanent at some future date is adding to a pool of "shadow ongoing," future claims on ongoing resources that are not included in the five- year forecast. Council must shine a light into these shadows and begin to curtail this practice.

Other examples include programs aimed at reducing homelessness and promoting green businesses, both laudable programs the Council supports, but largely funded with one-time dollars. There are also some services that have money committed for implementation but not for ongoing operations, such as the East Portland pool, which has funds for construction and five years of operations but insufficient funding beyond that.

The Council must share a strategic, long-range plan for Portland's future, and stick with it. The City is developing new, comprehensive plans that should provide a guide to how our city grows for the next 20 years. These plans—including an East Portland Plan—will also reflect the dreams of thousands of everyday Portlanders who shared their vision for their community's future during visionPDX.

But these plans will only matter if the Council not only shares the vision, but is able to work together on a common set of long-term goals and programs, making these the basis for future budget decisions. If not, it will be difficult to answer even simple budget questions in a downturn: What are the core services we must protect? How do we balance the need for sidewalks in Cully with a streetcar for east Portland?

The City must form more public-private partnerships. Government is not the solution to every problem. Our City must work more closely with our business and civic communities to find solutions. Two years ago, our business community joined local governments to keep our schools strong. This year, the business community worked with government and social providers on the SAFE (Street Access for Everyone) initiative, which built benches and restrooms downtown, and increased services for our homeless community. These kinds of partnerships leverage tax dollars and make the community a true partner in finding real solutions.

Portland must work more closely with its regional partners. Funding effective drug treatment strategies, building a regional training center for first responders, creating a comprehensive plan to stop domestic violence, and ending homelessness will require that we not only work closely with our regional partners, but that we include them at the very beginning of our work, not just at the end.

MAYOR'S APPROACH

In building this final budget, my priorities remain the same as when I built my first budget in 2005: to rebuild the core services and infrastructure that are government's truest purpose, to keep Portlanders safe and our city growing, and to make City Hall more open to every citizen, especially to those who have not historically felt welcome.

This Adopted Budget accomplishes those goals with these additional funds above current funding levels.

City of Portland, Oregon – FY 2008–09 Adopted Budget 5 Mayor’s Message

First, stabilize the core services and City infrastructure that are at the heart of every great city.

$6.0 million for Transportation, including:

$2.0 million to replace an anticipated shortfall in gas tax revenues

$1.6 million to finally build sidewalks and make other safety improvements for pedestrians, bicycles, and cars along NE Cully Boulevard

$400,000 to continue streetlight replacement

$250,000 to develop additional safe routes to schools

$200,000 to eliminate a traffic safety investigation backlog

$150,000 to continue improvements to the city’s bicycle network

$75,000 to begin planning for needed improvements to N/NE Killingsworth

Although PDOT's budget primarily relies on federal, state, and county sources, I am allocating $800,000 to meet its projected budget shortfall to maintain current service levels

$500,000 for a draft environmental impact statement for the proposed Milwaukie light rail In the past three budget cycles, the City's General Fund has filled the gap in critical street maintenance and safety needs with over $32 million. The General Fund cannot afford to continue to shore up transportation funding, which needs a new dedicated source of funding. The Street Safety and Maintenance fee proposed by Commissioner Adams, which I strongly support, would provide such a source.

$2.7 million to fully fund Portland Parks & Recreation's operating costs. The Parks levy that voters approved in 2002 has provided $10.6 million per year to support new capital construction and operations, but will end this year. Council has determined to keep parks a priority core service, but without asking voters to dig deeper. In addition, Parks will be allocated:

$500,000 for continued teen programs

$366,000 to complete Marysville Park in partnership with Portland Public Schools

$790,000 for deferred maintenance and to plan for maintenance facilities on Mount Tabor

$1.1 million for various programs, including $80,000 to support the Interstate Firehouse Cultural Center and $275,000 for fitness equipment replacement at community centers, among others

$8.0 million to the Bureau of Housing and Community Development (BHCD), including:

$4.3 million in one-time and $490,100 in ongoing funding to continue the important work of the Ten-Year Plan to End Homelessness

$1.0 million in one-time funds to support the Police Bureau Service Coordination Team with Housing Rapid Response services to link people in need to supportive housing

$500,000 to reflect higher personnel costs of service providers

$500,000 for rent assistance through the Schools, Families, Housing Initiative

$900,000 for Housing Services and Permanent Support for Housing

6 City of Portland, Oregon – FY 2008–09 Adopted Budget Mayor’s Message

$420,000 in one-time funds to support economic opportunity for both at-risk youth and adults and Project Clean Slate, which helps eliminate minor legal issues that act as barriers to employment and housing

$343,500 in one-time funds to support residents battling substance abuse through additional support for CHIERS and the Hooper facility The $6.9 million continues existing programs that have been funded with one-time funds. With this proposed funding, the City will have provided BHCD with $37 million in General Fund allocations over the last four budget cycles (including $26.6 million in one-time funds) to restore $4.5 million lost to federal government entitlement grant cuts and to provide new programs to address chronic homelessness. However, the one-time portion of this funding may not be available in future budgets, and BHCD must work with the community and its governmental partners to identify and prioritize its most effective programs.

Second, strengthen public safety.

$9.6 million, including $1.0 million in discretionary funds, to finance replacement of:

The 9-1-1 communications system used to dispatch all police, fire, and emergency medical personnel in Multnomah County

The 800 MHz system, used to carry voice and data traffic for all public safety personnel in Multnomah County, as the manufacturer will longer provide maintenance support after 2009

The Portland Police Data System, which is used by the Police Bureau and 19 other law enforcement agencies in the metropolitan area. The system—critical to officer safety, the apprehension of criminals, and the analysis of crime trends—is 24 years old and out of date. Completion of the system will require approximately $2.5 million annually over the next 15 years, funding that is built into this budget, and an additional $18 million yet to be secured.

$2.8 million to the Portland Police Bureau:

$1.4 million to replace the outdated mobile data computers the Police have been using and which have reached the end of their useful life

$1.2 million for the Voluntary Substance Abuse Treatment program which addresses the root causes of drug abuse among chronic offenders. The money will be directed toward successful treatment programs, housing, and a police officer walking beat in targeted areas.

$122,000 for sexual assault victim advocates

$50,000 for Elders in Action volunteers at Police contact offices throughout the community

City of Portland, Oregon – FY 2008–09 Adopted Budget 7 Mayor’s Message

$45,000 to fund additional investigation staff for the Independent Police Review Division in the Auditor's Office

$2.2 million for a one-stop Domestic Violence Resource Center which will bring together law enforcement and domestic violence resources to protect one of the most vulnerable populations in Portland

$522,000 in ongoing and one-time funds for the Office of Youth Violence Prevention (OYVP) to reduce and eventually eliminate violence from the lives of our youth. OYVP has demonstrated success; it will need to find additional local, state, and federal partners in the future.

$275,000 to continue funding proven downtown livability programs, including:

$25,000 to continue work with Multnomah County through the Local Public Safety Coordinating Committee on mental health issues facing our community

$250,000 to build 24-hour restrooms in Old Town

$2.0 million to partner with other cities and counties in the region to secure a site for a Regional Public Safety Training Center. Currently, emergency personnel have no local training facilities, adding cost and time to preparing officers for duty.

$350,000 to finance co-locating an Emergency Coordination Center at the Bureau of Emergency Communications. The need for an enhanced ECC was one of the core lessons of the recent TOPOFF exercise. Total cost of the project is estimated at $6 million.

$1.0 million to achieve a labor agreement with Portland’s firefighters.

$304,000 for Portland Fire & Rescue to address deferred and neglected maintenance at the City's Fire Prevention Office and stations

$103,000 for Portland Fire & Rescue to add a Special Hazards Inspector to reduce unsafe conditions in buildings

Third, keep Portland businesses thriving.

$2.3 million to the Portland Development Commission to expand its efforts around small business development; focus City resources on targeted industries; continue citywide storefront grants that support façade improvements; provide low-interest loans to small, locally-owned companies for working capital and equipment purchases; and provide business technical assistance focused on improving firm competitiveness through lean manufacturing, zero waste, and export/marketing strategies

$500,000 to the Office of Sustainable Development to provide economic development assistance to new sustainable businesses and to make certain biofuels will meet or exceed the City's standards. This will complement the office's efforts in the coming year to expand Portland's residential and commercial recycling programs.

8 City of Portland, Oregon – FY 2008–09 Adopted Budget Mayor’s Message

$742,000 to continue the City's commitment to expanding opportunity for minority, women, and emerging small businesses who want to contract with the City for services

$300,000 to support enhanced marketing of Portland’s downtown

$80,000 to continue funding the Lewis & Clark legal clinic to provide critical legal assistance and advice for small and start-up businesses

Fourth, grow Portland's reputation as the nation's most livable city.

$245,500 to complete Tree Code Policy Planning

$309,969 increase (10%) to the Regional Arts & Culture Council (RACC)

$200,000 to support RACC’s arts partners program

$250,000 in support of artist repertory theater’s 25th anniversary celebration

$225,000 for improvements to the Portland Center for the Performing Arts

$275,000 to continue the planning work for the Willamette River, resulting in better public access to the river, protection and restoration of habitat, and revitalization of the waterfront and Macadam Boulevard

$1.8 million for the Bureau of Planning for the Central Portland Plan and Comprehensive Plan update. Funds will also be provided to enhance the Planning Bureau's district liaison program and support the Youth Planning program. All of these planning efforts are intended to ensure that the growth in the city is smart growth that reflects the community's aspirations.

$500,000 to implement the East Portland Action Plan, which has brought together neighborhood, business, and elected leaders with school officials, law enforcement, and City agencies to identify and prioritize short- and longer-term actions to improve livability in east Portland neighborhoods

$125,000 for additional small neighborhood grants to immediately fund planning projects to bring the Vision into Action

$50,000 for a pilot program to construct homes with high energy efficiency All of the funding for these projects is one-time. The Bureau of Planning will need to request similar funding next year to continue or complete these projects.

Fifth, make Portland welcoming to every resident.

$377,000 to create the Office of Human Relations and restore the City's Human Rights Commission, which will provide a venue to address individuals' concerns of unfair treatment by local government because of their race, ethnicity, culture, immigration status, disability, or sexual preference

$103,250 to further address issues specific to immigrant and refugee populations in Portland as a part of the Office of Human Relations over the next two years

$1.0 million for the Office of Neighborhood Involvement (ONI) to enhance the capacity of district coalition office staffing; expand core ONI staff that can help neighborhoods resolve disputes; implement the recommendations of Community Connect, which will make government more accessible to residents; and assist underrepresented communities with finding their voice in the neighborhoods by giving them the organization and experience they need to make themselves heard

CONCLUSION This budget reflects collaboration among the entire City Council, our staffs, and the community. The choices we have made were not easy; some important programs will not grow in the coming year, and others will not grow as much as hoped.

City of Portland, Oregon – FY 2008–09 Adopted Budget 9 Mayor’s Message

In my first Proposed Budget in 2005, I wrote that "working with our citizens, we have delivered a budget that makes our community stronger, makes our children more secure, and protects those among us most in need of our help.” I believe this budget accomplishes those same goals. Thank you,

Tom Potter Mayor

10 City of Portland, Oregon – FY 2008–09 Adopted Budget Overviews

City Overview

INTRODUCTION This section of the FY 2008-09 budget document provides general information on the city of Portland, its demographics, and its government management systems. The information will help the reader understand the environment in which decisions are reached during the budget process. This section will also make it easier to examine and understand other sections of this budget document. Portland's budget document reflects City policies, goals, and priorities. In reviewing how revenues are collected and spent, readers of the budget are watching policy at work. The budget implements the City's long-range strategic and financial plans and serves as an operations guide for the government and its activities. It is also a communications tool, informing residents of the short- and long-term issues and challenges confronting the City. The budget document reflects the goals of residents and leaders alike.

CITY OF PORTLAND CHARACTERISTICS

Basic Statistics The city of Portland, with a population of 568,380, comprises an area of approximately 145 square miles in northwestern Oregon. Located astride the Willamette River at its confluence with the Columbia River, Portland is the center of commerce, industry, transportation, finance, and services for a metropolitan area of more than two million people. (The Portland/Vancouver Primary Metropolitan Statistical Area includes the Oregon counties of Clackamas, Columbia, Multnomah, Washington, and Yamhill, as well as Clark County in Washington). Portland is the largest city in Oregon, the seat of Multnomah County, and the second largest city in the Pacific Northwest.

City of Portland, Oregon – FY 2008–09 Adopted Budget 11 City Overview

Recreation Natural Areas Portland is situated in the heart of a vast and diverse recreational area encompassing desert, marine, forest, and mountain environments. The city is a convenient point of departure for Pacific Ocean beaches, located 78 miles to the west, and the forested Cascade Mountains to the east.

Nearby Cascade mountain Among the snow-capped peaks is 11,235-foot Mt. Hood, one of the world's most climbed peaks, the Columbia Gorge, mountains and home of the world famous Timberline Lodge, only 60 miles from Portland. and city parks provide There are two major ski resorts on the mountain. On a clear day, Mt. St. Helens, an active abundant opportunities for volcano, is visible to the north. lovers of the outdoors. The Columbia River Gorge National Scenic Area is within 20 miles of downtown Portland. The gorge presents opportunities for swimming, hiking, boating, sailing, and camping, and is a world center for windsurfing. The city, with one of the highest parks-per-capita ratios in the United States, prides itself on its many beautiful parks, forests, trails, and wetlands. These include the 40-Mile Loop (a trail circling the city that is now much more than 40 miles long); Forest Park, at 5,000 acres the largest wilderness park in the United States; Tom McCall Waterfront Park, built on the site of a freeway dismantled in 1974; and Tryon Creek State Park. Visitor Opportunities Known as the City of Roses, many tourist and business visitors are drawn to Portland’s attractions. The Oregon Symphony and Portland Opera, the annual Rose Festival, art and historical museums, the Oregon Museum of Science and Industry, the Western Forestry Center, the Classical Chinese and Japanese Gardens, the International Rose Test Garden, and the Oregon Zoo are some of Portland's cultural and recreational highlights. Portland’s professional sports teams include the Trail Blazers of the NBA; the indoor la- crosse team, the LumberJax; and the Winter Hawks hockey team. The city’s main arena, the Rose Garden, was opened in October 1995 as a private-public joint venture. The renovation of the city’s Civic Stadium, now called PGE Park, brought the Triple A Beavers baseball team and Timbers professional soccer team to Portland.

The Economy Overview

A diverse economy is key to Portland's economy has slowly diversified over the past decades. Steady growth in nontradi- Portland’s future. tional sectors, such as the manufacture of electrical equipment, instruments, and related products, has helped Portland’s economy adapt to national and global trends. Semiconductor manufacturers, such as Intel and Wacker Siltronic, have established major facilities in the region.Tektronix, Nike, and Freightliner, health systems Providence, Kaiser Permanente, and Legacy, as well as retailers Safeway, Albertsons, and Fred Meyer are some of the other major nongovernment employers in the Portland metropolitan area. Major public employers include Oregon Health and Science University (OHSU) and Portland State University.

12 City of Portland, Oregon – FY 2008–09 Adopted Budget City Overview

Recent Trends

Unemployment in Portand The University of Oregon Index of Economic Indicators dropped sharply in March and has remained above the April 2008. The April index fell by 0.9% to 101 - its lowest level since March 2004. national average since 2001. Compared to six months ago, the index declined at an annualized 3.1 %, the third decline greater than 2% in the past four months. Such continuous decline is indicative of at least a mild recession. As of April 2008 the unemployment rate in Portland metro area was 5.1% compared with 4.8% a year ago. The median home price in Portland declined 4.7% between April 2007 and April 2008, however that is a much lower decline than the national rate of 15.3%. On the inflation front, from 2006 to 2007 consumer prices (CPI-W) in the Portland metro area rose 3.8%, the sharpest increase since 1992.

Figure 1: Portland Metro Unemployment

10 9 8 7 6 5 % Rate 4 Portland 3 National 2 1 0 Jul Jul Jul Jul Jul Jul Jul Jul Oct Oct Oct Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Apr Apr Apr Apr Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08

Shipping and Other Port Facilities

The Port of Portland The Port of Portland, the governmental unit responsible for air and marine port facilities, manages shipping facilities offers outstanding opportunities for expanding export industries, investments, business, and and the Portland International Airport. travel. Portland's deep water location on the Columbia River gives it substantial geographic and economic advantages for freight shipping. The Columbia River shipping channel is maintained at a depth of 40 feet from the Portland harbor to the Pacific Ocean, 110 miles downstream. Portland is the largest wheat export port in the country. The Port also manages Portland International Airport (PDX). The airport handled nearly 14.7 million passengers in 2007 and is served by 22 passenger carriers providing more than 600 flights daily to over 100 cities in the U.S. and Canada, as well as daily flights to Mexico, Germany, and Japan. PDX is also served by 12 air cargo carriers, including Air China, which provides nonstop cargo links to Asia. Adjacent to PDX, the Port is moving ahead with a 120-acre mixed-use development of office, hotel, and retail space.

City of Portland, Oregon – FY 2008–09 Adopted Budget 13 City Overview

Downtown and Surrounding Redevelopment Projects

The City of Portland balances The City's financial commitment to its downtown has resulted in one of the nation's most housing, retail, and office attractive urban cores. Development activity has balanced well with strong gains in housing, space in its development retail, and office space. Through 2002, the downtown area experienced one of the strongest plans. building expansions in its history. Development continues at a high level in the nearby Pearl and South Waterfront districts. The City of Portland maintains strong historic preservation and multifamily housing programs. The preservation of downtown housing and historic structures has created a unique urban atmosphere. The blend of old and modern facilities enhances downtown livability. This livability is exemplified by the Pearl District, a modern mix of loft apartments, condominiums, small shops, and galleries, built in an area north of downtown formerly used for warehouses and factories. As a means to leverage the growth in the Pearl District, and recognizing the need for additional development in parts of downtown, several changes are occuring in downtown urban renewal areas. Plans are for the South Park Blocks and Downtown Waterfront urban renewal districts to end (final debt service payments in 2024), and for the River District urban renewal area to be expanded in both area and maximum indebtedness in order for the City to forge ahead with existing and potential new projects. As part of the development of the Portland Plan, citizens will have input on potential new urban renewal areas in the downtown core.

Transportation and TriMet: Tri-County Metropolitan Transportation District Land Use TriMet provides transit services to about 575 square miles of the metropolitan area. TriMet operates 93 bus lines and a light rail system. In 2007, TriMet provided 63.1 million bus trips and more than 307,000 daily trips on buses and light rail. System ridership continues to grow, as ridership has increased for 18 consecutive years. TriMet figures show the system eliminated 200,100 daily car trips, or 62.5 million trips in 2007.

The downtown Transit Mall is The centerpiece of the system is the downtown Transit Mall. 47 bus routes go through this at the heart of TriMet’s 36-block area, providing easy connections between buses and light rail. The Transit Mall is regional system. at the center of Fareless Square, which includes the heart of downtown Portland and extends to the Lloyd Center on the east side of the Willamette River. The Portland Mall Revitalization Project, expected to be completed in 2009, is intended to enliven SW 5th and 6th avenues at the center of the mall, and bring light rail to the heart of downtown Portland between Union Station and Portland State University.

Growth of Regional Light Rail System

TriMet continues to expand TriMet’s nationally recognized light rail system, known as MAX, runs on a 33-mile line the light rail system. between Hillsboro (18 miles to the west of downtown) and Gresham (15 miles to the east). In 2001, a 5.5-mile spur to the Portland airport was added, and the 5.8-mile Interstate line opened in May 2004. Portland is one of only nine major metropolitan cities in the nation with a public transportation rail system running from the city center to the airport. A new Interstate-205 MAX line, scheduled for completion in 2009, will run 6.5 miles from northeast Portland’s Gateway Transit Center to Clackamas Town Center and then to the city of Milwaukie. The growth in MAX lines has added significant economic value to the region. To date, $6 billion has been invested in new development within walking distance of the 64 MAX stations.

14 City of Portland, Oregon – FY 2008–09 Adopted Budget City Overview

Portland Streetcar Expansion

The Portland Streetcar Working with TriMet, the City completed a 2.1 mile streetcar line in October 2001. The line complements bus and light runs from Northwest Portland, through the Pearl District, to Portland State University’s rail transit. urban plaza. This successful system was coupled with development of the South Waterfront area extending along the Willamette River, passing through River Place at Lowell. Building on its past success, the City is working on expanding the streetcar by extending service to the Lloyd District and the Central Eastside. It will help stimulate and support new high- density, mixed-use development in the Central City east of the Willamette River.

Metro

Metro is the country’s only Under Oregon land use law, the Portland area is surrounded by an urban growth boundary. elected regional government. Metro, the country’s only elected regional government, manages the boundary and growth within it. Balancing growth with the maintenance of natural amenities is one of the region’s major challenges. Citizen desire for parks and natural areas was demonstrated through passage of a $227 million Metro park and nautral areas bond measure in 2006. Funds from the bond will be used to preserve natural areas at the regional, local, and neighborhood levels.

The Region and Its Environment

Portland is one of the first Portland works to maintain a high quality of life and a healthy environment. Under the cities in the country to have Endangered Species Act, steelhead and salmon within Portland-area watersheds were listed waterways listed under the as threatened species. In that context, the City must carefully balance environmental, Endangered Species Act. recreational, and commercial concerns as it develops both banks of the Willamette River through the River Renaissance project.

Post-Secondary Education

Portland State University’s Portland State University (PSU), one of three large state universities in Oregon and the new urban plaza sits along largest in the Portland area, is located on a campus encompassing more than 28 blocks the city’s recently developed adjacent to the downtown business and commercial district. As part of its nationally streetcar line. recognized University District Plan, PSU opened a new public administration building and urban plaza in 2001, and built a new $70 million Northwest Center for Engineering, Science, and Technology center nearby, which opened in 2006.

Many fine schools dot the The Portland area also hosts many other notable institutions, including public, private, and Portland landscape. health-oriented schools. Portland, Mount Hood, and Clackamas community colleges provide excellent and affordable two-year programs for many area residents. Private institutions like Lewis and Clark College, Reed College, and the University of Portland have each graduated outstanding leaders in diverse fields. Three health science institutions are found in Portland: Oregon Health and Science University, National College of Naturopathic Medicine, and Western States Chiropractic College.

These educational assets, plus clean water and air, cultural diversity, architectural beauty, and the relative ease of getting around, combine to make Portland a popular, livable city. Portland is consistently rated as one of the best cities in the United States in which to live.

City of Portland, Oregon – FY 2008–09 Adopted Budget 15 City Overview

Figure 2: A Profile of Portland’s Citizens

Percent Percent Percent General Characteristics 2000 of Total 2006 of Total Change City Population 1 529,121 --- 539,950 --- 2.0% Male 261,565 49.4% 267,342 49.5% 2.2% Female 267,556 50.6% 272,608 50.5% 1.9% Age Median age (years) 35.2 --- 36.4 --- 3.4% Under 5 years 32,300 6.1% 36,584 6.8% 13.3% 25 years and older 363,106 68.7% 379,962 70.4% 4.6% 65 years and older 61,163 11.6% 56,547 10.5% -7.5% Race/Ethnic Distribution One Race 507,166 95.9% 522,625 96.8% 3.0% White 412,241 77.9% 421,842 80.7% 2.3% Black or African American 35,115 6.6% 35,534 6.8% 1.2% American Indian & Alaska Native 5,587 1.1% 7,170 1.4% 28.3% Asian 33,470 6.3% 37,993 7.3% 13.5% Native Hawaiian & other Pac. Is. 1,993 0.4% 2,001 0.4% 0.4% Some other race 18,760 3.5% 18,085 3.5% -3.6% Two or more races 21,955 4.1% 17,325 3.2% -21.1% Hispanic or Latino (of any race) 36,058 6.8% 48,500 9.0% 34.5% Household Population 514,129 --- 526,107 --- 2.3% Average household size 2.30 --- 2.24 --- -2.6% Average family size 3.00 --- 3.01 --- 0.3% Social Characteristics Population 25 years and over 363,851 --- 379,962 --- 4.4% High school graduate or higher 311,725 85.7% 80,424 21.2% -74.2% Bachelor's degree or higher 118,698 32.6% 90,001 23.7% -24.2% Civilian veterans (18 years and over) 49,757 11.9% 37,848 7.0% -23.9% Speak language other than English at home (population 5 years and over) 84,128 16.9% 98,129 18.2% 16.6% Portland at Work Management, professional, and related occupations 102,760 37.2% 114,402 41.5% 11.3% Service occupations 41,444 15.0% 48,090 16.8% 16.0% Sales and office occupations 73,250 26.5% 68,916 23.6% -5.9% Farming, fishing, and forestry 679 0.2% 748 0.2% 10.2% Contruction, extraction, and maintenance occupations 19,405 7.0% 19,548 7.5% 0.7% Production, transportation, and material moving occupations 38,546 14.0% 32,732 10.5% -15.1% Median Household Income (dollars)2 $40,146 --- $44,273 --- 10.3% Median Family Income (dollars)2 $50,271 --- $57,952 --- 15.3% Housing in Portland Total Housing Units 237,307 --- 251,348 --- 5.9% Owner-occupied housing units 124,767 55.8% 134,101 57.7% 7.5% Renter-occupied housing units 98,970 44.2% 100,830 42.3% 1.9% Vacant housing units 13,570 5.7% 16,417 7.8% 21.0% Median home price3 $163,400 --- $275,000 --- 68.3% 1 All data is from the US Census Bureau's 2006 American Community Survey, unless noted. 2 Source: US Census Bureau, adjusted for inflation. 3 Source: local RMLS, May 2008

16 City of Portland, Oregon – FY 2008–09 Adopted Budget City Overview

Figure 3: City of Portland Organization Chart

City of Portland, Oregon – FY 2008–09 Adopted Budget 17 City Overview

FORM OF CITY GOVERNMENT The City of Portland, incorporated in 1851, is a home rule charter city. The City Charter is the basic law under which the City operates and can be amended only by a vote of the people. In 1913, a modified commission form of government was created, which is rare in cities as large as Portland. The City operates under the provisions of the City Charter and City Code, which are consistent with the Oregon Constitution and state law (the Oregon Revised Statutes). Nonemergency ordinances are passed by a simple majority vote of three of the five Council members. The Charter provides for five nonpartisan Council members, called Commissioners, including the Mayor. They are elected at-large to four-year terms. The positions are full- time and salaried. The City Auditor is also elected and required by Charter to be a Certified Public Accountant. The Auditor is not part of the Council and has no formal voting authority.

The Mayor and The Mayor is the formal representative of the City and is responsible for assigning each of Commissioners act the Commissioners responsibility for one of five departments: Finance and Administration, as legislators and Public Affairs, Public Safety, Public Utilities, and Public Works. The Mayor also decides administrators. which bureaus the Commissioners will manage. The Mayor can change these assignments at any time. Traditionally, the Mayor has been the Commissioner of Finance and Administration. The Mayor and Commissioners act as legislators and administrators. Thus, Council members are responsible for both enacting and enforcing City laws, as well as administering bureaus under their supervision. The Auditor receives and maintains all documents relating to the accounts and contracts of the City, including its debts, revenues, and financial affairs. The position is responsible for conducting financial and performance audits of City bureaus and their functions. In addition, the Auditor's Office serves as the Council Clerk, responsible for the processing and filing of all official Council actions.

18 City of Portland, Oregon – FY 2008–09 Adopted Budget City Overview

DEMOGRAPHIC DATA

Population Since 2000 Portland’s Rapid increases can be a negative trend if service demands increase faster than revenue Population has been growing growth. Similarly, declines in population can reduce demand and revenue requiring cuts in at 0.96% per annum, which is expenditures. From 1996 to 2007, Portland's population increased by about 65,000. This is well below Metro average of an overall increase of 13 % over twelve years or around 1.1% annually. 1.64.

Figure 4: Portland’s Population Growth

580,000

560,000

540,000

520,000

500,000

480,000

460,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Per Capita Income Portland’s 2006 per capita Per capita personal income is one measure of community's ability to pay for government income of $36,845 is 10.6% services. Declining per capita personal income is a warning trend indicating general higher than the state average. economic problems and a potential decline in the ability of citizens to provide tax resources for government services. From 1995 to 2006 per capita personal income in Portland metro increased by 3.6 percent a year in nominal dollars or 1.1 percent in constant dollars. Since 2003, after three years of consecutive decline, real per capita personal income has grown 1.5 percent per year.

Figure 5: Portland’s Per Capita Income (in 2006 dollars)

38,000

37,000 36,000

35,000 34,000

33,000 32,000

31,000 30,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

City of Portland, Oregon – FY 2008–09 Adopted Budget 19 City Overview

Job Growth A total of almost 34,000 jobs disappeared in the Multnomah County between 2000 and 2003. However 28,000 jobs were added to Multnomah County between 2003 and 2007, absorbing most prior years' job losses. Manufacturing suffered one of the sharpest declines in employment over the period, but education, health services, leisure, hospitality and government sectors witnessed the fastest growth in six years.

Figure 6: Multnomah County Employment 460,000

450,000

440,000

430,000

420,000

410,000

400,000

390,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

WORKFORCE DIVERSITY The Council has directed that all City bureaus develop a workforce reflecting the rich cultural diversity of Portland as a community. Figure 7 on page 21 indicates that the percentage of all City employees who are women has roughly stabilized at just over 32% in 2008. The percentage of minority employees hovers at just over 16%. Figure 8 on page 21 is current as of June, 2008. It shows female and minority employment as a percentage of total employment within City bureaus, with an increase in diversity being reported in 2008.

20 City of Portland, Oregon – FY 2008–09 Adopted Budget City Overview

Figure 7: Citywide Workforce Diversity History Women and Minorities as a % of City Employees

35%

30%

25%

20%

15 %

10 %

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Minority Female

Figure 8: Citywide Workforce Diversity by Bureau—2008

Female Employees as a Minority Employees as a Total Percent of Total Percent of Total Employees PoliceC 28.4% 13.1% 1,225 Portland Fire iand Rescue 9.4% 16.7% 747 Portland Officet of Transportation 25.5% 16.7% 726 Office of Managementy and Finance 41.7% 25.2% 626 Waterw 31.1% 17.1% 633 Bureau of Environmentali Services 32.8% 14.2% 494 Parks and Recreationd 37.7% 16.0% 413 Bureau of Developmente Services 45.2% 15.7% 325 Auditor 53.2% 6.4% 47 Bureau of EmergencyW Communication 71.5% 11.0% 137 Office of Neighborhoodo Involvement 67.5% 22.5% 40 Planningr 53.0% 13.3% 83 Attorneyk 67.9% 10.7% 56 Office of Sustainablef Development 66.7% 16.7% 42 Mayor's Officeo 50.0% 40.0% 20 Bureau of Housingr and Community Development 75.0% 40.6% 32 Commissionerc of Public Utilities (Sam Adams) 57.1% 28.6% 7 POEMe 50.0% 12.5% 16 Commissioner of Public Works (Nick Fish) 60.0% 40.0% 5 CableD 44.4% 33.3% 9 Commissioneri of Public Affairs (Dan Saltzman) 50.0% 33.3% 6 Commissionerv of Public Safety (Randy Leonard) 50.0% 16.6% 6 Children's Investmente Fund 75% 0.0% 4 Government Relations 40% 0.0% 5 FPD&R 93% 26.7% 15

City Totals 1,838 932 5,671

City of Portland, Oregon – FY 2008–09 Adopted Budget 21 Budget Overview

Budget Overview

A GUIDE TO THE BUDGET OVERVIEW

The City of Portland budget document for FY 2008-09 serves as a fiscal, programmatic, and policy information reference. The document is organized to provide Citywide information at levels of increasing detail. Within the Budget Overview, the City's budget decisions and financial information are presented from a variety of perspectives. There is special emphasis on the General Fund, as it contains the discretionary resources available to the City and thus represents the most flexibility for allocating funds to specific programs. In most instances, dollar amounts in the Budget Overview are shown in comparison with the Revised Budget for FY 2007-08. In the following pages, you will find information on:

The total City budget

The General Fund budget

Highlights of budget decisions by City goal

Highlights of the Capital Improvement Plan

A description of the budget process Summary financial tables are located in the Financial Summaries section of this document.

BUILDING A BUDGET TO MEET CITY GOALS

FY 2008-09 is only the second in many years that did not forecast a need for spending cuts to balance the General Fund. Funds are available to further the Council's goals, as set out below. These goals are informed by the City's mission, vision, and values, and the goals in turn helped define the Council's focus areas. For the FY 2008-09 budget, City Council members reaffirmed five priority focus areas they endorsed for FY 2006-07 and FY 2007- 08. In addition, the City has completed a two-year visioning process that engaged thousands of Portlanders in identifying a fresh, current vision for the City's future. This process provides the backdrop for a City strategic plan that will help drive budget decisions in coming years. The Portland Plan, which encompasses the City’s Comprehensive Plan update, the Central Portland Plan, and the Vision into Action project, will lay the policy groundwork for the City’s planning and development projects for the next 30 years. The three-year planning process will incorporate community feedback and make recommendations on issues such as urban design and growth, housing, transportation, economic development, and sustainability. FY 2008-09 marks the second year of the three-year effort to complete the plan.

Council Vision, Vision Mission, Values, and Goals We aspire to be a beautiful, safe, and clean city of choice for ourselves and future generations—a city with a healthy and sustainable economy, strong businesses, vital neighborhoods, a diverse population, excellent schools, a vibrant downtown, an honest government that is open and participatory, extensive recreational and cultural opportunities, a healthy environment, and sufficient housing stock to meet our needs.

22 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Mission The City of Portland is a responsive and accessible local government that strives to continually identify and seize opportunities to improve the quality of life in our community. We work to support civic excellence and effective, responsive community and intergovernmental partnerships. We provide urban services to meet the public health and safety, transportation, environmental, recreational, planning, and neighborhood livability needs of our citizens and visitors. We are responsible for providing clean and safe drinking water and for the maintenance of the City's water system. We are responsible stewards of our City's fiscal health and resources. We utilize a diverse, skilled, and dedicated workforce to provide seamless service to our citizens and visitors. We strive for excellence in all we do.

Values

Commitment: We believe that service to our citizens and customers is our most important job. We will make sure that people can count on us to be responsive to the needs of the community.

Integrity: Whenever we make a decision, provide a service, or deal with citizens and customers, we act with honesty and integrity. People learn from interacting with us that they can continue to trust us. We treat all people equally and equitably.

Partnerships: Our team supports and complements the leadership of our Mayor and City Council. We involve people and key stakeholders because we value their commitment, diversity, and ownership.

Innovation: We apply creative and cost-effective solutions when delivering services to our community with a goal of continuously improving the quality of life.

Goals The current goals of the Mayor and the City Council follow. In the coming years, these goals will be updated and realigned to reflect results of the citywide visioning process and to ensure consistency with the City's Managing for Results initiative. Ensure a safe and peaceful community:

Protect life

Preserve property

Promote community responsibility, commitment, and preparedness Promote economic vitality and opportunity:

Support quality education

Provide high quality, reasonably priced public utility services

Create an attractive location for businesses and jobs Improve the quality of life in neighborhoods:

Ensure growth and development are well managed

Provide access to transportation and recreation services

Provide affordable housing and reduce neighborhood nuisances

City of Portland, Oregon – FY 2008–09 Adopted Budget 23 Budget Overview

Protect and enhance the natural and built environment:

Protect the city's land, water, air, and open spaces

Provide safe drinking and waste water services

Protect endangered species Operate and maintain an effective and safe transportation system:

Provide multi-modal transportation choices

Maintain and improve street conditions

Support economic development and neighborhood livability Deliver efficient, effective, and accountable municipal services:

Deliver responsive, competitive government services

Maintain healthy City financial condition

Manage government to achieve goals

Budget Preparation The FY 2008-09 budget process built on the highly collaborative and participatory process Process and Direction Mayor Potter began in 2005. Advisors from the community and Commissioners engaged in a team process to review bureau budget requests and to make recommendations to the Mayor. The Mayor asked a group of Community Budget Advisors, composed of five Portland residents, and the City Commissioners to aid him in developing the Proposed Budget. Two budget teams, each composed of two Commissioners and two Advisors, reviewed bureau budget requests. Each team reviewed half the City bureaus, divided so that no Commissioner reviewed a budget in his portfolio. Each team made recommendations to the Mayor on the budget requests it reviewed, for consideration in development of the Mayor's Proposed Budget. In addition, a work group composed of two City Commissioners, one advisor, and two members of the Portland Development Commission (PDC) board reviewed PDC's budget. All groups held numerous public meetings. FY 2008-09 is the second year since FY 2000-01 that General Fund cuts have not been required as part of City bureau budget requests. A healthy regional economy has resulted in increases in the major General Fund revenue categories; total General Fund resources exceed the amount required to maintain current services by $33.2 million for FY 2008-09. Requests for these funds totaled $116.4 million, which called for difficult choices in the budget teams' review and the Mayor's Proposed Budget decisions. Council, sitting as the Budget Committee, held a public hearing on the Proposed Budget and also received online testimony. The Council/Budget Committee then considered suggested changes and approved a budget for FY 2008-09, which was forwarded to the Multnomah County Tax Supervising and Conservation Commission for review and another public hearing required by state law. Council adopted the budget on June 26, and the Budget Summary that follows contains a summary of decisions included in the Adopted Budget.

BUDGET SUMMARY

Total City Budget Total Legal Budget The total City budget is up State of Oregon Local Budget Law requires reporting of the City's total budget. This is by $84 million from the defined to include total operating costs and the internal transactions between funds. The FY 2007-08 Revised Budget. total Adopted Budget for FY 2008-09 is $3.26 billion, which reflects an $84 million increase from the FY 2007-08 Revised Budget.

24 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Total Net Budget The total City budget overstates actual expenditures for programs, because it double counts internal transactions (internal materials and services and fund-level cash transfers). Such transactions occur between City funds, when one City agency provides services to another. Because this technically inflates the budget, the City usually references a net budget.

The net Adopted Budget is After eliminating the internal double count and $30 million in tax anticipation notes, the $46 million more than the FY City's net budget in FY 2008-09 is $2.41 billion. Table 1 of the Financial Summaries 2007-08 Revised Budget. provides greater detail of the total and net City budget figures. A summary is shown below.

Figure 9: Expenditures by Major Object Category Revised Adopted Dollar Percent Major Object Category FY 2007-08 FY 2008-09 Change Change Personal Services$ 523,382,388 $ 546,279,689 $ 22,897,301 4.4% External Materials & Services 696,627,336 680,487,717 (16,139,619) -2.3% Internal Materials & Services 209,823,663 209,302,278 (521,385) -0.2% Capital Outlay 292,676,174 330,241,217 37,565,043 12.8% Total City Bureau Expenses 1,722,509,561 1,766,310,901 43,801,340 2.5% Contingency 429,484,607 449,378,393 19,893,786 4.6% Ending Fund Balance 103,030,487 79,711,028 (23,319,459) -22.6% Debt Service 346,080,075 357,299,774 11,219,699 3.2% Fund-level Cash Transfers 578,333,067 610,942,078 32,609,011 5.6% Total City Budget 3,179,437,797 3,263,642,174 84,204,377 2.6% Less Internal Transfers & Tax Anticipation Notes (811,796,730) (850,244,356) (38,447,626) 4.7% Total Net City Expenses$ 2,367,641,067 $ 2,413,397,818 $ 45,756,751 1.9%

Capital outlay expenditures are up $45.3 million in the Transportation Operating Fund; $33.1 million is for the Streetcar Eastside Extension project and streetcar vehicle purchases. Resources for the net City budget are summarized in the figure below:

Figure 10: Resources by Major Object Category

Revised Adopted Dollar Percent Major Object Category FY 2007-08 FY 2008-09 Change Change Beginning Fund Balance$ 617,533,213 $ 752,577,915 $ 135,044,702 21.9% Taxes 393,870,640 397,253,920 3,383,280 0.9% Licenses & Permits 154,544,827 167,379,164 12,834,337 8.3% Service Charges & Fees 443,388,369 464,786,052 21,397,683 4.8% Federal Sources 51,939,271 64,498,753 12,559,482 24.2% State Sources 54,777,378 65,949,868 11,172,490 20.4% Local Sources 71,350,221 100,232,390 28,882,169 40.5% Miscellaneous Sources 95,973,932 75,788,687 (20,185,245) -21.0% Bond & Note Proceeds 507,903,216 354,931,069 (152,972,147) -30.1% Internal Transfers 788,156,730 820,244,356 32,087,626 4.1% Total City Budget 3,179,437,797 3,263,642,174 84,204,377 2.6% Less Internal Transfers & Tax Anticipation Notes (811,796,730) (850,244,356) (38,447,626) 4.7% Total Net City Budget$ 2,367,641,067 $ 2,413,397,818 $ 45,756,751 1.9%

City of Portland, Oregon – FY 2008–09 Adopted Budget 25 Budget Overview

Major Resources The four largest resource categories in the net City budget are beginning balance, taxes, service charges and fees, and bond and note proceeds.

Beginning balance, the largest single resource, is increasing by $135.0 million or 21.9%. An increase of $151.4 million in the Sewer System Construction Fund’s beginning balance, due to a large debt issue in FY 2007-08, is most of the change.

Tax revenues, all but $19.3 million of which are property taxes, are increasing by $3.4 million. While the General Fund is increasing by $9.9 million and the Fire & Police Disability & Retirement (FPDR) Fund by $14.7 million, two local option levies ended in FY 2007-08. A renewed Children’s Investment Fund levy is on the November 2008 ballot, and Council has increased discretionary funding for Portland Parks & Recreation by $5.4 million over two years to replace the operating funding supplied by its levy.

Service charges and fees are up $21.4 million, primarily in the Sewer System Operating Fund ($17.4 million) and the Water Fund ($3.3 million). The FY 2008-09 average effective sewer and stormwater bill increase is 5.7%, and the average effective water rate increase is 8.6%.

Bond and note proceeds are decreasing by $153.0 million. The Sewer System Construction Fund budgeted $241 million less in FY 2008-09 than in FY 2007-08, when it issued $290 million in new revenue bonds. The Water Construction Fund, which did not have a debt issue in FY 2007-08, expects to issue $81 million in FY 2008-09.

Total City Budget The following charts graphically summarize the total net City budget. Charts

Figure 11: City Net Budget—Resources

Bond & Note Beginning Proceeds Fund Balance

Miscellaneous Sources

Local Sources

State Sources

Federal Sources

Taxes Resource Budget Percent Beginning Fund Balance$ 752,577,915 31.2% Taxes 397,253,920 16.5% Service Charges Licenses Licenses & Permits 167,379,164 6.9% & Fees & Permits Service Charges & Fees 464,786,052 19.3% Federal Sources 64,498,753 2.7% State Sources 65,949,868 2.7% Local Sources 100,232,390 4.2% Miscellaneous Sources 75,788,687 3.1% Bond & Note Proceeds 324,931,069 13.5% Total Net Budget$ 2,413,397,818 100.0%

26 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Figure 12: Total City Bureau Expenses—Requirements by Service Area

Leg/Admin/Support Public Utilities

Community Development

Transportation & Parking

Service Area Budget Percent Leg/Admin/Support$ 294,276,334 16.7% Parks, Recreation, Community Development 323,081,611 18.3% & Culture Parks, Recreation, & Culture 132,346,266 7.5% Public Safety Public Safety 381,250,434 21.6% Transportation & Parking 215,861,930 12.2% Public Utilities 419,494,326 23.7% Total City Bureau Expenses$ 1,766,310,901 100.0%

General Fund Budget General Fund resources are categorized as either discretionary or nondiscretionary. Discretionary resources are those that the City Council can allocate to programs and services in any area. In other words, these resources have few restrictions on how they can be allocated. General Fund discretionary resources are typically used to support such basic City services as police, fire, and parks.

Discretionary resources total Discretionary resources include property taxes, utility license fees, business license fees, $391.5 million, 73.7% of the transient lodging taxes, state shared revenues (from cigarette taxes and liquor sales), General Fund. interest income, and miscellaneous revenues and cash transfers into the General Fund. Nondiscretionary resources include grants, contract revenues, service reimbursements, and other revenues specifically dedicated to a particular purpose. All General Fund resources are also categorized as either one-time or ongoing. An example of a one-time resource is an increase in beginning fund balance. While available in the specific year, it is not a resource that can be relied on in future years. An example of an ongoing resource is an increase in property tax revenues that would be sustained over time. The City budget uses a combination of one-time and ongoing resources to fund programs and services. City financial policies state that one-time resources may not be used to fund ongoing expenses. The following charts summarize the City’s General Fund budget. General Fund resources are discussed in detail in the Financial Overview, and Table 9 in the Financial Summaries section shows General Fund discretionary and total resources as well as General Fund bureau appropriations backed by discretionary revenue.

City of Portland, Oregon – FY 2008–09 Adopted Budget 27 Budget Overview

Figure 13: General Fund—Resources by Major Category

Utility License Fees Service Charges & Other

Intergovernmental Business Licenses Bond and Note Proceeds

Lodging Taxes Transfers from Other Funds

Resource Budget Percent Beginning Fund Balance$ 42,632,005 8.0% Property Taxes 179,974,860 33.9% Lodging Taxes 16,079,911 3.0% Business Licenses 75,705,012 14.3% Beginning Fund Utility License Fees 65,810,675 12.4% Balance Service Charges & Other 29,911,009 5.6% Property Taxes Intergovernmental 38,052,017 7.2% Bond and Note Proceeds 7,600,000 1.4% Transfers from Other Funds 75,406,082 14.2% Total General Fund Budget$ 531,171,571 100.0%

Figure 14: General Fund—Requirements by Service Area

Reserves and Other Transfers Transportation & Parking Leg/Admin/Support

Public Safety Community Development

Parks, Recreation, & Culture Service Area Budget Percent Leg/Admin/Support$ 109,990,630 20.7% Public Utilities Community Development 48,070,280 9.0% Parks, Recreation, & Culture 64,029,745 12.1% Public Utilities 620,225 0.1% Public Safety 260,206,783 49.0% Transportation & Parking 14,060,159 2.6% Reserves and Other Transfers 34,193,749 6.4% Total General Fund Budget$ 531,171,571 100.0%

28 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Summary of Decisions This section summarizes the Council’s FY 2008-09 budget decisions by Council goal. Many by Council Goals of the decisions support more than one goal, which is consistent with the approach of the Mayor and Council to leverage efforts and funding.

Ensure a safe and peaceful community

$9.6 million, including $2.5 million in ongoing funds for debt service. These funds will be used to replace three critical public safety infrastructure systems: 800 MHz radios, 9- 1-1 dispatch, and police data. Also commit $4 million pledged in last year's budget for 9-1-1 dispatch system replacement.

Provide for purchase of suitable land for a regional public safety training center, to be supplemented with funds from partner jurisdictions

Commit funds to finance a $6 million Emergency Coordination Center, fulfilling a need that was called out in last year's TOPOFF emergency exercise

Purchase additional jail beds from Multnomah County for a third year ($456,000), targeted toward low-level repeat offenders

30 outpatient and 12 inpatient drug and alcohol treatment slots for chronic, low-level criminal offenders to reduce crime and help offenders become productive members of society

Replace mobile digital computers for police officers with laptop computers and provide for licensing, maintenance, and a replacement reserve for the new laptops

Continue domestic violence advocate positions in the Police Bureau

Continue sexual assault victim advocate positions in the Police Bureau

Add a half-time position to support Independent Police Review

Establish a one-stop domestic violence center with $1.8 million for implementation and $422,000 in ongoing funds for staffing and program operations

$250,000 to offer treatment and case-management services to prostitutes who have frequent interactions with the justice system

Continue implementation of the Street Access for Everyone initiative, providing day access facilities for the homeless

Add a special hazards inspector position in Portland Fire & Rescue

$304,000 for deferred maintenance and repairs to Portland Fire & Rescue facilities

Provide ongoing and one-time funding for the Office of Youth Violence Prevention, in addition to one-time funding for grants

Continue with implementation of a citywide drug strategy

Continue funding for the Local Public Safety Coordinating Committee

Promote economic vitality and opportunity

$889,000 for customer service improvements in the Bureau of Development Services, including technology upgrades and improvements

$500,000 for a sustainable economic development initiative in the Office of Sustainable Development, focused on sustainable food policy, sustainable business support, and biofuels

$3.6 million to the Portland Development Commission for economic development activities, including:

Continue another year of funding for storefront improvement grants and small business loans in targeted areas, expanding these successful programs beyond urban renewal districts ($900,000)

City of Portland, Oregon – FY 2008–09 Adopted Budget 29 Budget Overview

$1.3 million for a range of ongoing business retention and recruitment activities, including dedicated marketing for downtown businesses

$250,000 for technical assistance provided by minority chambers of commerce

$310,000 in support of neighborhood business districts

$300,000 for targeted trade sector industries, including high-tech, "green" business, apparel manufacturing, and traditional industries

$100,000 to restore Brownfields for potential industrial uses

$100,000 for business success assistance, largely targeted to small and mid-sized businesses

$300,000 to enhance marketing of downtown

A third year of funding to support Lewis & Clark Law School's popular and successful small business legal clinic, begun in FY 2006-07

Provide for increased coordination between Portland Development Commission and Office of Sustainable Development to recruit and retain sustainable businesses

Support for development of major Planning projects:

The second of three years' funding to update the City's Comprehensive Plan

The second of three years' funding to develop a long-range plan for the central city

Enhanced funding for youth employment

Improve the quality of life in neighborhoods

Complete a $5.4 million commitment of ongoing General Fund support in future years to continue Portland Parks & Recreation programming and operations currently funded by the expiring Parks levy

$7.0 million for the Bureau of Housing and Community Development to support essential services that further goals such as eliminating homelessness, enhancing economic opportunities that lead to family wage jobs, providing Housing Rapid Response for persons in crisis, and promoting affordable housing

Funding for a Human Rights Commission to improve community relations and access to City government

Improve civic engagement with additional funding to the Office of Neighborhood Involvement

A continued Schools, Families, Housing initiative, providing funds for rent assistance in targeted neighborhoods

Implementation of the citywide visioning project (visionPDX) with funds for "Vision into Action" grants

Continued funding for neighborhood district coalition offices to allow an additional community organizer position in each of the seven coalitions

Develop a long-term plan for use of Mt. Tabor

Implement a plan for East Portland developed in FY 2007-08

Convert a rundown playground at Marysville School into a neighborhood park

Construct and site 24-hour restrooms in selected neighborhoods

Continue enhanced programming for teens in the parks system

Continue support for the Interstate Firehouse Cultural Center

Create a position to coordinate immigrant and refugee programs with a focus on breaking down barriers to their participation in City government

30 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Protect and enhance the natural and built environment

Complete the development of a new park in the Downtown Park Blocks (Park Block 5)

Continued Downtown Transit Mall Renovation project, with collaboration among the bureaus of Water, Environmental Services (BES), and Transportation; PDC; and TriMet, to meet the scheduled completion date in 2009

Continued work on the BES Combined Sewer Overflow (CSO) project, on schedule for completion in 2011

Continue work to renovate and complete the East Portland Community Center with construction of a fitness center and swimming pool, to be completed in FY 2009-10

Expand efforts to reclaim the Willamette River for public use and economic activity by completing the plan for the river's north reach and beginning planning for the south and central reaches

Utilize urban renewal funding to plan, remodel, or complete several new park facilities, including a neighborhood park and a greenway in South Waterfront, "The Fields" neighborhood park in the Pearl neighborhood, Ankeny Plaza and Park, and Waterfront Park redevelopment to house Saturday Market

Expand the invasive species eradication program in the parks

Plan for compliance with the federally-mandated Long-Term 2 Surface Water Treatment (LT2) Rule for the City's Bull Run water supply

Build new sewer connections, pipes, and pumps in an unsewered area south of Portland International Airport

Design the planned rehabilitation of the Water Bureau's Interstate Avenue operations facility

Begin implementation of the Habitat Conservation Plan to improve habitat conditions in the Bull Run watershed and Sandy River basin to contribute to the recovery of native fish populations

Dedicate an additional $391,000 for maintenance activities in Portland Parks & Recreation

Increase the major maintenance reserve for the Portland Building

Complete revisions to the City's tree policy and related City Code provisions

Operate and maintain an effective and safe transportation system

The General Fund is providing $6.0 million to the Office of Transportation (PDOT), with projects including:

$2.0 million to cover a decrease in gas tax revenues

$1.6 million for sidewalks, bike lanes, and street improvements to NE Cully Blvd.

$800,000 to help bridge a funding gap in PDOT

$500,000 toward a draft environmental impact statement for the proposed Milwaukie light rail line

$400,000 to continue upgrades and needed equipment replacement for streetlights in the area around Keller Auditorium

$250,000 to develop additional safe routes to schools

$200,000 to augment traffic investigations and address a safety backlog

$150,000 for the City’s bicycle program

$75,000 for N/NE Killingsworth St. planning efforts

City of Portland, Oregon – FY 2008–09 Adopted Budget 31 Budget Overview

Deliver efficient, effective, and accountable municipal services

Continued funding for the Enterprise Business Solution project to implement and operate a new Citywide financial management system, which will go live in FY 2008- 09

Continue support for the City wellness policy and two positions in Human Resources to provide additional support for labor/management relations and coordinate the Family Medical Leave Act for the City

Continue a position in Purchases to administer the Sheltered Market and Supplier Diversity program, designed to increase City contracts with minority-owned, women- owned, and emerging small businesses

Continue a position to continue the Strategic Sourcing program to expand the effort to professional, technical, and expert contracts

Revise the City's franchise renewal policies and implement related changes to the City Code

Improve the City's efforts in e-government, and ensure compliance with regulations regarding online payments and security

Establish a reserve in the Water Bureau to stabilize the rate impact of implementing the LT2 Rule

CAPITAL IMPROVEMENT PLAN

Overview The FY 2008-09 Adopted Capital Improvement Plan (CIP) budget totals $459.3 million, not including the Portland Development Commission. The Citywide CIP for FY 2008-09 through FY 2012-13 is projected to be $1.6 billion. The General Fund Capital Set-Aside of $1.9 million, net of debt service, is dedicated to the Public Safety Systems Revitalization Project.

FY 2008-09 Highlights Public Safety

Fire & Rescue Facilities GO Bond Program $12,438,909

Public Safety Systems Revitalization Project $9,175,994

Emergency Coordination Center $4,000,000

Fire Apparatus Replacement $1,672,752 Parks, Recreation, and Culture

South Waterfront Greenway/Neighborhood Park $9,525,000

East Portland Community Center Pool $5,000,000

Metro Bond Neighborhood Park Acquisitions $2,949,115 Public Utilities

Combined Sewer Overflow Program $139,102,000

Sewage Treatment Systems $6,758,000

Bull Run Dams 1 & 2 Improvements $4,415,000

Sandy River Crossing Conduit Relocation $3,900,000

Interstate Facility Rehabilitation $3,738,000

EPA LT2 Compliance Planning $1,000,000

32 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Transportation

Streetcar Eastside Extension & Vehicle Purchase $41,645,540

Ledbetter Railroad Overcrossing $5,301,500

East Burnside: Bridge to 14th Avenue $4,822,313

47th & Columbia Intersection $3,900,000 Legislative, Administrative, and Support

Enterprise Business Solution Project $14,764,504

New Archives Center $3,670,000

10th & Yamhill Parking Garage Redevelopment $3,500,000

THE BUDGET PROCESS

Local Budget Law Local government budgeting in Oregon is governed by Local Budget Law, Chapter 294 of the Oregon Revised Statutes. The law has two major objectives:

Provide standard procedures for preparing, presenting, and administering local budgets

Ensure citizen involvement in the preparation of the budget Budgeting in Oregon is an effort shared by citizens and elected and appointed officials. Citizens involved in the budget process work to ensure the services they require and want are adequately funded. City officials are responsible for building a budget that reflects the public interest and is structurally correct. The Tax Supervising and Conservation Commission (TSCC), a five-member citizen board appointed by the Governor, reviews the budgets of all governmental jurisdictions in Multnomah County. The commission, together with the State Department of Revenue, is responsible for ensuring the City budget complies with Local Budget Law.

Budget Officer and To give the public ample opportunity to participate in the budget process, Local Budget Law Budget Committee requires that a Budget Officer be appointed and a Budget Committee formed. The Budget Officer prepares the Proposed Budget. The Budget Committee then reviews and revises the Proposed Budget before it is formally adopted by the governing body. For the City of Portland, the Budget Officer is the Mayor, and the Budget Committee consists of the members of the City Council. Notices are published, budgets are made available for public review, and opportunities for public comment are provided. These actions encourage public participation in the budget decision-making process and give public exposure to budgeted programs and fiscal policies prior to adoption.

Preparing the Acting as the Budget Officer, the Mayor is responsible for overseeing the preparation of the Proposed Budget Proposed Budget for presentation to the City Council, sitting as the Budget Committee. The Proposed Budget is the culmination of an extensive process of budget development, analysis, and revision. Bureaus prepare Requested Budgets in accordance with direction given by the Mayor. These are submitted to Financial Planning, which then analyzes the requests.

The Mayor considers a wide variety of input in crafting the Proposed Budget. This year he considered the recommendations from two work teams composed of Commissioners and Community Budget Advisors, as well as other public input in various forms.

City of Portland, Oregon – FY 2008–09 Adopted Budget 33 Budget Overview

Public Involvement The City of Portland engages in a proactive public outreach effort as part of the budget Process process. In the past, the City has utilized a variety of methods to solicit budget input, including telephone and mass mailed surveys, community forums, and a community budget web site.

This year, the City held two community budget forums to inform the Mayor and Council of citizens' comments for the development of the Proposed Budget, and a public hearing to comment on the Proposed Budget after its release. Comments and concerns were heard from the audience, and informal surveys were taken. The forums that preceded Proposed Budget decisions were round table, with community members spending time at several tables that focused on individual service areas. Attendees have consistently indicated that they felt the forums were an excellent opportunity for face-to-face interaction with City Council members and bureau management.

The City has a nationally recognized commitment to active participation in its budget process. Portland uses the following systems to ensure this high level of public involvement.

Budget Web Site The City maintains a community-oriented web site that includes a community budget web page: www.portlandonline.com/communitybudget. At the web site, the public can submit questions about the budget and offer budget suggestions. During the budget decision- making process, electronic testimony is accepted from the web site. The web site also contains bureaus' Requested Budgets, financial analyses of the requests, the budget teams' recommendation reports, and other financial reports.

Budget Advisory Committees (BACs) Bureaus’ BACs are made up of people appointed by the Commissioners-in-Charge. These committees monitor bureau budgets and operations and identify issues for Council consideration. The committees may be provided with time during Council budget hearings to present their reports or submit them in writing. Beginning with the FY 2006-07 budget process, the Mayor directed all bureaus to involve their employees and the public in their budget development. The BACs serve in addition to the previously discussed Community Budget Advisors, who participate in the initial review of bureaus' Requested Budgets and present recommendations to the Mayor for his Proposed Budget.

Portland Utility Review Board (PURB) PURB is an appointed body of nine community members who provide independent and representative review of water, sewer, and solid waste financial plans, budgets, and rates. PURB operates in an advisory capacity to the City Council. Council expects the PURB to provide common ground between the rate makers and the rate payers through analysis of financial plans and budgets. The board meets monthly to ensure a comprehensive under- standing and assessment of the workings of the City's utilities.

Direct Public Testimony Community members may directly contact the Mayor and Commissioners with input for the budget. In addition to participating in the budget advisory committees, the PURB, and community budget forums described above, community members also have several opportunities to personally testify on bureau budget requests:

34 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Overview

Annual Budget Hearings—the City Council, sitting as the Budget Committee, holds one or more public hearings before the budget is approved. The public may testify on any topic during these hearings or submit online testimony. The teams of Commissioners and Community Budget Advisors also took public comments at their meetings, and the City held two budget forums, where participants' comments were transcribed and forwarded to Council.

Tax Supervising and Conservation Commission Hearing—public testimony is taken during the TSCC hearing on the City's Approved Budget.

Adopted Budget Hearing—testimony is taken at the City Council session for the final adoption of the budget. Each year, the Office of the City Auditor issues a report identifying workload and performance trends for each of the City's public services. Part of the report, entitled Service Efforts and Accomplishments (available at www.portlandonline.com/auditor), is a nationally-recognized public opinion survey for the City overall and for each of the covered service areas. This report represents another form of public input used by the Council during the budget process.

Approving the Budget In accordance with Local Budget Law, the City Council is convened as the Budget Committee to consider the Proposed Budget. The public is encouraged to attend and provide testimony on the Proposed Budget. Announcements advertising the Budget Committee meeting are printed in local newspapers prior to the meeting. The timing and frequency of the public notices are governed by Local Budget Law.

Public Process

The Budget Committee meets to accomplish four actions:

Receive the budget message and budget document

Hear and consider public testimony

Review and approve a balanced budget

Approve the rate for property taxes

The Budget Officer may provide a copy of the Proposed Budget to each member of the Budget Committee at any time prior to the first Budget Committee meeting. The budget becomes a public record at this point.

At the first Budget Committee meeting, the Mayor delivers the budget message, explaining the Proposed Budget and significant changes in the City's financial position. After the initial meeting, the Budget Committee may meet as many times as needed to revise and approve the budget. If two or more meetings are held to take comment from the public, the first meeting must meet Local Budget Law publication requirements. Notice of other meetings of the Budget Committee must be provided as required by Oregon public meeting law. All meetings are open to the public.

Output from the Approved Budget Process

Financial Planning summarizes the changes from the Mayor's Proposed Budget to the Approved Budget. This information and copies of the Proposed Budget are sent to TSCC for review and analysis.

City of Portland, Oregon – FY 2008–09 Adopted Budget 35 Budget Overview

Tax Supervising & TSCC is responsible for reviewing, holding hearings, and producing a report on the budgets Conservation for every jurisdiction in Multnomah County. They hold a required public hearing, with Commission Hearing Council in attendance, on the Approved Budget. The outcome of this hearing is a letter certifying that the budget is in compliance with Local Budget Law. The letter may contain recommendations and/or objections. The City is responsible for addressing any objections or recommendations.

Adopting the Budget City Council votes to officially adopt the budget in late June. Changes that are allowed between the time the budget is approved and final adoption are defined by Local Budget Law and are limited. Changes normally include technical adjustments and carryover amendments.

Amending the Budget Changes after budget adoption are completed through the budget monitoring process (BuMP), which also includes a supplemental budget. In a BuMP, bureaus can request to transfer appropriation. In supplemental budgets, bureaus may ask to increase appropriation; the size of the increase determines whether a fund is in the minor or major supplemental budget. The BuMP and minor supplemental budget process provide Council the opportunity to change the budget three times a year. The major supplemental budget process occurs twice a year, timed to coincide with the fall and spring BuMPs, and includes a TSCC hearing.

Budget Calendar Below is a summary of the FY 2008-09 budget calendar, adopted in fall 2007.

Figure 15: FY 2008-09 Budget Schedule

Budget kickoff October 5 Presentation of General Fund financial forecast December 5

Bureaus submit Requested Budgets, capital improvements plans, and December 21 if required, five-year financial plans Public forums on Requested Budgets February 21 & 27 FPD analyses of five-year plans, CIPs, and Requested Budgets due February 25 Council, advisors review Requested Budgets, make recommendations Feb 26–Mar 21

Mayor releases Proposed Budget decisions April 15

Proposed Budget document available May 2 Budget Committee meetings on the Proposed Budget May 7–8, 14 Utility rate review (two hearings) May 21 & 28 Budget Committee action to approve budget June 4 TSCC hearing on Approved Budget June 25 Council action to adopt budget June 26

36 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

CITY FINANCIAL PLANNING PROCESS The first step in the budget process is to prepare updated five-year financial forecasts for each major fund. In addition to the General Fund, specific forecasts are prepared for other major City funds, including Transportation, Environmental Services, and Water. These plans, which forecast resources and expenditure requirements by fund over a five-year period, identify long-term service and financial issues requiring attention during the budget process. The plans aid Council by placing decisions in a long-range financial context for purposes of developing budgets that are balanced for the coming year and subsequent out-years of the forecast horizon.

GENERAL FUND FINANCIAL FORECAST

Overview Financial Planning regularly generates five-year estimates of General Fund discretionary resources and requirements for Council. Discretionary resources are funds available to be allocated by Council without restriction. Discretionary resources include property taxes, utility license fees, business license fees, lodging tax revenues, state-shared (cigarette and liquor) revenues, some interest income, some court fines, some cash transfers into the General Fund, and small amounts of other miscellaneous revenues. Discretionary resources exclude grants, bureau contract and service reimbursement revenues, bureau fee and permit revenues, and other revenues dedicated for specific purposes. The Council's financial planning process starts with the preparation of a five-year revenue forecast. The Office of Management and Finance (OMF) issues a five-year revenue forecast document, usually sometime in early November. The five-year revenue forecast is used to develop the five-year financial forecast. The financial forecast compares estimated annual resources (revenue plus beginning fund balance) with projected costs of maintaining General Fund current appropriation levels (CAL). Initial revenue and financial forecasts were published in December 2007 and formally reviewed with Council. Both of these forecasts were updated in March prior to Council FY 2008-09 budget decision making. The revenue forecast was updated using the most recent financial and economic data. Estimated CAL requirements were also updated. The discretionary beginning balance estimate, a key resource of the General Fund, is updated at the conclusion of each accounting period and published in the Financial Outlook. The outlook provides current information on the General Fund's financial condition, with the updated ending fund balance estimate fed into the financial forecast of General Fund resources.

Historical Resources The figure below summarizes General Fund revenue growth over the past five years.

City of Portland, Oregon – FY 2008–09 Adopted Budget 37 Financial Overview

Figure 16: General Fund Discretionary Resources

$450

$400

$350 Balance $300 Misc. & Interest $250 State Shared Licenses $200 $Millions Transient Lodgings

$150 Property Taxes

$100

$50

$0 2003 2004 2005 2006 2007 2008 Fiscal Year Ends June 30th

Revenue growth over the past five years has averaged about 5.6% per year. The picture shows that revenue growth was flat to declining early in the period due to recession. Revenue growth returned to more normal historic levels over the past four years. The General Fund's beginning fund balance has averaged about $30.6 million. Beginning balances have been higher than normal over the last several years due to above average under-expenditure of budgets and unanticipated revenue growth. Overall resource growth (revenues plus beginning fund balance) has averaged about 8.0 % per year, with most of this growth occurring over the last couple of years. The graph clearly shows a regional economy that was hit hard by the events of September 11th and the ensuing national recession. General Fund discretionary revenue growth for the three-year period ending FY 2003-04 was flat at best.

While revenue growth has improved, property tax revenue growth remains in the 3% to 4% range due to Measure 5/50 property tax limitations. Assessed value growth under Measure 50 is limited to 3% per year plus new construction. The General Fund's tax rate is permanently fixed at $4.5770 per $1,000 of Measure 50 taxable assessed value. Property tax revenues still constitute about 50% of General Fund discretionary revenues, and growth has averaged just 3.8% over the last five years. Growth on existing taxable assessed value has been somewhat less than the allowable 3%, and taxable value added to the tax rolls through new construction, outside of urban renewal districts, has been very weak with the exception of FY 2007-08. Overall, property tax revenues have grown at about 3.8%, but a large portion of this growth appears to be a one-time blip associated with a sharp increase in real market values that temporarily reduced compression on local government tax bills. For FY 2008-09 growth is expected to be about 3%.

38 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Revenue growth outside of property taxes has rebounded sharply from recession lows. Both transient lodging taxes and business license revenues are up sharply over the last three years, as would be expected in the expansionary phase of the business cycle. Interest income has also rebounded, responding to higher short-term interest rates but will start to ebb with lower interest rates put in place by the Federal Reserve over the last 18 months. At the end of FY 2007-08, consistent with Council Policy and previous five-year financial plans, the General Reserve Fund is expected to total about $47.3 million and remains fully funded at the required 10% of revenues (net of borrowing proceeds and grant revenues). Thus, the City will begin FY 2008-09 with the General Reserve at or slightly above the required 10% level.

Forecast Assumption: The key assumption underpinning Council's five-year financial plan is a mild recession that Shallow and Short is short and shallow. Metro-area employment regained pre-recession peak levels only during Recession the second quarter of FY 2005-06, and the regional economy entered the expansion phase for the current economic cycle. This trend appears to be reversing itself. First and second quarter of calendar year 2008 national employment numbers show consistent job losses while first quarter Gross Domestic Product (GDP) growth was barely 1%. Most observers expect that second quarter GDP growth will also be less than 1% or possibly negative, thus signaling the start of a recession Oregon's economy and the Portland metropolitan area are doing somewhat better than the national economy, but more recent employment numbers clearly show that a slowdown is in progress. Oregon's March 2008 unemployment rate increased to 5.7% compared to just 5% a year earlier. Oregon March nonfarm payroll employment was barely above that of a year ago. The fall revenue forecasts assumed that the national, state, and regional economies would continue to grow modestly. Thus, cyclical revenues such as business license and transient lodging tax revenues could be expected to grow modestly over the next couple of years. The deteriorating economic situation led to a March forecast that assumes a relatively short and shallow two-quarter recession during 2008. The December resources forecast called for $363.6 million of FY 2008-09 discretionary revenues along with a beginning fund balance of $24.4 million. This forecast represented a marked improvement over the previous forecast done last June, registering sharp increases in transient lodging taxes, utility license and franchise fees, business license revenues, and fund interest income. The March forecast showed a $3.1 million reduction in discretionary revenues and a $3.5 million increase in beginning fund balance to $27.9 million. The net change in forecast fund resources was about $371,000. Business license and transient lodging revenues are expected to flatten out over the next 18 to 24 months reflecting much weaker local and national economic conditions. The business license revenue estimates continue to reflect Council's passage of Resolution #36473, which increased the owners' compensation deduction to $80,000 a year and the gross receipts exemption to $50,000 beginning in tax year 2007. For the FY 2008-09 Adopted Budget, discretionary resources stand at $391.5 million. This resource forecast is $19.1 million above the FY 2007-08 Adopted Budget of $372.4 million. Forecast details for specific revenues are as follows: Property Taxes As noted above, property taxes are expected to grow about 3% per year, reflecting the constitutional limits on taxable assessed value growth on existing values, plus new construction outside of the City's eleven urban renewal districts.

City of Portland, Oregon – FY 2008–09 Adopted Budget 39 Financial Overview

Business License Business license revenues are forecast at $75.7 million inclusive of expected audit recovery revenues. The fall forecast called for about $77.0 million of FY 2008-09 revenues. This revenue estimate was revised downward by $1.3 million in March, reflecting the expected impact of a softer regional economy and a national economy in recession. At the very least revenues are expected to flatten for FY 2008-09 and FY 2009-10 and then resume growing, reaching about $87.5 million in the last year of the forecast. Transient Lodging Taxes Transient lodging taxes, which were at a low of $10.7 million as recently as FY 2002-03, are expected to be about $16.2 million for FY 2007-08 and are forecast at $16.1 million for FY 2008-09. Like business license revenues, transient lodging tax revenues are also expected to flatten over the next year with growth resuming during FY 2009-10. Utility License and Franchise Fees Utility license and franchise fees are expected to grow about 2.5% per year. Growth in this category remains constrained by water and sewer utility license revenues, which remain fixed at about $16.9 million as a result of previous Council action. Revenues are to stay at this level until such time as a 5% tax rate produces revenues in excess of about $17.0 million. No new revenues are expected until at least FY 2011-12. Other utility license and franchise fee revenues are growing more slowly, particularly in the energy sector where recent electric and natural gas rate decreases have cut into expected growth. Cigarette and Liquor Taxes Cigarette and liquor taxes distributed by the state are expected to grow by about 3%, with growth concentrated in liquor distributions. Cigarette tax revenues continue to stagnate at the $1 million level. The figure below summarizes the current five-year revenue forecast as of late March. Average annual revenue growth is projected at about 3.6%. Budget-to-budget revenue growth is currently forecast to be about 7.3%. Again, the critical forecast assumption is a mild recession with recovery taking hold sometime late in calendar year 2008.

40 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Figure 17: Forecast Discretionary Resources

$450

$400

$350

Balance $300 Misc. & Interest $250 State Shared

Licenses $200 $Millions Transient Lodgings $150 Property Taxes

$100

$50

$0 2008 2009 2010 2011 2012 2013 Fiscal Year Ends June 30th

Financial Forecast A much slower regional economy and national economic recession are the key factors Results driving the current financial forecast. At the margin, growth in the two basic cyclical revenues (business license and transient lodging tax revenues) are expected to flatten out over the next one to two years compared to previous forecasts. The December 2007 financial forecast showed that:

Sufficient resources would be available in FY 2008-09 to fund estimated General Fund CAL requirements, with an excess estimated of $34.4 million. The December financial forecast broke the excess out into $7.8 million in ongoing resources with the remaining $26.5 million in one-time resources.

Steadily declining amounts of one-time resources are likely to be available to Council through FY 2011-12.

This outcome was also partially the result of weaker healthcare benefits cost increases forecast for FY 2008-09 by AON, the City's health benefits consultant. The December financial forecast was updated in early March and showed a deterioration in forecast revenues along with an increase in the expected compensation set-aside. The December forecast assumed a 3.3% cost of living adjustment (COLA) but the actual increase in the Portland-Salem Consumer Price Index-Wages (CPI-W) was 3.8%. Thus, in the March financial forecast update, expected requirements increased while forecast revenues were revised downward by about $3.1 million. Estimated ongoing requirements were about $1.5 million higher due principally to the higher than expected CPI-W COLA number.

City of Portland, Oregon – FY 2008–09 Adopted Budget 41 Financial Overview

The revised March financial forecast showed ongoing resources available for the FY 2008- 09 budget process, declining from $7.8 million to $5 million, while one-time resources available increased from $26.5 million to $28.2 million.

The March forecast has been updated to include General Fund financial results for FY 2007- 08 through the end of accounting period 11. The discretionary beginning fund balance estimate has been increased to $31.6 million. A small technical revenue adjustment also increased estimated revenues by about $1.3 million net. These two changes brought March forecast discretionary resources up to $391.5 million.

Five-Year General The Council takes a five-year approach to balancing the budget, although the budget itself is Fund Financial Plan the first year of Council's five-year financial plan, ensuring that the long-range impact of major decisions is considered in developing the budget. This is even more important under current conditions, because Council's budget process will add requirements to ongoing program requirements.

Council Approach to As the financial forecast presently stands, Council's Adopted Budget balances the General Balancing the General Fund well above current FY 2008-09 ongoing CAL levels and ensures that requirements are Fund in line with resources for the duration of the five-year financial forecast. A comparison of the financial forecast with Council's Adopted Budget shows that ongoing program funding has increased by about $5 million. One-time funding in bureau budgets total about $24.9 million. Council set-asides include additional one-time budgets. The figure below details the five-year financial plan. One outcome of "making room" for increases in health benefits costs is that the forecast still shows the availability of significant amounts of one-time resources in subsequent budget cycles. FY 2009-10 one-time resources are currently estimated at $5.5 million, while in FY 2010-11 about $5.2 million of one-time resources are still forecast to be available.

Figure 18: Five-Year Financial Plan ITEM 2009 2010 2011 2012 2013 Resources $391,489,096 $376,480,083 $388,016,440 $400,468,855 $411,201,312 Transfer In From General Reserve Fund $0 $0 $0 $0 $3,814,934 Total Resources $391,489,096 $376,480,083 $388,016,440 $400,468,855 $415,016,246 Requirements Bureaus & Programs $310,003,790 $334,774,778 $348,970,042 $363,974,286 $379,285,510 One-Time Projects $24,994,766 $5,449,678 $5,225,519 $2,026,822 $200,000 Council Set-Asides $56,490,541 $36,255,627 $33,820,879 $34,467,746 $35,530,736 Total Requirements $391,489,096 $376,480,083 $388,016,441 $400,468,855 $415,016,246 Difference-GAP $0 $0 $0 $0 $0 Reserve Fund, Percent 10.8% 10.5% 10.6% 10.7% 10.1%

Uncertainties The Council's Adopted Budget and and financial plan balance the General Fund for the life of the five-year forecast. There are likely to be significant amounts of one-time money available over the next two budget cycles. This will provide the Mayor and Council with more flexibility in meeting future financial uncertainties that include:

42 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

The current financial forecast and proposed five-year plan assume that projected increases in healthcare funding are resolved through implementation of the 95% employer and 5% employee cost sharing solution. This plan commits the City to paying 95% of expected health benefits premiums. There are two primary uncertainties. First, healthcare funding and premium cost projections are current best-estimate forecasts, and there could easily be a large, unfavorable shift in the numbers. Second, the City has secured this solution through labor contract negotiations. Current labor contracts do not run for the life of the forecast. A higher-cost alternative could result from out-year labor contract negotiations.

Local economic conditions appear to be deteriorating and at the national level a recession is probably underway. The national economy is registering a rising unemployment rate as well as year-over-year job losses. This forecast is critically dependent on the assumption that the developing recession is relatively short and shallow; longer or deeper recession would mean a sharp downturn in business license and transient lodging revenues.

Business license revenues are now collected and booked net of refunds and after adjustment for credits. Credit adjustments can either increase or decrease net revenues. As a result of this change, this revenue stream will tend to be more volatile. Forecasts will tend to be less accurate than in the recent past because there is still little historical data available to generate forecasts on a net revenue concept.

Both the Parks and Children's local option levies expired at the end of FY 2007-08. Council's Adopted Budget and five-year financial plan includes a second $2.7 million ongoing increase to Parks' FY 2010-11 CAL target; this completes the backfill of the ongoing programs funded by the soon-to-be expired Parks local option levy.

Forecast Risks The principal risk to Council's Adopted Budget and five-year financial plan is emergence of recession conditions amid higher inflation. As this is being written, oil prices are hovering around the $140 per barrel mark. The persistence of much higher energy costs has slowed the economy and reignited inflation. Financial markets are still beset by the fallout from the subprime mortgage crisis which has developed into a much more extensive and widespread financial crisis. These kinds of conditions can easily morph into a longer, deeper recession. Subsequent revenue forecasts could show lower revenues, making it difficult for Council to fund the higher service levels found in the FY 2008-09 Adopted Budget. The second risk revolves around future labor contract negotiations. Current labor contracts only run to the middle of this five-year forecast horizon. The current financial forecast and Council's Adopted Budget assumes consumer price index (CPI) COLA and continuation of "95/5" health benefits premium sharing. Labor contracts in excess of CPI growth upset the forecast.

FINANCIAL OUTLOOK—MAJOR FUNDS In addition to the General Fund, the Financial Overview includes the outlook for the City’s other major funds: the Sewer System Operating Fund, the Transportation Operating Fund, and the Water Fund. The following table shows the actual expenditures or budgets for the General Fund, the three other major funds, and the sum of all other funds for FY 2006-07, FY 2007-08, and FY 2008-09. None of the major funds budget an unappropriated ending balance; each of the funds manages its reserves differently. The General Fund's 10% reserves are maintained in the General Reserve Fund. For the Bureau of Environmental Services, the combined ending fund balances of the Sewer System Operating Fund and the (BES) Sewer System Rate Stabilization Fund must be equal to or greater than 10% of each year's operating expenses,

City of Portland, Oregon – FY 2008–09 Adopted Budget 43 Financial Overview

as defined by bond covenants. BES generally maintains 1% reserves in contingency in its operating fund and 9% in its rate stabilization fund. The Office of Transportation maintains a Transportation Reserve Fund but has been unable to fund it at the desired 10% level of discretionary revenues; the FY 2008-09 level is 2.29%. The Water Bureau's policy is to keep a minimum of $12 million in operating reserves in Water Fund contingency, representing about 45 days of operating budget expenditures, and a further minimum of $5 million in Water Construction Fund contingency. Water’s actual financial reserves at any point are typically larger than these amounts, and vary with the timing of bond sales, the dates for scheduled debt service payments, season of the year, weather, and other factors. Five-year financial plans are prepared by each of the City's major non-General Fund bureaus. These financial plans provide a multi-year framework within which revenues, expenditures, and capital financing options are presented. This multi-year perspective allows the City to test the potential impact of policy, operational, and system changes, and to avoid subjecting customers to wide or irregular swings in rates and fees. The FY 2008-09 budget is based upon bureaus' financial plans which were developed using information available through December 2007. The following is a brief overview of the updated financial outlook for the City's three major non-General Fund bureaus. For each fund, the chart shows total fund expenditures.

44 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Figure 19: Summary of Major Funds

GeneralGeneral SewerSewer System System Trans Transportationportation Water Water All Other FundFund Operating Operatin gFund Fund O Operatingperating Fund Fund Fund Fund Funds FY 2006-07 Actual Beginning Balance$$ 70,212,844 70,212,844$ $ 25,478,156 25,478,156 $$ 29,471,441 29,471,441 $ $ 28,268,859 $ 618,636,581 External Revenues 363,367,439 363,367,439 235,165,839 235,165,839 133,259,055 133,259,055 88,358,328 88,358,328 $ 989,034,460 Internal Revenues 104,082,013 104,082,013 183,251,029 183,251,029 66,117,333 66,117,333 64,439,689 64,439,689 $ 331,340,247 Total Resources 537,662,296 537,662,296 443,895,024 443,895,024 228,847,829 228,847,829 181,066,876 181,066,876 1,939,011,288

Bureau Expenses 408,485,829 408,485,829 257,182,721 257,182,721 175,136,906 175,136,906 104,157,272 104,157,272 493,417,348 Fund-level Expenses 47,518,386 47,518,386 140,314,525 140,314,525 31,905,285 31,905,285 43,395,801 43,395,801 899,255,600 Ending Fund Balance 81,658,081 81,658,081 46,397,778 46,397,778 21,805,638 21,805,638 33,513,803 33,513,803 546,338,340 Total Requirements 537,662,296 537,662,296 443,895,024 443,895,024 228,847,829 228,847,829 181,066,876 181,066,876 1,939,011,288

FY 2007-08 Revised Budget Beginning Balance$$ 65,143,399 65,143,399$ $ 31,202,272 31,202,272 $$ 18,336,450 18,336,450 $ $ 27,745,488 $ 475,105,604 External Revenues 354,589,037 354,589,037 210,723,399 210,723,399 124,523,695 124,523,695 95,306,507 95,306,507 988,605,216 Internal Revenues 105,603,353 105,603,353 212,863,261 212,863,261 48,857,044 48,857,044 61,989,066 61,989,066 358,844,006 Total Resources 525,335,789 525,335,789 454,788,932 454,788,932 191,717,189 191,717,189 185,041,061 185,041,061 1,822,554,826

Bureau Expenses 455,960,566 455,960,566 289,146,431 289,146,431 166,848,601 166,848,601 125,650,955 125,650,955 684,903,008 Fund-level Expenses 56,226,876 56,226,876 144,717,392 144,717,392 13,316,300 13,316,300 41,593,193 41,593,193 668,559,381 Contingency 13,148,347 13,148,347 20,925,109 20,925,109 11,552,288 11,552,288 17,796,913 17,796,913 366,061,950 Ending Fund Balance ------103,030,487 Total Requirements 525,335,789 525,335,789 454,788,932 454,788,932 191,717,189 191,717,189 185,041,061 185,041,061 1,822,554,826

FY 2008-09 Adopted Budget Beginning Balance$$ 42,632,005 42,632,005$ $ 27,000,000 27,000,000 $$ 33,407,180 33,407,180 $ $ 28,724,429 $ 620,814,301 External Revenues 385,460,366 385,460,366 227,723,496 227,723,496 134,822,318 134,822,318 97,950,200 97,950,200 844,863,523 Internal Revenues 103,079,200 103,079,200 205,712,510 205,712,510 76,286,856 76,286,856 70,420,134 70,420,134 364,745,656 Total Resources 531,171,571 531,171,571 460,436,006 460,436,006 244,516,354 244,516,354 197,094,763 197,094,763 1,830,423,480

Bureau Expenses 461,795,332 461,795,332 279,390,195 279,390,195 203,897,370 203,897,370 129,098,999 129,098,999 692,129,005 Fund-level Expenses 52,122,439 52,122,439 150,076,319 150,076,319 13,025,443 13,025,443 42,581,159 42,581,159 710,436,492 Contingency 17,253,800 17,253,800 30,969,492 30,969,492 27,593,541 27,593,541 25,414,605 25,414,605 348,146,955 Ending Fund Balance ------79,711,028 Total Requirements 531,171,571 531,171,571 460,436,006 460,436,006 244,516,354 244,516,354 197,094,763 197,094,763 1,830,423,480

City of Portland, Oregon – FY 2008–09 Adopted Budget 45 Financial Overview

Bureau of Bureau of Environmental Environmental Sewer System Operating Fund Budget Services Services (BES) 500 operating 400 programs 300 continue to 200

emphasize water Millions$ 10 0 quality through 0 efforts at 2004 2005 2006 2007 2008 2009 pollution Fiscal Year Ending prevention, analytical services, drainage system maintenance, and watershed improvement programs. Capital costs continue to be the prime driver behind forecast rate increases. The largest category of capital improvement costs is the combined sewer overflow (CSO) program, followed by maintenance and reliability projects, and surface water management projects. BES's estimated annual revenue requirement increases $55.6 million over the forecast period. The five-year financial plan forecasts an increase of 5.75% in the average single- family sewer and stormwater bill for FY 2008-09 from $47.79 to $50.18, due to favorable bond rates and lower-than-anticipated participation in the Clean River Rewards stormwater discount program. Operating Plan: Five-year operating budget reductions are projected for the Portland Harbor Superfund program, electrical savings at the Swan Island pump station and from a new co-generation plant at the Columbia Boulevard Treatment Plant, and from the Clean River Rewards program. Five-year increases to the operating budget include addition of a second sewer spot liner crew and associated equipment, increased CSO flows, improvements for asset management, resources to reduce the City's stormwater footprint and enhance watershed health, the enterprise business solution project, PERS and health costs, and insurance. Capital Plan: CIP expenditures are projected to total $649 million over the forecast interval (including inflation). The pattern of expenditures is influenced primarily by the timing of the Eastside CSO project. These expenditures are funded by sewer system revenue bonds, but also include substantial cash contributions ($55 million over the five-year forecast interval) made possible by coverage requirements on sewer system revenue bonds. Annual Operating and CIP Budgets: The BES operating budget for FY 2008-09 is $237.4 million including expenditures of $96.9 million for operating programs, $5.2 million for General Fund overhead, $12.8 million for utility license fees, $121.2 million for debt payments to provide resources for the capital program and $6.2 million for other items. The capital budget for FY 2008-09 is $188 million including expenditures of $139.1 million for the CSO program, $25.2 million for system maintenance and reliability, $6.8 million for treatment systems, $6.7 million for systems development, and $10.2 million for surface water management projects.

46 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Water Bureau The preliminary financial plan for Water Fund Budget the Water Bureau 250 projected an 200 average retail rate 150 increase of 8.6% 100 in FY 2008-09; Millions $ 50 the increase was 0 2004 2005 2006 2007 2008 2009 approved by City Fiscal Year Ending Council. The factors contributing to the FY 2008-09 retail rate increase include a reserve fund set-aside for a potential Long Term 2 Enhanced Surface Water Treatment Rule (LT2) compliance mandate, higher than anticipated levels of completion of capital improvement plan projects, the FY 2008-09 decision package requests, lower retail water demand, and higher inflation. These rates were then offset by a combination of changes in financing strategies, accounting methodology, and expenditure discounts resulting in a 8.6% rate increase for FY 2008-09, and proposed rates of 9.5% in FY 2009-10, 10.5% in FY 2010-11, and 8.5% in both fiscal years 2011-12 and 2012-13. The average single-family residential water bill will experience a total bill increase of approximately 8.1%. Operating Budget: The operating budget of $70.7 million for FY 2008-09 is an increase of $3.8 million from the FY 2007-08 Revised Budget of $66.9 million. Capital Budget: The FY 2008-09 CIP budget of $58.9 million reflects an increase of $2.1 million from the FY 2007-08 Revised Budget. The increase in FY 2008-09 is largely due to revising the schedule for the security and maintenance work on the Mt. Tabor and Washington Park uncovered reservoirs ($9.3 million), as well as the large projects of Sandy River Conduit Crossing ($3.9 million), Bull Run Dam 2 Tower Improvements ($2.0 million), and Conduit Trestles Improvements ($4.3 million).

Office of The Office of Transportation Transportation's Transportation Operating Fund Budget five-year 300 financial plan 250 200 continues to 150 exhibit imbalance 100 between costs to Millions $ 50 maintain current 0 service levels and 2004 2005 2006 2007 2008 2009 Fiscal Year Ending anticipated general transportation revenues (GTR). In the most recent financial forecast, the funding gap is projected to increase to an estimated cumulative total of $11.3 million in FY 2012-13. In FY 2008-09, the bureau will receive $2.8 million in General Fund one-time resources to partially address the projected funding gap, $6 million for streetlight operations and maintenance, and $5.2 million for various traffic safety and light rail improvements. Total Budget: The FY 2008-09 Adopted Budget is $244.5 million, reflecting a 27.5% increase over the FY 2007-08 Revised Budget. The increase is attributed to changes in the bureau's capital program.

City of Portland, Oregon – FY 2008–09 Adopted Budget 47 Financial Overview

Capital Budget: The capital budget is approximately $96.5 million, of which $5.8 million or 6% is funded by GTR. The remaining 94% of the capital budget is funded by grants, system development charges, permit fees, contracts, and the General Fund. The capital budget is significantly higher than previous years due to $33.6 million budgeted for the eastside streetcar extension and $8 million for the purchase of streetcar vehicles. CITY DEBT MANAGEMENT The City of Portland issues a variety of Standard debt instruments to Definition Moody's & Poor's Fitch raise capital for Prime, Maximum Safety construction projects, Highest rating assigned Aaa AAA AAA for the acquisition of Very strong equipment and High Grade, High Quality Aa1 AA+ AA+ Very strong security. Aa2 AA AA facilities, and to Only slightly below best rating. Aa3 AA- AA- refinance existing Upper Medium Grade debt. Most of the Average security but more subject to A1 A+ A+ City's debt is rated by adverse financial and economic A2 A A one or more national developments A3 A- A- rating agencies, Lower Medium Grade Adequate capacity to secure debt. Adverse Baa1 BBB+ BBB+ including Moody's developments may affect ability to meet Baa2 BBB BBB Investors Service and debt service requirements. Baa3 BBB- BBB- Standard & Poor's Non-Investment Grade - Speculative Ba1 BB+ BB+ Corporation. Bond Ba2 BB BB ratings are based on Ba3 BB- BB- an independent Highly Speculative B1 B+ B+ analysis by financial B2 B B B3 B- B- market professionals Substantial Risk - In Poor Standing Caa1 CCC+ CCC+ and indicate the Caa2 CCC CCC credit-worthiness of Caa3 CCC- CCC- City's debt Extremely Speculative Ca -- -- obligations. "Aaa" is May be in default C -- -- the highest possible rating, and is based on analysis of four basic factors: economic condition, debt load, financial condition, and overall management of the City. Since 1973, the City's unlimited tax general obligation debt has been rated "Aaa" by Moody's. The City's various revenue bonds are rated between "A1" and "Aa1" by Moody's and "AA-" by Standard & Poor's. The City's debt management policies prescribe the circumstances under which the City may refinance outstanding debt:

Advance refundings, where the refunding bonds are issued more than 90 days before the redemption date of the refunded bonds

Current refundings, where the refunding bonds are issued less than 90 days before the redemption date of the refunded bonds

Debt restructurings Advance Refundings: In order to reissue advance refunding bonds, the City must determine that the refunding is advantageous, legally permissible, and prudent, and that net present value savings equal at least 5% of the proceeds of the refunding bonds. Exceptions to this policy can be made with the approval of the Debt Manager and the Director of the Bureau of Financial Services. Notwithstanding City policy, Oregon law requires that advance

48 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

refunding bonds issued for the purpose of obtaining debt service savings, must attain present value savings of at least 3% of the proceeds of the bonds. Current Refundings: The City may issue current refunding bonds, as defined for federal tax law purposes, when advantageous, legally permissible, and prudent, and when net present value savings equal or exceed $100,000. Debt Restructuring: The City may choose to refund outstanding indebtedness when existing bond covenants or other financial structures impinge on prudent and sound financial management. Savings requirements for current or advance refundings undertaken to restructure debt may be waived by the Debt Manager and the Chief Administrative Officer if such a restructuring is in the City's overall best financial interests. The following is a brief summary of the City's existing debt and debt instruments, projected as of June 30, 2008.

General Obligation General Obligation (G.O.) debt is backed by the full faith and credit and unlimited taxing (GO) Debt power of the City. Under current Oregon law, all general obligation debt (except for refunding bonds) must be approved by the voters. The City's outstanding GO debt includes:

$56.8 million in voter-approved general obligation bonds for park system improvements and emergency facilities improvements

$4.6 million in general obligation water bonds; these bonds are repaid from water user charges, but are secondarily backed by the City's general obligation pledge

Revenue Bonds Revenue bonds are secured by, and payable from, specifically pledged revenue sources such as water or sewer user fees. The City's outstanding revenue bonds include:

$1.4 billion in sewer system revenue bonds

$308.3 million in urban renewal bonds

$195.4 million in water revenue bonds

$18.6 million in hydropower revenue bonds

$5.4 million in gas tax revenue bonds

$3.6 million in parking revenue bonds

$3.5 million in golf revenue bonds

General Fund-Backed General Fund-backed debt is either paid from, or secured by, the General Fund and includes: Debt $293.5 million in limited tax pension obligation bonds, of which approximately $109 million is attributed to General Fund bureaus and approximately $184.6 to non-General Fund bureaus

$125.1 million in limited tax revenue bonds for the Convention Center Expansion project ($95 million), Civic Stadium (PGE Park) Improvement project ($28.5 million), and Portland Center for Performing Arts improvements ($1.6 million). The City has issued these bonds as part of an intergovernmental agreement known as the Visitor Development Initiative. While ultimately secured by the General Fund, these bonds are expected to be repaid with revenues generated from surcharges on the transient lodging tax and the motor vehicle rental tax levied by Multnomah County.

$84.2 million in limited tax revenue bonds for building improvements and equipment acquisition

City of Portland, Oregon – FY 2008–09 Adopted Budget 49 Financial Overview

$23 million in arena limited tax revenue bonds. Proceeds of these bonds were used to refund bonds originally issued to finance certain public improvements relating to the Oregon Arena Project. These arena limited tax revenue refunding bonds are ultimately secured by the City's General Fund. However, the City expects to pay the debt service on these bonds from revenues received from the Oregon Arena Project.

$23 million in limited tax revenue bonds issued to fund the Portland Streetcar project. These bonds are expected to be repaid from parking revenues, but are additionally secured by the General Fund.

$150.8 million in urban renewal lines of credit. It is expected these interim financing obligations will be retired with the proceeds of long-term tax increment bonds.

$20.6 million in limited tax housing revenue bonds

$49.5 million in limited tax improvement bonds

$17.1 million in lines of credit used to provide short-term and interim financing for local improvement district projects, the Children's Receiving Center, Parks land acquisition, and transportation projects.

Debt Limitation Under Oregon law (ORS 287.004), the City's general obligation debt limit is equal to 3% of the City's real market valuation ($84.3 billion), or about $2.5 billion. Certain self-supporting bonds are exempted from this limitation. Currently the City has $56.8 million outstanding in general obligation debt that is subject to the debt limitation.

Figure 20: Debt Limitation Criteria Criteria Limit FY 2007-08 Real Market Value $84,290,979,378 3% of Real Market Value $2,528,729,381 City outstanding debt subject to limit $56,770,000 Percent of limitation outstanding 2.25% Debt margin $2,471,959,381

The figure below displays gross bonded debt per capita. Included in these figures are the City's outstanding general obligation bonds, limited tax improvement bonds, limited tax revenue bonds, and General Fund-backed lines of credit.

Figure 21: Gross Bonded Debt per Capita In FY 2007-08 the City issued $1,600

three series of $1,500 refunding bonds to take advantage $1,400 of lower interest $1,300 rates and reduce the cost of the $1,200 City's 2003 2004 2005 2006 2007 2008 outstanding debt. Fiscal Year Ending The City issued the First Lien Sewer System Revenue Refunding Bonds, 2008 Series A to refund the outstanding Sewer System Revenue Bonds, 1998 Series A and the City issued the Second Lien Sewer System Revenue Refunding Bonds, 2008 Series B to refund the outstanding Second Lien Sewer System Revenue Bonds, 2003 Series B. The City also issued the

50 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Limited Tax Revenue Refunding Bonds, 2008 Series A (Development Services Building) to refund the outstanding Limited Tax Revenue Bonds, 1998 Series A.

In addition to the refunding bonds, the City issued about $28.8 million in Limited Tax Revenue Bonds to fund the Portland Mall Revitalization Project ($16.9 million) and the Archives Space Acquisition Project ($11.9 million). The City also issued Downtown Waterfront Urban Renewal and Redevelopment Bonds to fund improvements in the Downtown Waterfront urban renewal area.

In FY 2007-08, the City borrowed approximately $45.4 million on various lines of credit and state loans to fund capital projects including clean water, local improvement, urban renewal, home-ownership, and transportation projects.

Anticipated Debt The City anticipates issuing the following debt obligations during FY 2008-09: Issuance in FY 2008- 09 $80 million in Water System Revenue Bonds to finance improvements to the water system.

$26 million in Limited Tax Revenue Bonds to finance costs of the police traffic division relocation.

$30 million in urban renewal bonds for the River District urban renewal area

$60 million in urban renewal bonds for the South Park Blocks urban renewal area

$25 million in urban renewal bonds for the Interstate Corridor urban renewal area

$15 million in general obligation bonds for upgrades and improvements to emergency facilities

$8 million in limited tax improvement bonds to finance assessments

The City will likely incur additional indebtedness during FY 2008-09 for other capital needs. The amounts and specific types of debt instruments to be issued will be determined throughout the fiscal year.

THE CITY'S FINANCIAL STRUCTURE

Portland's Fund Revenues to the City are designated and set aside in funds. The fund structure used by the Structure City is detailed below. Fund summaries, which provide revenue and expenditure detail, are included within the appropriate service area section of Volume Two of the City budget document. For example, all Water Bureau-related funds are found within the Public Utilities Service Area section. General Fund summaries are found in the Financial Summaries section of Volume One and the City Funds section of Volume Two.

Types of Funds The City's funds are divided into three classifications: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for governmental activities. Proprietary funds include enterprise, or business-type activities, and internal service funds. Fiduciary funds are used for resources held for the benefit of parties outside City government where the City acts as an agent or trustee without commingling resources with general city programs.

City of Portland, Oregon – FY 2008–09 Adopted Budget 51 Financial Overview

Major Governmental Funds General Fund: The General Fund includes all activities of the City that are supported by property taxes and other non-dedicated revenues. These include license and permit fees and state shared cigarette and liquor tax revenues. Bureaus supported by the General Fund include Fire, Police, and Parks. Transportation Operating Fund: This operating fund supports the Office of Transportation and receives dedicated revenues as well as a transfer from the General Fund. Non-Major Governmental Funds Special Revenue Funds: Special revenue funds receive money from specific sources and are restricted to expenditure for specified purposes. Reserve funds hold resources for future use in countering recessionary trends and mitigating mid-year economic downturns or other financial emergencies. Debt Service Funds: Debt service funds account for the accumulation of resources for, and the payment of debt service on, general obligation, revenue, assessment, improvement, and urban renewal tax increment bonds. These funds are necessary to manage the City's diverse debt portfolio in a manner that ensures compliance with security covenants as well as state and federal regulations. Capital Projects Funds: These funds account for major capital acquisition or construction projects such as those funded by general obligation bonds and those in local improvement districts and parks. Revenues are received when the City issues bonds and notes for capital projects. Revenues are also received from other sources of income to the City. Permanent Funds: The City occasionally creates accounts for gifts or bequests that are legally restricted to the extent that only earnings, and not principal, may be used as designated by the donor. Currently, the City has only one fund of this type, the Parks Endowment Fund. Proprietary Funds Enterprise Funds: Enterprise funds, such as the Water Bureau and the Bureau of Environmental Services, support business-type activities that charge a fee to external users for goods and services. Internal Service Funds: Internal service funds account for the sale of central services such as vehicle and printing services to other City and/or other governmental agencies. These funds operate primarily on revenues received from the agencies using their services. Fiduciary Funds The City has three funds for the retirement or disability costs of police and fire personnel. Revenues for the main fund, the Fire & Police Disability & Retirement (FPDR) Fund, are received from a property tax levy authorized by Portland voters in 1948. Other City employees are covered by the Public Employees Retirement System (PERS), which is administered by the State of Oregon. Portland Development Commission The Portland Development Commission (PDC) is the City of Portland's urban renewal, economic development, and housing rehabilitation agency. PDC is a semi-autonomous organization that interacts with various City programs. Revenue for PDC is provided through a combination of tax increment revenues, federal grants, program income, contracts, private funding, and transfers from the General Fund. PDC's budget is published as separate budget document.

52 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

How Funds Interact City funds interact in a variety of ways. One fund may pay another fund for goods or services. Cash transfers may also result from the exchange of resources between funds to cover operating and capital expenses; for example, a transfer from the General Fund to the Transportation Operating Fund to support the operations and maintenance of the Street Lighting program. Transfers between funds result in the budgeting of dollars in both funds.

Budgetary Controls City Council maintains oversight of the City's financial condition through three formal and Change reviews of the annual budget, various informal reviews, and work sessions. Formal Management comparisons between historical and actual expenditures and revenues are completed three times per year under the direction of the Financial Planning Division, and reported to Council. Adjustments to bureau budgets generally occur during one of these trimester reporting processes or, if legally required by Local Budget Law, through a supplemental budget process, which typically occurs in the spring and fall. This requirement allows the Council to closely review the Citywide impact of budget adjustments and ensures that Council's directives are followed. The City has a system for monitoring the financial condition of its General Fund. A Financial Outlook report is issued 12 times per year. The report provides Council, bureau managers, and the public with information on the status of General Fund revenues and expenditures in comparison to the budget. The report also forecasts the year-end balance for the General Fund.

Basis of Accounting Governmental accounting, governed by state statutes and Generally Accepted Accounting and Accounting Principles (GAAP), differs substantially from private sector accounting. Private sector Structure financial reports measure economic profits, whereas governmental accounting focuses on disclosing how public money is spent. Types of Accounting

City funds employ either the Government-wide financial statements are reported using the economic resources accrual basis or modified measurement focus and the accrual basis of accounting, as are the proprietary fund and accrual basis of accounting. fiduciary fund financial statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Governmental funds include the General Fund as well as major and non-major Special Revenue, Debt Service, Capital Projects, and Permanent funds. Revenues are recognized as soon as they become both measurable and available. Federal and state grants revenues are recorded to the extent that revenues are earned as eligible expenditures are incurred. Expenditures are recorded when a liability is incurred with these exceptions: claims and judgments, interfund transactions for services which are recorded on the accrual basis, interest expenditures on general long-term debt that are recorded when due, earned but unpaid vacations that are recorded as expenditures to the extent they are expected to be liquidated with expendable, available financial resources. Financial Reporting The Comprehensive Annual Financial Report (CAFR) of the City presents a picture of the City's finances both on a Citywide and individual fund basis. The CAFR is prepared in accordance with GAAP. It reconciles differences between the budgetary basis, presented in the annual Adopted Budget, and the other presentations used in preparing the CAFR.

City of Portland, Oregon – FY 2008–09 Adopted Budget 53 Financial Overview

The City has earned GFOA’s The City has received the Government Finance Officers Association (GFOA) Certificate of Certificate of Achievement for Achievement for Excellence in Financial Reporting for the past 25 years. GFOA is a the past 25 years. national organization, composed of professionals in the field of public financial management. The group has established stringent criteria for the awards program to ensure quality and full-disclosure accounting and reporting systems within the public sector. Independent Audit Requirements

The fiscal affairs of the City The annual financial report of the City is prepared as required by state law and as are audited by an recommended by the American Institute of Certified Public Accountants (AICPA). The independent auditor each AICPA requires that an annual audit of the fiscal affairs of the City be performed by an year. independent auditor in accordance with Government Auditing Standards, issued by the Comptroller General of the United States, and with the minimum standards for audits of Oregon municipal corporations. Under the City Charter, the FPDR Funds and the PDC are required to have separate financial audits. The City also has an independently elected auditor responsible by City Charter for conducting internal financial and performance audits of specific City services.

SUMMARIES OF FINANCIAL POLICIES

The City has formal financial policies, adopted by City Council, as a component of sound government financial management. These policies provide direction to City leaders in making budgetary and financial management decisions. The complete set of policies and their associated linked procedures are on the City's website under Portland Policy Documents, Finance Section. The policies were updated and adopted by City Council in May 2008, with an effective date of July 1, 2008. A summary of these policies, numbered as part of the Portland Policy Documents, follows.

Comprehensive The City of Portland is accountable to the community for the use of public dollars. Financial Municipal resources will be used wisely to ensure adequate funding for the services, Management Policies public facilities, and infrastructure necessary to meet the community's present and Overview future needs. Financial management policies serve as the blueprint to achieve the fiscal stability required to meet the City's goals and objectives. The objectives for comprehensive financial management policies are to:

Guide City Council and City management policy decisions that have significant fiscal impact

Support planning for long-term needs

Maintain and protect City assets and infrastructure

Set forth operating principles that minimize the financial risk in providing City services

Optimize the efficiency and effectiveness of services to reduce costs and improve service quality

Employ balanced and fair revenue policies that provide adequate funding for desired programs

Maintain financial stability and sufficient financial capacity for present and future needs

Promote sound financial management by providing accurate and timely information on the City's financial condition

Maintain and enhance the City's credit ratings and prevent default on any municipal financial obligations

54 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

Ensure the legal use of financial resources through an effective system of internal controls

Promote cooperation and coordination within the City, with other governments and with the private sector in the financing and delivery of services

Financial Planning The City of Portland will prepare long-range financial plans to guide City Council in adopting the City budget and to assist Council in ensuring the delivery of needed services through all types of economic cycles. The plans help Council and the community evaluate the financial impact of all programs within the context of regional and local economic conditions. The plans will also assist in coordinating funding needs among enterprise, special revenue, and General Fund functions and needs. Financial planning and budgeting will be based on the following principles:

Revenue estimates will be prepared on a conservative basis to minimize the possibility that economic fluctuations could jeopardize ongoing service delivery during the fiscal year.

Expenditure estimates will anticipate needs that are reasonably predictable.

Forecasts will rely on a common set of basic economic assumptions that will be established, updated, and distributed by the Financial Planning Division of OMF Bureau of Financial Services. The Financial Planning Division will prepare an annual City financial assessment report. This report will include a comprehensive overview of the City's financial condition. Five-year financial plans will be prepared annually for the General Fund, General Fund bureaus, major enterprise funds, special revenue funds, and internal service funds. General Fund bureaus will forecast and monitor their own revenues and expenditures. Enterprise and special revenue fund forecasts will identify any impact on rates. Each bureau that has major capital assets will develop and maintain five-year capital improvement plans. The City will annually prepare a Citywide five-year Capital Improvement Plan that includes prioritized bureau needs for capital replacement, additions, and major maintenance. The City will preserve its current physical assets and plan in an orderly manner for future capital investments, including the operating and maintenance costs associated with new or additional capital improvements or major equipment. The City will annually prepare a Citywide Capital Asset Management Report for Council consideration, and the report will be delivered to Council prior to the annual budget discussions. At least 25% of General Fund discretionary revenue that exceeds budgeted beginning balance (adjusted) will be allocated to infrastructure maintenance or replacement in the fall budget monitoring process.

Budget Policies The City will develop and implement a budget process that will:

Make prudent use of public resources

Include financial forecast information to ensure that the City is planning adequately for current and future needs

Involve community members, elected officials, employees, and other key stakeholders

Provide performance measurement data to assist in assessing program effectiveness

Comply with City Charter, City Code, and State of Oregon Local Budget Law

City of Portland, Oregon – FY 2008–09 Adopted Budget 55 Financial Overview

The Mayor will develop and present a proposed City budget to the Council for consideration and adoption. The OMF Bureau of Financial Services Financial Planning Division will issue guidelines and rules for the preparation and review of bureau budget requests to the Mayor including a proposed annual budget process and calendar. The Financial Planning Division will maintain a system for financial monitoring and control of the City's budget during the fiscal year and will also review ordinances and significant administrative decisions submitted for Council actions throughout the fiscal year. For the fall budget monitoring process, General Fund discretionary revenue that exceeds budgeted beginning balance (adjusted) will be added to the General Fund contingency, except for those funds allocated to infrastructure maintenance or replacement. Funds that had been reserved to pay for General Fund encumbrances but are not needed for this purpose will also be added to the General Fund contingency. These funds will be included as a resource in the annual budget process for the upcoming fiscal year. The budget will comply with the following operating principles:

In each fund, resources shall be equal to or exceed requirements resulting in a balanced budget.

One-time funds are General Fund resources designed to be used for projects and purchases that can be accomplished within the fiscal year, although Council has increasingly relied on them to fund ongoing needs in recent years.

Unless otherwise stated explicitly by the Council, the City will not dedicate discretionary revenues for specific purposes in the General Fund. This will preserve the ability of the Council to determine the best use of available revenues to meet changing service requirements.

The City will budget only the amount of revenue that is needed to fund projected expenditures within the fiscal year.

The City will optimize the efficiency and effectiveness of its services to reduce costs and improve service quality. The City will coordinate its service delivery with other applicable public and private service providers.

City operations will be run on a self-supporting basis where doing so will increase efficiency in service delivery or recover the full cost of providing the service by a user fee or charge.

The City will budget a contingency account for each operating fund adequate to address reasonable but unforeseen requirements within the fiscal year.

Financial Reporting The City shall maintain a system of financial monitoring, control, and reporting for all operations, funds, and agencies to provide effective means of ensuring that overall City goals and objectives will be met and to assure the City's citizens, partners, and investors that the City is well managed and fiscally sound. The City will maintain its accounting records and report on its financial condition and results of operations in accordance with state and federal law and regulations, Generally Accepted Accounting Principles (GAAP), and standards established by the Governmental Accounting Standard Board (GASB). Budget reporting will be in accordance with Oregon Local Budget Law.

56 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

A qualified independent firm of certified public accountants will perform an annual financial and compliance audit of the City's financial statements. The firm's opinions will be presented in the City's Comprehensive Annual Financial Report (CAFR), in the single audit report as required by the Single Audit Act of 1984, and in the independent auditor's Report on Compliance and on Internal Control over Financial Reporting.

Revenue Policies The City will maximize and diversify its revenue base to raise sufficient revenue to support essential City services and to maintain services during periods of declining economic activity. City services providing private benefits should be paid for by fees and charges as much as possible to maximize flexibility in the use of City general revenue sources to meet the cost for services of broader public benefit. The City's overall revenue structure will be designed to recapture some of the financial benefits resulting from City economic and community development investments. Revenue collection efforts that produce positive net income for City service delivery will be the highest budget priority. Charges for services that benefit specific users should recover full costs, including all direct costs, bureau overhead, General Fund overhead, loss of interest, and depreciation on capital plant and equipment. The City will use and obtain resources according to the following principles:

The City will use as efficiently as possible the resources that it already collects.

The City will collect as efficiently as possible the resources to which it is already entitled.

The City will seek new resources, consistent with its financial policies and City goals.

The City will strive to keep a total revenue mix that encourages growth and keeps Portland competitive in the metropolitan area.

The City will enforce its authority to collect revenue due the City, including litigation if necessary. Bureaus shall conservatively estimate revenue. Bureaus shall retain all excess bureau- generated revenue. Overall bureau revenue shortfall requiring additional discretionary General Fund resources will result in a bureau current appropriation level reduction.

Reserve Funds Reserve funds will be established and maintained to ensure the continued delivery of City services to address emergencies, address a temporary revenue shortfall, or provide stability during economic cycles. Sufficient reserve funds will be managed to provide adequate cash flow, stabilize the City's interest rates, and provide continuity in service delivery.

The City shall maintain adequate cash reserves in each fund to maintain a positive cash position at any time during a fiscal year and at year-end.

The level of the General Reserve Fund shall be 10 percent of the General Fund revenues less any short-term borrowing receipts, intrafund, and grant revenues. There are two parts to the General Reserve Fund: the emergency reserve and the countercyclical reserve. One-half of the General Reserve Fund is designated as an emergency reserve and one-half is designated as a countercyclical reserve. The Council will begin to restore the reserves used under this policy within 24 months after their first use. The Financial Planning Division of the OMF Bureau of Financial Services will manage and monitor the General Reserve Fund and report on the current and projected level of the reserve funds during each budget process.

City of Portland, Oregon – FY 2008–09 Adopted Budget 57 Financial Overview

Cost Allocation The City will establish and maintain a consistent methodology for allocating the costs of the City's central service functions and activities that benefit or are used by several City organizations. The goal is to provide stable, predictable, and equitable costs and rates to organizations that pay for these services.

The two primary methods used to allocate central services costs to City organizations are the General Fund Overhead (GFOH) model and interagency agreements. Business service activities that recover costs through rates and interagency agreements will periodically compare the cost of their fees and rates with other comparable agencies and/or businesses, and report these findings to their customers.

Costs will be allocated for general central support services or activities budgeted in the General Fund. Bureaus and operations that are budgeted in the General Fund do not pay GFOH. The amount to be recovered through the GFOH model shall include all costs of the bureau or activity less all internal and external revenue. The Financial Planning Division of the OMF Bureau of Financial Services will provide each paying agency with its projected GFOH costs in a timely manner so the costs can be included in each agency's budget request.

The Financial Planning Division will annually review the updated GFOH model to ensure that it meets the goal of providing a stable, predictable, and equitable allocation of GFOH costs. Every five years, Financial Planning will conduct a comprehensive review of the GFOH model to identify any needed changes. The results of this review and any recommendations will be provided to the Council. The budget will include a table showing the City's GFOH metrics and the share each fund is paying.

Costs for services or activities provided to customers that can be defined on a per unit basis based on actual consumption will be allocated through rates. Designated business service activities will recover their costs by charging rates. Those bureaus recovering costs through the use of rates shall do so through the use of interagency agreements between the providing bureau and the receiving bureau. The amount to be recovered by those bureaus through rates shall include all direct and indirect costs of the bureau less any external revenue.

The system of interagency agreements involves budgeting, billing, and service description components. The Chief Administrative Officer issues procedures for interagency agreements that describe the types of agreements, the required elements, budgeting, rate setting, billing, and dispute resolution.

Cash Management The City will manage its cash assets to ensure accurate records, reduce the chance of loss or theft, and allow the City to maximize interest income. The Treasury Division will ensure the accurate and timely accounting, investment and security of all cash assets, and will develop, maintain, and constantly seek to improve cash management systems. All cash received by City agencies will be deposited to Treasury accounts in accordance with Accounting Administrative Rules. Only the City Treasurer is authorized to establish bank accounts for the City.

Electronic Payment The City will ensure that its banking services, systems, and procedures, including Processing electronic payment processing, are easy for the public to use, provide a cost-effective service, and maintain security for transactions.

58 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

The Treasury Division will establish and maintain all City banking-related services, including those related to payment card or automated clearinghouse (ACH) processing. Payment cards refer to credit and debit cards. Electronic payment processing refers to the use of credit, debit, or ACH methods of payment. Bureaus will use the City's e-Commerce platform (also known as the City's payment processing gateway, or PPG) for all electronic payment card services. Bureaus that provide electronic payment processing options will be responsible for all direct and indirect costs associated with providing the service.

Treasury Holding The Treasury Division will maintain Treasury Holding Accounts (formerly called Accounts Trustee Accounts) for use by, and as a service to, City bureaus. Treasury Holding Accounts (THAs) may be established by a bureau only for the exclusive purpose of holding non-City funds that cannot otherwise be recognized as bureau revenue within the City's financial system. THAs will be non-interest bearing accounts unless otherwise required by law.

Debt Management The primary objectives of the City's Debt Management policy are to maintain the City's Aaa bond rating issued by Moody's, to ensure prudent debt decisions, and to reduce the overall cost of debt management. The policy also places limits on the City's debt, centralizes the management function, and requires completion of various reports critical to maintaining the City's financial health. These guidelines are used both in constructing the debt portions of the budget and in gauging debt-related decisions. The City Debt Manager will be responsible for the implementation of this policy. The Debt Management policy provides additional detail on comprehensive capital planning and financing, limitations on City indebtedness, structure and term of City indebtedness, short-term debt and interim financing, improvement district assessment contract financing, urban renewal financing, conduit financings, financing proposals, selection of finance consultants and service providers, method of sale, refunding of City indebtedness, use of credit enhancement, credit ratings, rebate reporting, covenant compliance, ongoing disclosure, and derivative products.

Interest Rate The primary objective of the Interest Rate Exchange Agreement policy is to ensure that Exchange Agreement the City Council, City management and other decision makers adhere to sound financial and risk management practices when evaluating and entering into interest rate exchange agreements. The City will use interest rate exchange agreements (swaps) and related financial instruments as appropriate interest rate management tools for the purpose of increasing the City's financial flexibility and providing opportunities for interest rate savings. Swaps are designed to reduce the amount or duration of interest rate risk or produce a lower cost of borrowing when used in combination with the issuance of bonds. Swaps are appropriate to use when they achieve specific financial objectives consistent with this policy and the Debt Management policy. The City Debt Manager, in consultation with the City Treasurer and City Controller and subject to the approval of the Chief Financial Officer and/or the CAO, will be responsible for determining if and when it is in the City's best financial interests to enter into a swap or related financial instruments covered in this policy.

City of Portland, Oregon – FY 2008–09 Adopted Budget 59 Financial Overview

The Interest Rate Exchange Agreement policy provides additional detail on the authority for entering into swap agreements, permitted financial instruments, risk analysis, procurement and execution, credit rating designations, terms of swap agreements, and monitoring and reporting requirements.

Investment Policies The primary objective of the Investment policy is to establish a conservative set of investment criteria that will prudently protect the City's principal sums, enable the City to generate a fair rate of return from its investment activities, and provide ample liquidity to meet the City's daily cash requirements. The City Treasurer will be responsible for the implementation of this policy. Consistent with the Oregon Revised Statutes governing the investment of public funds, the City Council will adopt a City investment policy annually. The Investment policy provides additional detail on authorized investments, authorized investment institutions and dealers, risk analysis, diversification, distribution of portfolio maturities, internal controls, and reporting. SUMMARIES OF PLANNING POLICIES The Council has adopted numerous policies governing the provision of specific services by the City. These policies provide further guidance to bureaus as they develop the annual budget.

Comprehensive Plan The 1980 Comprehensive Plan for the City includes goals, policies, objectives, and a plan map, to guide future development and redevelopment of the city. The goals and policies of the Comprehensive Plan provide the context and guidance for future City programs, major capital projects, and other funding decisions. The Comprehensive Plan establishes policies for how and where development occurs in the city. It includes policies that address such issues as public involvement, land use, environmental protection, transportation, and affordable housing. The Bureau of Planning began updating the plan in FY 2007-08 and is continuing those efforts in FY 2008-09.

Portland Future Focus In August of 1991, the City issued its first community strategic plan called Portland Future Focus. It was designed to plan for Portland's future in the face of the community's changing role in the state and the region. The planning process was led by a policy committee of 55 citizens, including representatives from City government, businesses, neighborhoods, schools, neighboring governments, and other groups. The goals contained within the document were directed at achieving a vision for Portland. They provide a filter against which to base decisions, including those considered during the annual budget process. The City is currently in the process of updating the strategic plan.

Portland/Multnomah During 1993, a public process that included several hundred people was conducted to County Benchmarks develop measures to gauge how well the community is progressing toward its shared vision as articulated in Portland Future Focus and other community strategic plans. These benchmarks provide another tool for elected and community leaders to use in guiding government actions. These measures will be updated to reflect the new vision and objectives of the new Portland Plan which is currently being developed.

Community Policing Resolution 34670, approved by Council in 1990, adopted the original five-year plan for the Police Bureau transition to a community policing philosophy. Included were the goals and objectives of community policing. The plan called for 200 additional positions to implement community policing.

60 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

In 1994, Council further committed to the community policing philosophy with the passage of Resolution 35264, which adopted the Community Policing Strategic Plan. The plan is updated every five years and defines the bureau’s community policing mission, goals and objectives, strategies, and performance measures. The current Community Policing Strategic Plan covers 2007-2012.

Regional Resolution #34690, approved by Council in 1990, formalized the Council's commitment to Transportation development of a regional light rail plan. This action resulted from the successful installation and operation of a light rail line connecting downtown with the city of Gresham, east of Portland. The westside rail line extending to Hillsboro opened in August 1998.

Light rail will be the focus of In 2001 the Airport MAX rail service began running between downtown Portland and the the region's future Portland International Airport, and in May 2004, the north-south Interstate light rail line transportation system. opened, extending from the Rose Quarter in inner Northeast Portland to the Expo Center in North Portland. Future light rail developments include the Portland Mall Revitalization project, intended to enliven SW 5th and 6th avenues and bring light rail to the heart of downtown Portland between Union Station and Portland State University. This new light rail extension will be tied into the larger I-205 light rail project, which will bring high-capacity transit service to Clackamas County. Both projects are expected to be complete by 2009. In 2001 the City began operation of a new streetcar system that runs north and south through the central city. The streetcar has since been extended to SW Lowell, and an eastside extension to serve the Lloyd District and the Central Eastside is included in the FY 2008-09 Capital Improvement Plan and Adopted Budget.

Regional Water The RWSP provides a comprehensive, integrated framework of technical information, Supply Plan (RWSP) resource strategies, and actions to meet the water supply needs of the cities, counties, and and Regional Water water districts in the Portland metropolitan area through the year 2050. The Oregon part of Providers Consortium the metropolitan region is made up of three counties and 25 cities with a population of (RWPC) approximately 1.3 million. The RWSP was updated in 2004 by the entities which make up the Regional Water Providers Consortium. The Consortium has a five-year strategic plan which was last updated in 2004 and is in the process of being updated again for adoption in September 2008. In addition, the 2004 Regional Water Supply Plan was also updated. These two plans direct the Consortium to focus on conservation program implementation, emergency planning and preparedness, water issue coordination, and planning decision support tools for water providers through the use of conservation, demand forecasting, and integration models. Part of this effort included negotiation of new wholesale water sales agreements between the City and its major wholesale water customers.

Environmental The FY 2008-09 budget for the Bureau of Environmental Services reflects a number of Services Policy policies, with many intended to comply with federal and state requirements.

Endangered Species Act The City complies with In 1998 and 1999, NOAA-Fisheries (then called the National Marine Fisheries Service) federal ESA requirements to issued final rules to list the Lower Columbia steelhead and chinook salmon as threatened protect and restore salmon species under the Endangered Species Act. To respond, the BES budget includes funding to and steelhead species. develop and implement comprehensive watershed plans for the Willamette River watershed as well as the Fanno/Tryon Creek, Johnson Creek, and Columbia Slough sub-watersheds. The plans will provide background information and recommendations to improve watershed health that will support the City's fish recovery efforts.

City of Portland, Oregon – FY 2008–09 Adopted Budget 61 Financial Overview

Combined Sewer Overflow Program

The CSO capital program The budget provides for compliance with three administrative orders issued by the State continues with eastside tunnel Environmental Quality Commission relating to overflows from the combined sewer portion construction in FY 2008-09. of the collection system. Terms of those orders require the City to eliminate discharges that violate applicable water quality standards. Such work must be completed by December 1, 2011 and is expected to cost approximately $1.4 billion in current dollars.

Sustainable Office of Sustainable Development Development OSD carries out City/County In 2000, City Council created the Office of Sustainable Development (OSD) by merging the policies on energy, global former Energy Office and Bureau of Refuse Disposal. OSD implements the Portland Energy warming, green building, and Policy, adopted by Council in 1990, and the Local Action Plan on Global Warming, adopted sustainable operations. by both the City and Multnomah County in 2001. The office is also responsible for implementing the Green Building Initiative, which Council adopted in 1999, and supports and staffs the joint City-County Sustainable Development Commission, which was created to carry out the Sustainable City Principles adopted in 1994.

Solid Waste Solid waste programs are now In creating OSD, Council assigned it responsibility for solid waste programs and policies. managed by the Office of Council adopted Ordinance #162497 in 1990 to establish residential garbage collection Sustainable Development. franchise areas, expand neighborhood-based recycling programs, and assess a garbage collection franchise fee. In 1996, a commercial recycling program was implemented. In FY 2001-02, the City Council approved renewal of the franchise contracts with private haulers for the residential solid waste and recycling collection services. The FY 2008-09 Adopted Budget supports the continuation of this franchise collection system as well as an extensive recycling and yard debris program.

Economic In 2002, the Portland Development Commission released its Economic Development Development Strategy Strategy for the City of Portland. The strategy, resulting from the work of a blue ribbon committee appointed by the Mayor, became the basis of a five-year economic development plan managed by PDC for the City.

Housing Policies City Council's Comprehensive Plan includes a Housing Policy, known as Goal 4, which sets forth Portland's policies and objectives for housing supply, safety, quality, opportunity, and affordability. The Council also updated and adopted the Consolidated Plan 2005-10 in 2005. The Consolidated Plan describes the city's housing needs, and contains certain principles and priorities to guide expenditure of federal housing and community development funds to address those needs. In 2004, the City completed and published Home Again: A 10-Year Plan to End Homelessness. The plan focuses resources on programs and activities designed to end chronic homelessness, reduce the duration of homelessness, and improve coordination among the various public and private agencies that fund and administer programs. Affordable housing for people at 0-30% of median family income, along with necessary services, is a critical component of the 10-year plan, which calls for 1,600 new units of permanent supportive housing for chronically homeless people and an additional 600 new units for homeless families by 2015.

The City has a five-year goal In 2003 the Council adopted Resolution #36190 establishing an affordable housing to create 1,791 new production goal. The goal is intended to meet the requirements of Metro's Urban Growth affordable housing units. Management Functional Plan Title 7. The resolution sets the City's voluntary affordable

62 City of Portland, Oregon – FY 2008–09 Adopted Budget Financial Overview

housing production goal for the five-year reporting period at 1,791 new housing units. These are units affordable to households at or below 30% of area median income. In 2001, the City Council adopted a No Net Loss Policy establishing the goal of creating, preserving, and rehabilitating the supply of affordable housing in the central city and throughout the Portland metropolitan area.

Arts Plan 2000+ Presented to Council in 1991, Arts Plan 2000+ culminated an 18-month planning process launched by the City of Portland, the Metropolitan Service District, other regional governments, and private sector entities. The study reviewed the regional art industry and established goals and priorities for cultural development. The plan now serves as the City's cultural policy. In FY 1994-95 the Metropolitan Arts Commission converted to a nonprofit organization renamed the Regional Arts and Culture Council.

City of Portland, Oregon – FY 2008–09 Adopted Budget 63 Budget Notes

PURPOSE

Budget notes convey Council direction on a particular topic. They typically instruct a City bureau or office to take specific actions during the fiscal year. Sometimes they are also used to formally express Council intent, even if no specific action is directed. Budget notes are part of the budget adoption ordinance and have the same legal authority as any other ordinance.

PUBLIC SAFETY

Bureau of Police If the Police Bureau considers that additional support from the Bureau of Human Resources is a high priority, the Police Bureau may seek Council authorization in one of the annual budget monitoring processes to eliminate up to three permanent sworn positions in the Police Bureau's Personnel Division to make funds available for this purpose.

Portland Fire & Rescue Inspections Plan Portland Fire & Rescue will develop a plan for Council review by October 2008 to meet its inspections target with the bureau's FY 2008-09 resources.

Apparatus Replacement Schedule Portland Fire & Rescue will review its apparatus replacement schedule for possible extension of age or mileage criteria and report to Council by December 2008.

PARKS, RECREATION, AND CULTURE

Portland Parks & East Portland Community Center Pool (EPCC) Operations & Maintenance Recreation Portland Parks & Recreation will provide City Council with a funding plan by January 2009 addressing EPCC pool operations and maintenance (O&M) expenses beginning in FY 2012-13, at which time levy funding will no longer be available and the General Fund will be obligated to fund the O&M expense not covered by program revenue.

North Portland Noise Study Portland International Raceway will provide $25,000 to match the Friends of Portland International Raceway's $25,000 contribution for the completion of an acoustical sound study and begin design and engineering for the selected sound mitigation strategy resulting from the study.

Parks Trails Assessment Portland Parks & Recreation will report back to Council by February 2009 on how long it would take to complete a trail needs assessment and to develop a prioritized strategy for addressing trail gaps and maintenance needs.

64 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Notes

Washington-Monroe Site Community Center Study Portland Parks & Recreation has received $670,000 in federal funds to prepare a study for the proposed Washington-Monroe community center and parking facility. The study will produce design and cost estimates for various development options including the options of a community center developed both with and without a pool, parking facilities built above ground and underground, and a sports field developed on site.

Volunteer Coordination for Invasive Species Eradication Efforts Portland Parks & Recreation will increase volunteer coordination efforts to increase participation in invasive species eradication.

PUBLIC UTILITIES

Water Bureau Out-of-Service Water Tanks and Surplus Properties The Water Bureau will report back to Council by February 2009 on its progress in divesting of surplus properties, including the dismantling of out-of-service water towers.

Informing Water Customers of LT2 Financial Impacts The Water Bureau will report back to Council on the feasibility of:

Including a line on customers' quarterly billing statements that delineates the portion of customer payments dedicated to Long Term 2 Surface Water Treatment Rule (LT2) compliance and planning, once significant LT2 expenditures are occurring

Including a bill insert in the near term that explains the LT2 rule and the steps that the City is taking to plan for compliance and to pursue a variance to the rule

Base Charge Study The Water Bureau will convene a committee to study the base charges paid by water and/or sewer customers to determine how those costs can be better allocated among customer classes in a manner that reflects the true costs of delivering service to a particular customer group on the basis of the benefits they receive. The committee will include at least one member of the Portland Utility Review Board and will take public comment.

COMMUNITY DEVELOPMENT

Bureau of Permitting/Licensing Center Development Services The Bureau of Development Services will report back to Council by January 2009 on their coordination efforts with the other permitting and licensing bureaus to develop a web-based center to assist businesses and developers in ascertaining estimated City licensing and permitting costs.

Green Building Technical Assistance The Office of Sustainable Development and Bureau of Development Services will work with the development community to create a plan to fund green building technical assistance with permit and/or fee revenues on an ongoing basis.

City of Portland, Oregon – FY 2008–09 Adopted Budget 65 Budget Notes

Bureau of Housing and Bureau of Housing and Community Development Funding Issues Community Development The Bureau of Housing and Community Development will develop a report and presentation for a City Council work session in October 2008 that will focus on clarifying Council priorities for the bureau, presenting performance information to date, and identifying solutions for replacing one-time funding for ongoing programming. The report should include:

An explanation of the bureau's three campaigns (and funded efforts that fall outside of those campaigns), and the activities funded

An update of the bureau's 2006 funding Sustainability Plan that clearly shows which ongoing activities within the campaigns are funded with one-time resources in FY 2008-09, and will need ongoing funding in FY 2009-10 to maintain current service levels

A discussion of the bureau's funding sources, including federal entitlement grants, categorical grants, and local resources, that focuses on what elements of each campaign can be funded by these sources

Options for prioritization by Council among and within the campaigns and their activities The work session should allow for a dialogue with community service providers, accomplished through the means of a report on the results of a provider focus group convened in advance of the work session.

Community Economic Development Strategy The Portland Development Commission (PDC) and the Bureau of Housing and Community Development will collaborate on the community economic development portion of the Citywide Economic Development strategy. The goal of this collaboration will be to identify the tools that each agency has available to implement a community economic development strategy, focusing on complementary activities Citywide, and utilizing the financial resources available to both agencies Citywide (within the usage constraints of tax increment financing and grant requirements). The two agencies will report back to the City Council and the PDC Board of Commissioners by October 2008.

Housing Investment Fund The Bureau of Housing and Community Development, the Office of Management and Finance, and the Portland Development Commission (PDC) will develop a policy document for Council review by September 2008 that will:

Identify the use of Housing Investment Fund resources

Describe the treatment of interest and program income earnings

Analyze potential future funding sources for the fund

Include an updated intergovernmental agreement with PDC for management of loan programs and handling of bond proceeds under the fund

Bureau of Planning The Bureau of Planning is directed to work on the Humboldt Elementary School Plan in coordination with the Schools, Families, Housing initiative.

66 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Notes

Office of Council rescinds its FY 2007-08 budget note stating the following: "Starting in FY 2008-09, Neighborhood district coalition offices will receive 80% of the total City funds they receive in FY 2007-08. Involvement The remaining 20% will be allocated as a one-to-one match to funds raised by the coalition."

Office of Sustainable Green Building Technical Assistance Development The Office of Sustainable Development and Bureau of Development Services will work with the development community to create a plan to fund green building technical assistance with permit and/or fee revenues on an ongoing basis.

Urban Sustainability Institute The Office of Sustainable Development is directed to partner with the Portland Development Commission, the private sector, nonprofit organizations, and higher education institutions on the Urban Sustainability Institute project.

Low-Income Assistance Need Study The Office of Sustainable Development will convene an interdepartmental committee to determine if there is need for a low-income assistance program for residential solid waste and recycling customers patterned on the current program provided to Portland water and sewer customers. The study committee will include at least one member of the Portland Utility Review Board and a member from the hauling community.

LEGISLATIVE, ADMINISTRATIVE, AND SUPPORT

Office of the City The budget includes funding for a 0.5 FTE position for Independent Police Review. This Auditor position is to be funded for three years, through FY 2010-11. The Office of Management and Finance will ensure that this funding is included in the General Fund financial forecast, and is dedicated to the Auditor's Office for this position in FY 2009-10 and FY 2010-11.

Office of Management Housing Investment Fund & Finance The Bureau of Housing and Community Development, the Office of Management and Finance, and the Portland Development Commission will develop a policy document for Council review by September 2008 that will:

Identify the use of Housing Investment Fund resources

Describe the treatment of interest and program income earnings

Analyze potential future funding sources for the fund

Include an updated intergovernmental agreement with PDC for management of loan programs and handling of bond proceeds under the fund

Ongoing Funding Intent This budget sets forth City Council's intention to convert certain limited term positions to permanent and to fund those positions, and related operating expenses, with ongoing discretionary resources in the FY 2009-10 budget process. The positions and related operating expenses are funded in FY 2008-09 with one-time discretionary resources. The positions and expenses covered under this budget note will be limited to those that were included in the Mayor's Proposed Budget for FY 2008-09 as permanent and funded with ongoing resources. They are:

City of Portland, Oregon – FY 2008–09 Adopted Budget 67 Budget Notes

One Community Outreach and Information Representative in the Office of Human Relations and $5,100 of the office's external materials and services expenses (two positions and most of the office's materials and services expenses are funded with ongoing resources in the Adopted Budget)

One Youth Violence Prevention position in the Office of Neighborhood Involvement, and operating expenses for the program (one position in the Mayor's Office is funded with ongoing resources in the Adopted Budget)

One Labor Relations Coordinator in the Bureau of Human Resources

One Grants Analyst in the Bureau of Financial Services

One-Time Discretionary Resources Given the much smaller amount of General Fund one-time discretionary resources forecast for FY 2009-10 compared to FY 2008-09, Council commits to reserve any FY 2008-09 unanticipated beginning fund balance in the General Fund for inclusion in the FY 2009-10 General Fund Financial Forecast and budget process.

Public Safety Systems Revitalization Project (PSSRP) Council directs the Office of Management and Finance to:

Commit in the General Fund Financial Forecast $4.5 million of FY 2009-10 General Fund one-time resources to completing the Computer-Aided Dispatch and Portland Police Data Systems replacement projects

Develop a funding plan for completing the remaining PSSRP projects, the 800 MHz replacement and Fires2000 enhancements, for Council's review by December 2008

Rainy Day Reserve A "rainy day reserve" of $4.85 million is established in the General Fund Contingency, to be included as a resource for the FY 2009-10 budget in anticipation of a potential reduction in General Fund discretionary revenues. Within this rainy day reserve, the following will be made available for projects or programs if the need is identified:

$1,800,000 for Police vacancies. This funding has been in the General Fund contingency for the past three years, and is expected to return to the contingency in FY 2009-10. It is to be available to Police if needed for newly-hired Police Officers.

$1,750,000 for Regional Public Safety Training Facility. There is $250,000 in the FY 2008-09 budget for this facility, and this additional amount will be made available for purchase of property that is suitable for development of the facility.

$586,107 for City Hall reconfiguration. Space in City Hall is inadequate for the bureaus and offices that currently occupy it. These funds are to be available for costs associated with moving to another facility or within City Hall, upon identification of costs by City Facilities staff.

$300,000 for homeless self-sufficiency services. These funds are to be available when the Commissioner-in-Charge of the Bureau of Housing & Community Development determines how they are to be used.

Regional Training Center Land acquisition for the Public Safety Regional Training Center is based on the expectation that regional partners will contribute $500,000 to the project before June 30, 2010.

68 City of Portland, Oregon – FY 2008–09 Adopted Budget Budget Notes

Revenue Bureau Funding Plan The Office of Management and Finance will develop a new funding model for the Revenue Bureau for inclusion in the FY 2009-10 budget. The goal is to address the issue of positions that generate General Fund discretionary revenue greater than their costs but that must compete for discretionary revenue to become permanent positions.

Office of the Mayor The Mayor's Office will coordinate development of a long-term funding plan for the Lewis & Clark Small Business Legal Clinic by December 2008.

City of Portland, Oregon – FY 2008–09 Adopted Budget 69

Financial Summaries

Guide to the Financial Summaries

INTRODUCTION The Financial Summaries section of Volume One contains a variety of tables intended to help the reader view the FY 2008-09 Adopted Budget as a whole, consolidating budget figures across all the City's funds and bureaus. The tables in this section do not include figures for the Portland Development Commission (PDC). PDC is a semi-autonomous agency that operates under City charter but is budgeted separately.

SUMMARY TABLES

Total City Budget Table 1, Total City Budget - Revenues and Expenses, offers the broadest picture of the City budget. The table compares FY 2006-07 Actuals with the FY 2007-08 Revised Budget reflecting through accounting period 10 (April 2, 2008) with the FY 2008-09 Adopted Budget. Table 1 shows the budget broken out into major revenue and expense classes. There are two types of major expenses classes: bureau expenses and fund expenses. Bureau expenses are the types of operating and capital expenditures that result from the provision of programs or services by the City’s bureaus. Categories of bureau expenses are personal services, external materials and services, internal materials and services, and capital outlay. Fund expenses are financial requirements for a fund to meet its obligations such as contingencies, debt retirement, and most interfund transfers, but which may not be associated with the operations of any particular bureau. The Citywide totals in Table 1 and elsewhere show the sum of the various funds and a net budget figure. The net budget subtracts the double count caused by interfund transfers and tax anticipation notes (TANs). TANs are short-term debt sold early in some fiscal years to provide cash until property tax revenues are received. The double count occurs because the City budgets for both TANs and property tax revenues.

Appropriation Table 2, the Appropriation Schedule, is a legally required summary of budgeted Schedule expenditures by fund. Appropriations are divided into bureau expenses and fund expenses. Fund requirements are divided into contingency, interfund cash transfers, and debt retirement.

Bureau Expenses by Table 3, Summary of Bureau Expenses by Fund, provides detail of bureau expenses, Fund showing the amount budgeted for each major expense category. The total column of Table 3 is equal to the first column in Table 2.

Revenues by Fund Table 4, Summary of Revenues by Fund, provides a more detailed view of the major revenue types received by each fund.

City of Portland, Oregon – FY 2008–09 Adopted Budget 71 Guide to the Financial Summaries

Total Revenues and Table 5, Total Revenues and Expenses by Fund by Fiscal Year, shows the total expenses (or Expenses by Fund by the total revenues, since they are equal) in all funds for the budget year, current year, and Fiscal Year two prior years.

Tax Levy Computation Table 6, Tax Levy Computation, outlines City property tax levy calculations. It includes Measure 5 and Measure 47/50 tax base, operating property tax revenues, and pension obligation bond debt service property tax revenues. The table states total requirements for each tax-supported fund, less nontax revenues which leaves the amount the fund receives in current year tax revenues. This amount is then factored up for delinquencies and any applicable Measure 5 and 50 losses. The result is a certified property tax levy for each fund.

Urban Renewal Table 7, Urban Renewal Certification, shows estimated FY 2008-09 tax increment Certification collections for the City's 11 urban renewal districts.

Authorized Positions Table 8, Summary of Authorized Positions, is a summary of the positions authorized by Council through the budget process. The figures include permanent part-time positions and limited term positions, as well as permanent full-time positions.

General Fund Table 9, General Fund Revenues and Expenses, summarizes the budget for the General Revenues and Fund, the City's largest, most visible, and most flexible fund. It shows the different sources Expenses of revenue, the budgets for individual bureaus within the General Fund, and the fund-level expenses. The table compares the FY 2007-08 Revised Budget to the FY 2008-09 Adopted Budget.

Table 9 shows General Fund Table 9 also shows what portion of a bureau's budget is supported with discretionary discretionary and total General Fund resources. Some General Fund revenues, known as nondiscretionary budgets by bureau. resources, are restricted to certain purposes by contract or policy. For instance, TriMet (the regional transit authority) contracts with the Police Bureau for police services. Those dollars, provided by trimet, can only be spent by the Police Bureau for activities related to that contract. Similarly, Portland Parks & Recreation generates fee income from its recreation programs that the City Council has decided to dedicate for parks and recreation functions. The major types of nondiscretionary resources are grants and donations, contract revenues, interagency service agreements between City bureaus, fee revenue, and overhead recovery revenues. Overhead recovery from non-General Funds cover these funds’ share of the cost of services provided by central administrative bureaus within the General Fund. A bureau's discretionary budget does not include nondiscretionary resources, and thus represents the bureau's allocation of those dollars over which the City Council exercises discretion, such as property taxes, business license revenue, or utility license fees. The total General Fund FY 2008-09 Adopted Budget is $506.6 million. After subtracting the cost of those activities supported with nondiscretionary funding sources, the flexible portion of the General Fund is $386.9 million. City Council can choose to dedicate these discretionary resources to any service area, bureau, or program.

Service Area Table 10, Operating and Capital Budget by Service Area, summarizes the operating and Summary capital expenditures included in bureau budgets for each fiscal year by service area and bureau. It does not include fund requirements, such as contingencies, debt retirement, or interfund transfers.

72 City of Portland, Oregon – FY 2008–09 Adopted Budget Guide to the Financial Summaries

Capital Budget by Table 11, Capital Budget, summarizes the Citywide Capital Improvement Plan (CIP) budget Service Area by bureau for each service area. The City’s total capital budget for FY 2008-09 is $441.9 million.

Capital Budget by Table 12, CIP Geographic Summary, shows CIP budgets by geographic area for each Geographic Area service area. The geographic areas follow the street designators of N, NE, SE, NW, and SW. Some capital projects overlap districts and are reflected in the geographic areas of east, west, or all areas.

Historical Funds Table 13, Historical Funds and Appropriations, shows total information for City funds and General Fund special appropriations that have been closed during the past three fiscal years. This information is required by Local Budget Law.

City of Portland, Oregon – FY 2008–09 Adopted Budget 73 Total City Budget – Revenues and Expenses TABLE 1 This table summarizes the City budget as a whole according to the major categories of expenses and revenues. The figures on this page combine all of the City's funds except those of the Portland Development Commission, a semi-autonomous agency that operates under City charter but is budgeted separately. All subsequent budget tables follow this format. Actual Revised Adopted FY 2006–07 FY 2007–08 FY 2008–09

RESOURCES External Revenues Taxes 372,348,520 393,870,640 397,253,920 Licenses and Permits 163,573,392 154,544,827 167,379,164 Service Charges 452,785,122 443,388,369 464,786,052 Federal Sources 50,181,340 51,939,271 64,498,753 State Sources 63,853,776 54,777,378 65,949,868 Local Sources 74,990,162 71,350,221 100,232,390 Miscellaneous 84,577,945 95,973,932 75,788,687 Debt Proceeds 546,874,864 507,903,216 354,931,069 Total External Revenues 1,809,185,121 1,773,747,854 1,690,819,903 Transfers from Other Funds Service Reimbursements 189,147,290 209,823,663 209,302,278 Cash Transfers 560,083,021 578,333,067 610,942,078 Total Transfers from Other Funds 749,230,311 788,156,730 820,244,356 Beginning Fund Balances 772,067,881 617,533,213 752,577,915 Total Budget 3,330,483,313 3,179,437,797 3,263,642,174 Less Interfund Transfers and Tax Anticipation Notes (749,230,311) (811,796,730) (850,244,356) TOTAL NET BUDGET $ 2,581,253,002 $ 2,367,641,067 $ 2,413,397,818

REQUIREMENTS Bureau Expenses Personal Services 484,615,546 523,382,388 546,279,689 External Materials & Services 517,975,873 696,627,336 680,487,717 Internal Materials & Services 189,147,290 209,823,663 209,302,278 Capital Outlay 246,641,367 292,676,174 330,241,217 Total Bureau Expenses 1,438,380,076 1,722,509,561 1,766,310,901 Fund-Level Expenses Debt Service 602,306,576 346,080,075 357,299,774 Fund-Level Cash Transfers 543,574,139 558,424,421 587,979,135 General Fund Overhead 16,508,882 19,908,646 22,962,943 Contingency 0 429,484,607 449,378,393 Total Fund-Level Expenses 1,162,389,597 1,353,897,749 1,417,620,245 Total Appropriated Budget 2,600,769,673 3,076,407,310 3,183,931,146 Unappropriated Ending Balance 729,713,640 103,030,487 79,711,028 Total Budget 3,330,483,313 3,179,437,797 3,263,642,174 Less Interfund Transfers and Tax Anticipation Notes (749,230,311) (811,796,730) (850,244,356) TOTAL NET BUDGET $ 2,581,253,002 $ 2,367,641,067 $ 2,413,397,818

74 City of Portland, Oregon – FY 2008–09 Adopted Budget

Appropriation Schedule – FY 2008–09 TABLE 2 This table summarizes the major categories of expenditures, including fund-level expenses, by fund and by bureau. It does not include unappropriated ending balance. Fund Requirements

Bureau Interfund Program Cash Debt Total Expenses Contingency Transfers Retirement Appropriation

GENERAL FUND Bureau of Housing and Community 16,342,840 0 0 0 16,342,840 Development Bureau of Planning 11,786,657 0 0 0 11,786,657 Bureau of Police 152,975,376 0 0 0 152,975,376 Commissioner of Public Affairs 2,943,449 0 0 0 2,943,449 Commissioner of Public Safety 715,998 0 0 0 715,998 Commissioner of Public Utilities 851,936 0 0 0 851,936 Commissioner of Public Works 769,829 0 0 0 769,829 Office of Cable Communications & 2,013,772 0 0 0 2,013,772 Franchise Management Office of the City Attorney 7,811,310 0 0 0 7,811,310 Office of the City Auditor 8,075,114 0 0 0 8,075,114 Office of Government Relations 1,157,089 0 0 0 1,157,089 Office of Human Relations 647,250 0 0 0 647,250 Office of Management & Finance 29,111,711 0 0 0 29,111,711 Office of the Mayor 2,905,312 0 0 0 2,905,312 Office of Neighborhood Involvement 7,296,571 0 0 0 7,296,571 Office of Sustainable Development 2,904,697 0 0 0 2,904,697 Citywide Projects Division 25,824,904 0 0 0 25,824,904 Revenue Bureau 9,992,468 0 0 0 9,992,468 Portland Fire & Rescue 87,610,332 0 0 0 87,610,332 Portland Office of Emergency 8,254,232 0 0 0 8,254,232 Management Portland Parks & Recreation 58,144,597 0 0 0 58,144,597 Special Appropriations 23,659,888 0 250,000 0 23,909,888 Total General Fund 461,795,332 0 250,000 0 462,045,332 Total Fund Requirements 0 17,253,800 51,872,439 0 69,126,239 TOTAL GENERAL FUND $ 461,795,332 $ 17,253,800 $ 52,122,439 $0$ 531,171,571

OTHER MAJOR GOVERNMENT FUND Transportation Operating Fund 203,897,370 27,593,541 10,936,943 2,088,500 244,516,354 Total Other Major Gov't Fund 203,897,370 27,593,541 10,936,943 2,088,500 244,516,354 SPECIAL REVENUE FUNDS Assessment Collection Fund 206 76,771 348 0 77,325 Business License Surcharge Fund 302,420 0 1,500,831 0 1,803,251 Cable Fund 3,940,237 1,578,371 14,669 0 5,533,277 Campaign Finance Fund 997,690 865,463 341 0 1,863,494 Children's Investment Fund 11,822,752 1,000,000 25,000 0 12,847,752 Convention and Tourism Fund 3,257,253 44,609 7,393 0 3,309,255 Development Services Fund 42,782,025 3,829,573 3,124,230 0 49,735,828 Emergency Communication Fund 16,234,145 1,821,215 1,761,818 0 19,817,178 Grants Fund 420,273 0 48,090,602 0 48,510,875 General Reserve Fund 0 68,540,414 211,546 0 68,751,960 HOME Grant Fund 4,593,825 0 0 0 4,593,825 Housing and Community 11,233,972 0 235,081 0 11,469,053 Development Fund Housing Investment Fund 15,175,041 395,527 743,928 8,150,000 24,464,496 Parks Local Option Levy Fund 12,505,986 3,746,656 33,185 0 16,285,827 Portland Parks Memorial Trust Fund 898,110 1,560,006 0 0 2,458,116

City of Portland, Oregon – FY 2008–09 Adopted Budget 75 Appropriation Schedule – FY 2008–09 TABLE 2 This table summarizes the major categories of expenditures, including fund-level expenses, by fund and by bureau. It does not include unappropriated ending balance. Fund Requirements

Bureau Interfund Program Cash Debt Total Expenses Contingency Transfers Retirement Appropriation

Private for Hire Transportation 83,794 8,168 418 0 92,380 Safety Fund Property Management License 4,502,378 0 0 0 4,502,378 Fund Special Finance and Resource 177,736,902 0 0 2,082,319 179,819,221 Fund Transportation Reserve Fund 0 831,853 0 0 831,853 Total Special Revenue Funds 306,487,009 84,298,626 55,749,390 10,232,319 456,767,344 DEBT SERVICE FUNDS Airport Way Debt Service Fund 0 0 0 5,390,213 5,390,213 Bancroft Bond Interest & Sinking 0 0 0 6,849,936 6,849,936 Fund Bonded Debt Interest and Sinking 0 0 0 7,891,412 7,891,412 Fund Central Eastside Industrial District 0 0 0 4,586,858 4,586,858 Debt Service Fund Convention Center Area Debt 0 0 0 11,183,163 11,183,163 Service Fund Gas Tax Bond Redemption Fund 0 0 0 2,029,957 2,029,957 Gateway URA Debt Redemption 0 0 0 2,253,300 2,253,300 Fund Governmental Bond Redemption 0 0 0 9,504,214 9,504,214 Fund Interstate Corridor Debt Service 0 0 0 9,832,359 9,832,359 Fund Lents Town Center URA Debt 0 0 0 7,449,539 7,449,539 Redemption Fund North Macadam URA Debt 0 0 0 6,737,917 6,737,917 Redemption Fund Pension Debt Redemption Fund 136,000 0 4,000,000 23,176,929 27,312,929 River District URA Debt 0 0 0 21,555,432 21,555,432 Redemption Fund South Park Block Redemption Fund 0 0 0 7,295,971 7,295,971 Special Projects Debt Service Fund 0 0 0 6,171,703 6,171,703 Waterfront Renewal Bond Sinking 822,645 0 0 10,198,420 11,021,065 Fund Willamette Industrial URA Debt 0 0 0 397,151 397,151 Service Fund Total Debt Service Funds 958,645 0 4,000,000 142,504,474 147,463,119 CAPITAL PROJECTS FUNDS BFRES Facilities GO Bond 12,451,817 4,973,668 99,568 434,414 17,959,467 Construction Fund LID Construction Fund 1,476,336 4,891,266 4,628,537 1,954,250 12,950,389 Parks Capital Construction and 44,512,200 3,695,641 1,151,373 0 49,359,214 Maintenance Fund Total Capital Projects Funds 58,440,353 13,560,575 5,879,478 2,388,664 80,269,070 PERMANENT FUND Parks Endowment Fund 2,600 0 0 0 2,600 Total Permanent Fund 2,600 0 0 0 2,600 ENTERPRISE FUNDS Environmental Remediation Fund 5,514,732 1,071,725 45,769 0 6,632,226

76 City of Portland, Oregon – FY 2008–09 Adopted Budget Appropriation Schedule – FY 2008–09 TABLE 2 This table summarizes the major categories of expenditures, including fund-level expenses, by fund and by bureau. It does not include unappropriated ending balance. Fund Requirements

Bureau Interfund Program Cash Debt Total Expenses Contingency Transfers Retirement Appropriation

Golf Fund 7,151,210 1,285,340 1,193,823 0 9,630,373 Golf Revenue Bond Redemption 0 0 0 807,343 807,343 Fund Hydroelectric Power Bond 0 0 0 2,705,894 2,705,894 Redemption Fund Hydroelectric Power Operating 1,192,151 325,009 337,192 0 1,854,352 Fund Hydroelectric Power Renewal and 0 8,454,589 825,000 0 9,279,589 Replacement Fund Parking Facilities Fund 11,880,766 7,202,025 4,223,325 0 23,306,116 Parking Facilities Debt Redemption 0 0 0 3,071,375 3,071,375 Fund Portland International Raceway 1,598,311 491,821 84,942 274,204 2,449,278 Fund Sewer System Construction Fund 100,000 22,184,000 196,466,000 0 218,750,000 Sewer System Debt Redemption 0 0 0 121,206,330 121,206,330 Fund Sewer System Operating Fund 279,390,195 30,969,492 149,921,674 154,645 460,436,006 Sewer System Rate Stabilization 0 79,321,100 5,500,000 0 84,821,100 Fund Solid Waste Management Fund 4,198,249 72,505 981,291 0 5,252,045 Spectator Facilities Operating Fund 2,883,516 6,202,895 172,109 5,963,931 15,222,451 Water Fund 129,098,999 25,414,605 41,456,520 1,124,639 197,094,763 Water Bond Sinking Fund 0 0 0 21,527,674 21,527,674 Water Construction Fund 0 10,677,295 71,181,961 0 81,859,256 Water Growth Impact Charge Trust 0 0 1,912,526 0 1,912,526 Fund Total Enterprise Funds 443,008,129 193,672,401 474,302,132 156,836,035 1,267,818,697 INTERNAL SERVICE FUNDS CityFleet Operating Fund 25,746,065 17,722,745 1,608,955 0 45,077,765 Facilities Services Operating Fund 36,869,379 15,721,956 1,491,603 6,877,857 60,960,795 Health Insurance Operating Fund 38,617,054 12,925,173 218,523 0 51,760,750 Insurance and Claims Operating 9,640,122 18,191,313 437,040 0 28,268,475 Fund Portland Police Association Health 15,387 1,186,840 72,486 0 1,274,713 Insurance Fund Printing & Distribution Services 7,578,153 2,222,479 471,105 0 10,271,737 Operating Fund Technology Services Fund 66,224,395 22,498,599 2,386,906 5,436,925 96,546,825 Workers' Compensation Self- 4,081,613 18,639,661 339,702 0 23,060,976 Insurance Operating Fund Total Internal Service Funds 188,772,168 109,108,766 7,026,320 12,314,782 317,222,036 FIDUCIARY FUNDS Fire & Police Disability & 102,941,295 3,890,684 175,376 30,935,000 137,942,355 Retirement Fund Fire & Police Disability & 0 0 750,000 0 750,000 Retirement Reserve Fund Fire & Police Supplemental 8,000 0 0 0 8,000 Retirement Reserve Fund Total Fiduciary Funds 102,949,295 3,890,684 925,376 30,935,000 138,700,355 TOTAL ALL FUNDS $1,766,310,901 $ 449,378,393 $ 610,942,078 $ 357,299,774 $ 3,183,931,146

City of Portland, Oregon – FY 2008–09 Adopted Budget 77 Summary of Bureau Expenses by Fund – FY 2008–09 TABLE 3 This table summarizes the major categories of expenditures included in bureau budgets by fund and by bureau. Fund-level requirements such as contingencies and interfund transfers are summarized in Table 10. Personal External Internal Capital Total Services Mat’l & Svcs Mat’l & Svcs Outlay Bureau Expenses

GENERAL FUND Bureau of Housing and Community 2,622,375 13,397,110 323,355 0 16,342,840 Development Bureau of Planning 7,475,895 2,383,680 1,927,082 0 11,786,657 Bureau of Police 112,944,790 10,934,067 29,096,519 0 152,975,376 Commissioner of Public Affairs 663,040 829,369 131,040 1,320,000 2,943,449 Commissioner of Public Safety 575,784 12,212 128,002 0 715,998 Commissioner of Public Utilities 692,640 11,943 147,353 0 851,936 Commissioner of Public Works 630,435 12,916 126,478 0 769,829 Office of Cable Communications & 906,954 981,304 125,514 0 2,013,772 Franchise Management Office of the City Attorney 6,401,846 694,333 715,131 0 7,811,310 Office of the City Auditor 4,490,961 1,473,808 2,110,345 0 8,075,114 Office of Government Relations 681,762 330,469 144,858 0 1,157,089 Office of Human Relations 394,552 205,068 47,630 0 647,250 Office of Management & Finance 18,194,465 5,206,013 5,711,233 0 29,111,711 Office of the Mayor 1,794,622 586,473 524,217 0 2,905,312 Office of Neighborhood Involvement 2,985,210 3,810,349 501,012 0 7,296,571 Office of Sustainable Development 1,750,062 749,921 404,714 0 2,904,697 Citywide Projects Division 2,367,356 17,096,202 2,911,346 3,450,000 25,824,904 Revenue Bureau 4,966,966 2,410,328 2,615,174 0 9,992,468 Portland Fire & Rescue 75,201,344 5,195,416 5,178,820 2,034,752 87,610,332 Portland Office of Emergency 1,368,156 6,403,815 482,261 0 8,254,232 Management Portland Parks & Recreation 36,296,406 15,121,952 6,562,239 164,000 58,144,597 Special Appropriations 0 23,536,888 123,000 0 23,659,888 Total General Fund 283,405,621 111,383,636 60,037,323 6,968,752 461,795,332 OTHER MAJOR GOVERNMENT FUND Transportation Operating Fund 66,778,495 45,707,049 23,257,754 68,154,072 203,897,370 Total Other Major Gov't Fund 66,778,495 45,707,049 23,257,754 68,154,072 203,897,370 SPECIAL REVENUE FUNDS Assessment Collection Fund 0 0 206 0 206 Business License Surcharge Fund 0 0 302,420 0 302,420 Cable Fund 0 3,691,500 248,737 0 3,940,237 Campaign Finance Fund 0 937,914 59,776 0 997,690 Children's Investment Fund 354,022 11,445,640 23,090 0 11,822,752 Convention and Tourism Fund 0 3,145,779 111,474 0 3,257,253 Development Services Fund 31,878,937 2,240,921 8,662,167 0 42,782,025 Emergency Communication Fund 12,272,857 351,100 3,610,188 0 16,234,145 Grants Fund 0 420,273 0 0 420,273 General Reserve Fund 0 0 0 0 0 HOME Grant Fund 0 4,225,807 368,018 0 4,593,825 Housing and Community Development 0 9,617,147 1,616,825 0 11,233,972 Fund Housing Investment Fund 0 15,175,041 0 0 15,175,041 Parks Local Option Levy Fund 0 0 12,505,986 0 12,505,986 Portland Parks Memorial Trust Fund 0 400,052 498,058 0 898,110 Private for Hire Transportation Safety Fund 0 70,000 13,794 0 83,794 Property Management License Fund 0 4,457,354 45,024 0 4,502,378 Special Finance and Resource Fund 0 177,736,902 0 0 177,736,902 Transportation Reserve Fund 0 0 0 0 0 Total Special Revenue Funds 44,505,816 233,915,430 28,065,763 0 306,487,009

78 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Bureau Expenses by Fund – FY 2008–09 TABLE 3 This table summarizes the major categories of expenditures included in bureau budgets by fund and by bureau. Fund-level requirements such as contingencies and interfund transfers are summarized in Table 10. Personal External Internal Capital Total Services Mat’l & Svcs Mat’l & Svcs Outlay Bureau Expenses

DEBT SERVICE FUNDS Airport Way Debt Service Fund 0 0 0 0 0 Bancroft Bond Interest & Sinking Fund 0 0 0 0 0 Bonded Debt Interest and Sinking Fund 0 0 0 0 0 Central Eastside Industrial District Debt 0 0 0 0 0 Service Fund Convention Center Area Debt Service 0 0 0 0 0 Fund Gas Tax Bond Redemption Fund 0 0 0 0 0 Gateway URA Debt Redemption Fund 0 0 0 0 0 Governmental Bond Redemption Fund 0 0 0 0 0 Interstate Corridor Debt Service Fund 0 0 0 0 0 Lents Town Center URA Debt Redemption 0 0 0 0 0 Fund North Macadam URA Debt Redemption 0 0 0 0 0 Fund Pension Debt Redemption Fund 0 0 136,000 0 136,000 River District URA Debt Redemption Fund 0 0 0 0 0 South Park Block Redemption Fund 0 0 0 0 0 Special Projects Debt Service Fund 0 0 0 0 0 Waterfront Renewal Bond Sinking Fund 0 822,645 0 0 822,645 Willamette Industrial URA Debt Service 0 0 0 0 0 Fund Total Debt Service Funds 0 822,645 136,000 0 958,645 CAPITAL PROJECTS FUNDS BFRES Facilities GO Bond Construction 0 0 2,576,459 9,875,358 12,451,817 Fund LID Construction Fund 0 10,000 1,466,336 0 1,476,336 Parks Capital Construction and 1,527,049 1,658,518 322,789 41,003,844 44,512,200 Maintenance Fund Total Capital Projects Funds 1,527,049 1,668,518 4,365,584 50,879,202 58,440,353 PERMANENT FUND Parks Endowment Fund 0 400 2,200 0 2,600 Total Permanent Fund 0 400 2,200 0 2,600 ENTERPRISE FUNDS Environmental Remediation Fund 520,152 4,246,613 747,967 0 5,514,732 Golf Fund 2,817,555 3,545,209 738,446 50,000 7,151,210 Golf Revenue Bond Redemption Fund 0 0 0 0 0 Hydroelectric Power Bond Redemption 0 0 0 0 0 Fund Hydroelectric Power Operating Fund 280,179 704,792 207,180 0 1,192,151 Hydroelectric Power Renewal and 0 0 0 0 0 Replacement Fund Parking Facilities Fund 0 7,827,841 4,052,925 0 11,880,766 Parking Facilities Debt Redemption Fund 0 0 0 0 0 Portland International Raceway Fund 739,937 668,250 190,124 0 1,598,311 Sewer System Construction Fund 0 0 100,000 0 100,000 Sewer System Debt Redemption Fund 0 0 0 0 0 Sewer System Operating Fund 48,771,715 41,391,526 33,544,691 155,682,263 279,390,195 Sewer System Rate Stabilization Fund 0 0 0 0 0 Solid Waste Management Fund 1,778,386 1,352,433 1,067,430 0 4,198,249 Spectator Facilities Operating Fund 0 2,234,709 307,807 341,000 2,883,516

City of Portland, Oregon – FY 2008–09 Adopted Budget 79 Summary of Bureau Expenses by Fund – FY 2008–09 TABLE 3 This table summarizes the major categories of expenditures included in bureau budgets by fund and by bureau. Fund-level requirements such as contingencies and interfund transfers are summarized in Table 10. Personal External Internal Capital Total Services Mat’l & Svcs Mat’l & Svcs Outlay Bureau Expenses

Water Fund 55,932,739 24,278,213 20,636,536 28,251,511 129,098,999 Water Bond Sinking Fund 0 0 0 0 0 Water Construction Fund 0 0 0 0 0 Water Growth Impact Charge Trust Fund 0 0 0 0 0 Total Enterprise Funds 110,840,663 86,249,586 61,593,106 184,324,774 443,008,129 INTERNAL SERVICE FUNDS CityFleet Operating Fund 6,122,214 10,527,382 1,491,802 7,604,667 25,746,065 Facilities Services Operating Fund 3,015,056 21,482,763 2,965,060 9,406,500 36,869,379 Health Insurance Operating Fund 855,117 37,354,107 407,830 0 38,617,054 Insurance and Claims Operating Fund 971,490 6,601,171 2,060,461 7,000 9,640,122 Portland Police Association Health 0 0 15,387 0 15,387 Insurance Fund Printing & Distribution Services Operating 2,005,007 4,489,129 684,767 399,250 7,578,153 Fund Technology Services Fund 23,869,310 20,061,700 19,803,385 2,490,000 66,224,395 Workers' Compensation Self-Insurance 936,367 2,663,193 475,053 7,000 4,081,613 Operating Fund Total Internal Service Funds 37,774,561 103,179,445 27,903,745 19,914,417 188,772,168 FIDUCIARY FUNDS Fire & Police Disability & Retirement Fund 1,447,484 97,553,008 3,940,803 0 102,941,295 Fire & Police Disability & Retirement 0 0 0 0 0 Reserve Fund Fire & Police Supplemental Retirement 0 8,000 0 0 8,000 Reserve Fund Total Fiduciary Funds 1,447,484 97,561,008 3,940,803 0 102,949,295 TOTAL ALL FUNDS $ 546,279,689 $ 680,487,717 $ 209,302,278 $ 330,241,217 $1,766,310,901

80 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Revenues by Fund – FY 2008–09 TABLE 4 This table summarizes the major categories of estimated revenues, including beginning fund balance and transfers from other funds, in total appropriation budgets by fund. Property & Service Transient Charges, Lodging Licenses, & Other External Interfund Beginning Total Taxes Permits Revenue Revenues Balances Revenues

MAJOR GOVERNMENT FUNDS General Fund 196,054,771 146,594,195 42,811,400 103,079,200 42,632,005 531,171,571 Transportation Operating Fund 0 34,060,197 100,762,121 76,286,856 33,407,180 244,516,354 Total Major Government Funds 196,054,771 180,654,392 143,573,521 179,366,056 76,039,185 775,687,925 SPECIAL REVENUE FUNDS Assessment Collection Fund 0 0 3,500 0 73,825 77,325 Business License Surcharge Fund 0 1,802,251 1,000 0 0 1,803,251 Cable Fund 0 1,132,483 2,522,990 66,247 2,682,931 6,404,651 Campaign Finance Fund 0 0 75,800 320,000 1,467,694 1,863,494 Children's Investment Fund 236,098 0 345,189 0 13,807,554 14,388,841 Convention and Tourism Fund 3,243,113 0 21,533 0 100,398 3,365,044 Development Services Fund 0 38,137,000 2,581,000 2,508,551 14,554,385 57,780,936 Emergency Communication Fund 0 50,000 6,378,970 10,606,993 2,821,215 19,857,178 Grants Fund 0 0 48,510,875 0 0 48,510,875 General Reserve Fund 0 0 2,425,410 7,150,000 59,176,550 68,751,960 HOME Grant Fund 0 0 4,593,825 0 0 4,593,825 Housing and Community Development 0 0 11,469,053 0 0 11,469,053 Fund Housing Investment Fund 0 0 17,571,428 0 6,893,068 24,464,496 Parks Local Option Levy Fund 351,812 0 351,000 0 15,583,015 16,285,827 Portland Parks Memorial Trust Fund 0 96,945 466,324 0 1,894,847 2,458,116 Private for Hire Transportation Safety 0 89,890 2,490 0 0 92,380 Fund Property Management License Fund 0 4,488,199 14,179 0 0 4,502,378 Special Finance and Resource Fund 0 0 179,819,221 0 0 179,819,221 Transportation Reserve Fund 0 0 35,000 800,000 796,853 1,631,853 Total Special Revenue Funds 3,831,023 45,796,768 277,188,787 21,451,791 119,852,335 468,120,704 DEBT SERVICE FUNDS Airport Way Debt Service Fund 5,318,268 0 69,772 0 2,362,513 7,750,553 Bancroft Bond Interest & Sinking Fund 0 0 8,233,531 0 12,530,952 20,764,483 Bonded Debt Interest and Sinking Fund 7,791,412 0 100,000 0 0 7,891,412 Central Eastside Industrial District Debt 4,526,093 0 60,765 0 0 4,586,858 Service Fund Convention Center Area Debt Service 11,036,333 0 146,830 0 0 11,183,163 Fund Gas Tax Bond Redemption Fund 0 0 0 2,029,957 4,855 2,034,812 Gateway URA Debt Redemption Fund 2,223,685 0 29,615 0 0 2,253,300 Governmental Bond Redemption Fund 0 0 6,430,000 3,074,214 0 9,504,214 Interstate Corridor Debt Service Fund 9,702,722 0 129,637 0 0 9,832,359 Lents Town Center URA Debt 7,351,842 0 97,697 0 0 7,449,539 Redemption Fund North Macadam URA Debt Redemption 6,648,633 0 89,284 0 0 6,737,917 Fund Pension Debt Redemption Fund 0 0 994,496 21,318,433 5,000,000 27,312,929 River District URA Debt Redemption 21,081,798 0 473,634 0 4,734,950 26,290,382 Fund South Park Block Redemption Fund 7,094,058 0 201,913 0 0 7,295,971 Special Projects Debt Service Fund 0 0 6,171,703 0 0 6,171,703 Waterfront Renewal Bond Sinking Fund 10,598,934 0 422,131 0 6,546,500 17,567,565 Willamette Industrial URA Debt Service 391,874 0 5,277 0 0 397,151 Fund

City of Portland, Oregon – FY 2008–09 Adopted Budget 81 Summary of Revenues by Fund – FY 2008–09 TABLE 4 This table summarizes the major categories of estimated revenues, including beginning fund balance and transfers from other funds, in total appropriation budgets by fund. Property & Service Transient Charges, Lodging Licenses, & Other External Interfund Beginning Total Taxes Permits Revenue Revenues Balances Revenues

Total Debt Service Funds 93,765,652 0 23,656,285 26,422,604 31,179,770 175,024,311 CAPITAL PROJECTS FUNDS BFRES Facilities GO Bond Construction 0 0 14,167,467 0 3,792,000 17,959,467 Fund LID Construction Fund 0 1,031,320 6,593,700 0 5,325,369 12,950,389 Parks Capital Construction and 0 5,130,000 24,532,709 8,005,856 11,690,649 49,359,214 Maintenance Fund Total Capital Projects Funds 0 6,161,320 45,293,876 8,005,856 20,808,018 80,269,070 PERMANENT FUND Parks Endowment Fund 0 0 8,800 0 181,477 190,277 Total Permanent Fund 0 0 8,800 0 181,477 190,277 ENTERPRISE FUNDS Environmental Remediation Fund 0 585,000 50,000 5,097,226 900,000 6,632,226 Golf Fund 0 8,280,113 77,083 0 1,273,177 9,630,373 Golf Revenue Bond Redemption Fund 0 0 28,000 779,000 650,675 1,457,675 Hydroelectric Power Bond Redemption 0 0 2,717,115 200,000 4,307,481 7,224,596 Fund Hydroelectric Power Operating Fund 0 0 638,300 684,500 531,552 1,854,352 Hydroelectric Power Renewal and 0 0 583,600 0 8,695,989 9,279,589 Replacement Fund Parking Facilities Fund 0 11,717,951 517,562 779,372 10,291,231 23,306,116 Parking Facilities Debt Redemption Fund 0 0 0 3,071,375 0 3,071,375 Portland International Raceway Fund 0 1,955,000 24,500 0 469,778 2,449,278 Sewer System Construction Fund 0 1,550,000 7,800,000 4,400,000 205,000,000 218,750,000 Sewer System Debt Redemption Fund 0 0 10,000 121,196,330 2,900,000 124,106,330 Sewer System Operating Fund 0 224,804,012 2,919,484 205,712,510 27,000,000 460,436,006 Sewer System Rate Stabilization Fund 0 0 9,171,100 0 75,650,000 84,821,100 Solid Waste Management Fund 0 3,941,542 755,280 98,740 4,085,150 8,880,712 Spectator Facilities Operating Fund 0 5,601,000 2,351,490 734,709 6,535,252 15,222,451 Water Fund 0 96,823,723 1,126,477 70,420,134 28,724,429 197,094,763 Water Bond Sinking Fund 0 0 137,500 27,390,174 0 27,527,674 Water Construction Fund 0 2,750,000 83,040,721 10,862,291 8,059,242 104,712,254 Water Growth Impact Charge Trust Fund 0 0 0 0 1,912,526 1,912,526 Total Enterprise Funds 0 358,008,341 111,948,212 451,426,361 386,986,482 1,308,369,396 INTERNAL SERVICE FUNDS CityFleet Operating Fund 0 125,500 1,398,729 25,858,563 17,694,973 45,077,765 Facilities Services Operating Fund 0 1,950,071 8,935,214 30,157,237 19,918,273 60,960,795 Health Insurance Operating Fund 0 34,873,160 3,523,229 44,000 13,320,361 51,760,750 Insurance and Claims Operating Fund 0 0 637,725 9,454,387 18,176,363 28,268,475 Portland Police Association Health 0 0 59,409 0 1,215,304 1,274,713 Insurance Fund Printing & Distribution Services 0 286,154 1,040,366 6,690,925 2,254,292 10,271,737 Operating Fund Technology Services Fund 0 4,309,510 12,053,255 56,471,219 23,712,841 96,546,825 Workers' Compensation Self-Insurance 0 0 631,859 4,138,157 18,290,960 23,060,976 Operating Fund Total Internal Service Funds 0 41,544,395 28,279,786 132,814,488 114,583,367 317,222,036 FIDUCIARY FUNDS Fire & Police Disability & Retirement 103,602,474 0 31,450,000 757,200 2,132,681 137,942,355 Fund

82 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Revenues by Fund – FY 2008–09 TABLE 4 This table summarizes the major categories of estimated revenues, including beginning fund balance and transfers from other funds, in total appropriation budgets by fund. Property & Service Transient Charges, Lodging Licenses, & Other External Interfund Beginning Total Taxes Permits Revenue Revenues Balances Revenues

Fire & Police Disability & Retirement 0 0 0 0 750,000 750,000 Reserve Fund Fire & Police Supplemental Retirement 0 0 1,500 0 64,600 66,100 Reserve Fund Total Fiduciary Funds 103,602,474 0 31,451,500 757,200 2,947,281 138,758,455 TOTAL ALL FUNDS $ 397,253,920 $ 632,165,216 $ 661,400,767 $ 820,244,356 $ 752,577,915 $3,263,642,174

City of Portland, Oregon – FY 2008–09 Adopted Budget 83 Total Revenues and Expenses by Fund by Fiscal Year TABLE 5 In each fund total revenues, including beginning fund balances, must equal total expenses, including ending fund balances. This table states the total revenues and expenses for each City fund. Actual Actual Revised Proposed Adopted FY 2005–06 FY 2006–07 FY 2007–08 FY 2008–09 FY 2008–09

MAJOR GOVERNMENT FUNDS General Fund 483,980,471 537,662,296 525,335,789 506,636,646 531,171,571 Transportation Operating Fund 199,552,034 228,847,829 191,717,189 242,546,670 244,516,354 Total Major Government Funds 683,532,505 766,510,125 717,052,978 749,183,316 775,687,925 SPECIAL REVENUE FUNDS Assessment Collection Fund 68,900 71,934 74,380 77,325 77,325 Business License Surcharge Fund 9,584,342 6,432,654 3,281,820 1,799,813 1,803,251 Cable Fund 6,616,447 7,323,085 5,866,241 6,404,651 6,404,651 Campaign Finance Fund 1,318,778 1,640,046 2,322,616 1,863,494 1,863,494 Children's Investment Fund 19,544,774 23,099,291 24,764,061 14,388,841 14,388,841 Convention and Tourism Fund 2,826,407 3,110,270 3,320,717 3,365,044 3,365,044 Development Services Fund 42,811,762 51,999,709 52,590,598 57,780,936 57,780,936 Emergency Communication Fund 16,073,595 17,453,094 19,607,124 19,748,628 19,857,178 Grants Fund 37,369,204 36,123,111 32,129,551 46,970,052 48,510,875 General Reserve Fund 49,448,903 51,766,105 62,190,008 68,751,960 68,751,960 HOME Grant Fund 7,169,367 4,334,424 8,878,345 4,778,709 4,593,825 Housing and Community Development 12,913,815 13,024,010 14,928,528 11,622,138 11,469,053 Fund Housing Investment Fund 25,801,953 17,012,609 25,003,429 24,464,496 24,464,496 Parks Local Option Levy Fund 16,642,995 23,770,138 22,383,191 16,285,827 16,285,827 Portland Parks Memorial Trust Fund 6,178,671 4,992,593 2,066,750 2,458,116 2,458,116 Private for Hire Transportation Safety 107,285 119,389 92,380 92,380 92,380 Fund Property Management License Fund 4,285,673 4,309,671 4,285,672 4,502,378 4,502,378 Public Safety Fund 2,767,619 1,693,144 1,500,000 0 0 Special Finance and Resource Fund 84,211,589 98,881,108 174,671,645 238,685,106 179,819,221 Transportation Reserve Fund 725,883 763,253 781,382 1,631,853 1,631,853 Total Special Revenue Funds 346,467,962 367,919,638 460,738,438 525,671,747 468,120,704 DEBT SERVICE FUNDS Airport Way Debt Service Fund 56,434,605 7,543,618 7,494,305 7,750,553 7,750,553 Bancroft Bond Interest & Sinking Fund 18,768,030 19,351,679 19,333,879 20,764,483 20,764,483 Bonded Debt Interest and Sinking Fund 8,367,204 8,504,159 7,782,612 7,891,412 7,891,412 Central Eastside Industrial District Debt 4,038,769 4,378,273 4,819,593 4,586,858 4,586,858 Service Fund Convention Center Area Debt Service 7,157,009 7,589,582 7,542,076 11,183,163 11,183,163 Fund Gas Tax Bond Redemption Fund 1,079,705 6,667,555 2,507,521 2,034,812 2,034,812 Gateway URA Debt Redemption Fund 1,383,605 1,761,010 2,214,787 2,253,300 2,253,300 Governmental Bond Redemption Fund 3,734,438 3,561,905 13,522,657 9,504,214 9,504,214 Interstate Corridor Debt Service Fund 5,063,817 6,879,146 9,357,304 9,832,359 9,832,359 Lents Town Center URA Debt 5,249,057 6,106,208 7,514,466 7,449,539 7,449,539 Redemption Fund North Macadam URA Debt Redemption 1,442,404 2,387,219 8,091,715 6,737,917 6,737,917 Fund Pension Debt Redemption Fund 16,921,856 21,055,711 29,094,934 27,312,929 27,312,929 River District URA Debt Redemption 18,690,030 24,290,024 25,719,415 29,745,621 26,290,382 Fund South Park Block Redemption Fund 7,273,384 7,651,787 7,777,989 15,769,153 7,295,971 Special Projects Debt Service Fund 5,313,082 5,622,554 5,951,373 6,171,703 6,171,703 Waterfront Renewal Bond Sinking Fund 16,445,361 16,937,961 17,039,911 22,951,065 17,567,565 Willamette Industrial URA Debt Service 0 81,813 447,974 397,151 397,151 Fund

84 City of Portland, Oregon – FY 2008–09 Adopted Budget Total Revenues and Expenses by Fund by Fiscal Year TABLE 5 In each fund total revenues, including beginning fund balances, must equal total expenses, including ending fund balances. This table states the total revenues and expenses for each City fund. Actual Actual Revised Proposed Adopted FY 2005–06 FY 2006–07 FY 2007–08 FY 2008–09 FY 2008–09

Total Debt Service Funds 177,362,356 150,370,204 176,212,511 192,336,232 175,024,311 CAPITAL PROJECTS FUNDS BFRES Facilities GO Bond Construction 10,766,241 9,440,996 17,567,057 16,776,355 17,959,467 Fund LID Construction Fund 30,547,212 74,881,449 10,542,680 12,950,389 12,950,389 Parks Capital Construction and 17,267,584 27,899,251 52,230,298 45,083,850 49,359,214 Maintenance Fund Total Capital Projects Funds 58,581,037 112,221,696 80,340,035 74,810,594 80,269,070 PERMANENT FUND Parks Endowment Fund 168,416 175,891 184,190 190,277 190,277 Total Permanent Fund 168,416 175,891 184,190 190,277 190,277 ENTERPRISE FUNDS Environmental Remediation Fund 5,042,320 8,464,075 7,915,000 6,387,108 6,632,226 Golf Fund 6,266,638 7,040,516 7,823,862 8,195,439 9,630,373 Golf Revenue Bond Redemption Fund 1,454,300 1,457,054 1,457,600 1,457,675 1,457,675 Hydroelectric Power Bond Redemption 28,846,652 6,330,206 7,025,384 7,224,596 7,224,596 Fund Hydroelectric Power Operating Fund 3,047,099 1,465,538 1,693,464 1,854,352 1,854,352 Hydroelectric Power Renewal and 9,356,198 8,492,764 8,732,820 9,279,589 9,279,589 Replacement Fund Parking Facilities Fund 14,849,835 17,912,307 19,176,058 23,306,116 23,306,116 Parking Facilities Debt Redemption Fund 3,074,360 3,075,665 3,083,813 3,071,375 3,071,375 Portland International Raceway Fund 1,927,950 2,729,643 4,899,000 2,888,135 2,449,278 Sewer Revolving Loan Fund 570,100 576,106 0 0 0 Sewer System Construction Fund 413,054,172 278,366,460 309,870,000 193,500,000 218,750,000 Sewer System Debt Redemption Fund 80,317,899 310,478,347 106,265,734 122,931,720 124,106,330 Sewer System Operating Fund 394,762,427 443,895,024 454,788,932 455,062,263 460,436,006 Sewer System Rate Stabilization Fund 47,629,701 57,007,877 62,500,000 84,821,100 84,821,100 Sewer System Safety Net Fund 1,115,805 1,185,436 0 0 0 Solid Waste Management Fund 8,027,491 8,643,981 9,050,580 8,880,712 8,880,712 Spectator Facilities Operating Fund 13,925,973 14,515,251 15,323,064 15,222,451 15,222,451 Water Fund 150,555,624 181,066,876 185,041,061 196,248,503 197,094,763 Water Bond Sinking Fund 12,839,606 60,856,144 18,437,899 27,527,674 27,527,674 Water Construction Fund 46,564,647 106,634,903 76,095,306 108,279,286 104,712,254 Water Growth Impact Charge Trust Fund 1,765,928 1,856,842 1,946,349 1,912,526 1,912,526 Total Enterprise Funds 1,244,994,725 1,522,051,015 1,301,125,926 1,278,050,620 1,308,369,396 INTERNAL SERVICE FUNDS CityFleet Operating Fund 42,504,281 45,483,146 45,754,529 42,329,615 45,077,765 Facilities Services Operating Fund 40,707,028 47,170,491 67,113,748 60,837,600 60,960,795 Health Insurance Operating Fund 40,693,953 43,711,482 47,658,797 50,830,277 51,760,750 Insurance and Claims Operating Fund 25,980,140 26,958,714 24,983,633 27,145,275 28,268,475 Portland Police Association Health 9,141,205 11,215,685 12,952,876 1,274,713 1,274,713 Insurance Fund Printing & Distribution Services 8,527,028 9,068,491 10,281,303 9,784,848 10,271,737 Operating Fund Technology Services Fund 62,805,692 94,265,671 90,638,639 74,560,274 96,546,825 Workers' Compensation Self-Insurance 19,773,141 21,315,867 22,289,185 22,960,976 23,060,976 Operating Fund Total Internal Service Funds 250,132,468 299,189,547 321,672,710 289,723,578 317,222,036 FIDUCIARY FUNDS Fire & Police Disability & Retirement 110,417,901 111,217,838 121,289,459 137,942,355 137,942,355 Fund

City of Portland, Oregon – FY 2008–09 Adopted Budget 85 Total Revenues and Expenses by Fund by Fiscal Year TABLE 5 In each fund total revenues, including beginning fund balances, must equal total expenses, including ending fund balances. This table states the total revenues and expenses for each City fund. Actual Actual Revised Proposed Adopted FY 2005–06 FY 2006–07 FY 2007–08 FY 2008–09 FY 2008–09

Fire & Police Disability & Retirement 750,000 750,000 750,000 750,000 750,000 Reserve Fund Fire & Police Supplemental Retirement 81,166 77,359 71,550 66,100 66,100 Reserve Fund Total Fiduciary Funds 111,249,067 112,045,197 122,111,009 138,758,455 138,758,455 TOTAL ALL FUNDS $ 2,872,488,536 $ 3,330,483,313 $ 3,179,437,797 $ 3,248,724,819 $ 3,263,642,174

86 City of Portland, Oregon – FY 2008–09 Adopted Budget

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 707,067 TABLE 6 3,053,691 14,388,841 24,764,061 12,219,205 12,926,272 15,979,963 15,979,963 (14,388,841) (12,544,856) Option Levy Children’s Local Children’s $0 $ 15,979,963

0 0 0 0 0 0 0 0 0 0 0 0 0 684,784 2,957,455 16,285,827 22,383,191 11,834,121 12,518,905 15,476,360 15,476,360 (16,285,827) (10,549,070) Parks Local Parks Option Levy $0 $ 15,476,360

0 0 0 0 0 0 0 0 0 0 6,182,118 3,167,844 5,046,955 3,099,378 Disability 87,219,131 92,266,086 95,365,463 95,365,463 (36,139,881) (34,070,328) 137,942,355 101,802,474 107,984,592 111,152,436 111,152,436 121,289,459 Fire & Police & Retirement $ 111,152,436 $ 95,365,463 0 0 0 0 0 0 0 0 0 0 0 0 464,037 417,070 (250,000) (575,000) 7,891,412 7,641,412 8,105,449 8,105,449 8,105,449 7,782,612 7,207,612 7,624,682 7,624,682 7,624,682 General Obligation Debt Obligation $ 8,105,449 $ 7,624,682 0 0 0 0 0 0 0 0 0 0 5,444,200 9,651,026 5,926,776 Tax Base Tax 10,624,476 531,171,571 174,955,884 185,580,360 191,024,560 191,024,560 492,511,185 166,784,544 176,435,570 182,362,346 182,362,346 (356,215,687) (325,726,641) General Fund $ 191,024,560 $ 182,362,346 0 0 0 0 0 0 Total 8,612,044 8,105,449 7,624,682 17,270,630 16,506,902 15,037,300 95,365,463 707,680,006 284,399,770 301,670,400 310,282,445 191,024,560 111,152,436 668,730,508 285,264,613 301,771,515 316,808,815 213,818,669 (423,280,236) (383,465,895) $ 310,282,445 $ 316,808,815 sability Obligations sability Obligations Total Budget Requirements Total to Be Levied ExceptLess: Budgeted Resources, Taxes Balance Necessary To Equals: Taxes Total due to Delinquency & Discount Estimated Not to Be Received Add: Taxes Receivable Equals: Estimated (Measure 50) Levy Total Compression Add: Estimated Measure 50 Levy to $10 Limit Rate Levy-Subject Tax Fixed Tax Local Option Operating Local Option Capital Construction Tax Gap Bonds for Levy & Di Pension for Levy Bonded Indebtedness for Levy Budget Requirements Total to Be Levied Less: Budgeted Resources Except Taxes Necessary to Balance Equals: Taxes Total due to Delinquency & Discount Estimated Not to Be Received Add: Taxes Receivable Equals: Estimated (Measure 50) Levy Total Compression Add: Estimated Measure 5 Levy to $10 Limit Rate Limit Levy-Subject Permanent Tax Local Option Operating Local Option Capital Construction Tax Gap Bonds for Levy & Di Pension for Levy Bonded Indebtedness for Levy Total Taxes to Be Levied Taxes Total to Be Levied Legal Basis of Taxes to Be Levied Taxes Total to Be Levied Legal Basis of Taxes Tax Levy Computation Levy Tax law. state prescribed by format the in property levies tax City’s the of calculation the shows This table 2008-09 FISCAL YEAR BE LEVIED TO TAXES TOTAL 2007-08 FISCAL YEAR TO BE LEVIED TAXES TOTAL

City of Portland, Oregon – FY 2008–09 Adopted Budget 87 Urban Renewal Certification TABLE 7 This table shows the amount of tax increment collections planned for the City’s urban renewal districts.

Tax Increment Authority Amount from Division of Tax Special Levy Estimated for FY 2008–09 by Plan Area* Division of Tax Collection Amount Total Tax

Part 1: Option One Plans Not Applicable to Portland Part 2: Option Two Plans Not Applicable to Portland Part 3: Option Three Plans (Standard Rate) Airport Way 2,540,000 2,540,000 2,500,708 5,040,708 Downtown Waterfront 7,710,000 7,710,000 3,593,132 11,303,132 South Park Blocks 5,660,000 5,660,000 2,725,000 8,385,000 Convention Center 5,740,000 5,740,000 6,181,160 11,921,160 Total Part 3 Plans 21,650,000 21,650,000 15,000,000 36,650,000 Part 4: "Window" (Standard Rate)--(Adopted after Dec. 6, 1996, prior to Oct. 6, 2001) Lents Town Center District 100% 7,975,223 No Special Levy 7,975,223 River District 100% 23,029,474 No Special Levy 23,029,474 North Macadam District 100% 7,328,937 No Special Levy 7,328,937 Interstate District 100% 10,641,314 No Special Levy 10,641,314 Gateway Regional Center 100% 2,430,945 No Special Levy 2,430,945 Total Part 4 Plans 51,405,893 51,405,893 Part 5 "New Plans" (Reduced Rate)--(Adopted after Oct. 6, 2001) Willamette Industrial 100% 433,149 No Special Levy 433,149 Central Eastside 100% 4,987,914 No Special Levy 4,987,914 Total Part 5 Plans 5,421,063 5,421,063 TOTAL CERTIFIED FOR COLLECTIONS $ 78,476,956 $ 15,000,000 $ 93,476,956

(*) Before compression, delinquency and discounts. Note: Division of Taxes estimates for new URAs are based on projections of assessed value growth and property tax estimate that may vary from actual collections certified by Multnomah County.

88 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Authorized Positions TABLE 8 This table summarizes the number of regular permanent or limited term full-time and part-time positions authorized in each bureau or fund. Temporary part-time positions are not included. Actual Actual Revised Adopted FY 2005–06 FY 2006–07 FY 2007–08 FY 2008–09 Change

General Fund Bureau of Housing and Community Development 27.36 30.25 31.54 29.46 -2.08 Bureau of Licenses 81.07 0.00 0.00 0.00 0.00 Bureau of Planning 57.63 63.15 74.17 82.00 7.83 Bureau of Police 1,253.40 1,282.87 1,290.25 1,284.50 -5.75 Commissioner of Public Affairs 6.58 8.00 7.00 9.00 2.00 Commissioner of Public Safety 6.39 6.39 6.39 6.39 0.00 Commissioner of Public Utilities 8.67 8.50 8.50 8.50 0.00 Commissioner of Public Works 7.00 7.00 7.00 7.00 0.00 Office of Cable Communications & Franchise Management 6.80 6.80 8.80 8.80 0.00 Office of the City Attorney 46.30 47.23 52.35 52.35 0.00 Office of the City Auditor 59.07 47.91 47.50 47.50 0.00 Office of Government Relations 4.00 7.00 6.50 7.00 0.50 Office of Human Relations 0.00 0.00 0.00 4.00 4.00 Office of Management & Finance 176.19 180.52 193.92 201.77 7.85 Office of the Mayor 22.11 29.13 24.03 21.00 -3.03 Office of Neighborhood Involvement 55.24 35.71 39.50 38.15 -1.35 Office of Sustainable Development 17.70 19.64 25.46 20.60 -4.86 Citywide Projects Division 25.00 5.50 10.00 9.82 -0.18 Revenue Bureau 120.43 102.92 66.33 60.00 -6.33 Portland Fire & Rescue 712.29 735.37 755.17 756.00 0.83 Portland Office of Emergency Management 10.32 17.09 15.00 15.00 0.00 Portland Parks & Recreation 361.25 359.12 362.42 382.93 20.51 Special Appropriations 0.00 0.00 0.00 0.00 0.00 Total General Fund 3,064.80 3,000.10 3,031.83 3,051.77 19.94 Other Funds Bureau of Development Services 290.93 328.77 345.55 357.12 11.57 Bureau of Emergency Communications 136.33 141.25 141.17 140.00 -1.17 Bureau of Environmental Services 478.98 483.50 503.63 523.55 19.92 Campaign Finance Fund 1.00 0.00 0.00 0.00 0.00 Children's Investment Fund 3.55 3.35 2.50 3.25 0.75 Facilities Services Division 37.00 34.50 33.75 34.00 0.25 CityFleet Division 76.00 76.00 76.00 77.00 1.00 Bureau of Fire & Police Disability & Retirement 0.00 13.70 14.62 16.60 1.98 Golf Program 34.00 30.00 30.00 30.00 0.00 Health Administration 7.00 7.00 7.58 9.00 1.42 Hydroelectric Power Division 3.00 2.50 2.50 2.60 0.10 Bureau of Technology Services 200.72 219.18 227.72 230.80 3.08 Parks Capital Improvement Program 13.50 14.25 15.30 15.55 0.25 Portland International Raceway 5.00 5.00 6.00 6.00 0.00 Printing & Distribution Services Division 26.00 26.00 25.13 26.00 0.87 Office of Transportation 755.92 768.24 788.40 801.87 13.47 Risk Management Division 22.00 21.00 21.00 21.00 0.00 Solid Waste Management Fund 13.90 15.60 18.08 22.60 4.52 Water Division 486.62 657.95 664.44 666.40 1.96 Total Other Funds 2,591.45 2,847.79 2,923.37 2,983.34 59.97 TOTAL CITY 5,656.25 5,847.89 5,955.20 6,035.11 79.91

City of Portland, Oregon – FY 2008–09 Adopted Budget 89 General Fund Revenues and Expenses TABLE 9 This table summarizes the type of revenues into the General Fund, as well as the bureau expense budgets, with a comparison between fiscal years.

Discretionary Budget Total Budget

Revised Adopted Revised Adopted FY 2007–08 FY 2008–09 FY 2007–08 FY 2008–09

RESOURCES Property Taxes 171,508,684 179,974,860 171,508,684 179,974,860 Lodging Taxes 14,659,186 16,079,911 14,659,186 16,079,911 Business Licenses 64,531,784 75,705,012 64,531,784 75,705,012 Utility License Fees 64,031,616 65,810,675 64,031,616 65,810,675 Service Charges & Other 5,372,988 3,542,595 30,329,028 37,511,009 Intergovernmental 13,822,848 15,338,545 26,522,213 38,052,017 Transfers from Other Funds 2,046,066 2,465,089 88,609,879 75,406,082 Beginning Fund Balance 65,143,399 31,632,005 65,143,399 42,632,005 TOTAL GENERAL FUND RESOURCES $ 401,116,571 $ 390,548,692 $ 525,335,789 $ 531,171,571

EXPENSES Bureau of Housing & Community Development 19,536,430 12,126,617 28,692,925 16,342,840 Bureau of Planning 10,632,242 9,860,027 12,234,477 11,786,657 Bureau of Police 130,782,244 135,251,568 149,976,764 152,975,376 Commissioner of Public Affairs 312,300 2,521,782 712,082 2,943,449 Commissioner of Public Safety 404,342 307,278 792,236 715,998 Commissioner of Public Utilities 317,069 316,855 816,976 851,936 Commissioner of Public Works 340,192 321,798 807,551 769,829 Office of Cable Communications & Franchise Management 2,060,929 1,815,994 2,283,847 2,013,772 Office of the City Attorney 1,991,990 1,789,361 7,643,248 7,811,310 Office of the City Auditor 3,295,194 3,677,694 6,933,555 8,075,114 Office of Government Relations 631,561 469,960 1,114,664 1,157,089 Office of Human Relations 0 647,250 0 647,250 Office of Management & Finance 17,790,726 15,152,708 58,097,154 64,929,083 Office of the Mayor 2,023,449 1,582,603 3,298,560 2,905,312 Office of Neighborhood Involvement 6,626,792 6,641,619 7,334,371 7,296,571 Office of Sustainable Development 2,553,412 1,155,845 4,970,315 2,904,697 Portland Fire & Rescue 81,359,176 81,372,040 88,866,435 87,610,332 Portland Office of Emergency Management 788,804 706,094 6,994,751 8,254,232 Portland Parks & Recreation 35,860,921 35,458,939 56,151,964 58,144,597 Special Appropriations 17,721,575 23,286,824 18,238,691 23,659,888 Total Bureau Expenses 335,029,348 334,462,856 455,960,566 461,795,332 Transfers to Other Funds 52,938,876 49,832,036 54,208,876 52,122,439 Debt Retirement 0 0 2,018,000 0 Contingency-Operating & Unforeseen 10,113,991 6,253,800 10,113,991 6,253,800 Contingency-Encumbrance Carryover 3,034,356 0 3,034,356 11,000,000 TOTAL GENERAL FUND EXPENSES $ 401,116,571 $ 390,548,692 $ 525,335,789 $ 531,171,571

Certain minor cash transfers from General Fund bureaus are reflected in the bureau line and are excluded from Discretionary Transfers to Other Funds. These are the Parks transfer and Licenses transfer to the Governmental Bond Redemption Fund.

90 City of Portland, Oregon – FY 2008–09 Adopted Budget Operating and Capital Budget by Service Area TABLE 10 This table summarizes the operating and capital expenditures included in bureau budgets for each fiscal year, by service area, and by bureau. It does not include fund requirements such as contingencies, reserves, debt service, or interfund transfers. Revised Adopted FY 2007–08 FY 2008–09

Operating Capital Total Operating Capital Total Budget Improvements Expenditures Budget Improvements Expenditures

Public Safety Bureau of Emergency Communications 16,449,597 0 16,449,597 16,234,145 0 16,234,145 Bureau of Police 149,976,764 0 149,976,764 152,975,376 0 152,975,376 Fire & Police Disability & Retirement 93,288,200 0 93,288,200 102,949,295 0 102,949,295 Portland Fire & Rescue 84,183,787 4,682,648 88,866,435 85,633,580 1,976,752 87,610,332 Portland Office of Emergency 6,994,751 0 6,994,751 8,254,232 0 8,254,232 Management Other Public Safety 11,907,702 5,325,004 17,232,706 788,145 12,438,909 13,227,054 Total Public Safety 362,800,801 10,007,652 372,808,453 366,834,773 14,415,661 381,250,434 Parks, Recreation, and Culture Golf 5,328,661 200,000 5,528,661 6,751,210 400,000 7,151,210 Parks Construction Fund 510,000 43,567,620 44,077,620 17,689 44,494,511 44,512,200 Parks Local Option Levy 13,904,554 0 13,904,554 12,505,986 0 12,505,986 Portland International Raceway 1,721,974 2,500,000 4,221,974 1,598,311 0 1,598,311 Portland Parks and Recreation 56,151,964 0 56,151,964 58,144,597 0 58,144,597 Spectator Facilities 2,665,182 1,345,000 4,010,182 1,922,516 961,000 2,883,516 Other Parks, Recreation, and Culture 4,445,330 0 4,445,330 5,550,446 0 5,550,446 Total Parks, Recreation, and Culture 84,727,665 47,612,620 132,340,285 86,490,755 45,855,511 132,346,266 Public Utilities Bureau of Environmental Services 94,066,157 195,080,274 289,146,431 91,418,195 187,972,000 279,390,195 Portland Water Bureau 70,143,279 56,752,250 126,895,529 71,394,150 58,897,000 130,291,150 Solid Waste Management 4,055,116 0 4,055,116 4,198,249 0 4,198,249 Other Public Utilities 6,996,420 0 6,996,420 5,614,732 0 5,614,732 Total Public Utilities 175,260,972 251,832,524 427,093,496 172,625,326 246,869,000 419,494,326 Community Development Bureau of Housing & Community 28,692,925 0 28,692,925 16,342,840 0 16,342,840 Development Bureau of Planning 12,234,477 0 12,234,477 11,786,657 0 11,786,657 Cable Fund 3,673,865 0 3,673,865 3,940,237 0 3,940,237 Children's Investment Fund 11,039,549 0 11,039,549 11,822,752 0 11,822,752 Development Services Fund 40,950,657 0 40,950,657 42,782,025 0 42,782,025 Housing & Community Development 14,681,121 0 14,681,121 11,233,972 0 11,233,972 Fund Local Improvement District Construction 1,606,584 0 1,606,584 1,476,336 0 1,476,336 Office of Cable Communications & 2,283,847 0 2,283,847 2,013,772 0 2,013,772 Franchise Management Office of Neighborhood Involvement 7,334,371 0 7,334,371 7,296,571 0 7,296,571 Office of Sustainable Development 4,970,315 0 4,970,315 2,904,697 0 2,904,697 Special Finance & Resource 169,770,170 0 169,770,170 177,736,902 0 177,736,902 Other Community Development 33,756,118 0 33,756,118 33,744,850 0 33,744,850 Total Community Development 330,993,999 0 330,993,999 323,081,611 0 323,081,611 Transportation and Parking Office of Transportation 107,568,310 59,280,291 166,848,601 109,633,496 94,263,874 203,897,370 Parking Facilities 5,455,903 1,100,000 6,555,903 5,866,398 6,014,368 11,880,766 Private for Hire Transportation Safety 80,000 0 80,000 83,794 0 83,794 Other Transportation and Parking 200,000 0 200,000 0 0 0 Total Transportation and Parking 113,304,213 60,380,291 173,684,504 115,583,688 100,278,242 215,861,930 Legislative, Administrative, & Support Services Business License Surcharge 3,265,489 0 3,265,489 302,420 0 302,420

City of Portland, Oregon – FY 2008–09 Adopted Budget 91 Operating and Capital Budget by Service Area TABLE 10 This table summarizes the operating and capital expenditures included in bureau budgets for each fiscal year, by service area, and by bureau. It does not include fund requirements such as contingencies, reserves, debt service, or interfund transfers. Revised Adopted FY 2007–08 FY 2008–09

Operating Capital Total Operating Capital Total Budget Improvements Expenditures Budget Improvements Expenditures

Campaign Finance 1,898,562 0 1,898,562 997,690 0 997,690 Mayor and Commissioners' Offices 6,427,405 0 6,427,405 8,186,524 0 8,186,524 Office of the City Attorney 7,643,248 0 7,643,248 7,811,310 0 7,811,310 Office of the City Auditor 6,858,555 75,000 6,933,555 8,075,114 0 8,075,114 Office of Government Relations 1,114,664 0 1,114,664 1,157,089 0 1,157,089 Office of Human Relations 0 0 0 647,250 0 647,250 Office of Management and Finance 165,871,480 49,356,076 215,227,556 171,468,729 43,600,081 215,068,810 Other Leg, Admin, & Support Services 43,078,345 0 43,078,345 52,030,127 0 52,030,127 Total Legislative, Administrative, & Sup- 236,157,748 49,431,076 285,588,824 250,676,253 43,600,081 294,276,334 port Services TOTAL EXPENDITURES $1,303,245,398 $ 419,264,163 $1,722,509,561 $1,315,292,406 $ 451,018,495 $1,766,310,901

FUND REQUIREMENTS Contingency 429,484,607 449,378,393 Debt Retirement 346,080,075 357,299,774 Ending Fund Balance 103,030,487 79,711,028 GF Overhead Transfers 19,908,646 22,962,943 Other Cash Transfers 558,424,421 587,979,135 TOTAL CITY BUDGET $ $ $3,179,437,797 $ $ $3,263,642,174

TOTAL NET CITY BUDGET $ $ $2,367,641,067 $ $ $2,413,397,818

92 City of Portland, Oregon – FY 2008–09 Adopted Budget Capital Budget Table 11

This table summarizes Capital Improvement Plan project costs by bureaus within each service area.

Service Area Revised Adopted Capital Plan

Bureau Prior Years FY 2007–08 FY 2008–09 FY 2009–10 FY 2010–11 FY 2011–12 FY 2012–13 5–Year Total

Public Safety Portland Fire & Rescue 978,800 4,682,648 1,976,752 1,672,752 1,672,752 1,672,752 1,672,752 8,667,760 Total Public Safety 978,800 4,682,648 1,976,752 1,672,752 1,672,752 1,672,752 1,672,752 8,667,760 Parks, Recreation, and Culture Parks and Recreation 7,718,702 19,354,030 49,759,214 73,673,039 51,714,157 34,984,051 27,195,307 237,325,768 Total Parks, Recreation, and Culture 7,718,702 19,354,030 49,759,214 73,673,039 51,714,157 34,984,051 27,195,307 237,325,768 Public Utilities Bureau of Environmental Services 44,266,030 142,002,738 187,972,000 193,783,000 130,372,000 68,979,000 67,949,000 649,055,000 Portland Water Bureau 43,550,000 56,632,250 58,897,000 53,835,000 57,540,000 44,935,000 48,985,000 264,192,000 Total Public Utilities 87,816,030 198,634,988 246,869,000 247,618,000 187,912,000 113,914,000 116,934,000 913,247,000 Transportation and Parking Office of Transportation 10,279,560 47,221,924 96,476,420 93,482,455 84,956,604 9,421,528 9,337,077 293,674,084 Total Transportation and Parking 10,279,560 47,221,924 96,476,420 93,482,455 84,956,604 9,421,528 9,337,077 293,674,084 Legislative, Administrative, and Support Office of Management & Finance 33,676,245 29,949,863 64,194,270 47,229,146 34,819,150 5,756,163 2,818,320 154,817,049 Total Legislative, Admin, and Support 33,676,245 29,949,863 64,194,270 47,229,146 34,819,150 5,756,163 2,818,320 154,817,049 Total City Capital Plan $140,469,337 $299,843,453 $459,275,656 $463,675,392 $361,074,663 $165,748,494 $157,957,456 $1,607,731,661

City of Portland, Oregon – FY 2008–09 Adopted Budget 93 CIP Geographic Summary Table 12 This table summarizes capital costs by geographic area within each Service Area.

Service Area Revised Adopted Capital Plan Geographic Area Prior Years FY 2007–08 FY 2008–09 FY 2009–10 FY 2010–11 FY 2011–12 FY 2012–13 5–Year Total

Public Safety All Areas 978,800 4,682,648 1,896,752 1,672,752 1,672,752 1,672,752 1,672,752 8,587,760 Southeast 0 0 80,000 0 0 0 0 80,000 Total Public Safety 978,800 4,682,648 1,976,752 1,672,752 1,672,752 1,672,752 1,672,752 8,667,760 Parks, Recreation, and Culture All Areas 5,637,478 5,809,930 20,643,124 17,031,239 18,618,430 14,223,051 13,540,307 84,056,151 Central City 150,571 1,361,868 10,740,500 4,200,000 6,575,000 3,397,000 2,000,000 26,912,500 East 1,060,646 7,390,426 5,259,990 1,494,800 2,222,500 0 0 8,977,290 North 168,849 616,209 2,523,237 1,830,000 4,230,000 505,000 505,000 9,593,237 Northeast 0 190,000 470,000 0 0 0 0 470,000 Northwest 0 0 10,000 575,000 4,500,000 2,000,000 0 7,085,000 Southeast 701,158 1,357,488 3,090,322 48,050,000 14,058,227 14,255,000 9,000,000 88,453,549 Southwest 0 2,628,109 6,777,041 492,000 1,510,000 604,000 2,150,000 11,533,041 Undefined 0 0 245,000 0 0 0 0 245,000 Total Parks, Recreation, and Culture 7,718,702 19,354,030 49,759,214 73,673,039 51,714,157 34,984,051 27,195,307 237,325,768 Public Utilities All Areas 49,563,972 61,283,170 71,748,000 66,200,000 73,869,000 59,193,000 63,071,000 334,081,000 Central City 975,000 1,257,000 1,420,000 1,050,000 2,463,000 6,872,000 11,581,000 23,386,000 East 30,991,880 103,143,645 105,732,000 68,985,000 64,182,000 16,433,000 600,000 255,932,000 North 302,054 5,496,000 8,033,000 19,743,000 16,518,000 3,418,000 644,000 48,356,000 Northeast 853,059 8,865,855 13,675,000 7,932,000 803,000 706,000 1,924,000 25,040,000 Northwest 57,306 4,100,000 27,799,000 62,335,000 13,356,000 3,290,000 16,157,000 122,937,000 Southeast 5,030,452 12,353,130 9,229,000 13,481,000 13,571,000 19,231,000 19,620,000 75,132,000 Southwest 42,307 2,136,188 7,633,000 7,892,000 3,150,000 4,771,000 3,131,000 26,577,000 Undefined 0 0 1,600,000 0 0 0 206,000 1,806,000 Total Public Utilities 87,816,030 198,634,988 246,869,000 247,618,000 187,912,000 113,914,000 116,934,000 913,247,000 Transportation and Parking All Areas 1,715,193 4,660,200 6,763,692 3,890,000 3,932,000 3,937,000 4,022,000 22,544,692 Central City 0 82,551 10,246,544 6,025,241 6,000,000 0 0 22,271,785 East 1,265,247 938,472 224,174 45,000 0 0 0 269,174 North 255,589 2,568,719 14,963,502 17,011,211 125,000 125,000 125,000 32,349,713 Northeast 595,653 6,644,131 17,744,905 14,752,336 7,890,090 0 0 40,387,331 Northwest 251,846 625,319 2,567,263 2,633,000 0 0 0 5,200,263 Southeast 3,024,213 3,922,033 37,081,905 42,069,057 55,777,870 360,000 390,000 135,678,832 Southwest 3,171,819 26,471,761 5,563,584 5,539,116 9,691,103 3,298,528 3,099,077 27,191,408 Undefined 0 1,308,738 1,320,851 1,517,494 1,540,541 1,701,000 1,701,000 7,780,886 Total Transportation and Parking 10,279,560 47,221,924 96,476,420 93,482,455 84,956,604 9,421,528 9,337,077 293,674,084 Legislative, Administrative, and Support All Areas 32,560,397 20,776,036 26,085,498 30,747,377 31,020,000 720,000 780,000 89,352,875 Central City 162,939 6,101,074 17,161,374 11,222,366 3,100,150 2,253,202 1,098,320 34,835,412 East 0 0 61,149 0 0 0 0 61,149 Northeast 0 0 668,840 626,000 674,000 2,782,961 940,000 5,691,801 Southeast 12,202 92,730 4,712,902 709,266 0 0 0 5,422,168 Southwest 940,707 2,980,023 11,776,007 3,924,137 25,000 0 0 15,725,144 Undefined 0 0 3,728,500 0 0 0 0 3,728,500 Total Legislative, Admin, and Support 33,676,245 29,949,863 64,194,270 47,229,146 34,819,150 5,756,163 2,818,320 154,817,049 Total City Capital Plan $140,469,337 $299,843,453 $459,275,656 $463,675,392 $361,074,663 $165,748,494 $157,957,456 $1,607,731,661

94 City of Portland, Oregon – FY 2008–09 Adopted Budget Historical Funds and Appropriations TABLE 13 This table shows the City funds and General Fund special appropriations that have been closed in the past three years.

Actual Actual Revised Adopted FY 2005–06 FY 2006–07 FY 2007–08 FY 2008–09

HISTORICAL FUNDS Public Safety Fund 2,767,619 1,693,144 1,500,000 0 Sewer System Revolving Loan Fund 570,100 576,106 0 0 Sewer System Safety Net Fund 1,115,805 1,185,436 0 0 Total Historical Funds 4,453,524 3,454,686 1,500,000 0 HISTORICAL SPECIAL APPROPRIATIONS General Fund BHCD Workforce Development 97,365 0 0 0 FPDR Review 120,000 0 0 0 Local Public Safety Coordinating Council 20,000 0 0 0 PGE Legal Costs 480,560 0 0 0 Pioneer Square Security 100,000 0 0 0 Portland Opera 200,000 0 0 0 Bureau Innovation Project 112,220 112,220 0 0 City Charter Review 45,860 238,845 0 0 COPPEA Professional Development Fund 88,781 277,963 0 0 Countywide Public Safety 230,845 150,000 0 0 Artquake Loan 0 250,000 0 0 Ball School 0 1,400,000 0 0 CIP O&M Set-Aside 0 105,600 0 0 Lone Fir Cemetery 0 150,000 0 0 Mental Health/Public Safety Panel 0 15,000 0 0 Street Access for Everyone 0 406,100 0 0 Vintage Trolley 0 250,000 0 0 Wilson-Cleveland Track & Field 0 300,000 0 0 Independent Audit of Independent Police Review 60,000 60,000 60,000 0 Portland Area Schools 600,000 10,000,000 60,000 0 Diverse Empowered Employees of Portland 0 43,500 43,500 0 Family Justice Center 0 113,750 113,750 0 Immigration & Racial Profiling 0 30,000 15,000 0 Human Relations Project 0 0 240,000 0 Miracles Club 0 0 450,000 0 PDC Farmers Market 0 0 100,000 0 1st Thursday Art 0 0 3,000 0 Bicycle Truck Safety 0 0 200,000 0 Blandena St. Transitional Housing 0 0 100,000 0 Consultant for Contractors' Health Insurance 0 0 69,000 0 COPPEA Training Fund 0 0 29,224 0 North by Northwest Health Center 0 0 35,000 0 Oregon Museum of Science & Industry 0 0 200,000 0 Outside Inn - Virginia Woof 0 0 50,000 0 Parade Access 0 0 50,000 0 Self Enhancement Inc. 0 0 200,000 0 Steel Bridge SkatePark Study 0 0 50,000 0 Sweatfree Consortium 0 0 20,000 0 Veterans Reintegration Projects 0 0 3,000 0 Wordstock 0 0 100,000 0 Total Historical Special Appropriations 2,155,631 13,902,978 2,191,474 0 TOTAL HISTORICAL FUNDS AND APPROPRIATIONS $ 6,609,155 $ 17,357,664 $ 3,691,474 $0

City of Portland, Oregon – FY 2008–09 Adopted Budget 95 Summary of Indebtedness TABLE 14 DEBT OUTSTANDING Service Facility/ Type of Area Function Indebtedness FY 2006–07 FY 2007–08 Change

DEBT OUTSTANDING BY SERVICE AREA Parks, Recreation and Culture Arena Limited Tax Revenue Refunding Bonds $24,675,000 $23,085,000 ($1,590,000) Civic Stadium Limited Tax Revenue Bonds 29,655,000 28,530,000 (1,125,000) PCPA Limited Tax Revenue Bonds 1,660,000 1,570,000 (90,000) Golf Revenue Bonds 4,096,000 3,488,000 (608,000) PIR Limited Tax Revenue Bonds 0 1,860,000 1,860,000 Parks Land Purchases (WAMO) Line of Credit 3,691,158 0 (3,691,158) Children's Receiving Center Line of Credit 200,281 0 (200,281) 63,977,439 58,533,000 (5,444,439) Public Utilities Sewer System 1st Lien Revenue Bonds 879,515,000 1,063,380,000 183,865,000 2nd Lien Revenue Bonds 298,705,000 334,280,000 35,575,000 State Loans 20,499,969 21,470,228 970,259 Water System 1st Lien Revenue Bonds 134,130,000 127,975,000 (6,155,000) 2nd Lien Revenue Bonds 68,970,000 67,450,000 (1,520,000) General Obligation Water Revenue Bonds 6,080,000 4,630,000 (1,450,000) Hydroelectric Power Revenue Bonds 20,280,000 18,620,000 (1,660,000) 1,428,179,969 1,637,805,228 209,625,259 Community Development and Services Public Infrastructure Limited Tax Improvement Bonds 56,535,000 49,460,000 (7,075,000) Local Improvement line of credit Limited Tax Revenue (secured) 1,245,169 8,943,575 7,698,406 Convention Ctr Expan. Limited Tax Revenue Bonds 96,608,888 95,048,888 (1,560,000) New Columbia Infrastructure HUD Loan 2,721,000 0 (2,721,000) Homeownership line of credit Limited Tax Revenue (secured) 0 532,027 532,027 North Macadam Investors NMI Line of Credit 2,470,107 2,398,808 (71,299) Headwaters Apartments Limited Tax Revenue (Housing) 11,740,000 11,565,000 (175,000) Housing Opportunity Bond Limited Tax Revenue (Housing) 9,430,000 9,070,000 (360,000) 180,750,165 177,018,298 (3,731,867) Urban Renewal & Redev. Airport Way Tax Increment 53,080,000 50,110,000 (2,970,000) Central Eastside Tax Increment 19,635,654 25,254,592 5,618,938 Convention Center Tax Increment 69,395,929 70,263,326 867,397 Lents Tax Increment 6,400,000 11,407,251 5,007,251 River District Tax Increment 62,541,032 60,108,966 (2,432,066) Interstate Corridor Tax Increment 37,965,000 40,058,584 2,093,584 North Macadam Tax Increment 52,937,737 62,863,660 9,925,923 Gateway Tax Increment 7,242,000 9,245,051 2,003,051 South Park Blocks Tax Increment 33,480,000 31,774,542 (1,705,458) Downtown Waterfront Tax Increment 53,160,000 98,040,000 44,880,000 395,837,352 459,125,972 63,288,620 Transportation and Parking Parking Facilities Parking Revenue Refunding Bonds 4,375,000 3,565,000 (810,000) Streetcar Limited Tax Revenue Bonds 23,940,000 22,970,000 (970,000) Transit Mall Limited Tax Revenue Bonds 0 15,360,000 15,360,000 Trans. (Streetcar, Meters, Lines of Credit 9,874,468 8,546,770 (1,327,698) Recycling) Street Improvements 5,940,000 5,415,000 (525,000) 44,129,468 55,856,770 11,727,302 Legislative, Admin. And Support Services Equipment and Facility Limited Tax Revenue Bonds 75,510,000 80,430,000 4,920,000 State Loans 6,789 0 (6,789)

96 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Indebtedness TABLE 14 DEBT OUTSTANDING Service Facility/ Type of Area Function Indebtedness FY 2006–07 FY 2007–08 Change

Limited Tax Revenue Bonds (FF&C Ref.) 5,560,000 2,415,000 (3,145,000) Pension Limited Tax Pension Obligations 298,278,346 293,523,346 (4,755,000) Parks System Voter Approved General Obligation Bonds 32,080,000 28,740,000 (3,340,000) Emergency Facilities Voter Approved General Obligation Bonds 29,690,000 28,030,000 (1,660,000) 441,125,135 433,138,346 (7,986,789) Portland Development Services TOTAL DEBT OUTSTANDING $2,553,999,527 $2,821,477,614 $ 267,478,086

TYPE OF INDEBTEDNESS Limited Tax Bonds 298,278,346 293,523,346 (4,755,000) Limited Tax Improvement Bonds 56,535,000 49,460,000 (7,075,000) General Obligation Water Revenue Bonds 6,080,000 4,630,000 (1,450,000) Voter Approved General Obligation Bonds 61,770,000 56,770,000 (5,000,000) Gas Tax Revenue Bonds 15,814,468 13,961,770 (1,852,698) Revenue Bonds 1,410,071,000 1,618,758,000 208,687,000 Limited Tax Revenue Bonds 286,385,604 303,778,298 17,392,694 State / Federal Loans 23,227,758 21,470,228 (1,757,530) Tax Increment 395,837,352 459,125,972 63,288,620 TOTAL DEBT OUTSTANDING $2,553,999,527 $2,821,477,614 $ 267,478,086

ACTUAL DEBT OUTSTANDING Facility/ Type of Function Indebtedness FY 2006–07 FY 2007–08 FY 2008–09

ACTUAL DEBT OUTSTANDING JULY 1, 2007 Debt Issued Fiscal Year 2007-08 Facilities - Archives Limited Tax Revenue $11,925,000 Transit Mall Limited Tax Revenue 16,860,000 Portland International Raceway Limited Tax Revenue 2,010,000 Urban Renewal Downtown Waterfront 50,165,000 Sewer Sewer Revenue and Refunding 528,715,000 Line of Credit various 532,027 Total 610,207,027 Total Debt Redeemed Fiscal Year 2007-08 (342,728,941) TOTAL PROJECTED DEBT OUTSTANDING JULY 1, 2008 $ $2,821,477,614 $

Estimated Debt to be Issued Fiscal Year 2008-09 Water Water Revenue Bonds 80,000,000 Police Traffic Relocation Limited Tax Revenue 26,000,000 Urban Renewal South Park Blocks 60,000,000 Urban Renewal River District 30,000,000 Urban Renewal Interstate Corridor 25,000,000 Emergency Facilities General Obligation Fire 15,000,000 Assessment Improvements Limited Tax Improvement 8,000,000 Total 244,000,000 Total Projected Debt Redemption Fiscal Year 2008-09 (150,183,975) TOTAL PROJECTED DEBT OUTSTANDING JULY 1, 2009 $ $ $2,915,293,639

City of Portland, Oregon – FY 2008–09 Adopted Budget 97 Summary of Indebtedness TABLE 15 DEBT SERVICE Service Area Type of Facility/Function Indebtedness Principal Interest Total

Parks, Recreation and Culture Arena Limited Tax Revenue Bonds 1,755,000 1,068,250 2,823,250 1,755,000 1,068,250 2,823,250 Golf Revenue Bonds 634,000 173,343 807,343 Portland International Raceway Limited Tax Revenue Bonds 160,000 114,204 274,204 Civic Stadium 2001 Limited Tax Revenue Bonds 1,200,000 1,940,680 3,140,680 PCPA 2001 Limited Tax Revenue Bonds 90,000 77,820 167,820 2,084,000 2,306,047 4,390,047 Public Utilities Sewer System First Lien Revenue Bonds 35,680,000 54,345,994 90,025,994 Second Lien Revenue Bonds 11,360,000 18,238,285 29,598,285 State Loans 896,414 685,637 1,582,051 47,936,414 73,269,916 121,206,330 Water System First Lien Revenue Bonds 6,465,000 8,894,286 15,359,286 Second Lien Revenue Bonds 1,595,000 2,952,463 4,547,463 General Obligation Water Revenue Bonds 1,495,000 125,925 1,620,925 9,555,000 11,972,674 21,527,674 Hydroelectric Power Revenue Bonds 1,750,000 980,056 2,730,056 59,241,414 86,222,646 145,464,060 Community Development and Services Public Infrastructure Limited Tax Improvement Bonds 4,140,000 2,709,936 6,849,936 4,140,000 2,709,936 6,849,936 Urban Renewal & Redev. Airport Way Tax Increment 3,090,000 2,300,213 5,390,213 Central Eastside Tax Increment 2,843,440 1,743,418 4,586,858 Convention Center Tax Increment 6,189,726 4,993,436 11,183,162 South Park Blocks Tax Increment 2,053,098 5,242,873 7,295,971 Waterfront Tax Increment 4,440,000 5,758,419 10,198,419 River District Tax Increment 18,716,772 2,838,660 21,555,432 Gateway Tax Increment 1,557,410 695,890 2,253,300 Lents Tax Increment 6,159,255 1,290,284 7,449,539 North Macadam Tax Increment 2,175,431 4,562,486 6,737,917 Interstate Tax Increment 7,554,057 2,278,301 9,832,358 Willamette Industrial Tax Increment 396,651 500 397,151 59,315,840 34,414,415 93,730,255 Transportation and Parking Parking Facilities Revenue Bonds 1,840,000 1,231,375 3,071,375 Transit Mall Street Improvements Limited Tax Revenue Bonds 1,440,000 648,500 2,088,500 Street Improvements Gas Tax Revenue Bonds 1,662,263 367,694 2,029,957 4,942,263 2,247,569 7,189,832 Legislative, Admin. And Support Services Pension Bonds Limited Tax Bonds 5,990,000 16,768,729 22,758,729 Parks / Fire Voter Approved General Obligation Bonds 5,310,000 2,581,412 7,891,412 Equipment and Facility Limited Tax Revenue Bonds 9,035,000 4,776,048 13,811,048 North Macadam Limited Tax Revenue Bonds 75,458 136,862 212,320 Convention Ctr Expan. Limited Tax Revenue Bonds 1,870,000 3,921,563 5,791,563 Housing Limited Tax Housing Revenue Bonds 565,000 926,476 1,491,476 22,845,458 29,111,088 51,956,546 TOTAL DEBT SERVICE BY SERVICE AREA $ 150,183,975 $ 155,370,015 $ 305,553,990

Limited Tax Bonds 5,990,000 16,768,729 22,758,729 Limited Tax Improvement Bonds 4,140,000 2,709,936 6,849,936

98 City of Portland, Oregon – FY 2008–09 Adopted Budget Summary of Indebtedness TABLE 15 DEBT SERVICE Service Area Type of Facility/Function Indebtedness Principal Interest Total

General Obligation Water Revenue Bonds 1,495,000 125,925 1,620,925 Voter Approved General Obligation Bonds 5,310,000 2,581,412 7,891,412 Gas Tax Revenue Bonds 1,662,263 367,694 2,029,957 Revenue Bonds 59,324,000 86,815,802 146,139,802 Limited Tax Revenue Bonds 15,625,458 12,683,926 28,309,384 Limited Tax Housing Revenue Bonds 565,000 926,476 1,491,476 State Loans 896,414 685,637 1,582,051 Tax Increment 55,175,840 31,704,479 86,880,319 TOTAL DEBT SERVICE BY TYPE $ 150,183,975 $ 155,370,015 $ 305,553,990

City of Portland, Oregon – FY 2008–09 Adopted Budget 99 Urban 9,295,000 2,410,000 Portland Renewal 55,175,840 16,740,000 17,695,000 18,680,000 19,740,000 20,880,000 21,950,000 23,090,000 24,330,000 25,645,000 27,030,000 28,505,000 11,515,000 12,170,000 12,830,000 TABLE 16 Commission Development $347,680,840 3,595,000 3,745,000 3,900,000 4,075,000 4,280,000 4,470,000 4,675,000 Gen. Obl. Parks & Fire Parks $ 28,740,000 Legislative, PRINCIPAL REQUIREMENTS 585,000 610,000 640,000 665,000 700,000 690,000 8,375,175 8,245,423 7,059,733 6,132,228 5,943,274 5,762,955 5,589,559 Facility & Facility 27,075,458 22,619,859 24,734,517 26,134,447 27,884,664 29,255,185 31,861,029 27,157,213 28,171,438 29,270,000 29,080,000 30,180,000 33,370,000 37,345,000 Administrative & Support Equipment $455,137,154 1,840,000 1,920,000 1,995,000 1,605,000 1,675,000 1,250,000 1,310,000 1,370,000 1,430,000 1,500,000 1,570,000 1,650,000 1,720,000 1,810,000 1,900,000 1,990,000 System Parking $ 26,535,000 570,000 580,000 600,000 630,000 650,000 680,000 695,000 220,000 240,000 Street Public 1,662,263 Transportation & Parking Transportation Improvements $ 6,527,263 0 0 0 0 0 0 0 0 0 0 0 Public 4,140,000 2,190,000 2,185,000 2,160,000 9,840,000 1,140,000 10,070,000 19,680,000 & Services Community Development Improvements $ 51,405,000 1,750,000 1,835,000 1,940,000 2,045,000 2,145,000 2,270,000 2,390,000 2,505,000 1,740,000 Hydroelectric $ 18,620,000 9,555,000 9,310,000 9,745,000 7,065,000 7,400,000 7,760,000 3,270,000 3,415,000 3,565,000 3,725,000 3,895,000 4,070,000 4,250,000 4,450,000 10,010,000 10,465,000 10,215,000 10,705,000 11,190,000 12,000,000 12,600,000 13,200,000 13,795,000 14,400,000 Water System Water $200,055,000 Public Utilities Sewer System 47,936,414 53,367,450 56,430,232 59,187,419 62,100,909 65,169,496 68,428,189 74,066,985 77,775,885 82,449,902 84,694,496 87,998,251 92,677,098 96,801,032 37,969,183 39,813,398 28,627,716 29,349,029 30,406,507 31,835,000 33,320,000 34,870,000 18,145,000 19,020,000

101,535,061 $1,413,974,652 Arts 1,960,000 1,629,780 1,609,440 1,665,734 1,808,250 1,853,112 1,940,530 2,006,940 2,349,000 2,335,720 2,599,480 2,897,480 3,901,250 4,282,172 6,640,000 6,970,000 7,320,000 7,700,000 8,090,000 8,510,000 9,040,000 9,510,000 Center & Performing Convention $ 96,618,888 Life of the Debt Life 794,000 833,000 875,000 919,000 972,000 215,000 230,000 245,000 265,000 Culture Golf & PIR $ 5,348,000 Parks, Recreation & Recreation Parks, Arena 2,955,000 3,205,000 3,715,000 4,000,000 4,300,000 4,655,000 5,035,000 5,445,000 3,850,000 2,130,000 2,275,000 2,435,000 2,605,000 2,790,000 2,220,000 $ 51,615,000 Year Fiscal Principal Over the Transactions Principal Bond Projected of Schedule 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 TOTAL

100 City of Portland, Oregon – FY 2008–09 Adopted Budget 676,250 120,500 Urban 9,603,494 8,362,610 7,049,870 5,663,839 4,188,556 2,695,666 2,044,546 1,383,410 Renewal Portland 31,704,479 15,884,006 14,994,968 14,013,206 12,951,018 11,816,418 10,742,239 TABLE 17 Commission Development $153,895,074 835,720 631,970 439,370 233,750 1,319,575 1,170,383 1,011,220 Gen. Obl. Parks & Fire Fire & Parks $ 5,641,988 Legislative, INTEREST REQUIREMENTS 69,035 34,260 193,225 164,170 133,865 102,075 8,094,399 5,841,351 3,337,141 25,519,526 25,070,272 23,857,158 22,499,467 21,016,080 19,469,162 17,793,965 15,923,705 14,172,090 12,362,235 10,104,179 33,823,285 35,560,843 37,349,133 39,233,837 41,203,941 43,244,175 45,341,236 Administrative & Support & Administrative Equipment Facility and Facility $501,513,809 99,500 990,650 919,588 843,938 786,125 723,900 658,825 590,900 519,650 445,075 366,700 285,000 194,500 1,231,375 1,155,275 1,074,538 System Parking $ 10,885,538 78,643 51,563 23,000 12,000 367,694 190,038 170,378 149,628 127,578 103,863 Street Public Transportation and Parking Transportation Improvements $ 1,274,382 984,000 984,000 984,000 984,000 Public 2,709,936 2,236,420 2,148,820 2,061,420 1,969,620 1,969,620 1,969,620 1,969,620 1,969,620 1,477,620 1,477,620 1,422,045 1,422,045 1,422,045 1,422,045 & Services Community Development Development Improvements $ 31,584,116 48,050 980,056 881,057 776,810 666,764 551,057 429,137 300,451 165,276 Hydro- Electric $ 4,798,659 983,131 823,563 652,113 477,988 295,875 100,125 Water 8,433,579 7,967,560 7,512,518 7,070,455 6,598,709 6,111,669 5,624,319 5,079,656 4,473,869 3,870,781 3,274,003 2,670,275 2,216,953 1,889,631 1,533,619 1,279,825 1,133,591 System 11,972,674 $ 92,046,478 Public Utilities Public 913,713 Sewer System 9,252,133 7,876,396 6,437,100 4,956,688 3,407,125 1,785,375 73,269,916 66,245,923 63,621,309 60,819,913 57,913,099 54,825,998 51,584,744 48,180,311 44,493,185 40,665,802 35,456,940 31,271,498 26,921,838 23,711,936 19,008,982 14,021,235 12,189,657 10,595,434

$769,426,247 950,688 487,388 Arts 3,999,383 4,572,793 4,628,083 4,764,189 4,953,473 5,157,831 5,321,023 5,651,613 6,010,553 6,083,703 6,145,233 6,184,433 5,538,363 5,098,540 3,251,713 2,919,713 2,571,213 2,196,063 1,801,438 1,386,825 Center & Center Performing Convention $ 89,674,244 77,669 40,344 173,343 144,369 112,280 Culture Golf & PIR Golf & $ 548,005 Parks, Recreation Recreation & Parks, 862,750 703,500 533,050 350,700 155,400 Arena 3,008,930 2,854,588 2,687,758 2,507,030 2,323,680 2,084,040 1,823,410 1,541,910 1,236,000 1,007,590 $ 23,680,335 Year Fiscal Interest Over the Life of the Debt Interest Over the Life Bond Interest Transactions Projected of Schedule 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 TOTAL

City of Portland, Oregon – FY 2008–09 Adopted Budget 101 Summary of Defeased Indebtedness TABLE 18 DEFEASED BONDS PAYABLE Principal

Type of Outstanding Maturity Outstanding Indebtedness FY 2007–08 FY 2007–08 7–1–08

The City will have about $212 million of defeased bonds outstanding as of July 1, 2008. Defeased bonds are payable from fully funded irrevocable escrow accounts established with the proceeds from the sale of refunding bonds. Defeased bonds are thereby removed as actual liabilities of the City, and the refunding bond liabilities are assumed in their place. Defeased bonds are then paid by the escrow account until their first available call date, at which time they are paid in their entirety. Bonds are defeased in this manner in order to convert higher rate debt with lower interest rate debt, or modify bond covenants for the City's benefit, or a combination of both. DEFEASED BONDS OUTSTANDING Urban Renewal & Redevelopment Bonds Airport Way 2000 Series A (2010-20 Maturities) 44,385,000 0 44,385,000 44,385,000 0 44,385,000 Water System Revenue Bonds Series 1997 A (2008-17 Maturities) 21,460,000 (21,460,000) 0 Series 2000 A (2018-20 Maturities) 22,290,000 0 22,290,000 22,290,000 (21,460,000) 22,290,000 Sewer Revenue Bonds Series 2000 A 146,000,000 0 146,000,000 146,000,000 0 146,000,000 TOTAL DEFEASED BONDS OUTSTANDING $ 212,675,000 $ (21,460,000) $ 212,675,000

102 City of Portland, Oregon – FY 2008–09 Adopted Budget