Bureau of Fire & Police Disability & Retirement

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Breadcrumb: 2 B&F › Budget-and-Finance---Vol-1 › Budget & Finance Service Area › Bureau of Fire & Police Disability & Retirement

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Bureau of Fire & Police Disability & Retirement Jonas Biery, DCA - Budget & Finance Samuel Hutchison, Director Fire & Police Disability & Retirement 3.6% City Budget 96.4% Disability and Death Benefits 4.5% Sworn PERS Contributions 24.7% Other 1.5% FPDR Pension Benefits 69.2% Bureau Overview Requested Revised Total Change from Percent Requirements FY 2024-25 2025-26 Prior Year Change Operating $288,873,466 $304,290,534 $15,417,068 5% Capital $60,000 $165,001 $105,001 175% Total $288,933,466 $304,455,535 $15,522,069 5% Authorized Positions 18.00 18.00 — —% City of Portland, Oregon - FY 2025-26 Requested Budget 23

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Bureau of Fire & Police Retirement & Disability FPDR Fund Director Sam Hutchison FPDR Pension Sworn PERS Disability / Administration Benefits Contributions Death Benefits & Support 24 City of Portland, Oregon - FY 2025-26 Requested Budget

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Bureau Summary Bureau Mission The mission of the Bureau of Fire & Police Disability & Retirement is to deliver peace of mind to our fire and police members and their survivors by providing disability and retirement benefits in a timely, compassionate, and fiscally responsible manner. Bureau Overview The FPDR Fund provides disability (on-the-job injury and non-service), retirement, and death benefits to the sworn employees of Portland Fire and Rescue and the Portland Police Bureau and the surviving spouses and dependent minor children of deceased sworn employees. The FPDR Plan provides direct disability, retirement and death benefits to sworn employees hired before 2007 and their survivors, but only disability and pre- retirement death benefits to sworn employees hired in 2007 or later. In addition, the FPDR Fund pays the contributions to the Oregon Public Employees Retirement System (PERS) for sworn employees hired in 2007 or later, who are enrolled in the pre-funded PERS Plan for pension benefits. The FPDR Fund and Plan are administered by a Board of Trustees (Board), which acts as an independent public body. The Board’s purpose is to ensure that the provisions of the FPDR Plan are followed and that the funds provided by the taxpayers of the City of Portland are expended prudently. In addition, the Board sets policy for the Fund and Plan administration and approves the FPDR budget. The FPDR Plan is funded through a dedicated tax levy on all taxable property within the City of Portland. The FPDR Fund does not retain or invest any monies to pay for future benefits. This is called “pay-as-you-go” funding. Executive Leadership  Sam Hutchison, Bureau Director  Stacy Jones, Deputy Director and Finance Manager  Kim Mitchell, Disability Claims Manager Major Work Groups Disability Group The Disability Group adjudicates and administers injury and illness claims filed by the City’s sworn firefighters and police officers, as well as pre-retirement death claims filed by their survivors. Finance and Pension The Finance and Pension Group oversees the bureau’s financial operations and Group reporting, develops and administers the FPDR budget, and assures that correct disability and pension benefits are paid. In addition, this group manages the FPDR Pension Plan. City of Portland, Oregon - FY 2025-26 Requested Budget 25

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Administration The Administration Group provides administrative support for the entire bureau, Group the FPDR Board of Trustees, and the FPDR members. Recent Accomplishments  FPDR recently oversaw the dissolution of one managed care organization (MCO) and onboarded two new MCOs. During these transitions, FPDR worked diligently to ensure continuity of quality care for disabled members.  FPDR converted all finance and disability claim processes to digital/paperless systems over the last four years. This conversion increased the security of documents and better prepared FPDR for operations during a disaster. It also improved collaboration and information sharing between staff, helped the environment by significantly reducing paper use, and supported flexible work options for employees. Further, it allowed members and medical providers to more conveniently submit forms and documents electronically.  During the COVID pandemic, FPDR successfully managed the fund’s financial health during the greatest period of economic uncertainty in modern memory. This ensured the fund could withstand property tax revenue losses and higher- than-usual pension and disability costs associated with record retirement levels and COVID disability claims.  FPDR also successfully retained staff and maintained morale during the COVID pandemic and successfully integrated staff into first a remote and then a hybrid workplace model. This included an office move to downsize our footprint and lease expenses; purchase, installation, and training on new equipment for remote and hybrid work; and new work procedures and routines to accommodate hybrid work.  Importantly, FPDR provided seamless service and continuous availability for both active and retired members throughout the pandemic and shifting work environment. 26 City of Portland, Oregon - FY 2025-26 Requested Budget

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Challenges and Opportunities  Closely monitor the following to determine potential impacts to the future adequacy of the FPDR tax levy: wage increases for sworn firefighters and police officers above normal cost of living adjustments, or significant growth in the number of sworn employees; any decrease in Portland property values and corresponding decrease in taxable real estate; any increases in property tax compression under Measures 5 and 50; increases in PERS contribution rates; any potential changes to Oregon’s property taxation laws  Begin executing a bureau strategic plan that focuses on preparing for the future of FPDR, staff retention, preparation for future retirements, customer service improvements, and a technology plan.  Ensure that FPDR is resilient and can quickly adapt to disruptions, while maintaining continuous operations and excellent service.  Conduct a thorough review of FPDR’s response to the COVID pandemic. Update FPDR’s continuity of operations plan, emergency plans, and disaster training plans based on the results of the review.  Continue to build an excellent workplace culture in a shifting work environment. Encourage newer employees to step into informal leadership gaps left by recent retirements. Coming to City Council FPDR borrows funds each year to cover a short-term cash flow deficit between July 1 and December 1, when most revenue from the FPDR property tax levy will be received. If FPDR borrows these monies from another City fund (as opposed to the municipal tax anticipation note market), an ordinance will be presented to City Council in June or July to authorize the loan. Should the Oregon Legislature pass any laws that impact the FPDR Fund or Plan in the upcoming 2025 legislative session, FPDR may seek Council’s approval to change or modify the FPDR Plan per City Charter Section 5-403(a), which allows Council to amend the Plan to bring it into compliance with federal and state law. What’s New or Different City Charter caps the FPDR levy at $2.80 per $1,000 of real market value (RMV). In connection with the plan’s actuarial valuation, the Board orders a levy adequacy analysis from an independent actuarial firm every two years. The most recent analysis was completed in January 2025 with data as of June 30, 2024. Under a wide range of simulated economic scenarios over the next 20 years, the analysis found less than a 2% probability of the FPDR levy reaching the maximum $2.80 per $1,000 of RMV in any year through 2043. City of Portland, Oregon - FY 2025-26 Requested Budget 27

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Although there is very little risk that the FPDR property tax levy will ever be insufficient to fund FPDR obligations, declining downtown property values have pushed the FPDR RMV property tax rate up more than previously forecast. Real market value in the City declined by 2.9% in 2024 and is projected to drop another 3.0% in 2025. Partly as a result, the FPDR RMV tax rate is now expected to be roughly 10% higher than previously predicted. Currently, the rate is projected to increase from $1.18 in FY 2024-25 to $1.50 in FY 2025-26, and to $1.82 by the end of the five-year forecast period in FY 2029-30. FY 2023-24 was the second highest retirement year in FPDR history, and between December 2023 and January 2025 (when there were three advantageous 27 pay date retirement months) an unprecedented 144 public safety employees covered by FPDR’s pension plan retired. This led to unusually rapid growth in both FPDR pension benefit expenses and PERS contribution costs for the new sworn employees hired to replace outgoing FPDR retirees. Short-term disability claims and costs, both for medical care and for wage replacement for time away from work, have dropped from the highs reached during the pandemic and are now below pre-pandemic averages. However, this is likely the result of normal fluctuation. Disability benefit costs are forecast to resume more typical (of pre-pandemic) spending levels for FY 2025-26 and beyond. 28 City of Portland, Oregon - FY 2025-26 Requested Budget

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Performance Measures Actuals Actuals Target Target Strategic Performance FY2022-23 FY2023-24 FY2024-25 FY2025-26 Target Efficiency Median days to prepare a pension estimate 6 20 10 15 10 Administrative spending per participant $855 $827 $844 $917 $951 Input Number of active employees in FPDR 3 798 859 960 1,051 1,368 Number of FPDR 2 retirements from active service 53 70 65 57 49 Number of medical bills 2,429 2,920 3,000 2,800 3,000 FPDR tax levy rate (per $1,000 of Real Market Value) $1.11 $1.17 $1.36 $1.50 $1.82 Percent of workforce who are FPDR 3 56% 61% 65% 71% 86% Percentage of workforce on disability at June 30 3.3% 3.0% 3.0% 3.0% 3.0% Outcome Percentage of members whose final pay was 99% or more of last estimate 100% 100% 98% 100% 100% Administrative cost as a percentage of bureau budget 1.54% 1.39% 1.34% 1.50% 1.50% Output Number of disability claims filed 320 231 320 325 325 Number of FPDR 1 and 2 pension recipients 2,148 2,211 2,180 2,310 2,423 Number of long-term disability recipients 25 23 25 23 23 Number of members on short-term disability 284 187 300 300 300 Number of pension estimates 248 209 250 250 200 Number of pre-retirement workshop participants 82 79 120 150 100 Quality Percentage of disability claims decisions in 60 days 78% 84% 90% 90% 90% Percentage of FPDR 2 members now or soon-to-be retirement eligible who 89% 81% 80% 80% 90% received a pension estimate in the last two years Percent of pension recipients who are paperless 42.0% 45.0% 50.0% 55.0% 75.0% City of Portland, Oregon - FY 2025-26 Requested Budget 29

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area Summary of Bureau Budget Requested Requested Actuals Actuals Revised No DP Total FY2022-23 FY2023-24 FY 2024-25 2025-26 2025-26 Resources External Revenues Taxes 184,369,301 193,478,035 221,850,559 229,896,204 229,896,204 Charges for Services 15 31 0 0 0 Bond & Note 28,000,000 32,565,839 45,000,000 47,000,000 47,000,000 Miscellaneous 1,688,101 2,101,533 2,922,000 3,116,800 3,116,800 External Revenues Total 214,057,416 228,145,437 269,772,559 280,013,004 280,013,004 Internal Revenues Fund Transfers - Revenue 0 0 1,500,000 1,500,000 1,500,000 Interagency Revenue 405,347 519,086 690,330 844,041 844,041 Internal Revenues Total 405,347 519,086 2,190,330 2,344,041 2,344,041 Beginning Fund Balance 30,723,348 0 16,970,577 22,098,490 22,098,490 Resources Total 245,186,111 228,664,523 288,933,466 304,455,535 304,455,535 Requirements Bureau Expenditures Personnel Services 2,771,576 3,111,483 3,257,501 3,615,000 3,615,000 External Materials and Services 154,621,450 161,364,146 170,280,703 172,336,845 172,336,845 Internal Materials and Services 32,082,703 40,475,153 51,966,823 59,981,026 59,981,026 Capital Outlay 59,020 59,020 60,000 165,001 165,001 Bureau Expenditures Total 189,534,750 205,009,802 225,565,027 236,097,872 236,097,872 Fund Expenditures Debt Service 28,418,299 33,110,519 45,824,962 48,820,461 48,820,461 Contingency 0 0 15,114,082 17,000,000 17,000,000 Fund Transfers - Expense 171,249 151,673 1,679,395 1,787,202 1,787,202 Fund Expenditures Total 28,589,548 33,262,192 62,618,439 67,607,663 67,607,663 Ending Fund Balance 27,061,813 0 750,000 750,000 750,000 Requirements Total 245,186,111 238,271,994 288,933,466 304,455,535 304,455,535 Programs Administration & Support 2,909,021 2,854,484 3,120,171 3,633,309 3,633,309 Disability and Death Benefits 8,092,500 9,790,611 9,579,669 10,688,171 10,688,171 FPDR Pension Benefits 147,980,751 153,439,355 162,305,187 163,406,392 163,406,392 Pension Benefits (343,093) (445,031) — — — Sworn PERS Contributions 30,895,571 39,370,384 50,560,000 58,370,000 58,370,000 Total Programs 189,534,750 205,009,802 225,565,027 236,097,872 236,097,872 30 City of Portland, Oregon - FY 2025-26 Requested Budget

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area FTE Summary Requested Requested Revised No DP Total Salary Range FY 2024-25 2025-26 2025-26 Class Title Min Max No. Amount No. Amount No. Amount 30000063 Accountant II 74,589 93,891 1.00 93,891 1.00 93,891 1.00 93,891 30003976 Administrative Specialist II - 75,442 107,640 1.00 75,929 1.00 91,541 1.00 91,541 CPPW 30003978 Analyst I - CPPW 83,221 118,768 3.00 271,071 3.00 300,087 3.00 300,087 30003979 Analyst II - CPPW 97,510 126,693 3.00 299,108 3.00 336,306 3.00 336,306 30003012 Business Systems Analyst III 111,093 156,270 1.00 123,217 1.00 129,386 1.00 129,386 30000066 Claims Technician 62,317 82,576 1.00 82,576 1.00 82,576 1.00 82,576 30000065 Claims Technician, Assistant 48,381 69,701 1.00 69,701 1.00 69,701 1.00 69,701 30003034 Deputy Director I 129,771 183,082 1.00 138,858 1.00 156,426 1.00 156,426 30003037 Director I 157,019 228,259 1.00 157,019 1.00 191,695 1.00 191,695 30003986 Financial Analyst II - CPPW 97,510 126,693 1.00 97,510 1.00 111,217 1.00 111,217 30003987 Financial Analyst III - CPPW 107,266 151,882 1.00 110,054 1.00 129,574 1.00 129,574 30003077 Legal Assistant 83,221 118,768 1.00 86,924 1.00 100,994 1.00 100,994 30003081 Manager I 117,957 168,709 1.00 117,957 1.00 134,201 1.00 134,201 30000013 Office Support Specialist III 60,424 80,122 1.00 72,987 1.00 77,572 1.00 77,572 Total Full-Time Positions 18.00 1,796,802 18.00 2,005,167 18.00 2,005,167 Grand Total 18.00 1,796,802 18.00 2,005,167 18.00 2,005,167 City of Portland, Oregon - FY 2025-26 Requested Budget 31

Bureau of Fire & Police Disability & Retirement Budget & Finance Service Area 32 City of Portland, Oregon - FY 2025-26 Requested Budget

Parent: Budget & Finance Service Area · PDF: pp. 184-193