TL;DR (generated · confidence: high)

Bureau of Environmental Services contributes $1.5 million in ongoing revenues to establish Portland Permitting & Development, comprised of $1.2 million freed from a no-longer-needed UFSWQD loan and $300 thousand from reduced Tryon Creek savings. This supplements a 21.5 FTE transfer (approximately $3.53 million) and existing $2.77 million ratepayer subsidy, raising total ratepayer support to 61%. Council directs enterprise-wide review of utility revenue appropriateness. BES absorbs budget impacts through deferred capital projects and reduced personnel, with the subsidy expected to persist until permit fees increase or costs decrease to full cost recovery.

Key points (each cites a PDF page):

BES contributes $1.5 million in ongoing revenues to Portland Permitting & Development in FY 2024-25 and beyond (p. 1474)
$1.2 million from elimination of UFSWQD loan; $300 thousand from reduced Tryon Creek Wastewater Treatment Plant savings (p. 1474)
21.5 FTE transferred from BES to PP&D, valued at approximately $3.53 million (p. 1474)
Ratepayer subsidy increases from 50% ($2.77 million) to 61% with the additional $1.5 million contribution (p. 1474)
Council directs City Attorney and bureau staff to review enterprise-wide budget for appropriate use of utility ratepayer revenue (p. 1474)
BES budget impacts include deferred capital projects, reduced environmental remediation resources, and fewer personnel for core functions (p. 1475)
Tryon Creek replacement cost savings provide only one-time relief insufficient for long-term subsidy support (p. 1475)
Only PP&D expenditures with direct nexus to BES services are eligible for ratepayer funding (p. 1475)
Bureau transferred fee revenue to PP&D to decrease total interbureau transfers and address fee collection constraints (p. 1476)

💰 $1.5M · $1.2M · $300K · $3.53M · $2.77M · 👥 21.5 FTE · 📋 Portland Permitting & Development · Tryon Creek Wastewater Treatment Plant replacement · 🏛️ Bureau of Environmental Services · Portland Permitting & Development · Bureau of Development Services

BES---PPD-IA-Agreement-Evaluation-Budget-Note

Source: PDF pp. 1474-1476 · raw: 1474 · 1475 · 1476

Breadcrumb: 6 pw › BES---PPD-IA-Agreement-Evaluation-Budget-Note

To: Ruth Levine, City Budget Office Director From: Cecilia Hyunh, Water Finance & Support Services Group Director CC: Mike Jordan, City Administrator Deputy City Administrators Mayor & Council Date: February 14, 2025 Re: FY 2024-25 Adopted Budget Note Updates Portland Permitting & Development -- BES Interagency Budget Note Title Agreement Evaluation Primary Service Area Public Works Due By TBD Lead Priya Dhanapal Priya Dhanapal Donnie Oliveira Dawn Uchiyama Staff to include Ken Bartocci Farshad Allahdadi Eric Shaffner In Budget Concept? No Budget Concept DP # N/A Budget Note Full Text In response to a request from the mayor’s office, the Bureau of Environmental Services (BES) will contribute approximately $1.5 million in ongoing revenues above permitting revenue to the establishment of the City’s Portland Permitting & Development (PP&D), previously known as the Bureau of Development Services. The bureau will use $1.2M that will no longer need to be loaned to the UFSWQD to partially pay for PP&D. BES will reduce its savings for future Tryon Creek Wastewater Treatment Plant replacement costs to cover remaining $300K. The source of BES’s ongoing contributions after the FY 2024-25 budget year will be determined during the subsequent years’ annual budget development process and budgetary allocation calculation changes to Portland Permitting & Development’s assumptions which will be reviewed collectively this summer. This contribution is in addition to the transfer of position authority budget of 21.5 FTE (approximate $3.53 million) from BES to the PP&D and the continued ratepayer subsidization of permitting costs at its current level of 50% (approximately $2.77 million). With the additional $1.5 million, the rate payer subsidy increases to 61%. Council directs the City Attorney and utility bureau staff to review the budget enterprise wide to ensure an accurate understanding as to the appropriate use of utility rate payer revenue to support the establishment and continued operation of the PP&D.

Deliverable Report Next Steps (from June 2024) Connected to the PP&D overhead budget note Status Update (from December 2024) Removing the required $1.2 million loan to the UFSWQD provided temporary relief. Because it was a loan forecast to be repaid, the impact remains $1.5 million per year (including FY 2024- 25) in current year dollars to the financial forecast. The reduction to the level of subsidy can only be achieved by a reduction in PP&D costs or an increase in fees charged for permits. As a result, the bureau had to make reductions and forego needed increases to support core functions of the bureau. Some combination of reduction to the following areas will likely include: • Deferral of capital projects • Fewer resources available to prepare for future environmental remediation costs. • Less personnel resources to support core functions of the bureau The reduction to the savings for Tryon Creek Wastewater Treatment replacement cost had a lower impact as a result of the project being delayed but is only a one-time impact that will not support the long-term costs of the subsidy. Regarding the appropriate use of ratepayer dollars, the bureau will be paying to PP&D only for actual expenditures incurred that support and have a direct nexus to BES services. As a result, the expenditures are eligible to be funded from rate payer dollars as long as that condition exists. Although payments to PP&D that have a direct nexus to BES services are an eligible use of rate payer dollars, the subsidy will remain until fees are increased or costs are reduced to achieve 100% cost recovery. With the high level of ratepayer subsidy, it is expected to take a number of years to phase in to a 100% cost recovery from permit fees without a significant up front fee increases or reduction to PP&D costs.

Final Update Status The bureau has worked with PP&D to transfer fee revenue over and therefore decrease the total amount of money transferred between bureaus. While this does not lessen the subsidy, it addresses an issue related to fee collection due to PP&D being unable to keep revenues from fees on the BES rate ordinance. The bureau also worked with PP&D to ensure they only collect money based on actual expenditures and actual cost reporting provides sufficient backing documentation. Ultimately, payments to PP&D have a direct nexus to BES services are an eligible use of rate payer dollars. However, the subsidy will remain until fees are increased or costs are reduced to achieve 100% cost recovery.

Parent: 6 pw · PDF: pp. 1474-1476