TL;DR (generated · confidence: high)

This section explains PBOT's non-discretionary revenue sources, expense linkages, and three primary risks. Fund transfers support streetlight operations and ADA curb ramps; interagency revenues recover full service costs. Non-discretionary expenditures move in tandem with revenues, requiring cuts if shortfalls occur. Three risks emerge: COVID-19 continues to threaten construction and development permit revenues with potential permanent structural changes; long-term development pattern shifts toward suburban and single-family housing may reduce permitting demand; and grant funding for capital projects faces secular decline post-ARPA with a more challenging federal environment ahead.

Key points (each cites a PDF page):

Fund Transfers support streetlight operations, ADA-compliant curb ramps, and LID capital projects from General Fund and Local Improvement District (p. 1403)
Interagency revenues reflect full cost recovery inclusive of general and administrative expenses; overhead recovery offset in discretionary expenditures (p. 1403)
Non-discretionary revenues and expenditures move in tandem; revenue shortfalls require corresponding expenditure reductions (p. 1403)
COVID-19 impacts on construction and development permit and fee revenues remain uncertain with risk of permanent structural changes (p. 1403)
Largest 1% of development projects historically generated over one-third of System Development Charge revenues (p. 1403)
Development activity expected to remain depressed in office and hotel markets; long-term shifts may favor suburban and single-family housing (p. 1403)
Grant funding for PBOT capital program faces secular decline after American Recovery Plan Act dollars sunsetted end of 2024 (p. 1403)
Trump administration signals more challenging federal grant environment in coming years (p. 1403)

📋 Local Improvement District (LID) · ADA-compliant curb ramps · System Development Charge (SDC) · PBOT capital program · 🏛️ PBOT

Risks & Opportunities

Source: PDF p. 1403 · raw: 1403

Breadcrumb: 6 pw › PW---FYFP---ALL_0 › Executive Summary › Non-Discretionary Revenues and Expenses › Risks & Opportunities

Fund Transfers include one-time and ongoing transfers from other City funds, including transfers from the General Fund for streetlight operations and construction of ADA-compliant curb ramps, as well as the Local Improvement District (LID) fund for LID capital projects. Interagency revenues are reimbursements for work performed on behalf of other City bureaus. Interagency revenues reflect the full cost of performing a service, inclusive of general and administrative expenses. Overhead recovered via interagency agreements is reflected in the Overhead Recovery offset within the bureau’s discretionary expenditures. Reimbursements are expected to grow in line with inflation. Expenses Non-discretionary expenses are linked to their funding sources. As most non-discretionary revenues are received on a reimbursement basis, or calculated to ensure cost recovery, revenue and expenditure levels tend to move in tandem. If a revenue shortfall is anticipated, expenditures must be reduced accordingly. Risks & Opportunities COVID-19 Impacts Most, if not all, of the risks outlined in the discretionary revenues section of this forecast apply to non-discretionary permit and fee revenues. For fees linked to construction and development, there remains considerable uncertainty in the timing and shape of recovery, and the risk of permanent, structural changes remains. Changing Development Patterns The long-term changes brought about by COVID may have significant impacts on the bureau’s permitting revenues. In the short term, development activity is expected to remain depressed, particularly in the office and hotel market. In the long run, shifts in the market that favor suburban development or smaller/single family housing may impact the total demand for permitting within the city and the types of permitting and traffic control required at building sites. Changes to large developments may also have a disproportionate impact on SDC revenues: in previous fiscal years, the largest 1% of projects generated over a third of SDCs. Grant Funding Availability Grants are a critical source of funding for PBOT’s capital program, but funding levels have seen secular decline in recent years – with a known substantial decline after the federal American Recovery Plan Act (ARPA) dollars sunsetted at the end of the 2024 calendar year. The bureau’s current allocation of discretionary revenue to the CIP mostly serves as match payments for grants. In its early days the Trump administration has signaled that the federal grant environment is likely to be more challenging in the coming years. 10

Parent: Non-Discretionary Revenues and Expenses · PDF: p. 1403