Vibrant-Communities-FY-25-26-Five-Year-Financial-Plans-v2
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Breadcrumb: 7 vs › Vibrant-Communities-FY-25-26-Five-Year-Financial-Plans-v2
FY 2026-30 Requested Budget Five Year Plan Plan Overview – Operating Fund The five-year financial forecast has been updated to inform the development of the FY 2025-26 budget. This overview highlights the service levels and projection assumptions used in the plan, associated financial risks and identified funding gaps, and a capital improvement summary. It is principally focused on operating activities within the General Fund. Portland Parks & Recreation (PP&R) oversees an annual operating budget of $173.2million (FY 2024-25 Revised) which is managed within the General Fund. General Fund discretionary resources are budgeted to cover 47% of the requirement, with charges, fees and interagency revenue covering another 10%. These are supplemented by resources from the 2020 Parks Levy Fund, which receives local option property tax receipts over the five-year period from FY 2021-22 through FY 2025-26 to provide an enhanced level of services to the community, after which replacement funding will need to be secured. Revenue Assumptions Operations are funded with three principal resources: program revenues in the form of fees and charges; General Fund discretionary resources; and, transfers from the 2020 Parks Levy Fund to supplement those resources sufficient to support expenditures. In addition to a proposed $6.8 million General Fund reduction, PP&R is also working to absorb a reduced Parks Local Op�on Levy (Parks Levy) forecast which predicts more than $7 million in reduced ongoing resources. This reduced forecast is the result of property tax compression, largely the result of real market declines for downtown proper�es. This plan assumes that the current appropriation level of General Fund discretionary resources will include full allocation of the compensation set aside each year. Program revenue increases are projected using the CPI rates published by the City Budget Office. Program revenue assumptions include discounts intended to reduce financial barriers to access PP&R services, and this foregone revenue is offset by resources from the Parks Levy. Local option property tax levy receipt forecasts are based on estimates from the City Budget Office. A portion of those receipts are passed to the Children’s Investment Fund to compensate for the tax compression reduction to its local option levy that resulted from the creation of the Parks Levy. This transfer is budgeted at $400,000 in the FY 2024-25 base budget. Parks Levy revenue is projected to expire after the first year of this five-year plan, which represents a significant funding gap. This five-year plan shows that a successor local option levy with the current mill rate of $0.80 per $1,000 AV would require $23 million in expense reductions in FY 2025-26 and an additional $27 million in reductions in FY 2026-27 to sustain operations. City Council will refer a levy to the November 2025 ballot at a rate that is yet to be determined.
FY 2026-30 Requested Budget Five Year Plan Expenditure Assumptions Expenditure assumptions in the base budget for operations are based on a fully implemented set of enhanced services consistent with the commitments made to voters in the referral of the 2020 Parks Local Option Levy. This includes an increased staffing level, workspace, vehicles, and equipment required to support those services. The plan also includes annual increases in ongoing expense appropriation for operation and maintenance (O&M) of PP&R’s expanding system are incorporated. Based on a PP&R commitment, these O&M appropriation increases are funded exclusively by the Parks Levy, rather than General Fund discretionary resources, as they have historically. The plan relies on inflation factors established by the City Budget Office. There are currently three outstanding collective bargaining agreements outstanding as of February 2025 and their impact is not included. To balance the FY 2025-26 budget this plan assumes $23 million in ongoing expense reductions, with $3.5 million in one-time 2025 summer programming buy-back elements. This accommodates the $6.8 million General Fund resource reduction and prevents drawing the Parks Levy to a negative balance. This plan assumes renewal of the Parks Levy in FY 2026-27 at the current $0.80 mill rate, and that an additional $27 million in ongoing reductions would be required in FY 2026-27. Alternative proposals at higher mill rates reduce the need for expense reductions that may impact service levels to the public. City Council will determine what rate to refer to the 2025 November ballot. As new assets such as natural areas, playgrounds, trails, and new parks come into service, PP&R will continue to identify the necessary resources to cover the operating and maintenance. Parks Bureau has relied on the approval of ongoing additional operation and maintenance funds from the General Fund to care for and maintain new park assets and facilities from construction projects in the past, consistent with City financial policies. Beginning in FY 2021-22, Parks Bureau is funding additional operations and maintenance with Local Option Levy and this plan estimates that $12.2 million will have been spent through the fifth year of the levy, and with a successor, at the tenth year cumulative levy-funded operations and maintenance spending will have exceeded $56 million. Risks to the Forecast and Confidence Level The most significant risks inherent in this plan are related to increased inflationary pressures, growing OMF inter-agency costs, and the expiration of the Parks Levy at the close of FY 2025-26 and the amount of resources a successor funding stream will provide. Inflation is a moderate risk, which impacts the point at which Parks Levy resources are exhausted, which is the principal risk to the forecast. The potential for future General Fund discretionary resource reduction exists and is not included in the model.
FY 2026-30 Requested Budget Five Year Plan Subject to the $23 million of ongoing expense reduction packages, the forecast is based on the underlying full build-out of enhanced service levels the City committed to provide with use of the Parks Levy. These included significant increases in staffing levels, as well as additional workspace, vehicles and other equipment. The inflationary trends in each of these has increased substantially since 2020, and all have become more difficult to predict than was the case prior to the pandemic. Health care insurance benefits are under negotiation with the carrier, but increased inflation assumptions have tempered the risk within the forecast The forecast includes no assumptions for wage increases for the three collective bargaining agreements currently under bargaining, which represents a risk. The growth rate of the Parks Levy resource is constrained by property tax increase limitations that were enacted by Oregon ballot measures 5 and 50. The impact of reduced real market valuation in downtown properties has decreased the forecast for Parks Levy receipts. This is on top of the fact that growth normally is limited to 3% to 4% in the prior economic condition, and that was substantially lower than the currently projected cost increases for required labor, materials, and services. The sizing of operational expense is primarily dependent on the level of resource that would be provided by a successor to the 2020 Parks Levy. PP&R's FY 2025-26 Requested Budget must be considered within a multi-year context. Long term, PP&R is committed to financial sustainability that aligns equitable service and funding levels. As part of that commitment, Bureau leadership remains focused on the Sustainable Future Program to identify gaps between identified community service needs and current funding levels, and to provide City Council with options to either adjust and reduce services, or pursue support for additional funding measures. Combined, these impacts will continue to require a multi-year operating budget gap-closing effort.
FY 2026-30 Requested Budget Five Year Plan
FY 2026-30 Requested Budget Five Year Plan Fee Study PP&R reviewed and revised the Cost Recovery Policy in FY 2022-23. It will serve as one of the guiding elements for revisions to the fee development process across all programs. It will balance comprehensive cost recovery against the impact of imposing or increasing fees on businesses and economically at-risk populations, to the achievement of the bureau’s mission and goals, and to meeting the commitments made to voters in the 2020 Parks Levy. PP&R is updating the methodology it will use to develop fees for services. It will incorporate cost-of-service principals, benchmark pricing, and equity considerations, and it will rely upon guidance from the updated cost recovery policy. A consultant was engaged in late FY 2022-23 to perform a competitive market analysis of fees charged for similar services from comparable agencies to serve as a benchmark. Additional internal work has been directed to further develop PP&R’s cost allocation model and cost-of- service based fee development process. These elements will assist PP&R to redefine cost pools, the cost allocation methodology and indirect cost model, and to meet the requirements of Binding City Policy FIN 2.06 – Revenue. A comprehensive cost-of-service analysis at the program and sub-program level has been performed and is included in the table, below. It includes those programs that provide direct services for which fees are charged, which include the application of indirect costs of those supporting programs which do not provide direct services. It includes the program revenue associated with the direct service programs in both dollars and percent of direct cost.
FY 2026-30 Requested Budget Five Year Plan FY2022-23 Year End Actuals Direct Cost Recovery Supra- Program Net as % Sub-Program Name Expense Revenue Net Expense Program Name Exp PRCY Community 1,444,654 - 1,444,654 0.0% PRCYVS Visitor Services 1,444,654 - 1,444,654 0.0% Visitor Services General 1,444,654 - 1,444,654 0.0% PRRE Recreation 45,041,703 24,257,440 20,784,263 53.9% PRREAQ Aquatics 7,046,522 1,936,212 5,110,310 27.5% Aquatics 197,950 197,950 0.0% Aquatics General 6,571,074 1,476,584 5,094,489 22.5% Aquatics Swim Instruction 277,498 459,627 (182,129) 165.6% PRREAR Arts 2,388,732 1,028,116 1,360,616 43.0% Arts 138,981 138,981 0.0% Arts General 950,445 132,529 817,917 13.9% Clay Arts 152,127 130,785 21,342 86.0% Dance 68,304 54,396 13,908 79.6% Hobbies and Crafts 81,157 68,862 12,295 84.9% Metal Arts 107,669 92,237 15,432 85.7% Music 653,299 334,215 319,084 51.2% Performing Arts 7,159 7,159 0.0% Theater 85,847 51,902 33,944 60.5% Visual Arts 143,744 163,191 (19,446) 113.5% PRRECS Community and Socialization 9,518,404 2,353,818 7,164,587 24.7% After School Enrichment Programs 2,863,083 430,346 2,432,738 15.0% Camps 1,349,365 435,475 913,891 32.3% Community and Socialization 633,023 110,950 522,073 17.5% Community and Socialization General 1,255,957 375,323 880,634 29.9% Environmental Education 1,109,159 123,121 986,038 11.1% Lifelong Learning 2,166 2,166 - 100.0% Movies in Parks 110,373 110,373 0.0% Preschool 961,780 482,545 479,235 50.2% Recreation Operations 112,575 108,428 4,147 96.3% Rentals 278,126 264,441 13,685 95.1% Social 138,007 1,025 136,982 0.7% Summer Concerts 203,052 203,052 0.0% Summer Playgrounds 501,738 20,000 481,738 4.0% PRREOP Recreation Facility Operations 8,204,829 129,313 8,075,516 1.6% Recreation Facility Operations 8,204,829 129,313 8,075,516 1.6% PRRESG Sports and Games 17,883,216 18,809,982 (926,765) 105.2% Fitness 1,014,638 1,142,848 (128,210) 112.6% Golf 11,511,732 14,099,928 (2,588,196) 122.5% Portland International Raceway 1,530,407 2,231,270 (700,863) 145.8% Skating 11,089 11,737 (648) 105.8% Sports and Games 48,341 48,341 0.0% Sports and Games General 3,733,749 1,325,802 2,407,947 35.5% Team Sports 33,260 (1,603) 34,863 -4.8% PRUF Urban Forestry 7,107,148 2,188,846 4,918,302 30.8% PRUFSO Urban Forestry Science and Outreach 1,090,478 2,921 1,087,557 0.3% Urban Forestry Science and Outreach 669,485 2,921 666,564 0.4% Urban Forestry Science and Policy 420,993 420,993 0.0% PRUFTM Tree Maintenance 6,016,671 2,185,925 3,830,745 36.3% Tree Maintenance 3,865,123 245,275 3,619,847 6.3% Tree Planting 2,151,548 1,940,650 210,898 90.2% Grand Total 53,593,505 26,446,286 27,147,219 49.3%
FY 2026-30 Requested Budget Five Year Plan Plan Overview – Golf Fund The five-year financial forecast has been updated to inform the development of the FY 2025-26 budget for the Golf program. The Golf Fund is an enterprise fund which maintains operations and capital reserves for the five public golf courses operated by Portland Parks & Recreation. It funds the program’s operating costs and establishes reserves for capital maintenance requirements with revenue from user fees paid by public golfers. It does not receive or use any tax dollars. Revenue Assumptions The five golf course facilities and equipment are owned by the City of Portland, and the staff are city employees. The courses managed and operated under a pair of third-party management concession agreements. The program relies to a degree on the expertise of those professional management companies in developing revenue estimates. Revenue in excess of current costs is retained in operating contingency. The reserve in the golf fund supports future capital projects and helps mitigate negative impacts to revenue, such as poor weather. In addition to an operating contingency, a distinct sub-fund maintains a reserve for capital major maintenance, such as facility or irrigation system renovations or replacements. Expenditure Assumptions Expenditure assumptions for operations in the base budget align with those of other Parks & Recreation programs. Contingency budgeted within the operating portion of the fund is intended to allow the program to sustain one year of poor financial performance out of three. The development of reserves for future major maintenance requirements anticipates that irrigation systems and course facilities. Risks to the Forecast and Confidence Level The three most significant risks inherent in this plan are related to increased inflationary pressures in operations, decreased revenue due to low demand, and failure of critical infrastructure required to maintain operations. The program is exposed to all of the inflation risks associated with all of Parks & Recreation operations. As an outdoor sport, golf programs are susceptible to the risk of an under-performing financially due to persistent poor weather conditions, particularly during high-demand times such as weekends. The program maintains an operating contingency intended to allow for one “bad year” out of three, a rubric based on the program’s actual experience. Like much of the City’s capital infrastructure, the Golf program’s aging infrastructure has substantial major maintenance requirements. The Fund has a growing capital reserve to address it, but there is a risk that it could be insufficient to respond to catastrophic failure of an expensive component, such as an irrigation system.
FY 2026-30 Requested Budget Five Year Plan
FY 2026-30 Requested Budget Five Year Plan Plan Overview – Portland International Raceway Fund The five-year financial forecast has been updated to inform the development of the FY 2025-26 budget. The Portland International Raceway (PIR) Fund is an enterprise fund which maintains operations and capital reserves for the motorsport facility located in West Delta Park, just south of the Columbia River near the Portsmouth, Kenton, and Piedmont neighborhoods. The program is operated by Portland Parks & Recreation. It funds the program’s operating costs and establishes reserves for capital maintenance requirements with revenue from user fees paid by event attendees. It does not receive or use any tax dollars. Revenue Assumptions Revenue assumptions are based on estimates for scheduled local programming as well for major events that will be hosted at PIR, such as IndyCar series, Formula E, or NASCAR races. Expenditure Assumptions Expenditure assumptions in the base budget align with those of other Parks & Recreation programs. The development of reserves is intended to provide for for future major maintenance requirements. The fund also maintains an expense appropriation specific to programming within the neighborhoods adjacent to PIR. Risks to the Forecast and Confidence Level The most significant risks inherent in this plan are related to increased inflationary pressures, the availability of major events to host and generate revenue, and that major maintenance reserves are insufficient to maintain the program’s capital infrastructure.
FY 2026-30 Requested Budget Five Year Plan
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