Beaverton City Council Work Session on Financial Recovery Plan – September 9, 2025
Beaverton City Council Work Session on Financial Recovery Plan
On September 9, 2025, the Beaverton City Council held a work session to discuss the city's fiscal sustainability and a potential financial recovery plan. The meeting, which began at 7:00 PM, featured presentations from the city manager and assistant city manager on property tax limitations, the fiscal sustainability action plan, expense reductions, and revenue generation options. Council members asked questions and shared perspectives on the path forward, including the possibility of a local option levy in May 2026. No votes were taken.
Discussion Items
- Property Tax Context: Assistant City Manager Elizabeth explained that property taxes make up 54% of the general fund revenue and are constrained by Oregon’s Measures 5 and 50. The city receives 21 cents of every dollar of property tax. Assessed values are not reset to market value upon sale; residential properties have an average assessed value of 55% of real market value, multifamily 37%, and commercial/industrial 65%. Compression (the $10 per $1,000 real market value limit) currently costs the city approximately $87,000 annually.
- Fiscal Sustainability Action Plan: The city manager presented the status of the plan adopted in FY22-23. Revenue enhancements include adjusting property tax to the cap (generated $4.2 million), a fee study (estimated $1 million, likely lower), and a future operating levy (originally estimated at $3.3 million but expected to be significantly higher due to rising costs). The transportation utility fee, estimated at $6.8 million, is now projected at $9–10 million and will be discussed on September 16.
- Expenditure Reductions: The city has reduced general fund FTEs from 380 in FY22 to 340 currently. The city achieved 95% of its expense reduction target ($9 million out of $9.5 million). Examples include $2.5 million in materials/supplies savings (target $1 million) and organizational assessments. Further cuts would directly impact services; eliminating a $10 million deficit through personnel cuts alone would require 42 fully general-funded FTEs or 75 partially funded FTEs—equivalent to nearly all staff in City Hall.
- Revenue Options: Staff outlined tools available to the council: fees (e.g., public safety fee, adopted via resolution), a local option levy (requires voter approval), business license fee study underway, and increasing the transient lodging tax (currently 4%, with 70% required for tourist promotion and 30% for general services, but much of that is dedicated to the Patricia Research Center for the Arts). For the levy, a May 2026 ballot would allow revenue by July 2027, whereas November 2026 would delay revenue until November 2027 and require interim budget adjustments. However, the Tualatin Hills Park and Recreation District plans a bond renewal in May 2026, creating potential voter competition.
- Council Reactions:
- Counselor Duggar requested analysis of essential services, peer city comparisons, and polling on public appetite. He emphasized the need to explore revenue options and understand what neighboring cities are doing.
- Counselor Hartmeyer Prigg supported a May 2026 levy path, noting that expense reductions have been as aggressive as possible and further cuts would harm services. She stressed the importance of timing to avoid losing another year of revenue.
- Counselor Tibnon praised the staff’s work on efficiencies, including AI tools that save staff time, and asked that all options—even unattractive ones—be placed on the table for transparent deliberation.
- Counselor Teter asked about raising the transient lodging tax to offset general fund costs for arts and other services. He also favored a May levy to align with city council elections and drive voter turnout.
- Counselor Kimmy argued that the structural deficit cannot be solved by revenue alone; he called for identifying non-essential services to cut, warning that a levy only covers a portion of the shortfall and that without service reductions, the city will deplete reserves by mid-2026.
- Mayor’s Remarks: The mayor encouraged council to document all ideas and use one-on-one time with the city manager to vet them. He stressed the need for a unified front and urged council members to call county commissioners about the library levy, noting that the county does not see the value of services like the bookmobile. He also clarified that the city’s base property tax rate is already higher than some peer cities, making comparisons difficult.
Key Outcomes
- No formal votes or decisions were made; this was a discussion-only work session.
- Staff will refine the general fund forecast and bring a follow-up presentation to council in October 2025 for direction on the fiscal sustainability action plan.
- The council is likely to consider a local option levy on the May 2026 ballot, pending further analysis and public engagement (including a community survey and potential polling).
- The city will continue to explore other revenue tools (e.g., business license fee restructuring, TLT increase) and expense efficiencies (e.g., fleet study, shared insurance pools).
- Council will prepare for upcoming decisions on the transportation utility fee (September 16) and engage with county officials on the library levy.
Meeting Transcript
Counselor Duggar. Here. Councilor Hart, Mayor Prigg here. Counselor Kimmy. Here. Counselor Teeter. Here. Counselor Tivnon. Here. Mayor Beatty. Here. And I have the Councillor Hassanus absent tonight. Correct. All right. Well, we have one gigantic agenda item for tonight. I want to thank the city counselors for prioritizing this meeting. As you know, it is the Lord's work to get the seven of us on a schedule that makes sense. I know the city managers team had to go out, I think, five times with a doodle poll to make this happen. So I know Councillor Kimmy is very tired, so we will get him some coffee. So one upgrade is seltzer. And I think tonight what we have ahead of us is the start of a really tough conversation of where we are with our finances. We've been having versions of this conversation through four budgets. Our first year we had, as many people know, we had ARPA funds that backfilled a lot of our cuts, so they were not as substantial as they are now. It is structural for those that are watching. Structural means that what we've been doing to patch the budget, which is save money here, do some stuff there, doesn't fix the long-term inequities that measure 5 and 50 created, in which our our revenue grows 3% a year, but our employees and their family and dignity grow much larger than that. The council has made years of tough decisions to get here, and now we're at a point where there's not a lot of cutting left to be had. The city manager and the assistant city manager are gonna go over tonight where we are as we discuss uh the financial recovery plan. So I would encourage the council. I've spent a lot of time looking at the budget, a lot of time looking at the framework to ask the questions that you have. Our hope is that we don't we leave tonight on the same page and the same piece of understanding about the hard decisions that are ahead of us that we are equipped to talk to our community in a way. I mean, I remember right before the last budget committee, KATU was outside interviewing random people walking by City Hall about what they thought about Beaverton's um budget situation. And of course, with no context, everyone just simply says they need to manage their money better. This is not a money management issue. This is about a group of seven community members elected to represent their voice in the building to make hard choices. What we have valued in my time as the mayor is our staff. And uh as best as we can keeping up with inflations, and we've not been able to give the prey raises that we've wanted to. We've had to make hard decisions about our PERS liability versus our street fund. So I think this council has done a great job as the stewards of the funds in a system that was not designed to maintain what is happening to us right now. So with that, great opening of uh doom and gloom. I'm gonna hand it over to the city manager. Well, thank you, Mayor. Um, if we can get the slide deck up, I'll go over briefly uh what we'd like to achieve with tonight's discussion. We can go to the next slide that'll show the agenda for this evening. Uh so this is a follow-up from the 2526 budget process in which we um told the council that we would come back through a work session and really dive into our fiscal recovery and approaches to achieve fiscal sustainability for the long haul. Uh Elizabeth and I are gonna be covering um a variety of content tonight. Uh the four areas I think that are the most important to pay attention to is really the challenges to the general fund, understanding the fiscal sustainability plan that the council approved and where we're at on that and the accomplishments that we've made, and then where we need to go from there. Um expense reductions and revenue generation options. We want to know um what's in your toolbox uh that you can use moving forward, and then finally wrapping up with next steps in terms of where do we go from here. There are three basic things that we want you to get out of tonight's conversation. One is to understand the progress that we've made to date.
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