Meeting to order.

Will the recorder please call the roll?

Councillor Duggar.

I am here.

Councillor Hartmeyer Prigg?

Here.

Councillor Hassan.

Here.

Kimmy.

Here.

Counselor Teeter?

Here.

Counselor Tivnon?

Here.

Mayor Beatty?

Here.

Okay, tonight we have a short but intense agenda.

We have a few items on consent.

A first reading and then a work session on our fiscal recovery follow-up.

So consent agenda, please.

And and Mayor would like to pull item 3.5 from the consent agenda.

Okay.

Second.

It's been moved by Councillor Duggar, seconded by Councillor Hussen.

Any discussion on tonight's uh consent.

Seeing none.

Uh will the recorder call the roll.

Counselor Duggar.

Yes.

Counselor Hartmayer Prigg?

Yes.

Counselor Husson?

Yes.

Councillor Kimmy?

Yes.

Counselor Teeter?

Yes.

Counselor Tivnon?

Yes.

Mayor Beatty.

Yes.

All right, City Manager.

Um, I will have Megan Thornton go over some minor changes that we have to Section D of this policy item.

Thank you.

Thank you.

Good evening, Mayor and Council.

Um, there are a couple of administrative fixes to the policy before you.

So you have in front of you a revised policy that's clean, and then also one that shows the red lines.

There are two changes.

You will see that there's an addition that specifies and makes sure that this is consistent with other city policies that expenditures that violate the policy or the responsibility of the city official.

And secondly, it clarifies that this is only compensation for purposes of ethics provision in ORS 244040 and not for the purposes of the city charter or the Beaverton Code.

To clarify, because this does not apply to the city charter, it can be applied right away.

Is that what you're saying?

No, that is not what I'm saying.

I'm just saying that this policy is very, very limited to only deal with the ethics issue and only the ethics issue that we are required to define compensation under ORS 244040.

We can talk about implementation of the policy at another time, but it's not covered in the policy itself.

So why did you add that section then?

Clarifying that it was specifically just to be clear that there is there's no requirement that it be defined as compensation under the charter and that this is specific and solely for the purpose of the ethics laws.

Is there a agenda bill?

Is it the same one?

No, a different one.

It's um 25174.

It is too uh make a motion we approve the revised permissible expenditure policy as outlined in 25174.

Second.

It's been moved by Counselor Duggar and seconded by Councillor Husson.

Any more discussion on this agenda item.

Seeing none, will the recorder call the roll?

Counselor Duggar?

Yes.

Counselor Hartmeyer Prigg?

Yes.

Counselor Husson?

Yes.

Counselor Kimmy.

Yes.

Councillor Teter?

Yes.

Counselor Tivnon?

Yes.

Mayor Beatty.

Yes.

Seven, yes, zero no.

The next item on the agenda is the first reading of an ordinance on November 18th, 2025, during the regularly scheduled city council meeting.

A public hearing will be held regarding ordinance amending the Beaverton Comprehensive Plan Land Use Map to adopt boundaries for Raleigh Hill Town Center and Sunset Town Center.

LU42025-00608 backslash CPTA42025-00718.

Now the next item on the agenda is a work session regarding our fiscal recovery follow-up, and that will be led by the city manager, the assistant city manager to our left, and maybe the one banished to the right side of the table.

Dealer's choice.

Thank you.

Well, thank you, Mayor.

We'll wait to get this slide deck up.

And while we're waiting, just a reminder.

So as council's aware, we had a work session on September 9th, and we had an opportunity to provide you an update of our fiscal sustainability plan and the work completed to date.

Today's a continuation of that conversation.

And if we can move to the next slide, I'll just remind you of what we'll be talking about tonight.

We'll present you some revenue research, which council directed along with what we are proposing for the action plan moving forward.

Short-term actions specifically would like to focus on this evening along with timeline and next steps for you.

Next slide.

So there's four things that we'd like to accomplish with the council by the end of this meeting is one, we'd like you to understand the various tools that you have in your tool belt.

We'd like you to consider options for short-term actions, including any type of revenue generation and other strategies that'll help us balance the budget.

Of course, we want you to ask questions and last feedback to help us refine proposals for short-term action, which will come before you remember.

And on the next slide is your policy questions.

These are going to stem around short-term revenue actions.

So we really are looking for direction to refine some of the options that'll be presented to you this evening.

Short-term balancing, um, excuse me, budget balancing strategies.

So really feedback on how we propose to adjust reserve targets, and then also we'll go through a little bit of an exercise with you on service prioritization.

You'll also have an opportunity to talk about this more in detail at your upcoming retreat.

And then lastly, a medium and short-term plan, we'd like feedback on some proposed actions that you're going to present or present to you for your consideration, but we do not plan on getting to those all about the short-term actions for right now.

So with that, I will turn it over to Elizabeth Coffey to run you through the revenue research.

All right.

Uh good evening, Mayor and Council.

And so uh bear with me.

I have a number of slides to get through tonight.

Um, and we're gonna start off with uh revenue research.

So we're gonna talk um a little bit about some of the revenue strategies that cities are deploying statewide to address their own financial challenges because Beaverton is definitely not alone in this challenge.

Um next slide, please.

And so um we talked um a lot at the September 9th council work session about how Oregon's constitution limits the annual growth of assessed property um values, which then restricts how much property tax revenue cities like Beaverton can generate, and then that results in a structural deficit because our expenses grow higher than our revenue.

And so when you look at um seven similarly sized cities across the state, um including Beaverton, uh, Bend, Eugene, Gresham, Hillsboro, Salem, and Medford, Medford, um, what you find is that six out of the seven cities are considering or have passed new revenue to address the impacts of these um property tax limitations.

Um and the one that's um not currently on the list is Hillsboro because they have a longtime local levy, and they also have a mix of payers that have an industrial, um high industrial um value.

And so um when we do that environmental scan, um some of the tools that um other cities are using to address their deficits, which range from approximately six million dollars um to 15 million dollars.

Um they're looking at things like special districts, which we certainly have an abundance of here in Beaverton already.

Um they're considering uh public safety and transportation fees, which we'll talk a little bit more about later in this presentation.

Um they are indexing their fees um to uh more adequately cover the growth of their expenses.

And uh like Beaverton, they've also used one-time funds to address their deficits.

Um they're also deploying reduction strategies that include things like hiring freezes and um FTE reductions.

And so uh next slide, please.

So um as we looked at what the other six similarly sized cities are doing to address their financial challenges, there's three clear strategies that emerge that we want to highlight um in these slides here.

And there's really no right or wrong way to approach how we deal with financial sustainability.

And as you'll see, some cities choose to focus um on taxes, um, others focus more on fees, and then most cities focus on a combination of both approaches, and there's gonna be pros and cons to each approach.

And so um, we'll start first with um a city that's focusing a lot on taxes.

And I'll note that you'll see Beaverton here on this slide, and I'm not saying that that's Beaverton's strategy.

Um, it's really more of our current state and our council direction will determine our strategy going forward.

It's really more of our current state and our council direction will determine our strategy going forward.

And so but you can see here that in Beaverton, we do have a geo bond for our public safety center.

And we do have the property tax rate of approximately $4.78.

I would note that that might be a little bit misleading that because of the various special districts that we have here in Beaverton, the impact to residents is actually much higher than our own property tax rate.

So excuse me, when we look at the city of Eugene, they have really focused on taxes as they've dealt with their financial sustainability plan.

So they have two levies, one for libraries, one for parks, they have two bonds, one for street reconstruction, and one for parks capital needs.

Under utility fees, you'll see that they have none with an asterisk.

So the pro to this approach of kind of focusing on taxes is that for the most part, at least when it comes to the levies and the bonds and the gas tax, voters are approving the investments that they're willing to make in city services.

So you can assume there's some level of buy-in for what they're paying for.

Levies do offer a stable revenue source over five years for cities, as does a payroll tax, and provide certainty for residents during that time period as well.

The cons would be that it is dependent upon voter approval.

And for the levies, the annual growth is limited due to the property tax limitations.

At the time that the payroll tax was implemented, they did face significant opposition, so it was a long-term effort to get that up and running.

And so and then there's also not a ready assistance program available for taxes versus fee collection.

Next slide, please.

So in the city of Medford, they have taken a different approach.

They have a permanent rate of five dollars and twenty-nine cents per thousand assessed value.

And you can see here on this slide that they have taken the approach of really focusing on fees.

And so they have a public safety fee, they have a parks fee, and they have a street maintenance or transportation fee.

So all told per month for single family residents that totals um third approximately $32 per month that they collect for fees to provide city services.

And the pros to this approach are that it is a highly flexible approach.

It can be adjusted anytime that city council wants to accommodate financial needs or to make different policy decisions.

Council can choose to adopt an annual escalator that better reflects the actual growth of expenses.

And then cities can choose to offer an assistance program to offset the impact to vulnerable residents.

Although when you do that, you do need to fold that into the overall rate package, and it can make the rate slightly higher.

The con is that similar to the pro, it is highly flexible.

And so these are fees that can be repealed anytime by council.

And so when elected bodies change and if they have different policy perspectives, they could choose to take a different path, and that can lead to some instability in the revenue system.

Fees do need to have a legal nexus in terms of you know what they're being collected for and how they're collected.

And they can, as we saw in the city of Eugene, they can be referred by voters if they're not popular and voters feel like they want to be able to vote on them.

Next slide, please.

Maybe a little unorthodox, but we have some questions, and I just it's hard for me in this capacity when we use these, because that's how I know if there's questions from the council.

But go ahead, Councilor Hartmeyer, Craig.

Yeah, thanks, Elizabeth.

I was just curious on the payroll tax, and it's like it's like half a penny or whatever on Eugene, sorry, on the slide before.

How do how do you even assess?

Like how do you is that like they get half a penny per paycheck from the city?

You know, like I'm I don't understand how it would work from a city implementation.

Yeah, I'm not real familiar with the mechanism of how what it's assessed on.

Um I know that it's assessed, you know, through the employer and they collect it from the employee paychecks, but um, I think you'll see later on that at this moment we weren't recommending that as a potential tool to move forward.

So I'll have to admit I haven't researched that into much detail yet.

Thank you.

Okay.

Um and so then um most of the um other six cities focus on a combination of taxes and fees.

And so you can see here um that uh Bend has a levy and a bond and a transportation utility fee.

Um Gresham has a levy for police and fire, and then a fee for public safety and parks.

Hillsboro has a police fire and parks levy and a transportation utility fee.

And uh Salem has a levy that recently passed for libraries, parks, recreation, and their senior center, um, as well as a bond, and then they have a city operations fee for general city services.

And so you can see um it's a little bit all over the map in terms of the um property tax rate and then the um fees that are collected by these uh jurisdictions.

And so the pros of this approach is that um generally speaking, a diverse set of revenue tools is going to provide a healthier financial system because you'll you know, if one tool fails, you have a backup tool, and um it does kind of spread the impact um a little bit across various customer types.

Um the cons can be that there is you know potential resident backlash um over numerous uh revenue tools, and so it can require some additional outreach and education to explain why that's needed.

Next slide, please.

Um so now we're gonna talk a little bit more about various revenue tool options.

And so at the last council work session, um there was a desire to discuss um some of the various revenue tools that are being used in in a little bit more detail.

Um and I would say that there's there's a number of different uh revenue tools that are out there, and so what we focused on is what are the ones that are most commonly being used by jurisdictions across the state to address their deficit situations, and what we are doing here is categorizing them by most viable for the short term, and so these would be things that um could that are within the city's authority that could potentially generate income within one to two years of implementation.

Um we have also um categorized them by cons maybe we might want to consider them for the medium or long term, and so medium term are ones that are also within the city authority that could be generating revenue within two to five years.

Um, and then um long-term ones are also ones that um currently are beyond city authority, and so these are things um that might require substantial changes to state law or actions by other governmental um entities.

And then we've also noted um a category of revenue options that we they're not recommended for consideration at this time.

And so we'll talk a little bit through each um of these tools, um, starting with the next slide, please.

So we talked a little bit about local option levies at the last council work session regarding financial sustainability.

Um that is one that is on the council's uh financial sustainability action plan at the moment.

And so um, this is as a reminder an additional five-year property tax for operating expenses.

Um this is compatible with the city's budget needs.

Um it has the potential to generate moderate to high revenue, and it does provide stability for five years that it's in effect.

Uh who pays, that's property owners and the um administrative ease.

Uh most of the work is really going into the development of the measure, um, the communications and outreach um campaign.

The implementation itself is fairly straightforward as the county collects property taxes.

And so the timeline 2026 options as an example, um, a May 2026 vote, um, we would receive funding in November of 2026.

For a November 26 vote, we would receive funding in November of 2027.

And um council would refer this for public vote.

So in this scenario, if we waited until November, we would have a one-year funding gap in which we would still have to make reductions even when voters are voting to move it forward.

So the difference between May and November is an entire year of funding.

That's correct.

And I would also note that when we look at November of 2026 or for example, May of 2027, in terms of when we receive the revenue, no difference, right?

And so the difference would be more, you know, what's the right timing politically for the measure.

Next slide, please.

Probably no surprise given the slides we just looked at is some sort of monthly service fee.

And so I'm gonna spend a little more time talking about this fee because we haven't talked about that much with council.

This is a fee established for city services and collected on the utility bill.

And the reason that it's collected on the utility bill is that it's a bill that's already in existence.

So it really streamlines our ability to collect.

We already have that collection mechanism.

We don't have to purchase a new billing software, we don't have to hire additional staff to set up a whole new collection mechanism like we would for a tax, for example.

Um cities have used these for as you just saw, for transportation, public safety, general city services, um, and even for things like uh streetlight replacement.

Um this does have, and I would mention also that the um the structure really varies.

Um and that's a that'll be a key policy decision if we decide to pursue this.

Um so some cities have flat fees that are the same across customer types.

So whether you're a large business or a small business or a single family homeowner or a multifamily, it could be the same fee.

Um other cities have chosen to tier the fees by customer class, so that for example, a single family might pay a different fee than multifamily, et cetera.

Um, and sometimes they are scaled by the size of the development.

So the larger the development, the larger the fee.

Um I would also note too that there's um something to be considered in terms of that nexus to service and being able to justify why you're structuring the fee the way you're structuring it.

And so, for example, for our transportation um utility fee that we've been discussing, that really relies on the number of trips and uh uses that as a calculation to determine the fee, and then that fee considers residential customers as a single unit, multiplies that fee by that, but then for commercial looks at the number of employees to determine the units and multiplies it by that.

So, all very long way to say, there's a variety of different ways you can structure the revenue, and that's a key policy decision.

I would also note that the timeline that you see here on the screen is really dependent upon what structure we go with.

Um if we are going to go with a structure where we can use data that we already collect through our current utility billing system, like the size of the meter or the number of sewer hookups.

Um, that is a relatively straightforward timeline, six months to a year to research the policy options and provide those to council, go through the communications and outreach, et cetera.

If we decided to go a different direction and we needed to collect data that we don't currently have, then that is not that it's not impossible.

It's just it would take longer for us to actually go out, collect that data and adjust our billing system accordingly.

Um in terms of who pays this particular fee, all utility customers would pay.

We do have an existing assistance program that's available for low-income residents.

Um then council has the ability to adopt this via ordinance and resolution.

And we'll talk a little bit more about this later in this presentation, too.

Um moving on to medium and long-term options.

Um lots of cities are looking at franchise fees and licenses, and those are fees on utility service providers who are utilizing the city's right-of way.

Often those are passed on to the customers, and so customers might see something on their electricity bill that says you know, City of Beaverton fee.

Um, and that can have potentially a moderate impact on the city's financial situation.

Um we charge uh about 5% right now for those, and so for every 1% increase, it would be roughly $1 million.

And so, as mentioned, this is technically assessed to utility providers, but it is passed on to utility customers.

It's relatively straightforward to administer.

We already have this in place, and it would just be an increase.

And the timeline therefore is pretty short to implement it, but potentially needing more time for outreach and also to consider the impact on residents as well.

And this is something that council can has authority to adopt directly.

Next slide, please.

This is a tax on overnight lodging, as you know.

Our TLT is 4%.

So it has a fairly moderate revenue potential.

As an example, a 1% increase is approximately 400,000.

It's paid by visitors staying in lodging.

Pretty straightforward from an administrative perspective.

I'll note under the timeline that currently we have funds that are being used in part to pay for some bonds that were issued in 2020 for the construction of the RECER.

And that bond will be paid off in 2040.

So that's just a piece of data for you to know and consider.

And this one seems question mark.

But the hoteliers put it as a tax, they don't put it as a fee.

It's their language.

That's when we adopted it the first time.

Okay.

All right.

Sorry.

You're fine.

Can you can you tell me why this is medium term?

And if it's easy to implement and we generates 400,000.

It seems like it maybe should fit into short term unless they're not.

Yeah, I mean, that's definitely something that we can talk about and consider moving forward.

I mean, there's a certain staggering out of some of the revenue tools, also just from a staff workload perspective as well.

But if it's some this is one of the reasons we wanted to bring this to council today, right?

To see do we have these categorized correctly?

Um is this in the right spot?

If there's something that folks want to move up or want to postpone, we can certainly have that discussion today.

And then again, I'm not sure if I mentioned, but council has the authority to adopt this via ordinance.

So moving on to the next slide, please.

Um, so there are revenue tools other cities are considering or have implemented that we're not recommending at this time.

And generally the reason for that could be that there might not be significant revenue raising opportunity.

Um it could also be that administration might be costly and difficult or time consuming to set up and kind of eat into the revenue that's being raised.

Um we might also anticipate significant opposition to the implementation.

And so I would say just because we're not recommending them at this particular moment in time, subject to council direction, doesn't mean that we wouldn't consider them at some point in the future.

We're just looking at the deficit situation that we're in now and what tools are most appropriate to address that.

And so lots of cities have general obligation bonds.

Beaverton is no exception to that, and um, we're not recommending that for this particular deficit because it is appropriate for capital and not for operations.

Um but that's a great example of something that we may consider down the road.

Um payroll taxes as we talked about a little bit earlier, um, that tax that's um based on wages.

Um we're not recommending that at this time due to the significant administrative cost and time to implement.

Um unlike income taxes, um, payroll taxes are withheld by employers from employees' paychecks and then remitted to local governments.

They can fund um various local services.

Um they have faced significant opposition elsewhere in the state.

Um I know that Salem did try to implement that and was voted down.

Um, and so if we did pursue, I would suggest it would be in medium in the medium term bucket due to this need for significant outreach and time to really develop a new collections program.

The other tool that we're not recommending at this time is the targeted sales tax, and so cities can impose a targeted sales tax for specific goods or services.

And so cities can impose a targeted sales tax for specific goods or services.

This could be also things like admissions to theater or concert events.

And so these taxes often focus on items that capture significant contributions from tourists and non-residents.

So as an example, tourist destinations like the City of Ashland and Cannon Beach both have a 5% tax on all prepared food and beverages, including foods sold by restaurants.

At one time, the City of Eugene had identified this as a potential tool as well as an admissions tax, but they haven't moved forward with either of those options yet.

We haven't recommended this at this time, primarily because of concerns about the impacts that this could have on our economic development efforts and our local business community.

But I would know that it would also require again significant administration costs to set up a tax collection program.

One thing that a couple of other jurisdictions are almost also pursuing potentially long term are payments in lieu of taxes.

And so that is a payment that's made by a tax exempt entity like a government or nonprofit organization to a city to compensate them for some of the cost of providing municipal services to that community.

And so these payments could be mandated through legislation, but they're usually voluntary agreements between the jurisdiction and the organization.

And so when you look at the City of Eugene and Salem's long-term revenue reports, those are tools that they have identified long-term interest in pursuing.

And so I would note one key reason that we are not recommending this option at this time is what is different about Salem and Eugene is that they already have multiple revenue tools in place that they've established to help address their deficit situation.

And then you know the makeup of those cities is a little bit different as well.

And so an effort like this would really take several years to implement due to either having to get it legislated or having voluntary agreements.

So moving on to the next slide.

So now we're going to talk through some potential adjustments to the finance fiscal sustainability action plan.

Next slide, please.

And the reason that we're talking about that is that significant progress has been made on the current fiscal sustainability action plan.

And so, as we talked about at the last council work session, I want to highlight again that we've made $9 million in expense reductions over the last couple of years.

We've reduced 32 FTE positions.

Property taxes have been raised to the full capacity, and the fee study has been completed.

And really the key things that have not been done but are in progress is really exploring additional revenue tools.

And so you know, exploring a future local option levy or a fee, and then exploring that transportation utility fee.

Next slide, please.

So our recommendation as we think about the plan going forward.

It kind of helps organize and prioritize the work that we're doing.

So we would recommend updating the plan with new actions for each of those categories and really focus a lot on the short term, as Jenny mentioned today.

That's what we'll spend most of our time talking about.

And then would recommend that the plan really is intended to be a living document to be able to respond to changing circumstances or changing policy direction.

So we do want to review and update that plan annually.

So here is our proposal pending council feedback today.

And so for the short term, as I mentioned, we do have discussions around the transportation utility fee are in progress.

We will embark on a business license fee study later this year and report back to council on the findings on that.

We are in the middle of a soft hiring freeze where we're being intentional about the positions that we fill.

And then we want to discuss today a potential local option levy and or some sort of monthly fee.

And then we also do want to discuss some budget balancing strategies, which would include service prioritization and our reserve targets.

On the medium-term list, we have considered transient lodging tax increase as well as a franchise fee increase.

We'd suggest a library fund focus given recent discussions around library funding have highlighted the need for long term solutions for that program.

And then we would like to look at healthcare designs and future cost sharing options.

For the long term, of course, we're always interested in property tax reform.

I know that's ongoing work.

And then there was a suggestion at the last council work session to consider insurance pooling, and we'd love to look into that long term as well.

So we're gonna uh hone in now on short-term actions and we'll start with some revenue options.

Next slide, please.

And so what I'd like to focus in on these next couple slides is really give council an idea of the policy decisions that would be in front of you for each revenue tool that you might pursue so that you have an idea of what work you have kind of on your plate, and then we'll also go a little bit over what the next steps are from a staff perspective so that you have an idea of the work that it would take to kind of come back to you with more information.

And again, we're not asking for uh a decision today.

We're just looking to check in to see what options you're interested in pursuing and refining further.

So for the local option levy, um the policy decisions, um, there's a couple policy decisions around timing.

If we want to go for a May or November levy, um we'd want to think about are we going to go out in 2026 or 2027 or beyond?

Um we will eventually want to have some discussions around the amount of the levy that we want to go out for, and then the scope, um, what's going to be covered in the levy, what is that going to be paying for.

Um, if we do pursue a levy, the next steps would be to really refine our message and do some voter engagement to continue to assess where we're at.

We do need to do some updated financial analysis.

We have property tax data that's coming in in November, and then we do need to create a more refined model for exact costing of what the levy would be covering over the next five years and overlay that with our general fund forecast.

So, some work to do around financial analysis.

And then we'd also want to really hone in on exactly what services are preserved through the potential passage of a levy.

Um, and then I want to make a note about uh developing that communications and engagement plan.

Um we, regardless of whatever direction we receive tonight, um, we are hard at work on developing a communications and engagement plan around the value of city services and our financial sustainability work in general.

And so that work will be proceeding regardless.

Um, and so just wanted to provide some reassurance on that.

Um, but of course, if we were to pursue a local option levy, we'd need to develop a specific communication engagement plan around the levy itself.

Next slide, please.

Okay, monthly fee policy decisions, um, not too dissimilar from the levy.

Um, we'd want to think about the timing.

Uh, when might the fee be effective and when might you want to implement it?

Um, we'd want to pick a revenue target, um, or conversely, you can focus more on the monthly impact to residents and and kind of pick some targets around that.

And then, as I mentioned, there's lots of different structure options, and so we'd that's a really key policy decision for council is as how you want it to be structured and what impact it might have on various customer types.

And then we do have an assistance program.

Um, you know, council could choose to invest more funds in that as part of the fee modeling as well.

Um, and then we'd want to determine what purpose we want the fee to be for.

The most common purpose across the cities we've looked at is public safety, and then a couple have uh general city services.

So if we were to pursue developing the fee further, and the key next step would really be to work with a consultant to research fee structures and develop um per month impacts for each structure that we study, um and then come back to council and probably a couple different work sessions to give you the opportunity to discuss and ask questions.

Um of course, we'd want to develop and implement a communications and engagement plan, and then after the research and work sessions are done, present for adoption, and then adjust our billing system.

Next slide, please.

Okay, so we wanted to give you some examples of how these decisions could play out, and I want to heavily caveat this slide that this is a very simplistic back of the napkin example.

You know, we did this just in-house, um, using some pretty general assumptions, and so um don't get too attached to these numbers, I guess is what I would like you to take away from this slide.

It's really more to just provide you a sense of scale and what might be possible.

And I think one thing to really take away from this slide is that I think what it shows you is that um there's um definitely possibilities in all three of these approaches.

And so um, you know, we can make it work um through these various approaches, and what's important to consider is really just the impact on residents and the policy decisions that you want to make.

So and then also um you'll see at the bottom of the slide a little asterisk, and that's just a reminder that a transportation utility fee if adopted would be an additional utility fee.

So keep that in mind as you're looking at the monthly residential impact, you can go ahead and kind of add on a potential tough to these figures.

I think it's important to think through the total total impact um moving forward.

And so um for the purposes of this hypothetical uh example, we are assuming an approximately 10 million dollar deficit.

And so, as an example, if you had a local option levy and we targeted 10 million dollars, um that would be about 76 cents per thousand with um a monthly residential impact of $17.51 cents for the average single family homeowner in Beaverton.

Um if we had a monthly fee only, that's a little bit more difficult to estimate because the various structures um really the revenue that's brought in will vary sub substantially.

Um but if we had a 10 million dollar um target, depending on the structure, you could see anywhere from sixteen dollars to you know 35.50 per month.

Um so um that is one option.

Um if we had both a levy and the fee just for the purposes of easy math, um, we assume that the levy would bring in five million um and the fee would also, and so uh levy bringing in five million dollars would be about 38 cents per thousand assessed value with an eight dollar and seventy-seven cents a month impact to the average single family homeowner.

And then the fee again, depending on the structure could be between eight dollars and um 1775.

So you can note that all options end up about the same on the low end um of the of the structure.

Um next slide, please.

Okay, moving away from revenue and talking through budget balancing.

Um thing that we wanted to talk about today are our reserve targets.

And so um Beaverton has a reserve policy that sets targets that are to guide our budget development.

Um and so right now our targets are that we are to have 11% of our general fund operating expenses set aside into reserve at the time of budget development, and then by the end of the fiscal year, we are to have 17% um set aside um in that reserve in total.

And the reason that we have these two targets can be a little confusing, um, but the reason for that is that generally speaking, um the industry best practice is to have about two months total um in reserves.

And um two months is almost 17%.

And so um by only having 11% in the reserve fund at budget time, that provides more flexibility for budgeting and service preservation.

Um, but 17% at the end of the year captures some of the underspend that naturally um occurs.

So it's a way to meet that target.

But I'm gonna pause because I see that counselor Degger has a question.

Yeah, I was thinking about reserve targets, but also just budget processing.

Years before I was on the council, I was on the budget committee.

How do reserve targets change if we go to like a two year old?

I think we really need to consider that we put in to put together a document and a process.

I just don't know that we receive a whole lot of value of doing it annually versus like a two-year cycle, like some of the cities that that are actually included in this study have moved towards.

So, like how would that change our discussion on reserve targets?

If you don't know that, it's okay.

And Susan, you can correct me if if I'm wrong, I'll take a stab at it and she can't like I mean what I'll what I would say about biennual budgets is so um one of the things that's difficult about a city that in our financial situation about switching to a biennial budget is that we are already struggling to balance the budget on an annual basis.

And so um just my professional perspective is that um it would be better to look at that um when we're a little bit more stable because I think you know adding in the two-year span makes it all the more difficult um to budget over that span.

Um but Susan, I will turn it over to you if you'd like to answer that question.

Yeah, so uh good evening, Susan Cole, assistant finance director.

So the specific question about reserve and binary budgeting, actually it would not change because uh under um our audit and accounting and our government finance officer association we're still required to report annually, and so those reserve targets two months worth of annual operating is the 17%.

So that would be the industry standard that we internally would measure each fiscal year end, irrespective of our budgeting period.

Even though um fiscal year kind of ending where we carry over money would be different on a two year versus a single because that's kind of where my brain was going is like that that that carryover money would impact things differently because in theory you would just carry it over.

Uh correct there there is a carryover.

Um the challenge is is how it this is really wonky, but how accounting works is it looks at the June 30th fiscal year end, not counting that carryover, that carryover would go into the following year and could help that following year's um reserve target, if that makes sense.

But it's still at the fiscal year end, it's still two months.

So if we have extra in the first year, let's say that we carry over, it just helps meet that second year target.

Okay.

No, that that makes sense.

And and the reason I just wanted to make sure, like as we were thinking about reserve targets, and because I really want to push for a two-year budget cycle at some point that we're not setting a target and then having to go and revise it the moment we do something else.

So thank you.

Thank you.

Um I have a couple questions about the reserve slide.

Um so as I read this, if it's kind of best practice to have two months, and ours would be would lead us to 16.6, but we actually set ours at 11.

So we're we're we're lower maybe than we would recommend.

Um so we do 11% at budget, and then at the end of the fiscal year, we have to have 17% if we want to meet the target.

And so that's a way for us, there's typically some level of underspend that occurs, and that's a way for us to capture that underspend.

It gets put in our reserve policy.

So at the end of the fiscal year, we are in compliance with the best practices.

And so the recommendation of temporary temporarily decrease the targets by one percent, that would mean that at the end of the year we'd want 16.

Is that where the uh reduction, like you put it at the tail end?

Yeah, I mean, you could do either or both.

And so one of the reasons that we're recommending that is that we're in a period where we're trying to get more financially stable, and so there's a balance between we want to of course remain fiscally responsible and make sure that our reserves are healthy, but we are also trying to at a certain point to try to preserve some of our services because we know that sometimes bringing online these new revenue tools takes time.

And so it could be an option to temporarily decrease those targets instead of reducing some services.

Okay.

And I think that um if if we come to consensus on that temporary reduction, I think I would like for us to build in the reinstatement timeline um because of like what happened with our street fund, right?

And actually like put it in uh proactively of when that change would be undone.

Well, and I would just say from the past council that set the rever uh reserve budget, it was much higher than 11 when Mark sent Susie and Mark Fagan, and then part of our reduction strategy over the years was to reduce it to 11.

So I we had started at a much higher amount, and one of the main reasons the past city council did that was we're sitting in a building that we were able to purchase because we had significant revenue on hand for major projects, and so this the council set the reserve thing much higher.

So we've already been adjusting as a council.

This isn't new for this elected body.

We just I don't think I've ever looked at it this way.

Yeah, okay.

And then this question I don't I feel silly for asking, but I don't understand the difference between operating expenses and operating budget as like your baseline for determining your reserves.

Can you help me understand?

Yeah, so some people use their operating, you know, actuals, and so they might look at what their actuals were for the previous fiscal year.

And then some people will use their operating budget.

And so the operating budget is going to be a little bit more conservative, right?

Because we're going to assume that all of our positions are filled 100% of the year, right?

For example.

And so and then sometimes uh it's also just administratively easier to look at the operating budget because that's what you're setting at that moment in time.

So it's just um it's just a policy decision that that folks can make.

Okay.

Um do you have any insight into why Gresham's is set at 5% and how long it's been like that.

Yes.

Um it's been that way as long as I have been there.

So I was there for um nine years and it's at 5%.

And the reason for that is because of their financial situation.

And so Gresham has been kind of teetering on the edge of the fiscal cliff for a long time.

Um and they just um did not have the funds to have more uh money in their reserves, and that was the choice that they made was to um they chose to preserve services and um and not have as much in their uh reserves, which um there are pros and cons to that approach, right?

And they are actually in the middle of revising this policy because it's long been acknowledged it really is not meeting best practice or sufficient, um and they haven't quite yet decided what they're what they're going to do yet.

Um so this is their current policy.

I'm not quite sure what they're going to change it to.

They have talked about, I think doing some aspirational targets because they like the idea of maybe maintaining that flexibility if times are tough again.

Okay.

Um and then a follow-up on something stated from the mayor that first time that the council has looked at re decreasing this is the language around temporary decrease.

What does that mean?

Is it something that's revisited every year?

Because I haven't heard this mentioned during the budget conversations before about the other decreases that were made if those were considered temporary.

So how does this circle back to council to the budget committee?

Yeah, I think that this would be um a decision that you could make during the budget process.

And so um, you know, it is a it's part of your reserve policy.

It sets a target that that is supposed to guide budget development specifically, right?

And so it seems appropriate that you would be considering this during the budget process, and then it can be an annual discussion.

Can I just also don't want to eclipse this moment without pointing out if any of you guys are thinking of suggesting that our fee our services drop to five percent, that Gresham's base taxes is almost a dollar per thousand lower than ours, and they have fire and parks wrapped in.

So our base revenue is much higher than theirs.

So just I mean, in case any of you guys are thinking that's the easy button we're gonna smash here, she's a lot more polite than I um explain to me one more time um why you're asking us to decrease the target budget by one percent.

Um sure.

Um so um this is a potential recommendation for you to consider, and as we're looking at um potential options to work towards financial sustainability, one of the issues that cities um tend to face is that revenue tools can take a long time to get in place.

So, like let's say for example, uh the council decided to go out for a levy in May of 2026.

And let's just say, I'm sure this wouldn't happen, but let's just say it failed.

Um, and then you're you're faced with um going out again in November and you're going to have a long delay.

And so temporarily decreasing the target in that situation acknowledges the fact that you are working on bringing in new revenue, and it is taking you longer than expected.

And so rather than making the decision to let's say eliminate one million dollars in services, you are making the decision to temporarily um not meet those reserve targets.

Um and so that's one way to look at it, um, is really trying to determine um is this something that we want to do temporarily while we're working on getting to a more financially stable place.

So you're basing this on maybe the levy and fee question if not passing the same level of services potentially, right?

And this is just a recommendation that ultimately would come back to council during the budget process.

And so it is a tool that you have in your toolbox that you can use to try to balance the budget.

Yeah, because I would be hesitant to decrease the target budget without uh addressing um operational uh reductions or cost saving measures implemented.

That's my comment.

Councilor Hammeyer Prague.

Yeah, I just wanted to clarify reserve is funding that we do not allocate in the budget, so it's just money that is set aside, and so by reducing it by one percent, right?

Then then we have a little bit more that we could allocate through our budget process.

And I think that like the one percent is a very small recommendation, right?

So that we still have a really solid baseline in that reserve.

Um, but that it gives us that chance to we have a little bit more, right?

You have a little bit more to work with.

Is that the right understanding?

Correct.

That is that is uh the rationale behind us um bringing that to forward for consideration.

Okay, if there's no other questions on this slide, I'll move on to the next slide, please.

And I'm almost at the end.

Thank you for hanging there and hanging in there with me.

So um, as we mentioned over the last few years, um 32 staff positions have been eliminated.

And going forward, um, further reductions really will have a noticeable impacts on our service delivery.

Um, and for some areas, we may need to have some hard conversations about whether that's a service that we can continue to offer giving giving given staffing levels.

And so um to aid council in providing input on our service delivery options.

Um we were thinking that we could take the work that we started in April to do a general fund uh program inventory and further refine that work.

And we could come back to you with um more detail around that general fund inventory and categorize the services so that you have a deeper understanding of the services that we offer.

Um, so we could really um look at and provide you information about um services and indicate whether or not they're a direct service to the community.

We could um indicate this is a service that is an indirect service provided by departments, we could indicate whether there's a mandate or whether it the service provides administrative support for mandated services, whether it's discretionary and whether there is any revenue that either um covers the cost or partially covers this the cost.

Um, then we could really work on um developing a framework for council to consider when we talk about um the services that we offer, and we could look at um impact, we could look at how many residents um this reaches, uh, if it's an internal service, we could look at whether it's relied upon by one department or multiple.

Um we could also consider the baseline level of the service.

So um is this a so leanly staff that further reductions mean that we need to think about whether we can offer it or could it be reduced, and if so, what would the impact be?

Um we could also consider um the cost of the service, and then of course, council and community priorities.

And so we wanted to check in with council to see if this is something that seems like it would be useful, and if so, then we would um go back to our department head team and work on um creating this report for council.

And with that, I believe I'm turning it over to Jenny for the next slide.

All right, well, we're almost over the goal line.

If we can get to the next slide, this is a timeline that assumes a um May levy, and as you can see, starting out over the next three months, there would be a levy development underway, fee development underway as well.

Um, moving into January, would we would want to develop um a statement and a ballot measure, council would need to vote then on that measure.

We would continue to have fee work sessions as Elizabeth said, uh there's some structure policy um issues that you need to weigh in on, and then moving into the spring, that uh deadline to file a ballot measure occurs in March.

And then we have a fee adoption that would need to occur, plus there's outreach that would be um tied into that.

Um kind of coming to May and June, of course, there's uh renewal that you know is occurring, and then the potential levy could be scheduled, and then depending on what councils have outreach there, and then if you notice um in the box below, there's a parallel process.

And then if you notice in the box below, there's a parallel process.

We've got the budget that's happening all throughout that time.

So we've got the the proposed budgets finalized in April, and then we bring that to the budget committee meeting final adoption in June.

Um and this could have a potential fee implementation that we have to talk about, whether that makes sense.

And then as Elizabeth said, we would not receive um revenue obviously until November, which is the better um alternative than if we went into next year because then we're delayed a year.

This is just kind of food for thought, and then the overlay that you don't see here is obviously the campaign framework, which developed now, but that would also need to be really fed up if we are going to be focusing on the levy.

So with that on the last slide here, these are the policy questions that I talked to you about in the beginning.

And so really think about the short-term revenue options that seem to appeal to you and ask questions that you've done during the discussion.

We really are interested in hearing your feedback so we can get some direction on the reserve targets.

That's important for me because I'll bring budget to you that takes whatever direction you give to me tonight in consideration, and then any feedback that you have in the prioritization, and as I mentioned in member, and then having a more conversation develop some of that framework criteria that Elizabeth was talking about on the medium and short up a little bit, and that could be considered in the budget development process as well.

That concludes um our presentation.

Thank you for listening.

Counselor Tipnon.

Sorry, Councilor Hartmeyer Prague.

Thank you.

I have a couple of questions on the revenue options.

So for the local option levy, like early in the presentation it said property owners, but then a little bit later you said homeowners.

And I wanted to ask, does the can does the levy apply to all types of properties that are owned, or is it only homeowners?

Yes, that's correct.

It is all um property um owners, uh, but I was focusing on the um the monthly impact on homeownership.

Okay, thank you.

And then um in if we do a levy, since it's on assessed value as assessed value goes up incrementally, does do is a does that apply to a levy as well?

Correct, but the growth is capped at three percent per year.

Okay, and then a question on the service fee, where we mentioned the low income assistance program.

Do we do we essentially do that by reducing the projected revenue, or like do you have to like set aside money to pay for that program?

So we do have money set aside to fund the program.

And so um typically, if you were going to increase it and you had a new revenue source coming in, you might consider building that into the revenue structure.

Um, but cities can also choose to subsidize the assistance program um out of their funds if they have funds available, so um, it can be either or okay.

I think that's it.

Counselor Tipman.

Okay.

Um as we're thinking about communicating this out to the public, if a levy were passed or a mixture of fee and levy passed, not including the transportation fee.

So conversation.

Um the graphs look different in terms of our expenses and revenue in a way where we start to see coming back together, or is this still just short-term?

And I I ask this in what are we assuring the public of when it comes to communications plan?

Um, I think it depends on the revenue solution and the structure, right?

And so I think for example, um if you have a fee and you choose to set an escalator that more closely matches the growth of our expenses, um, then yes, like you would see those two lines start to converge.

Um I think with a property tax um levy, um, typically you do see the lines um converge, right?

Particularly in the beginning years, and then typically what you see is like towards the end of the life of the levy, you see the the graph maybe start to widen again, right?

And that's typically why um jurisdictions will often have to increase the levy when they go out for renewal.

So you know, there isn't a permanent fix, right, until we are able to really fix the system we're in.

But um, you know, if you consider the five-year life of a levy to be long term, then yes, you will see improvements in that graph.

Um are we giving our thoughts when going back to that slide that had the the different scenarios of levy, fee, levy, and fee looking at the numbers associated with both of those.

My inclination is who other counselors are thinking is to do a blend.

I think uh for one, the communication around the levy, it's competing.

And I think that might ease things up a little bit in making the arguments, but also with the knowing that the fees are much easier to implement and streamlined in terms of collection.

It just seems like having a little bit of both is something that I'm feeling more interested in exploring.

Um, but also want to hear more about the um the fact that future councils could decide to rescind a fee or that uh exactly what kind of insight we can have to know what's the risks we're taking on if we do go.

Well, I would just say that in the event that measure five and fifty were adjusted at the state and revenues were changed, like you would that would be when you would reduce a fee.

I can't imagine a future council under the budget constraints wrong being like, nope, no more money for us, give it back.

I mean, all things are possible, but I also think you know the 76 per thousand in the operating fee isn't really even addressing our total budget.

And I would say if we look at historic levies that have been passed, a f uh levy that high would be incredibly difficult to accomplish.

Counselor Huston.

Yeah, thanks for the presentation.

I'm gonna take us to the way back machine for a minute when we started the fiscal sustainability committee with Councillor Duggar and Mayor Beatty.

I remember calling in from Australia and uh making sure we we made all the right decisions, and I think we were having a hard time with the conversation, and I think we're gonna continue to have a hard time with the conversation.

Uh I am hesitant to do fee and levy.

That feels like a lot to throw at people.

I feel like uh it's my gut feeling right now.

So I'm that makes me nervous.

Um I spent some time with you all last night watching the meeting that I missed, so I feel really like up to date on what you all talked about.

Um that meeting and today, I'm just looking at the appetite of the community around levies, and it just feels not great.

And I would be lying if I said that that.

Like I just want to say that out loud.

Um my comments I think will not be new, should not be new to folks.

Um, so I'll just kind of say it out loud.

Um I think the appetite of the community is is going to be difficult with levy.

So personally I'm leaning towards fee, but I want to continue to have the conversation.

Um the general fund is mostly tied to police.

Um, and I've talked about what does it look like for us to understand what our police are doing and making sure that we build better systems around public safety.

So, what does a study look like to say these are the needs that our officers are dealing with?

Some that are police needs and some that are housing, for example.

So just that's I've said that, you know, probably quite a bit.

Um I know that there's been a conversation just about like understanding more about the municipal court.

So just want to make sure I know that was something we kind of talked about in fiscal sustainability, and if I missed something that happened, please let me know.

Uh the other piece I think is um management to staff ratio.

Uh we've talked about this probably I've probably talked about this more in my one-on-ones just you know, I I think I talked because I feel more I've been in this change for longer.

I know I hear from folks who feel like the city has maybe become more top-heavy than in the community.

I think that's wrong, but I'd like to get more data around that so that I can communicate that.

So, you know, what is our sort of folks out there doing the work to management ratio has been on my mind.

Um because I just watched the meeting last night, I just want to put this out there.

Like I support the TLT move moving of the TLT and increasing that.

I know Counselor Teter brought that up last time.

Um Counselor Kimmy also had brought up some some ideas around shared services, which I was also very interested in.

I acknowledge that that is probably a very big lift, but I just want to make sure I put it out there.

Um I go to these other questions.

Uh I support the reserve target move.

I think it's fine.

I understand the hesitation from some folks, but I support it.

Um when I talk about service prioritization, I do like what you're saying about the general fund.

Um but again, I feel like I need more information about what our officers are doing on the street and like what is something that they should be doing versus what is something that our home our homeless services liaison should be doing and trying to better build something around that response.

Um the medium and long-term plans, I think were just taxes correct.

TLT.

I think that was it.

Yep, TLT consider franchise franchise fee increase.

Love it.

Can you just elaborate really quickly for me on health care design update so that I know what that is, please.

Yes, um, so I think we know that um the cost of our personnel is in is an issue, right?

And we have a generous benefits package.

Um one thing that we could consider is looking at how our healthcare package is designed.

We could look at changing the deductible amount to see if that might get us a lower um cost or at least minimize the increase.

Um we could also consider some sort of future cost sharing um with employees.

Um those are kind of the things that don't have a ton of detail on that because it's it's not work that we're you know um uh pursuing in detail right at this time, but it could be something that we consider to kind of contain some of our cost increases.

Okay.

Uh my last comment, and I've said this probably more in my one-on-ones than publicly.

I I worry about putting this on people's election too during their election.

Like I do have a some empathy around like having run for office and then also trying to pass a thing.

So there's a little bit of concern I have around asking folks to do too much.

So those are my initial thoughts.

Thanks.

Counselor Teter.

Thank you.

This was a very thorough uh data and presentation, so I really appreciate that.

Coming into this, I was definitely leaning more towards want to be aggressive as pursuing primarily levy and prioritizing less on the fee side of things.

Um but I think just being realistic and counselor Tim Nunn and Mayor Beatty's comments about having more of a blend of it.

I could see that working.

Um because it might make a levy more feasible for us to actually pass.

I do think we want to levy, I do want to pursue a levy.

Um my election is in May and I'm planning to run for re-election.

I I would be more than happy to support a levy being on the ballot in May.

I know that would be a lot of work.

I know it's a lot of work for the city to help or to plan that all out over the next six months.

Um, but I think we need we need the revenue.

Um I think the urgency, especially given the federal circumstances that we're in.

I think the urgency is there, the story is there where we can say.

I think there's some good some good storytelling and some good messaging we could do for a levy in May.

Um I think I would like the more advanced timeline there.

Um I would be interested in moving TLT up to the shorter time frame.

I think if I'm thinking about adding a levy, we're already planning the transportation utility fee, uh, potentially some other fee too.

It puts more urgency on having a TLT increase for me, even though it might be 400,000 for one percent increase.

Um that's part of the storytelling for me if I'm going out to voters and saying why they should support a levy.

Um I want to also say it's not just locals who are bearing this cost.

Um I think that's one of the driving reasons why advance that a little bit.

And then uh I would support having the option to temporarily reduce our reserves target.

Uh I think that was really creative.

Um I think the focus on temporary is really good because we don't know what'll happen if we pursue a levy.

And I think the flexibility of just saying, all right, we just need something to carry us over for a year or maybe two while we work something out.

I think that could help reduce the the burden we feel as we're really planning all this out.

And then um long term, definitely support property tax reform at the state level.

Um it would love if that wasn't long term, but that is just the real reality of it.

So I appreciate the work that went into this, and I think we got some good options moving forward, but definitely a blend of a levy and and fees for me.

Counselor Duggar.

Uh thanks for all this, as always.

Um I'll start with service prioritization.

There's some additional criteria I think we need to think about.

One of them is we're in the land of special districts.

And if our special districts are providing a service, I would like us to look at that as maybe us not having to provide that service as well.

And maybe that's just not the case.

Maybe that's not good, but but I think if our residents are paying for it from another jurisdiction, I I want us to put that on there as like a consideration.

Also are there services we are we are offering that our peer cities are not?

That's gonna be pretty clear to me.

Not a basic service.

Now obviously it's not that simple, but I would like to see that highlighted as is a potential thing.

Um for short-term revenue options.

I'm gonna be the third or fourth person to say TLT should be higher, but I'm gonna go a little further and say I think franchise fees, we should look at that.

And if and if we can't do it in the next year, then it should be closer to year two than year five on our medium term.

Just I would like to see what other peer cities are doing with that.

And to be frank, like as far as utilities and things like that go, and in all these fees, those are just lines on a number that I pay, and I I think it would be less mentally impactful for people for us.

So I think I I'd like to see us look at that.

I'm not saying we have to move it to short term, but closer to that two year than that that five year.

I think we've got to really look at that.

Um I do support a mix of fees and the operating levy.

Um I I think about in my perspective is being on this council almost, you know, I'm coming up on my fourth year next year.

I think about future councils, and that that fee gives them flexibility and that allows gives them future future colleagues or future replacements of me and and and us more tools in the belt to solve the problems that they're going to face that we did not have available to us now.

And I think part of our legacy has to be not only do we make our budgets better and things like that, but do we give tools to our future elected officials to solve whatever problem might be coming to them?

And so I really like the idea of a mix of both a levy, because that also allows us to lower the levy.

You know, if we institute a public service or a public safety fee or something like that, I think uh you would have asked me at the beginning of the meeting, I was leaning a different direction.

So I I I like um that's that's playing well in my head.

Um adjustments to reserve funds, that make me really uncomfortable.

I'm not saying no.

I'm saying that in very specific situations, such as like what the mayor uh mentioned about you know giving financial flexibility for a building or something, something that we have to use right away, maybe a specific situation I I could consider a temporary one.

Um in general, like I I think we should be trying to save more, and I think that's all of our goals, right?

Like we'd love to see these increase over time.

And so I love the the uh what counselor Hartmeyer Priggs said.

Like if we do that, it would have to come with a stunt timestamp for me.

Like this is fiscal year 25 and 26, 27, it's back to you know, 11% or whatever.

So I think I could be convinced there, but uh it's gonna take a little bit more than we have right now.

Um couple other general comments.

When we think about rising costs, I think about health care and I think about PERS, and these are out of our control, right?

And I think one of the things that I need is a storyteller to our community is like do we have a strategy here?

Like, and I know that we can't control the strategy ourselves.

We cannot implement some of these things, but we are we can react to them.

And we can we can talk about them and we can figure some things out long term.

I would really like to see us begin that conversation around a strategy on what are we gonna do for healthcare and PERS.

And again, knowing full well that we are we just get a bill on these things and for some of them, but but I think a strategy or at least a conversation that direction would help me.

I also think about future costs within the Cooper Mountain area that will be developed and what strategies we can do to possibly start thinking about containing cost growth out there, I think would help us help me as a storyteller, because that's gonna be a big area of city uh of new Beaverton, right?

Like like that's that's you know by far the majority of the development, and I think I don't want to be having this conversation four years from now because we weren't thinking about that right now, right?

Like that's gonna be a big area.

So if we could start those conversations around a strategies, how are we thinking about you know, and and I know that part parts of those conversations have already happened with like public works and building a new facilities and locating it in different areas and stuff like that.

I I think I I think I want more of that.

Like I think those are really good and really helpful for us as to do our job, which is to really work with and educate and tell the story to the public.

That's all I had.

Counselor Hartmeyer, Prague.

Thank you.

Um I agree with the majority of what my um colleagues have said.

Um I get nervous about a franchise fee increase because those are typically um locally owned and operated.

So I would want to just be careful that like I I don't know enough about a franchise fee, but if it has a local impact, I would want us to be really careful.

The TLT one is really interesting, but knowing we can only use 30% of it, I'm curious.

Would the extra then go towards paying off the bond faster?

Is that what we would do with we could use it for things that are related to tourist um promotion and so um you know arts.

Okay, thank you.

Um I do know that I think it was maybe considered in the last legislative session, but to make some changes around TLT, right?

Is something that that we want to have happen.

And so I think I think it's a smart move for us to really think about this.

Um, and the in the hopes that we have more control, right, of this uh in the future.

So I and I also like that.

I I think that it makes a lot of sense to say, hey, it's not just Beaverton residents bearing this burden.

So um I really appreciate that that part of the because we are looking at like lots of ways of raising revenue.

I'm also in the boat of I think we need to look at the levy and the fee to find a balance between those two things, especially because one we have a bit more assurances of that coming in because it's within our control.

Um I also like that there's there's some flexibility there, right?

And so just depending on how the will of the voters goes, if we needed to adjust, we have the ability to adjust.

So I do think it's important for us to look at both.

Um I also I know it's in the long term, but I think it's a great idea that insurance pooling, right?

Any of those kind of those uh and I think Councilor Husning, you brought up something that Councillor Keep brought up last time, right?

Of like where do we kind of pool different services as best we can.

And I also agree that the services um assessment what service prioritization, I think it's really critical that we look at um what we do that is above and beyond, and I know it's really hard because I think the above and beyond things are a lot of what makes Beaverton so special, and so it's really hard to think about certain things and maybe not be listed as our core services, but I think we're we're just really at that point that we have to um get really specific and clear on what are the services that we must fund as a city and kind of use that as the that baseline of what's above the line, what's below the line.

Um counselor Kimmy.

Yes, uh thank you.

Um I have a question for Mayor.

What what are the what are the chances of changing five major 550?

Easy, zero.

Zero, right?

So it's not happening.

So we're gonna have a structural deficit going forward for sure.

Um I I like levy and fee uh just for stability plus the flexibility if to catch up with inflation.

Um when you talk about fee, are you trying to are you talking about transportation fee plus the public safety fee that might be coming?

What are what are the what do you mean by fee exactly?

Um for the purposes of the conversation today, when we're talking about local option levy and monthly fee, we're talking about a potential um public safety fee or city operations fee, um an additional tool to address the city's um deficit.

But um you as I mentioned on that one slide, keep in mind that discussions are still ongoing around the transportation utility fee.

So that's an ongoing discussion for council as well.

Right.

Um it would make me comfortable if I would know at least the ballpark or exact number of how much do we have to raise to meet our obligations and pay our expenses because um ideally last time I thought when transportation came up came along, it was like close to like 30 bucks.

Uh and you've if you add uh public safety and on top of another fee, you're looking at pre-high number per month for residents to pay.

So on this, I have uh basic somewhat close to the number that we need.

So unless I have uh basic somewhat close to the number that we need, uh uh it's gonna be hard to approve any increasing fee or or anything because I just see the whole number.

Um if we just ask us, okay, let's go add levy and fee without knowing exactly how much we need, it might be impacting the residents over 50 bucks a month.

Um so we need to fight find out how much our residents are willing to pay an increase per month.

So that's good that is uh crucial for me to make decision on but I am for Leban fee.

Um but we have a structured deficit.

Um and is there what are your pathway to get a permanent fix on this?

Um idea.

Uh well, counselor Kimmy, I'll address um kind of your other comment about uh we need to kind of figure out exactly what we need and what our deficit is, and that is something that our finance team will be working on is really refining our um five-year forecast.

Um, we do have property tax data coming in in November.

So in the coming months, we'll have a better idea of exactly what our deficit is.

And then today we're really just trying to figure out what are the revenue tools that we want to move forward with, and then we'll come back with more precise um cost estimates um on those going forward.

Um, and then in terms of you know, a permanent fix, I'm not sure that anybody has figured that out here in the state of Oregon um yet.

Um, but you know, we're kind of starting um with the foundation um here of of really kind of addressing what tools we want to start with.

Um and so I don't know that any city really has a magic solution to that at this moment in time.

Okay, but the reason behind that question is we know there's no not five measure five and fifty will never want to fix.

So then we have to catch up with inflation if we build in some kind of um system in our uh budgeting where with the fee or some what somewhat of a tool that we can address those deficits ongoing, and and that was the I guess basis on my format question.

Um that's it for now.

Thank you.

Yeah, please.

I'm stunned, but go on.

Uh I've got one final quick comment.

Uh Counselor Kimmy was just mentioning long-term fixes, and I know it is very difficult given the situation we're working in to get any long-term fix.

But one of the benefits from uh fees that we didn't talk about too much tonight is the ability to index them to inflation.

And so uh Counselor Kimmy to your point and uh some of our long-term planning, like that is one of the real benefits of going that direction is that we can build that in so we don't have to have a drastic increase five or ten years down the road when we suddenly are falling way short.

But I think fees that are indexed appropriately can can help with some of that.

Um so hopefully we can talk a little bit more about that in the future.

And the fee isn't a five-year cap.

So I think, you know, um I won't be here in five years when you guys have to do this again.

So good luck.

Uh I will do my part now, and a future mayor will have to absorb that responsibility of a uh of renewing the bond in five years.

I will say I think renewal is much easier than um passing.

Um I do want to uh have a couple words about a franchise fee as one of the city counselors that instituted a franchise fee.

Trust me, people had very emotional opinions about it, and we were in a what eight-year lawsuit with telecoms over our franchise free adjustment.

So it did not come um, it was not an easy fee to initiate for us.

And I will tell you, and we initiated it, it was the council's legislative intent for it to be spent on roads.

And we don't really do that now.

And we had to really like what we told voters and why we were doing it, and we told the community over and over again, people cut into the infrastructure and it damages it, and we need to be able to fix it.

Right on my road 155th this week, they are putting in um a uh uh fiber optic line, and they they jacked up a road that's in really great operating condition before some new utility is putting in something to address a handful of people, and all of us taxpayers pay it.

So the reason we initiated that fee initially was to address the roads.

Now it's being used in a in a plethora of way.

And we approved it.

It's not like we didn't do it, but when we institute fees and communities absorb it, we tell them why we're doing it.

And so if we're gonna raise utility fees, we need to be able to be pretty clear on what we're spending it on.

And I think sending it in other areas of the general fund is going to be a hard pill for people to swallow.

And if you look at the bills, a lot of them say City of Beaverton fee.

And so I agree the franchise fee can probably be adjusted a little bit, but that is not smashing the easy button.

You will see some very angry people that have landlines coming in here to get you.

And we know that we just completed the lawsuit not too long ago about what they were paying, and they will sue us again.

So it will come with costs and it will come with that.

TLT, I would would love to adjust it.

I don't know what our cap is.

There's a reason why we set it at what we did, and I just can't remember the exact reason.

I don't do you do you know you were around when we said it.

Was there a cap?

There's not a cap.

There's not a cap.

Okay.

So I do think some adjustment to that makes a lot of sense.

We're having a pretty good night head in bed compared to our cities around us right now because I think people really generally like our community and the safety that it offers.

And I've never once in my entire life booked a hotel and thought, I wonder what the local taxes are as I'm doing this.

So that's an easy fee, I think, to adjust.

And because we had long envisioned the TLT supporting arts, and that is totally absorbed in our general fund right now.

So this would be a good way for us to kind of peel off an important and look at what we just went through in the last budget cycle, saving the arts manager position.

We know it's an important piece for the community, and this would be a way for us to live our commitment to art and kind of safeguard it moving forward would be to do that.

So I'm I'm very much supportive of that.

Um I think we have to approach a levy and a fee.

I for us to generate the amount of revenue to just keep us even, I don't know if voters would pass.

We're talking 80 to a dollar per thousand to be able to catch up to where we are.

And um that's challenging.

I think we also have to go in May, otherwise, we're cutting 10 to 13 million dollars.

Um and we could adjust the reserves a little bit, but we have to pay the reserves back at some point too.

Like we're borrowing from ourselves, not creating free revenue.

So if we bridge loan ourselves for three years to do that, who how are we gonna have to be very disciplined in paying it back?

And that has to be accounted for when we're trying to operate in the levy.

Um, I think the sequential um pace in which we do a levy and a fee has to be very strategic.

If we go levy first, then it fails, and then go just kidding, fee.

I imagine the pitchforks that are going to be coming for us.

So we almost we need to do them in parallel or go fee then levy.

Because I think it would seem very disingenuous, even though us in this room understands, you know, people don't pay attention to our daily actions until they start seeing things.

And if they feel like we're trying to get over on them, that's gonna be challenging.

I also understand the the need and desire to have uh low-income tax program, and we did that with garbage, and it caused everyone else's rates to go up.

So think about if we're going to go into a fee structure saying we're going to automatically exclude low-income people, uh, we're gonna end up having to have a much higher fee to actually generate the amount of revenue we need.

So those are just things that are are challenging, and we don't do that with property taxes.

So, how we might adjust those two things or reconcile with ourselves, um, we might not be able to live that value here and get what we need.

So the other, you know, I just I want to make sure that we circle back on counselor Huston's point about the courts because I'm old enough to remember when it wasn't a cost drag on the city.

And so I think the council needs to see a long term how our decision making has impacted the court's financial ability.

Us trying to address things and make it right, like not collect property or not collect ticket revenue really drove the court in a different direction.

When we agreed to not have the photo radar vans because the police managed it and it made their budget easier, but the court got the revenue.

That's part of the reason the court's having a revenue issue right now.

And so I think we need to, and the city manager and I talked about this, I think a week or two ago of scheduling it, we have to see how our own impacting decision making makes some of these financial decisions because a municipal court, considering this is a council full of Democrats that are very social justice oriented, is really one of the only tools we have to impact the mental health court, the DUII court, and some of these other services that we do.

So I do think we need to look at it in its totality with the idea that it should be as cost revenue neutral as possible because it used to not just be cost revenue neutral, it used to produce revenue, and so we have gone the opposite direction.

So I think looking at that, but I don't think it's gonna be a place where we're gonna cut, if we cut it right now, there's gonna be cost associated to the city.

Our officers will have to go to Hillsborough to to service our community.

Um I think that's a piece.

I I am interested from the council perspective on having some kind of me, Counselor Duggar, and Counselor Hussen went through this white board exercise around what things we were gonna do, and all three of us had different ideas on what um were essential city services based on our own lived experience and value.

And so I would be happy to do that again from the council.

But what I think it would serve is a uh it would serve as a tool that the city manager could reduce fees from.

And I want to take that conversation a little bit separately from this because we're trying to create and maintain the services we have, that feels like the next step.

But that would be her blueprint on cuts.

If we end up not having a levy, not having a fee, and we're into 10 to 13 million this year and then 10 to 13 million, she's gonna have to start.

There's no more under filling vacancies or are like those times are beyond us.

We're at the bone now.

So if she needs a blueprint on which limb to chop off, that's where I think that exercise would be helpful from my opinion.

But given the the next three month window to get something going, the number one important thing for me is what is the right mixture of fee and levy.

How do we move forward so we could in January, February, make a decision to refer this to voters?

And we have to do a massive communication outreach to our community right now.

And I sound like a broken record, but it's to dictate value so they understand the value of the city.

Because I think most people really like living here.

Most people really like the clinics, they really like feeling safe, they really like a lot of those things, but they don't understand how they're feeling is connected to the services we provide because we don't tell them.

And so we have to ramp up communication, and just as a reminder, when it goes to a levy, the second we refer it, it is council's responsibility to get it over the line.

So, yes, there are people on the ballot.

That means the other four of us are gonna have a little bit more work.

You're gonna have to work this into your talking points and why you're running for re-election.

And this is gonna take all of us.

Having worked on the police bond that failed and the police bond that succeeded, it is a lot of work.

It is not like running a campaign for re-election.

It is 10 times worse and harder.

And you have to raise money for it at the same time.

So this is something we all have to go into together as a council, and I think it's one of the few times that I would like our council to move forward with some degree of unison so our community hears from us how important this is.

And I've rarely asked the council to move forward in unison on anything because I think we all bring different perspectives.

So, what I think you heard today, just to recap what I think I heard from my colleagues, they're interested in looking at a blend of fee and levy, understanding how much money we need to do.

I think in the the fee, what's interesting to me from the fee perspective is we do have all these, we have a lot of nonprofits, we have a lot of government entities that don't pay.

They would be in the mix to pay this versus the property tax increase.

So, how do we get a better idea of what those are?

And we saw that a little bit in the transportation fee methodology.

And so I think we need a little bit of work to better understand what that number would actually produce.

Because I when I look at these numbers compared to what we just heard from Tim a few weeks ago, the math doesn't math for me in the outcome.

So he's over there, like, yeah, I get that.

So we need to have an understanding to that.

And I would just say, just a few weeks ago, this council was really and I cautioned us, we're like, okay, you want to move forward with a 20 dollar utility fee, like these other fees are coming in a couple weeks.

And so I my personal perspective is a bit of a split.

A $10 transportation, $10 utility, kind of split the, you know, how we're gonna implement and move things around.

I do not think in any stretch of the way that we could do a $20 road utility fee and a $20 service fee.

I I just think that would lead us to a really bad situation where I think people would be very upset.

But that is my perspective.

I'm one of seven.

So I think a good set of numbers would help us make that decision.

And we need to think about what the timeline of the next few months looks like.

We're meeting once in December, then we have our council retreat, like what information and at what pace.

We're probably gonna have to have an extra meeting.

We're gonna have to commit to moving this forward and it's gonna have to be isolated and um we're gonna have to commit to having some extra meetings to get you guys the information you need.

And I would take today, write down all your questions, go back to the city manager so she can compile these and make sure we're getting everything answered because we have about three months.

That's it.

So counselor Hussen.

Yeah, I um I hear that there's a majority that's probably not what I said on the record, which is which is fine.

But I also hear you, mayor, that you want us to move in unison.

So I think I just I want to say this.

Um a lot of people in our community right now aren't calling the police because of what's happening.

And I acknowledge that this is related but unrelated, but to ask me to support a levy and not have the conversation when I'm begging people in my community to call the police is very complicated.

So I just I I need to like I need to name that because I'm I'm asking folks to report the things that they don't even want to report.

And so that's just like where I live right now, and so that's why I I need more to feel comfortable.

And I just I would be remiss if I didn't make sure that you all heard that because that is very much kind of the world that I live in.

And so uh if I have to get behind a levy because this is the pleasure of the council, like I that is what I need.

I don't think I've said anything that you haven't heard in the past from me uh in the last four to five years.

So um I I just it it's really important, especially now when I um, you know, we had two three car broken broken car windows um by um most likely department of human services of of constituents that live in our community.

So their cars were broken to to take them and and they don't want to call the police.

I'm like you gotta call the police, like at least report the thing, right?

So that's just where I'm living in this moment, and if I didn't at least express that for you all to hear to understand, then I just think I'd be remiss to to not mention that.

So um I want to move obviously with you all, and I I need to be really honest about where I'm sitting right now too.

So thank you.

I I hear that.

And what I would hope is you could meet with the city manager and go into detail what you need, because I I a complete system reform of the police is not gonna match this timeline.

And I understand your vote's gonna be contingent on that, and I want to be honest, and I don't not that I I believe what you're saying and I believe to move forward.

I don't know if we could do both of those at the same time.

I'm willing to have meet with you and have a conversation with the city manager to see what kind of information we could produce to make sure you have whatever you make.

I'm not gonna beholden you to make a decision, but I want you to have the information you need to make a yes or no decision.

I will a hundred percent to commit to that, whatever you need to move this forward, and I will work with the city manager to get it.

But it we need to I need to understand a little bit more in depth of what you'd like to see, and I'd be happy to help facilitate that.

Anything else?

All right, this is like the worst part of being an elected.

Like, you know, they talk about two things like policy and budget being your two main jobs.

I only like to focus on the policy because it's the fun part.

This part sucks.

So um, and I'm so glad that Elizabeth, you left your other city to do years of fiscal recovery to come to a city where you probably presume the problems didn't exist to jump right back in.

I also just my my closing comments of why I've been so fierce about the library and working with our our um on our behalf is you know the the library is facing a two million dollar deficit.

It is a big chunk of this deficit that we're facing today, and that revenue is being collected from our taxpayers by our community for their likely assumption that it's gonna go to Beaver 10.

And so this is part of what's been challenging and hard and why Elizabeth and I have been going to the mat with the county is this is not 10 years ago where we had so much money we could do everything, every bit counts.

Um, and why I think with from THPRD's perspective, why I was so challenging for them to convince me on Cooper Mountain because a 30-acre expansion takes all of that off the tax revenue for us forever for a regional asset that people outside Beaver 10 will be enjoying.

And I am a heavy utilizer of Cooper Mountain, and I love it there.

But those are the decisions this council, every time we make a decision like that, this is leading to where we're at.

And so we play a big piece in kind of the situation we're in now too.

And I would like to at some point have a larger discussion about what's hard for us when we're making policy decisions is they're one-off, and we don't see how it's impacting the larger scheme of it.

And so I don't know how to fix that.

I don't know any mayor that's been able to solve that issue, but I think that that piece is constantly the teetering point for us of when we make a decision, it impacts the budget, but we don't really understand how it impacts the budget till years later.

So with that, we'll have our last agenda item, council new business.

If anyone has any more fun things to add to today's conversation, I'm here to hear it.

All right, we stunned them to silence.

With that, we're adjourned.