I'm gonna call tonight's meeting to order.

We are in our first night of our proposed budget for 26-27.

I want to welcome our new budget committee members.

It was very rigorous process of interviews, second interviews, making sure you guys.

I mean, I I will be honest, we had a lot of interest in in serving in the budget.

Why?

I'm unsure.

As you're about to find out over the next two days, this is one of the toughest jobs.

When I was a baby city counselor, used to at least get a meal.

Like we had your city hall and we provided dinner.

So I'm gonna have to buy you guys coffee or something uh to make up for it.

At least you get to be at home wearing sweatpants, but we did miss the good dinner together and the hanging out, it made it easier.

Uh with that, I'm gonna ask the recorder to come back on and call the role.

Budget committee member Duggar.

I am here, Hartmeyer Prigg.

Here, Hassan, Nadia.

Uh not here.

Okay.

Um Kimmy.

Here Teter.

Here.

Tivnon.

Here.

Beatty.

Here.

Bamas?

Nelson?

Here.

Thank you.

Stephen Bennett.

Chris Campbell.

Julie Langford.

Here.

Thank you.

I understand Teresa Payne is absent tonight.

Venice Shaw.

Present.

Kia Sundberg.

Here.

Okay.

That's the role, Mayor.

All right.

For those of us that are in our second budget meeting of the evening, it's gonna follow a similar cadence.

Our first order of business is going to be to elect a chair and vice chair of the budget committee.

Any member may nominate that member or another member.

The nomination does not need to be seconded.

The person nominating may decline the nomination up with once the voting is complete, although I highly suggest you do not do that.

If a person uh nominated isn't absent, the nomination still stands, but the person has the opportunity to decline.

So with that, um, I will open up the floor for any nominations.

Counselor Teter.

Uh yeah, I'd like to nominate Councillor Duggar for uh chair.

All right, so we'll well we'll go in order.

We'll do chair, uh, and then I will turn the meeting over to the chair, and the chair will run the nomination for the vice chair.

Is there anyone else chopping at the bits?

Looking wanting to be the chair.

Okay.

See none.

Counselor Duggar, do you accept the nomination?

Twist my arm, I guess so.

Don't act like you don't like it.

Running this meeting is my favorite job of the year.

All right.

Uh with that, I'll ask the recorder to call the roll.

Duggar.

Sure.

Hartmeyer Prigg.

Yes.

Kimmy.

Yes.

Teter.

Yes.

Tivnon.

Yes.

Beatty.

Yes.

Bonos.

Yes.

Bennett.

Yes.

Um, Langford.

Yes.

Shaw.

Yes.

Sundberg.

Yes.

And I still have Campbell in.

Okay, Hassan and Payne is absent.

So I'm trying to do math.

It was never my strong suit.

Um motion pick carries.

Congratulations, Mr.

Chair.

There you go.

Let's do it.

All right, you guys.

Uh, same process.

Let's open the floor for uh nominations for vice chair.

Again, same rules apply.

Doesn't need to be seconded.

You heard it all a second ago.

So who would who would like to nominate for vice chair?

Uh Mr.

Chair, I believe that since we have an elected official chairing, I would love to see one of our community members as the vice chair.

And while I did not ask her prior to this, I would like to nominate Kia to serve as the vice chair.

Kia, are you willing to serve as vice chair?

I am.

Yep.

Perfect.

All right, I picked right.

Any other nominations?

Hearing none.

Recorder, please call the roll.

Duggar.

Yes.

Hartmeyer Prigg.

Yes.

Kimmy.

Yes.

Teter?

Yes.

Tivnon.

Yes.

Beatty.

Yes.

Bamas.

Yes.

Bennett.

Yes.

Langford.

Yes.

Shaw.

Yes.

Sundberg.

Yes.

Eleven, yes, zero, no, three absent.

Motion carries.

Thank you, recorder.

Uh looks like the first item on the agenda is public input.

Do we have any members of the public wishing to address the budget committee?

Chair, we have no one in the audience or online.

Thank you.

Thank you, recorder.

So moving on then.

Um it looks like the next agenda item is approval of minutes from May 5th and May 19th of 2025.

Uh, as a reminder.

Um, it is customary if you weren't at those meetings, i.e., new members uh of the committee to abstain from voting.

Um I will now entertain a motion for approval of those minutes.

I move that we approve the meeting minutes from May 5th and May 19th of 2025.

Thank you, Counselor.

Do we have a second?

Second.

Thank you, Councilor.

It's been moved and seconded.

Uh, any discussion.

Signa on recorder, please call the roll.

Duggar?

Yes.

Hartmeyer Prig.

Yes.

Kimmy.

Yes.

Teeter.

Yes.

Tivnon.

Yes.

Beatty.

Yes.

Bonas.

Yes.

Bennett.

Yes.

Langford.

Yes.

Shaw.

Yes.

Sundberg.

Abstain.

Abstain.

Okay.

We have 10.

Yes, one abstain and three absent.

Motion carries.

Thank you, recorder.

So it looks like uh for the next well, the rest of the agenda for tonight is going to be individual presentations.

Before I turn it over to the mayor, I do want to remind you all as budget committee members.

If you would like to speak, we're gonna pause after each section for questions.

Just put your name in the chat.

I will call on you in the order they are uh in that chat box.

Having said that, the opening comments for tonight's uh budget.

I'm gonna turn it over back over to the mayor for those.

Mayor.

Thank you, Mr.

Chair.

Uh good evening, members of the committee.

I want to take a moment to thank our interim city manager who um made a Herculean lift to get this budget off the ground after taking this job.

I want to thank the city council, the budget committee, and the staff who built this document.

And anyone watching and taking time out of their day, thank you for being here.

We have a 16.2 million dollar structural deficit.

How we fix it will say everything about who we are.

I'm a mom.

And right now, families across Beaverton are struggling.

We're trying to figure out how to make it work.

How um how we feel when we fill up the gas tanks?

We feel it when we check out at the grocery store.

We feel it when another bill shows up.

So when the budget asks our neighbors to pay more, we have to take this responsibility seriously.

A new nine point uh nine dollar and fifty cent monthly fee, utility rates are going up, and at the same time, cuts to services people depend on.

Library on wills, DUI enforcement, the police wellness officer.

This is not where I want us to be.

Before we ask residents to pay more, we need to make sure that we have done everything we can with the resources we already have.

I believe in public service.

I believe government can make people's lives better.

I believe in the people who make this city work every day and in the services our residents count on to live and work in Beaverton.

If we believe in those services, we also have a responsibility to be honest about how we pay for them, how we staff them, and whether we are using the resources we already have as wisely as possible.

We are spending millions of dollars on outside consultants while we also have talented staff right here.

I'm not saying we should never use consultants.

Sometimes specialized expertise is exactly what we need, but we need to be clear about where those contracts are essential and where and where investing in our own staff would be better to serve the city long term.

This is not just about money, it's about believing in our workforce.

Beaverton has a council manager form of government, and that matters here.

Our budget is not the mayor's document that the council's reaction to.

We are a team collectively, we set the direction for this city, and our budget should reflect that.

They are commitments.

And those commitments need to show up in this budget.

That means every cut, every fee, every decision we make over the next few weeks has to be measured against the values we have said matter.

If we say equity matters, we need to ask how the budget protects the people least able to absorb higher cost of reduced services.

If we say access matters, then we need to ask what it means to cut services like library on wheels and whether there's another way to preserve the connection it provides.

If we say we believe in our workforce, we need to ask whether our spending choices reflect that belief.

Are we using outside consultant strategies for specialized expertise we truly need?

And are and are there places we could work that work would be better supported by our intern and internal talented staff.

These are not rhetorical questions.

These are questions that budget committee should be asking.

And to be clear, this is a shared responsibility.

We own this together.

Over the next few weeks, we're gonna ask hard questions, but this cannot just be an exercise in cutting.

We need to look for structural change.

We need to look at where we may duplicate work and we need to look at where staff are being pulled in too many directions.

We need to look at the administration overhead contracts, vacancies over time, and whether there's a better way to organize the work.

Maybe that means consolidating functions, maybe it means partnering with one of our special districts on landscaping or other services we collectively make more sense than doing everything alone.

Maybe it means taking a harder look at the contracts before we reduce city services.

Maybe it means reducing overtime by fixing the staffing and workload problems causing it instead of burning our people out.

The goal is not to make our staff do more with less.

Our staff have been doing that for years.

The goal is to build a budget that supports our workforce in a way that lasts.

So we're not asking people to carry workloads that are unsustainable.

The goal is to restructure the work so our employees can do their jobs well.

Residents can receive the services they rely on, and the city can be honest about what it costs.

And yes, even after we do the work, we still have to have a bigger conversation with the community about revenue.

I'm not going to pretend that efficiencies alone will solve a 6.2 million dollar structural deficit.

But before we ask Beaverton residents to pay more, we need to be able to look at them in the eye and say, we did everything we could first.

We need to be able to explain what we protected, what we changed, what we cut, and most importantly, why.

We ask residents all the time what services they want, but we also have to be honest with them about those service costs and whether they're willing to pay for them.

This conversation will only work if people trust that we have done our part.

I'm not asking for an easy budget.

I'm asking for a budget that reflects the priorities this council has already set.

So I'm asking this committee to dig into the numbers, ask the hard questions, protect the families who need us most, believe in our people, push for creativity, push for compromise, push for a budget that we can explain clearly and stand behind together.

And let's make sure we've collectively done everything we can and been clear about it before we ask Beaverton to pay more.

With that, let's get to work, Mr.

Chair.

Thank you, Mayor.

Uh appreciate that.

Um, it looks like next is the city manager's budget message for fiscal 26 to 27.

Um, interim city manager uh coffee URL.

All right, um, good evening, and members of the budget committee.

I'm gonna share my screen.

One moment, please.

All right.

Um, if you have any trouble seeing my uh PowerPoint, just um give a holler.

Um, but otherwise, I'll go ahead and launch right in.

Um, for those of you that I haven't met yet, I'm the interim city manager, Elizabeth Coffee, and I'm here tonight to present our um proposed fiscal year 26-27 um budget.

And our theme this year is um roots to canopies, sustaining the written services with the theme that um our uh city organization is like a complex forest ecosystem with lots of interwoven uh factors.

And before I dive in, I just want to give a big thank you to the members of the budget committee for diving into this work.

It is no small task to read through that giant uh budget book, and we have gotten a lot of um questions, and so it's clear that people have been doing their homework and diving right in, and we really um appreciate that.

Um, I also want to thank um our whole finance team and in particular um assistant finance instructor Susan Cole and also our executive team for the months that we spent um kind of developing this uh proposed budget.

So today we're going to go over kind of light through the canopy, celebrating successes that we've seen over the last year.

Then we're going to talk a little bit about some of the financial challenges that the mayor alluded to.

Then we'll go over an overview of the proposed fiscal year 26-27 budget and look forward to the future and then go over next steps.

So Light Through the Canopy is the successes that we've seen in our city forest over the last year and lots of good work that's been done despite the challenges that we face.

And just a few things that I want to highlight, and by no means a very extensive list, but a few of the successes over the last fiscal year.

One thing that is interesting to note there was a question about this from the budget committee map committee.

Our detectives handle on average 32 cases per year, which is quite a heavy load.

And those cases can take anywhere from 30 to 300 days to investigate, depending on the complexity of those serious person and property crimes.

And then we're really proud of the fact as well that our Beaverton police officers are really dedicated to modern policing strategies and really remaining up to date on the latest policing strategies and best practices.

And in the last year, they have logged more than 12,000 training hours to stay up to date and make sure they're serving the community to the best of their ability.

Next, I want to highlight our library.

One of our community cornerstones, and 91% of our residents rated our library as excellent and good, which is a really tremendous vote of satisfaction from our residents in a recent community survey.

And in addition to launching a three-year strategic plan in the last year and expanding their on-site social services during open hours and hosting a number of different events.

They also issued 9,610 library cards and welcomed more than 437 visitors over the last year.

Additional successes to highlight over the last year.

Thanks to Beaverton's portion of Metro's affordable housing bond.

Beaverton saw additional affordable housing units added.

Starting through the new Metal Arc development, leading to almost 350 affordable units that are either online or coming soon to Beaverton.

If you know Mayor Beatty well, you'll know that her favorite thing is other people's money, and we are diligently pursuing and continuing to get federal funding.

And so in the last fiscal year, we have received $6 million from the federal government for a variety of projects, including Medalark Place that I just mentioned, our capital project to construct seismically resilient secondary water supply line and our behavioral health court among others.

And then we are diligently working on trying to get even more funding.

And so we are in the process of trying to get $3.5 million total in additional funding for projects like the Beaverton Downtown Loop that will increase waffle downtown, the Laurel Ward Sidebock Project, and other projects.

Also in the last year, we were able to issue 1,117 bill issuance bill assistances for residents in need.

We all need a helping hand from time to time.

And we do offer bill assistance through our partners at community action for residents that might be struggling to pay their utility bills.

And we did provide additional flexibility this year given the challenging times that our residents are facing, and we've made additional assistance available for folks who are struggling with their utility bills.

And then we have a relatively new program over the last couple of years to also issue assistance with garbage and recycling bills as well.

And so we're proud to be able to continue to offer that assistance to community members that need it.

We do have amazing staff as the mayor mentioned, but we also couldn't do the work that we do without all of the passionate and involved community members that dedicate many, many hours to making the city a better place.

And so thanks to our volunteers, they hosted 25 different community events and projects.

And just one of the things that we could highlight is they uh thanks to their efforts, a thousand plus native trees were planted throughout the city.

Um we also were able to bring community together through 45 plus citywide events that attracted more than 78,000 um attendees over the last year.

And then finally, I just want to touch on um our municipal court over the last year.

They um handled 22,000 plus violations, uh, 1900 plus new criminal cases and 8,000 um hearings.

And so they are providing local service um to our residents um here in Beaverton.

So uh next we're gonna talk a little bit about um some of the strains that we are facing here in Beaverton and some of the financial um challenges that we see.

Um and our fiscal challenges aren't sudden, they are the accumulated effect of long-standing pressures, and like a forest facing prolonged drought, we are experiencing a persistent gap due to limited revenue and rising expenses.

And so uh many of you have probably seen this graph before.

Um, if you're a city council member or if you're a community member that's attended one of our um fiscal sustainability forums that we held over the last year.

Um, but what this graph really demonstrates is um kind of the impact of Oregon's property tax restrictions.

Um our constitution limits the annual growth of assessed property values, which restricts how much property tax revenue cities like Beverton can generate.

And so, as you can see from the slide, the city receives only 21 cents out of every dollar to fund critical services across the organization, including police, our library services, a community development and engagement.

And then uh there are many other uh agencies here in Beaverton.

And that we have lots of other um partners through special districts and um other governmental agencies that all get a slice out of that um dollar.

Um the other challenge that we face are rising expenses, and so you can see here on the screen on average um our property taxes rise at about a 3.8% when you look at um existing construction and new construction.

Sometimes it's a little bit lower, sometimes it's a little bit higher.

Um, and then on average, um our expenses rise around 6%.

So you can see that kind of fundamental math problem that we're facing.

And some of the expenses that we um are challenged by are an 8% increase in our um health care costs, um, and that is even despite um lots of work that staff have been doing this year to really minimize the increase, um, which we'll talk about in a little bit.

Uh, we see a 7% increase in retirement costs, and then despite the fact that we have made reductions in materials and services, uh, we as an organization are also impacted by the same kind of rising cost of goods that our residents are experiencing, and so we're still seeing that significant increase in cost in materials and services.

Uh city manager, I don't want to disrupt your flow, but the way that the screen is being shared, there's blocks that are kind of moving some of the text the way that we see it.

Okay.

Are other people having that issue also?

Yeah.

Hmm.

Okay, that would be a good one.

I'll try again.

It looks like what happens when you share a screen and your screen doesn't want to show like your video participants if you got a gallery up or something.

Like it's just a block you can't see behind.

Okay.

Is this any better?

Are you seeing it?

Okay.

No, it still has a block.

It still has a block.

What about now?

And it's in um presenter mode.

Okay.

We see the next slide.

And you can see the next slide.

Okay, got it.

Elizabeth, if you want to send me the link, I can share screen.

This is Nicole.

Yeah, I will send you the link.

And we have it up too, Elizabeth.

Yeah, Susan, if you have it up and you can share it, that would be great.

This is why other people usually share presentations for me.

But I was like, I can do it.

See, but you're the talent now, so okay, but you have to remind me what page you were on, and if you can, and then it is it shared.

Can people see it?

We can see it.

And I was on slide eight, tackling the problem.

Okay.

Much better.

Thank you for letting me know and not having me go through the whole presentation unaware.

And then I think then, yeah, that one.

Perfect.

Thank you so much, Susan.

And so the city council and leadership here have been working for quite some time to tackle the financial challenges that we're facing.

And so in fiscal year 22-23, our city council adopted a fiscal sustainability action plan to tackle those challenges.

And for the last few years, the focus really primarily has been around the expense reduction portion of this plan.

And really wanting to do our due diligence to be mindful of what we're asking from the community in terms of additional fees or levy before without first taking a hard look at our expenses.

And so our initial expense reduction goal was set at 9.6 million dollars in the plan.

And so since 22, 23, and through this proposed fiscal year 26-27 budget, we've exceeded that goal and have reduced expenses by 11 million dollars through total materials and services reductions and elimination of personnel positions.

And so I say this not to say that we're done.

But we have made significant progress over the last few years.

And then we have also embarked upon numerous efficiency initiatives.

And those have not necessarily identified reductions in staff that are possible, but they have helped us identify where staff can open up capacity while we continue to operate with reduced resources.

And so we've looked at how our boards and commissions are structured and staffed.

We've done assessments of our human resources team and just finished up some efficiency assessments of our municipal core.

And then I do want to be transparent that the services impacts, the reductions have impacted our services.

And so we've had to make some hard choices along the way, and we'll continue to be making those heading through this fiscal year.

We had to eliminate a dedicated mental health response team resource.

We've reduced community organization grants and continue to do so.

We had to reduce hours at our Mauricio's library branch.

And we have less proactive code compliance projects or efforts with some of the staff reductions that we've made.

Next slide, please.

And so over the last several months, um, our city council has had numerous conversations to update our fiscal sustainability action plan given the progress that we have made.

And we're focusing on a number of short-term, medium-term, and long-term actions.

So in the short term, um we've talked about a couple different revenue measures, including a potential local option levy, a general services fee, a street maintenance fee, and a potential transient lodging tax increase.

None of those have been adopted, but they are things that we are still working through.

And on the expense side, we have a soft hiring freeze where we are carefully evaluating what positions we're filling and if they need to be filled.

We've also been evaluating our service levels and what impacts of further reductions would be, and looking at making sure our reserve targets are set appropriately.

In the medium and long term, we're going to be really focusing on healthcare design updates to continue to really tackle that cost driver and consider future cost sharing with employees, which would require bargaining with our union uh partners.

Uh, we also want to focus on the library fund, which we'll touch on later this evening, um, because that also needs some long-term uh planning.

And then long-term, there are uh areas that are beyond our full control, but we still want to pursue property tax reform.

That's always on our list with the legislature to pursue, and we want to consider creative ideas of how to continue to reduce costs and look at things like um insurance pooling.

Next slide, please.

And so if we look at our proposed fiscal year 26-27 budget, that is the ecosystem of our forest for the next year.

And we're going to dive a little bit into some of the decisions that were made.

And before we do that, just a quick slide to orient you.

As members of the budget committee, I think you probably know a little bit of this already, but I don't want to assume the city has multiple funds, as you can see here on the screen.

And these funds all have different revenue sources, not all revenues created equal, and there's rules about how revenue can be used and how expenses can be made in these funds.

And we can't move money from one fund to another because of those rules.

And the key takeaway from this slide is you can see the general fund on here takes up 21% of our citywide budget, but that is where we spend a significant amount of our time due to that structural deficit.

Next slide, please.

And citywide, the budget invests approximately $384 million to sustain essential operations and advance work that strengthens our long-term resilience.

And this proposed budget, while it does contain expense reductions, provides a framework for great work to continue.

And so one key area of focus is continuing to support transparency and community trust through the police department's upgraded contract for body worn camera technology.

These are body worn cameras were due for replacement, and we would have incurred a significant one-time cost to replace those.

But we were able to negotiate a contract that lets us have upgraded body worn cameras as well as some new technology to really handle the significant amount of evidence and data that our police department is managing so they can be more effective and efficient, and so that we can also be more responsive to community members through tools such as live translation and real-time crime awareness.

We are also working on providing safer streets by installing the first of three additional planned photo enforcement cameras.

The goal of these cameras is ultimately to reduce speeding and red light violations through education.

But we know that there will be violations and increased violations.

And then we are also providing ongoing livability benefits by completing several long-range community planning projects, which include the transportation system update, our economic development strategic plan, and our climate action plan that I mentioned earlier.

These are examples of funded long-term strategic planning work that will influence livability in the community for many years to come.

Next slide, please.

Um, amid the financial uncertainty that we're facing.

We really want to focus on removing barriers to access for residents and continuing to provide culturally relevant programming.

A second area of continuous improvement is around community engagement and communications refresh.

And so we'll talk a little bit more about this throughout the evening tonight.

But we are restructuring our city's communication, neighborhood, and community event programs.

We are integrating teams that have been doing related work so that we can serve the public more effectively and consistently.

So we are really aligning our communications, our engagement, our equity, and our digital content teams together to really increase efficiency and strengthen the value that we provide without increasing the cost.

We are also shifting our communication approach to be more engaging and human-centered and with a stronger emphasis on helping people use and interact with city services, and then really telling the story of how people are impacted by our city services.

And then finally, we're focusing on modernizing our city systems.

We are launching the first steps of a future multi-year enterprise resource planning upgrade, and that's a very wonky term to just say that we're going to replace some very old and inefficient financial and HR systems, which are really the core of providing data and information and accountability to the way that we work to a more modern, effective and integrated platform that will reduce risk and errors and save some staff time through automation.

So all these projects together help strengthen our forest canopy and support services that help shape shape community life.

So this slide is a snapshot that you all received via email in our kind of budget summary, but it just gives you a good overview of where we started in the budget process in the general fund specifically.

So we faced a $16.2 million deficit and then made a number of decisions along the way to get to a balanced budget.

And so we on the revenue side, we'll talk a little bit more about the general services fee in just a moment.

I've mentioned increased photo radar fines.

We are also seeing increased fee revenue from increased volume in planning and site development, which is helping our revenue forecast.

Is something that's on the fiscal sustainability action plan with the goal of eventually fully funding the arts program.

Being conservative as we like to do with the budget, we're estimating that it could partially offset the arts program this year by the time that we work with our city council to potentially implement that increase.

Each fund here in the city uses payroll as a service, and so they make a payment into the general fund to help fund that service.

We have updated that cost allocation methodology this year to really reflect the use of those services, and that resulted in an increase of in funds to the general fund.

And then we did use some one-time revenue of 2.5 million less than we used last year, and we are still meeting our required reserve targets.

So that does not put the city at risk there.

We'll go over expense reductions in a little more detail in the coming slides, but in the general fund specifically, we used 6.6 staff positions.

We were able to negotiate down our medical dental cost increase.

And so our HR staff worked really hard to really bring that cost increase down, and that saved some money for us.

We were able to reduce materials and services.

And then we have some staff that are doing work for Bureau as well as our building fund.

And so when staff are doing work for other funds, we reallocate a portion of their staff costs to those funds to be to more appropriately reflect the work that they're doing.

And then we have a small amount of some new expenses.

We have some temporary staff in our municipal court of around 440,000 to process those new photo radar fines.

We are planning on using temporary staff to evaluate if those staff are needed given the volume of the fines coming in.

And then there is funding for two-thirds of an administrative assistant position for our HR IT and finance teams who currently are not operating with any administrative support.

So that is just a snapshot of the key decisions that we made to balance the budget.

Next, I'll talk a little bit about the proposed general services fee because this is a significant strategy in our budget this year.

This proposed general services fee would be around 950 per month for single family residential customers, and is something that council has been talking about for several months, and we'll be continuing to discuss on June 16th with a potential adoption and public hearing on July 7th.

The fiscal year 26-27 proposed budget assumes $5.3 million in revenue from this fee.

And this fee is proposed to help preserve foundational services residents rely on every day.

So the next couple slides will go over the impacts of the proposed reductions in the budget.

So total citywide across all the funds.

We have 10 positions that are proposed for elimination.

There are six vacant total FTE that are proposed for elimination, and then four filled positions.

And so the impacts of reductions are really around a couple of different themes, and one of those themes is resource realignment.

So we have eliminated two leadership roles in recognition of the fiscal realities that we're facing and to provide for a leaner management structure.

And so that reduced a senior program manager within community engagement and communications, as well as the chief equity officer position.

As I mentioned previously, we will be restructuring community engagement and communications for clearer alignment, streamlining our events, and centralizing digital content.

We plan on integrating the Office of Equity into this team to really focus on community-based partnership building and engagement.

We want to build on the Office of Equities Foundation and expand its impact by making it part of every stage of designing how we show up for the community.

This will embed equity into our everyday systems and strengthen our ability to deliver clear, accessible, culturally informed communications and engagement across all our communities.

We will continue with key priorities such as language access and Title VI, equity decision making tools and data, and then acting as we are able on multicultural gap analysis findings that call for clearer communication, stronger civic community participation support, and consistent access to information.

And so the next key theme, if you go to the next slide for the reductions, really has to do with what service impacts that we might see.

And so this proposed budget, one of the police officer positions that is reduced was dedicated to DUII enforcement.

And so our dedicated DUII enforcement will be limited to four days a week.

What that means is that patrol officers currently when they find a potential impaired driver and pull them over.

So this reduces that dedicated resource to four days a week instead of seven.

And then there's a variety of things that we are able to still maintain, but we will reduce, which includes neighborhood association committee matching grants, still able to maintain a robust grant there, but have reduced it.

We've made a 10% reduction across some of our business support partnerships, made some minor reductions to arts grants, our down payment assistance program and to recycling outreach.

We have made reductions to our building and improvement program for Allen Boulevard over the years.

Next slide, please.

And then our library collection services are transitioning to a centralized collections model that will be managed by the Washington County Cooperative Library System.

And so we have steadily been making reductions to vacant library positions in anticipation of this transition, which will occur in July of 2027.

So you can see three positions here that are proposed for elimination as a result of that transition.

And then there are a variety of capacity reductions.

The police support specialist that was handling our alarm program was doing about 10 to 15 hours of administrative work outside of the alarm program, and that will need to shift to other staff in the police department.

Reduction of an associate planner position and community development means that long-range planning, policy work, and code amendment capacity will shift and be reduced.

And then a reduction of our affordable housing program coordinator position means that other team members will need to take on some CDBG support, housing loan contractor tracking, and contract compliance.

And then finally, a reduction of a second police officer position.

That position was coordinating the efforts that were occurring across our police department.

Those wellness programs will continue, but the coordination will be reduced through the elimination of that dedicated position.

Next slide, please.

So now we're going to talk a little bit about kind of what's ahead when we look at our financial future.

Next slide, please.

So this is a look at our general fund forecast, and you'll see this a little bit later in the presentation as well.

So I won't spend too much time on it.

But I just do want to point out that even with careful budgeting and strategic use of one-time funds, we do face absent any action, significant gaps in the years ahead.

And so without look making significant changes, whether that's to our revenue stream or expense stream or both, the community will face deeper cuts to services.

And you can see that our expenses are the orange line and they are outpacing our total revenues, which is kind of that dark blue line.

And then on the bottom, you can see the light blue line is our target ending fund balance that we are to maintain per best practices and policy.

And again, apps and action that will draw down over time, as seen in that green line.

So we are going to be continuing to work on structural solutions so that we can tackle this problem in the years.

It's a marathon, not a sprint, is what we usually say.

All that to be said, um, I don't want to leave you on a depressing note.

Um, and I do think that despite these challenges, there's a lot of reason for optimism here in Beaverton.

And I like to show this quote here he who plants a tree plants a hope.

Uh, Lucy Larcombe's poem uh uses the act of planting as a metaphor for human responsibility, hope, and the enduring influence of positive action.

And those are really all key cornerstones of public service.

Um, the work that we have before us isn't easy.

It's not easy to plant a tree, uh, right.

You have to dig the hole, you have to water it and nurture it.

But we know that our forest is resilient.

Our roots run deep, and they include leadership from our city council, um, our dedicated staff and our engaged residents, um, like the ones that you see here on this slide, um, who are uh planting hope.

We all share a commitment to Beaverton's future and a belief that while we do have hard challenges to tackle, this work matters and it's worth tending to.

And I believe that with thoughtful stewardship, collaborative planning and a clear view of the path ahead, we can continue nurturing a city that grows stronger, more connected, and more vibrant with every passing season.

So together we're going to continue attending this forest, protecting what's essential today, and then preparing for the possibilities of tomorrow.

So, with that, I am almost done talking for now, but I want to go over a couple of next steps.

Just a quick reminder that tonight is the first of two budget committee meetings.

The second one is scheduled June 2nd, and at that meeting we'll cover our public works funds and our capital improvement plan.

Um, and then we'll have an overall discussion on the budget, and the budget committee will make your recommendation to city council around the budget.

Um, and I want to note that sometimes, but not always that committee members wish to propose amendments to the proposed budget.

And so if you have that uh thought that you might want to do that, I really encourage you to reach out to either Susan Cole or myself as soon as you can because we would love to help you craft that amendment in a way that it's compliant with budget law and provides a good structure for the committee to have a discussion.

Um and then we have our council meeting scheduled for June 16th, where council will consider and adopt the budget, and the new fiscal year will begin July 1st.

Next slide, please.

And then we've got a couple more staff presentations.

I know it's a lot of talking uh tonight.

But next up, our assistant finance director Susan Cole will go over a general fund overview.

I'll hop back on to talk a little bit about general fund departments and the library fund.

And then Susan will close us out before we have discussion with the transient lodging tax.

Thank you very much.

Thanks, City Manager.

Reminding everyone that we are going to dive deeper into general fund in the library front and transit lodging transient lodging tax tonight.

Are there any questions for the city manager?

Put your name in the chat.

I will pause for a few seconds while we do that before we move forward.

Chair, I do see a question in the chat about how general services fee will be collected.

And that will be collected via our utility bill.

Thanks, City Manager.

And it looks like Kia has a question.

K you have the floor.

Yeah, Elizabeth, I was for starters.

Thank you for doing a presentation around budget that incorporates something other than just words and charts.

The theme is beautiful.

My question is on slide 20.

I'm curious if you can articulate the actual projected gap, the dollar amount between those lines, just to kind of further highlight the anticipated shortcomings over the next five years.

That would be great.

Obviously, not for this moment, but it would be would be nice to see that.

Yeah, sorry, my computer started freezing up for a minute there.

So I might actually turn to uh Susan if you're able to articulate those gaps a little bit more in terms of dollar numbers.

So you'll notice from the graph that the scale is fairly large.

You know, it's 20 million between the lines.

And so you can see how in fiscal 27, of course, we have to have a balanced budget.

In fiscal 28, you know, it approaches the 15 to 16 million-ish.

And then you know it increases to you know 20 to over 20 million dollar deficit in fiscal 30.

And as Elizabeth pointed out, a lot of that is the dynamic of how our revenues are growing versus our expenses.

And unfortunately, in the state of Oregon, um, we're very limited by property tax, the Oregon constitution.

Um, hence in our long-term goal, we have property tax reform, which is similar to other um taxing jurisdictions in Oregon.

So a lot of other cities are facing this one city calls it negative ongoing alignment.

Um, we call it a structural deficit, uh, but call it what you will.

Um, expenses do outpace revenues, and that's it's an unfortunate um situation here in Oregon that we are facing.

Yeah.

Thank you.

Um, my other question, if I could just do my second one real fast, John.

Um I think Elizabeth, I heard you say that you guys were able to capture uh more significant reductions for 26, 27 than what you needed.

And so my question is do you still foresee needing to use those one-time funds to balance if you have made further reductions elsewhere?

I hope that made sense.

Yes, and I think what you might be referring to is we originally had a goal in our fiscal sustainability plan to reduce uh materials and services and personnel by 9.6 million.

Um what I'm referring to is that collectively over the last couple of years since fiscal year 22-23, we have exceeded that goal.

And so that really refers to kind of the marathon that we've been in over the last several years and not specific to the reductions that we're making this year.

If does that make sense?

It does.

That's easy.

Thank you.

Thank you.

Um I do have one question, city manager, and maybe this is for Susan.

Um, can you talk a little bit more about the one-time uh revenues this year?

I believe it was 2.5 million.

Is that uh I'm assuming most of that or all of that will come from reserves.

Can you just confirm that and then tell me what that does to our reserves?

Uh as a, you know, I think we have a policy.

Um, what does that look like?

I'll start and then Susan, you can chime in if you want to go into more detail.

I'll just keep it real high level.

But yes, generally speaking, that comes from um our reserves and the anticipated underspend that we have in this current fiscal year.

Um, and we are still able to maintain our reserve policy.

Um, and so we have um a targeted line item in our um reserves that um per policy targets 11% um of operating expenses in the general fund um at the time of that we um approve the budget.

And then over the course of the year, we know we're going to have natural underspend when positions become vacant or projects get delayed.

And so the policy says then by the end of the fiscal year, we should have 17% of operating expenses in that in our reserves.

And that's just a way to capture that natural underspend and not artificially constrain us at budget time.

Okay.

Yeah, and you you actually answered my second question there, which was which was I don't know if you just know me, but that was really good.

So thank you for that.

Um cool.

I don't see any other questions.

So it looks like uh Susan, you're up for the general fund.

Okay.

Thank you.

Yes.

Just one moment, please, why I share my screen.

Okay.

So continuing on a little bit with um what Elizabeth was presenting with the citywide um information for the budget.

So what we have here is a slide that talks about the budgeting principles that we use to balance the budget.

So we kept the city council goals in mind and the guiding principles to inform these decisions.

And there are 21 guiding principles.

These are just uh the highlights.

The guiding principles discuss transparency in our budget development, and what we want to emphasize belonging and climate stability.

We want to be able to do strong forecasting and limit the amount of budget supplementals that happen during the year, and we incorporate fiscal planning or reserve planning, um, and we are committed to, of course, improved service delivery as we go through the year.

So a copy of the full text of these budget principles are included in your budget binder.

So, just another overview of the budget.

Um, we're proposing a 514 million dollar budget.

Uh, Elizabeth's information also had the Bureau funds, and so tonight this committee right here is only dealing with the city, the Bureau budget committee met right beforehand.

So, this slide is only the city resource overview where you can see our taxes and right-of-way fees are 20 million or 4%.

Uh, we have some intergovernmental revenue, which makes up grants and state shared revenues and loans from um various or grants, I'm sorry, from various governments, service fees include our utility fees, uh, fines and forfeitures, uh, so on and so forth.

For total uses, you can see the split out here between personnel, materials and services, and capital outlay.

Personnel do make up uh 26% when we're looking at the total.

Uh, we do have contingencies and reserves, which look which are 25%, and that is largely driven by our utility and capital funds.

Uh, those funds do have to have pretty healthy reserves because we want to have cash on hand.

If something breaks, we want to make sure that we're still providing clean water and that when people flush their toilets, the pipes still work.

So we want to make sure that we have adequate capital reserves set aside.

Uh, and then I apologize the percent cut cut off for capital outlay, but that is uh proposed at roughly 83 million.

We have a pretty healthy capital plan that we'll be going over on June 2nd.

So this chart just compares the revenues from fiscal 26 to fiscal 27 and highlights the changes in more detail.

So the prior slide was the pie chart of just 27, and so here you can see 26 and 27 compared.

You can see that property taxes are increasing, uh, the increases due to new construction and also the 3% limit that is built into the state constitution.

And there's also a little bit here for the revenue share with our urban renewal district that we mentioned.

Intergovernmental revenue is increasing due to budgeting resources from the Metro Affordable Housing Bond.

We're also budgeting resources, if I can remember this acronym from the major streets transportation improvement program from Washington County, and that is for Millikan Way improvements, and we also have some reimbursements from clean water services for sewer capital projects.

The permits and fee category you'll notice are uh projected to do decrease overall just slightly, and that's because the South Cooper Mountain development is tapering off, so we're not anticipating as much system development charges as we have had in prior years.

But these decreases are slightly offset with an increase in the general fund where we are recognizing and trueing up revenue to actual experience that we've had.

And also we did have one-time funding in our general fund from certain reserves we had set aside for it's kind of technical, what we call vacation payout.

So we had a reserve that had some extra that we dipped into in fiscal 26.

And so that revenue is removed for fiscal 27.

And so that drops that category.

And the transfers are increasing, and that represents a revamping of our cost allocation methodology to make sure that the funds are paying their fair share for the different services offered.

There is an increase here also for project management and oversight for Bureau.

And then also there's transfers to capital construction funds from our operating funds, and that's mainly in the utilities and transportation.

And then the bonds and loan category represent a decrease for the amount that we will be receiving from the EPA Wi-Fi alone.

Fiscal 27 actually represents the last year where we'll draw down on that 81 million, and that 81 million dollar loan drawdown will then be complete in next fiscal year.

But then that's offset with a $30 million bond for water capital projects.

So on the expenditure side, this is again the overall city of expenditure by type.

Our personnel expenses are increasing due to cost of living adjustments, step increases, changes to our health and dental plans, and all the associated payroll taxes and benefits.

Materials and services are increasing across the city due to work associated with a metro affordable housing bond.

We we are actually budgeting brand new thing, our operational costs for a brand new water treatment plant that's related to the Willamette water supply program in Sherwood.

That water treatment plant is scheduled to be operational, and so we do need to budget funds to pay for that operation.

Another increase relates to how we are budgeting our CDBG funds.

Those grants through the federal government are coded by year.

And in the past, the city has only budgeted for the current year, and that has caused a little confusion with how we draw down our CDBG funds.

And so that change in budgeting is that we are budgeting all prior years also.

And so that will make it a little bit more efficient for our CDBG staff to accomplish that work and draw down those funds from the federal government now that our budget is lining up better with the funds that we had previously applied for, but not receive that reimbursement.

So we're accounting for that in fiscal 27.

Our capital outlay is increasing, and that's representing, as I mentioned before, the construction work on Millican Way, some work on the North Transmission line, and some sewer projects with partnership with Clean Water Services.

You'll notice the debt category is going slightly down, and that's because uh fiscal 26 this June 30 represents the final year of a payoff of a 2016 water revenue bond.

However, that will be offset this year and into the future with new revenue bonds that we will be issuing to finance our capital program through the water utility, and also we anticipate our first Wi-Fi alone payment in the subsequent year in fiscal 28.

And as I mentioned, the transfers are changing due to revamping the cost allocation method.

Um, and so that so we have to balance the transfers both on incoming and outgoing, so it's the same reasons for that.

This slide here just shows you the proportion of the various sections we have where we spend money.

Uh, we spend money, of course, on public works.

This is just another way to look at the budget.

26% of our the citywide budget goes for supportive public works.

Uh, infrastructure projects make up 19%.

Uh, police overall make up 11%, um, so on and so forth.

So we we think this is just an interesting chart because we do spend a lot of time on the general fund, but you can see here that the city is all about different lines of businesses.

Um, and then an important part will be getting to um on June 2nd with our public works and um CIP budgets.

So this slide here talks a little bit about our property taxes.

So the city's assessed valuation is $13.3 million dollars, and we are assuming that AV will grow 3.7%.

3% is the constitutional limit.

So the 0.07 that's included here is our estimate for new construction, and and that's citywide.

Um, and that has we we don't drill in too much detail on new construction, it's basically a straight-line uh projection on what our new construction has been.

It takes quite a bit of development to move the needle on assessed valuation, and then a small fraction for the revenue share from Bureau.

So we collect property taxes not only for the general fund, but we also collect property taxes for the library fund.

And then we have a tax bond out there that paid for our public safety center.

That was voter approved back in, I think it was 2017.

And so that tax rate for that bond levy is 0.18, but basically 18 cents, and that's on top of our permanent rate.

So this chart here just shows you the proportionality of our property taxes and um and where they go.

So this slide shows you the personnel across the city, and Elizabeth talked a little bit about the general fund changes, but here you can see the changes across the city in all the various funds.

So our personnel expenses are increasing by 7%.

And as I mentioned, that was for cost of living step increases, benefit changes, that sort of thing.

Our purse contribution rate is not changing in this upcoming fiscal year.

But we do expect a change in when fiscal 28 comes along.

So as Elizabeth mentioned, our health care increase overall about 8%.

Our cost of living is roughly 4%.

And as Elizabeth mentioned, we did have strategic reductions in personnel, and then departments continue to strategically reduce their expenditures and realize efficiencies.

And just as a reminder, FTE stands for full-time equivalent.

Okay, so now moving on to the general fund.

So this slide here gives you an overview of the general fund revenues.

We expect to receive roughly 106 million dollars in general fund revenues next year.

We're starting the year off with about 17.8 in beginning working capital or beginning fund balance.

We use those terms synonymously.

So the entire resource base for the general fund in fiscal 27 is 124.2 million.

The property taxes, as I mentioned, are the primary source at 51%.

And then there's some other taxes, such as right-away fees and such that make up 15% of the general fund.

And as we talked about, we we are proposing a general service fee, and that category of service fees makes up 6% or 5.9 million.

That within the service fees is also a small amount for uh the Beaverton Central Plan.

This table here uh shows the differences between the the fiscal years the budget 26 and 27.

And so as I mentioned, the general fund property taxes are going up, and it's a combination of the 3% cap plus new construction and the revenue share for Bureau.

Uh right-away fees increase because those rates increase that that may that's Portland General Electric, Northwest Natural Gas, those kind of utilities.

So as they increase rates and as their accounts increase, we do realize a little bit of increased revenue in that category.

Um intergovernmental revenue is declining as state and federal grants do fluctuate from year to year.

And also we did have a unique funding arrangement with Washington County for our shelter where we did a little bit of grant swapping, and so that arrangement wraps up in fiscal 27, and so that is also leading to a decrease in intergovernmental revenue.

Uh permits and fees are increasing when compared to last year's budget or this current excuse me for fiscal 26 budget, and that represents a realization of increased revenue from development permits that are processed through CDD.

Charges for services, as I mentioned, is this general service fee.

Um but it is offset slightly from the central plant in fiscal 27.

We we anticipate that um revenue to go uh down a little bit.

Fines and forfeitures are showing an increase because of the photo radar expansion.

Miscellaneous revenues are decreasing due to a removal of one times funds, as I mentioned, that um that vacation payout reserve, and then transfers are increasing, and and as I mentioned before, this is due to a revamping of cost allocations and recovering the full cost of services provided by the general fund to other funds.

And so we did discover there was some subsidies going on, and so now we are revamping those cost allocations, and then the beginning fund balance represents the variations from the prior years, and so the fiscal 26 beginning fund balance would have been the fiscal 25 results, and as we move into fiscal 27, the 17.8 million, uh, that's a that's a representation of how we anticipate the current year fiscal 26 ending.

So our operating expenditures in the general fund are anticipated to be 1.8 million, and you'll notice the gap, and that's what Elizabeth was referring to that we are using one-time resources for.

So the funds are from, as I mentioned, the revenues and underspend from fiscal 26.

So that's where that money is coming from.

Our personnel budget is the largest expense in the general fund, which makes sense because it's very service oriented and to provide community service.

We largely depend on staff to provide those services.

And so that's our largest expense at 72% of the general fund budget.

Reserves and contingencies, we anticipate ending the year at 15.8 million on June 30.

Um, and so at budget time, as Elizabeth mentioned, we do have an 11% goal.

The 15.8 represents uh roughly 14.6 percent.

So that kind of bridges between the 11% budget and then the 16th or 17% we want to end the fiscal year at.

And that also includes uh targeted reserves that we're setting aside money for equipment replacements, the public works operations center replacement.

So the 15.8 million, we we do not consider it unreserved or undesignated because we do have reserves in there, we're actively trying to save up money for.

Um, but all those put together, we're still meeting our target.

So here you have a slide that shows you the proportionality of the various um general fund departments.

So public safety is a priority of our community and as and of our council.

So you can see that priority reflected in this pie chart here, where the police department makes up 44% of the general fund or 54.7 million.

Uh so you can see how the other uh departments here in the general fund, how they uh rank in proportionality across the fund.

The contingency makes up, like I said, about 13%.

Um, which is different than the sorry about that real-time typo here, so forgive me on that.

Um, this shows the um relationship of our general fund departments to one another.

This table here compares fiscal 26 to fiscal 27, so you could get an idea of some of the changes that are happening.

So, even though we are making strategic reductions in the general fund, our personnel services expenses still going up, reflecting cost of living per collective bargaining agreements and our mental or excuse me, our medical and dental increases.

Uh, our materials and services are going down, representing budget reductions.

Our capital outlay does fluctuate from year to year, and this is according to our fleet replacement schedule, and and it's mainly uh driven by our police uh fleet, our patrol vehicles, and so we do have them on a four-year, four to five year cycle.

Our fleet manager does review those vehicles each and every year to make sure they're still performing.

If they're still fine, they stay on the street.

Um, so really our replacement schedule is more of a guideline.

We don't like stick to it specifically, those vehicles are reviewed each and every year.

And the transfers are going down a little bit because um what's happening is the general fund support for our Griffith building is changing because we are welcoming a new tenant in that Griffith building, and um we're we're dividing the cost of the Griffith into that new tenant, and that new tenant is our very own water utility.

So they're going to occupy the third floor of the Griffith building.

So of course we want to tag them with the appropriate expense to pay for that building, and that is saving the general fund a little bit of money.

Um, additionally, as part of the budget um balancing strategy, the other change in transfers is we are reducing transfers to the arts program, and that is based on a plan to increase the transient lodging tax midway through the fiscal year to help fund the arts program.

So here's a snapshot of the general fund positions by department.

And so, as Elizabeth mentioned, we are making strategic reductions to the FTEs to address the uh structural deficit, and then we have some realignments and reductions, and the positions were viewed through a funding lens when we looked at the allocations, and so we looked at the work that positions were performing, and then we reallocated them across funding streams so that the funding matches the tasks and the work that they were doing again to relieve any kind of subsidy that the general fund might have been providing.

And so we did spread out FTEs to the building fund, the public works family funds and urban renewal.

And Elizabeth already went over the general fund forecast showing that there are the alignment of revenues and expenditures will continue to be a challenge.

And with that, I will hand it back to Elizabeth.

All right, thank you, Susan.

So now we're going to transition to go into a little bit more detail to departmental budgets.

And so I know you've been listening to a lot of staff presentations.

So I'll try to walk through this relatively quickly.

And so each slide will have about the same format.

We're going to talk a little bit about some of the key priorities that the departments are working on in the coming fiscal year, and then we'll go over significant changes to their budget, a lot of which we've already talked about.

So we have our city council budget, and their priorities are really geared around a handful of key goals around fiscal sustainability, affordable housing, enhance mobility, economic development, community safety, and then across all of those goals, really enhancing community engagement and communications.

There's no significant additions or reductions to this program.

So in our city administration slide, we've combined our office of the city manager, our city recorders office, and city attorney's office into this slide just to reduce the number of slides.

And so some key strategic priorities for us over the next year are to implement the fiscal sustainability action plan that we talked about earlier to formally launch our citywide strategic plan development.

We do not have a citywide strategic plan and would like to establish one within our existing budget to really align around the vision and strategy for the organization.

We are going through a leadership transition as you may know.

And so we're wanting to ensure organizational consistency and transparency through this leadership transition.

So that's a key focus.

And then we'll continue to provide a responsive legal services for the city and mitigate risk.

And key change, our city attorney's office was able to reduce about 100,000 in external legal resources due to the resolution of some ongoing litigation efforts.

Next slide, please.

And so our finance team works on lots of different projects, but three key priorities for them is to really work on our internal and external customer service and always continue to meet the needs of the organization.

We're going to be elevating fiscal awareness throughout the organization and really providing departments with more tools and education to manage and monitor their budgets.

And then, of course, they're very involved in fiscal sustainability initiatives, including a potential trans-Dale lodging tax increase.

And so they are sharing an administrative assistant with HR and IT, which is two-thirds funded by the general fund, which I mentioned earlier in the presentation.

And then they have added a utility billing customer service representative to respond to increased calls that we are seeing come through that program, and that's funded by our utilities program.

Next slide, please.

So our human resources priorities for the coming year are to reestablish some foundational and ongoing training and professional development for our supervisors.

We do offer professional development for everyone across the organization, but really want to focus on our supervisors in the coming year.

And then we really want to have a strategic plan will be very helpful for our HR team.

So they want to align their priorities with that strategic plan and then really continue to provide our HR staff with increased professional development opportunities and exploring how we can perhaps model a business partner model where we have HR specialists assigned to departments that get to know those lines of business and can provide some more custom on-demand services.

And then in partnership with our city attorney's office, they'll be leading effective and collaborative labor negotiations in advance of our labor union SDIU contract expiration in June of 2027.

And then what's changed is that they share will plan to share an administrative assistant with HR and IT, or excuse me, with finance and IT.

And our information technology and services department, I've mentioned previously, working on developing requirements for any finance, payroll, and HR enterprise platform.

Another priority is migrating our public works physical infrastructure asset management system to a cloud-based solution.

This is kind of one of those must-do projects because our current vendor solution is no longer being supported, and that provides some operational risks to be operating through a program that's not supported.

And so we will need to make that migration.

We also want to develop plan and design for city server relocation.

We have a number of physical servers that we would like to relocate out of the Griffith building.

And so we're looking on plans to do that.

And then finally, one of the fun ones is that we want to pursue a What Works City certification.

And this is a program that was launched by Bloomberg Philanthropies, and that it sets the standard of excellence in city governance by evaluating how well cities are managed and whether they have the right people, practices, and policies in place to put data and evidence at the center of decision making.

So we're excited to really explore how we can better send our data and evidence in our decision making practices.

What's changed, IT was able to reduce approximately 128,000 in software costs by using some of the tools that we already have available to us.

We do have reserves set aside for our enterprise replacement system replacement project.

And so we have allocated $300,000 from those reserves so that we can begin consulting and planning work for that project.

We've already talked about their shared administrative assistant program, and then they are adding a business analyst, which is funded by the utilities to assist with that required public works asset management software upgrade because that will be a pretty big lift for our staff.

Our sustainability and recycling team in the next fiscal year, they will they will begin implementation of the Beaver 10 Climate Action Plan.

And then they'll continue to focus on reducing contamination in recycling by implementing the state pollution and recycling modernization act.

They're going to continue a pilot for multifamily food scrap composting.

And I mentioned the next phase of reduced rate programs and moving forward with getting more community members into assistance or helping them with their bills, and then planning on updating some outdated code language around our solid waste and recycling rules.

What's changed is that we were able to reduce around $57,000 to materials and services to reduce our outreach and planning work that will delay some of the implementation of our climate action plan but still allows us to move forward.

I would note too that we will have some uncertainty around some of the revenue in this program going forward because Metro has proposed eliminating funding for cities that would that has covered our business food scraps program.

So we have been advocating for a gradual off-ramp rather than a sudden elimination of that funding.

And so we may need to make some adjustments to that particular program in the months ahead if that revenue does not come to fruition.

We've talked a lot about community engagement and communications earlier in the presentation.

And so again, we're going to be embedding the Office of Equity program to really prioritize that community focus and incorporate equity into every message event and engagement.

Deploy some focused campaigns centered on the value of city services and the need for street maintenance.

And then we really want to improve our digital outreach from website design to refresh of our social media content.

This group also plans on updating our boards and commissions by laws, recommended by that recent assessment that we did and how we operate those bodies.

And then we're looking to be more cost-effective in how we offer community events, and so we're excited to explore updating fees and to better capture cost and then pursue sponsorships.

We've restructured the program to bring in our events program, two positions from the Office of Equity and Inclusion, and then one position from IETS so that we can really centralize the management of web content.

And then they've reduced their materials and services by 55,000, eliminating some of our advertising and streamlining our operational costs.

And so we will be focusing, as I mentioned, on enhancing equitable engagement and reaching our underserved community and implementing recommendations from the multicultural gap analysis as resources allow.

Our equity budget also includes our Center for Mediation and Dialogue, and that will be moving to report to our assistant city manager, Dan Weinheimer.

They plan on launching a restorative justice adult diversion program that is grant funded in partnership with our municipal court.

That will be a diversion pathway for certain misdemeanor cases.

And the goal of that program is to support defendants, crime victims, and impacted community members.

We're in a facilitated process where they can discuss their needs and the impacts and meaningful accountability with that restorative justice lens.

And then they're also looking at updating their fees to better recoup the cost of services.

They provide a lot of trainings and services in the community and to other organizations.

Next slide, please.

And so our municipal court, we've talked a lot about the new photo radar camera, which is being installed on TV Highway, and we will continue to work on those two additional cameras.

We are going to be implementing process improvements that were identified in a recent grant funded efficiency assessment, and then work collaborative collaboratively with our Center for Mediation and Dialogue to pile to pilot that restorative justice diversion program.

Our court was able to reduce materials and services by around 83,000 to align with our actual expenses and then also account for costs that are now covered by a grant.

And that covers some temporary part-time court specialists, a part-time court bailiff, and additional interpreter services.

And then they have added approximately 30,000 for part-time temporary support for our behavioral health court, which is grant funded.

So our police department strategic priorities include implementing enhanced technology through our new contract for body war and cameras, as I mentioned earlier in the presentation.

They're also expanding their marketing of the police department's work to strengthen community relations, and then prioritizing new recruit training in order to maintain a steady flow of well-prepared officers.

And we've discussed earlier in the presentation, there is two vacant officer positions that were eliminated in the budget and a support specialist position as well.

Our community development department has a number of key strategic priorities.

We talked about some of their long plan long-range planning efforts, including economic development strategy, transportation system plan, housing production strategy, and then also working through some key projects like the Millikan Way improvements, our downtown loop project, our downtown Beaverton sub-basin strategy.

We talked earlier this evening about Bureau, which is the Beaverton Urban Redevelopment Agency, which has its own governing board and a separate budget.

But they're working on redevelopment of some key transformative sites, Holland Center, Alumboard Lombard West, and BC2.

They'll be working through the downtown parking management plan and then doing development review and construction inspections business improvements.

They have a number of changes in their budget.

They've eliminated a couple of positions, the Affordable Housing Program Coordinator and the Associate Planner, eliminated the building improvement program for Allen Boulevard as we discussed earlier.

They were able to reduce some one-time transportation system plan expenses of approximately 260,000.

They've made some reductions to city-sponsored grants and grants and sponsorships, minor reductions for various arts grants, 10% to our business support partners, and a 50% reduction to our home buyer down payment assistance program.

They've also reduced materials and services expenses to better reflect actual expenditures, and then reallocated the equivalent of 3.25 FTE to Bureau and Building Funds in recognition of their changing work.

And then public works, we'll talk more about public works at our next meeting, but at a very high level, they are closing out construction of Everton's portion of the Willamette water supply system in anticipation of the 2027 completion.

Um they are developing a multi-year plan for street maintenance and would like to begin construction on the year one street um repairs, but that does assume passage of a new street maintenance fee.

Um and then they're working on implementing digital management of um some of their um infrastructure like pump stations and buildings by doing some mapping and 3D visualization and maintenance tracking, and that really improves um efficiency, um, enhances our decision making and then also helps us identify and mitigate hazards around those facilities.

And they have added a modest amount of funds around 70,000 to replace a security gate at the operations building to protect um some of our high value equipment.

Um and with that, I'm gonna move on to the library funds.

Um I'll pause there, um, Chair, if you want to take questions now, or if you want to hold them to the end, it's up to you.

Sure, we'll we'll go ahead and take questions now.

It looks like the mayor will kick us off.

Um I'm I'm rarely ever caught off guard with new information, but I'd like a little more information about the water utilities moving to Griffith, particularly because every time we've asked about the building, we're saying that it can't be used.

So can you illuminate us on what that is and how is it a cost saving measure?

Um I might ask um Dan Weinhammer to chime in on that.

Thank you.

Uh yeah, uh budget committee Dan Weinham, our assistant city manager.

Um the move is being made um actually as much because of the status of the operations yard and uh how full the um the yard and the buildings are.

We really don't have capacity for the staff that we have.

And so the thought had been looking for options to either rent space or your you know, uh thinking about the facility master plan and some options there of like co-locating at other sites.

Um water appeared to be the most flexible in terms of the size of the team and where we might be able to relocate them.

And I agree with you and and your your memory of Griffith and how we wanted to use that and to move people out of it.

Um, and we very much have been clear with folks that this is a very temporary move.

We're looking at, you know, a few years before uh we're able to move some of the infrastructure we spoke to about uh servers and other things like that out of the Griffith building to then bring to council some idea of what we might do, uh how we might move uh move past, move on from the Griffith building.

So it's really honestly quite uh quite honestly, it's a band-aid at the moment, uh, acknowledging the the status we have with operations and the fact that we need to have the amount of staff that we have and probably more for public works, and that we just really can't put them anywhere.

Um, and so since we had vacant space in Griffith for the time being, we felt like um that that could work and um you know, just again with the caveat that it's a it's a short time.

I just would like to say that I know there's a lot of noobs around City Hall, but I'm I lived in that building when I was a new elected official.

So we used to have our entire city there, so it's perplexing to me that it's like empty virtually besides the court.

And so I want to encourage us, there's not money coming down to solve issues around building.

And so we got to get more creative with our space.

So I I appreciate that we're doing it, but there's uh two other floors in that building that we could be doing other things with, and there's a desperate need for community space.

So I look forward to as we band-aid this for a few years, opening it up for more use because we hear all the time that um our staff have nowhere to go, and we own this gigantic building that is sitting that really empty.

But I do have one more question.

Like, how is what I miss the money transfer piece?

And this is because the uh the water utility has funds, and so you know, like other uh other users of city spaces, uh their charge price square footage.

Um, you know, and and there's a cost allocation uh cost recovery uh method for that.

And so uh the water utility paying for some uh aspects of maintenance and the care for the building that would otherwise be paid for by the general fund.

And Susan's popped on, so she may have additional information to add to my answer.

Yeah, it helps the general fund, but it does not it's almost neutral for the water fund because the water fund had to pay its share for the public works operational center.

And so instead of it being directed over to what we call the public works facility fund, um, that amount is now going to the general, you know, helping out the general fund with Griffith.

Sweet.

Go find some other people to move in the building with outside funds.

That would be really helpful.

Cool.

Thank you.

Um, Councilor Peter.

Yeah, thank you.

Um I've got a few different comments that are pretty quick, but they're just kind of the concerns I want to highlight, but also I don't have solutions to them.

I think they're just things that I want us to be aware of as we move forward with the budget.

Um the first is regarding the the planning department, and it's the we're proposing eliminating one associate planner.

We eliminated one a couple years ago, I believe.

But there's also a a note in the budget that said that uh we have temporarily, I think it was an associate planner who's moving over to be our interim city engineer.

Was I reading that right?

Um that's correct.

We do have um an individual from community development that is the um interim city engineer.

Um, and I see Dan coming online, and he's talking about that than I am.

Sorry, um, yes, the we have someone is interim uh uh city engineer who has uh an engineering background and is uh coming over from a position as a project manager, not as a planner that has an engineering PE and all of the requisite uh requirements of that role as city engineer.

And we are using some of that one that we consider that one-time savings, that fund swap, and we are using it.

So she the the position is moving over to public works, which frees up funds in the general fund, and one would think, oh gosh, there's money there.

No, we used it to balance the budget.

So uh when the temporary assignment ends, the funding will go back.

If it ends, yeah.

Okay, no, and I appreciate us being able to use staff to fill in uh gaps and needs like that.

I think my concern is just in the the planning department, uh the planning divisions that capacity to do some of our work.

Will that affect our ability to either implement some of our mountain planning or some of our other bigger planning related goals, or are we able to divide up the workload and keep that work moving forward?

Um I'm gonna give you the very honest answer, and and so yes, it will absolutely impact our work and our ability to to do work, and it will force prioritization of the work that we have coming forward, right?

So um it's not more with less, it's less with less.

Um, and it's it's hopefully more prioritization around the work that we execute in planning.

So we understand the long-range planning may suffer.

What often happens in planning is that current planning also shifts and does some long-range planning, and so it's not a discrete, you know, you are only doing one or the other.

So there it may be some opportunity to have uh cross-pollination and opportunities for staff to grow in that way, but um, it will definitely um result in less um happening uh and one or the other, and it will be dependent, I think, on current planning and the workload there.

Okay, thank you.

And I appreciate the honest answer.

I think it helps uh council set good or reasonable expectations for ourselves with what's appropriate, but also set expectations with our community about where we might feel pain with some of the reductions we're having to make and why we need a general services, general services fee.

Um got another comment about uh the police reductions.

Um I did a write-along with our DUI team when I first joined council, and it was a very informative.

They do they do really they do really good work, and uh they're not lying when they say that uh processing one DUI case can take a couple hours.

There's a lot of paperwork and a lot of uh process to that.

Um so I that's a cut that that hurts from for me to make.

I think that's a really important service that we're providing the community.

I know patrol officers can do that work too, but also means we're not getting the same service coverage throughout the night or when the DUI enforcement is happening.

Um there's also uh our partnership with TriMet.

So TriMet's funding are they funding four new police officers to support transit security in the in the area, is that right?

Um I think Chief Jeffson is online.

I might ask her to assist answering that question.

Okay.

Um actually that's an offset of two positions.

So the two uh reductions that you see in the actual budget are separate from the transit uh situation.

So we were able to negotiate uh basically placing two additional officers uh over to transit, and obviously we get back filled the money for that, those two positions.

So they're kind of separate things.

Yes.

Okay, no, I appreciate the clarification.

And um one of the reasons why I bring this up is just for budget committee and council, but also for community members as we are talking about the cuts and sacrifices we're making.

This is one creative way for us to keep officers engaged with the city and available for the city, but those officers are not going to be out on patrol, they're gonna be working with trimate security, which is needed too, but um there is an impact there too.

So I just raised raise these just for uh context for us to be aware of of the impact that we're feeling and how we're trying to create approach it.

Um that is all I had.

I appreciate general fund overview.

It's been helpful.

Thank you.

Thank you, Council Tierra looks like uh Kia, you're up next.

Yeah, thank you.

A few questions.

I I think the first one is I believe I heard you say, Elizabeth, that you guys are working on a strategic plan and there's the fiscal sustainability plan, and you kind of mentioned with the event program, and I believe also the equity within the Office of Equity, um, that there are certain fee structures that you guys are looking to make cost recovery.

And I'm curious if we have like a collective list for the city of our fee structures and which are not at full cost recovery today, and what the kind of the game plan would be to get to cost recovery for those particular fee structures, and is that included already in the fiscal sustainability plan.

Um so I'll take a shot at answering this, and um, Susan, you can chime in if if I miss something critical.

So we do have a master fee schedule here at the city that details out the various fees that we have for our services.

And so cost recovery definitely has been something that we've been working on over the last couple years.

Um, we did a big update to our master fee schedule last year to really kind of bring some of our fees in line and kind of focusing on some of our um our larger fees.

And so we are now kind of looking at, you know, what fees did we not get to that are really supporting services that could be at risk as we continue to move forward um through the financial challenges that we're facing.

Um, and so we that's something that we are continually evaluating as we're moving forward with the services that we're offering.

Okay.

Um, and then I have one more question, and this uh may not be a popular question.

So um we haven't talked much about the the general service fee, and my concern is um that when we talk about affordability as being a priority for the city, and we look at this fee structure, and then we look at the utility fee increases that we're also imposing on the community members.

I'm curious how we are selling that package and and still calling ourselves you know, prioritizing affordability for our our residents in our area.

I fully recognize the revenue constraints within the state of Oregon, every jurisdiction is doing this, you know, kind of we're all feeling the pain, but is this really the best effort that we can move forward with and how do we maintain that with affordability and how do we do that if there hasn't been necessarily a core services assessment to say these are the real things that the city should be providing, and these are the luxury things that we love to do.

We love to do them, but they are not core services.

Um, and maybe we hold off on moving forward with those programs or expanding those programs because they're maybe easier, and I use that term delicately, easier to turn off for a few years and maybe easier to reinstate later when revenues maybe improve, hopefully, and in my theoretical fantasy world.

Um, but I'm just curious how we how we continue to move forward with the idea of a general service fee with all the other fees increases to community members and maintain the uh a focus on affordability.

Yeah, I think it's a fair question, right?

Um, and it's just a it's not an easy um situation for anyone to be in, right?

Um, because there's no easy solutions, and so um we do continue to have our utility assistance program for those residents that you know really are struggling to pay their utility bills, and we're gonna be closely evaluating that program if the new fee comes into the uh we want to look and make sure that we're continuing to provide adequate assistance and if there's increased need.

So that's one way that we can really target um assistance to those residents that need it the most.

Um we have been working on evaluating our services and doing that with uh our financial sustainability action plan.

And so earlier this year in April, staff presented council with services evaluation, and so we went through every program that we offer in the general fund, and we looked at how it's staffed, what it costs, what is the level of service that it's operating at, and then what are the reductions that what would be the impact of reductions.

And so we have been really starting to have those conversations about as a city what services are we offering and want to continue to offer.

I will be transparent though that if we were not to have the general services fee, that's a significant amount of reductions that would need to be made.

And at 5.3 million dollars, I understand what you're saying about quote unquote discretionary services, right?

The services that we all love that make the community a very livable place, but there is not a way that I can cut $5.3 million from our budget without tapping into core services.

And so we would be cutting in to our police department significantly.

Um those are kind of some of the trade-offs that our city council has talked about over the last year or so related to the fiscal sustainability action plan, is how much how much reductions is enough, and then at what level do we get to a point where we're really cutting into our public safety and livability efforts in the community.

I appreciate that.

I guess I'm I'm just generally concerned at where we then draw the line on increases to that general service fee year over year to to residents and whether or not that's the best approach for the long-term sustainability and affordability in our area.

So I do have some concerns there.

Um I recognize it's not something that's easy to solve.

So just wanted to voice that.

Thank you.

Thanks.

Thanks, Kia.

Um, looks like there are no more questions.

So City Manager, you're you're up for the library fund.

Okay, um, hang in there.

We're getting to the end.

Um, and so I'm going to talk a little bit about our library fund.

Um, and so um our library over the coming year and we'll focus on some key priorities, uh, beginning to implement their strategic plan goals.

We mentioned already they're going to be developing long-term funding plan that prioritizes community needs in light of ongoing funding challenges.

And then we've talked a little bit about that transition to centralized collection services in July of 2027.

And so we've already talked a little bit as well, too.

We've eliminated some positions in preparation for the centralization of collections at the county.

And then we've also reduced the materials and services related to our collections by 105,000.

Um, and then we've eliminated a part-time library outreach specialist.

And then when we look at the library fund itself, um, the way that the library is funded, um, 54% of the funding comes from the Washington County Cooperative Library Service.

So that's a group of libraries and nonprofit partners from around the region that have pooled together to provide library services.

Um C CLS provides funding to partner libraries through two ways.

One is through a contribution from the county's general fund, and then the second is through the voter approved library levy that was just recently renewed in November.

And then the other key piece of funding for the library is property taxes, and so a portion of the city's property taxes also fund the library.

Um, you can see here expenses for the library somewhat similar to some of our other funds, personnel services making up the bulk of those costs.

It takes people to provide the services, and they're really critical part of providing that community cornerstone that we like to see in our library, um, and then materials and services, a much smaller portion at 8%.

Next slide, please.

Um this slide is just a different way.

Um, if you like numbers instead of graphs, um, this shows you um kind of the detailed numbers behind the library fund, including the revenue that's coming in as well as the personnel services and materials and services.

Next slide, please.

And so I want to highlight the library fund because this is this slide kind of illustrates one of the reasons that formulating a plan for the financial future of the library is really important.

And so you can see here on the screen the total expenditures are that blue line and the green line represents the revenues, and that blue line is above the revenues.

And then in particular at the bottom of the screen, you can see that we have been drawing down on our reserves and the library fund due to the financial challenges.

And so we do not have the fund balance maintained at that target amount that we would like to see.

And so that points to just the ongoing need to really look at what services we're providing through our library.

It's one of the key we'll be using a lot of data that we gathered from the community and through developing the library strategic plan to determine what services are most impactful to the community.

And making sure that we prioritize those in our discussions moving forward.

And so it's more just a highlight of kind of why we need to prioritize creating a long-term plan for the library fund's financial future.

And so that is really the end of the library fund.

And so I'll just pause there before turning it over to Susan to close us out today.

Don't oh, Councilor Hartman.

Yeah, sorry, I don't have a specific library fund question, but I wanted to I went and pulled the link to our April special meeting.

So for the budget committee members, um, because Katie, your questions are so spot on.

Um we had a session in April where we talked a lot about our services themselves and like what like what's mandated, what if we set maybe by ordinance and um to interim city manager's point, like we've kind of cut all the discretionary that we can.

Um, but it was a very helpful meeting for me to kind of just kind of see clearly what the next steps were.

Um so I wanted to share that for the other budget committee members in case that's a helpful.

There's a presentation in there that I thought helped kind of tell a story of like just kind of where we're at, and also council continues to do work and there'll have to be additional strategies because affordability and livability, like if people leave that affects our our revenue too.

Right.

So like we want people to continue to choose Beaverton as home, and we still have more strategies that we're gonna have to do, and also like there's bigger structural changes that we I think we'll have to advocate for to kind of help with the larger ecosystem of affordability that we're that we're in right now.

So, anyways, I just wanted to put that in there before I forgot that like I think that might be a helpful resource for us all to refresh on or to check out before our next meeting too.

Thank you, Councillor Harbor.

Any other questions looks like uh transient lodging tax city manager.

Yes, that would be me, and I'm having a little technical difficulty, so sorry.

Sorry, Susan, I thought it was city manager, and it's right.

No, it's okay.

I I was gonna make a joke about my monitor, you know, budget reductions, even impact.

You know, my monitor will flash on or off.

So I had to switch monitors really quick.

Okay, transient lodging tax.

So this these two pie charts uh demonstrate uh the revenue and you or the resources and uses of our transient lodging tax.

So uh we have a beginning working capital uh about 24%.

Our city tax, we have two taxes.

There's a city tax of four and a half percent, and then we get a two and a half percent share of the county transient lodging tax.

And so you can see those two together make up about 65% of the revenues, and then we have miscellaneous, such as um interest and that sort of thing.

Uh, and then we do have a transfer from the general fund to fund the arts program.

So on the uses side of the equation, we have uh an operating contribution to the PRCA of 1.4 million.

We do support the exterior of the PRCA building um to about 335,000 that also includes uh HVAC for the central plant.

That also includes HVAC for the central plant.

And then we have a debt service payment of just under $1.5 million for the building.

So the building was funded through a mosaic of funding, large, large donations from Patricia Reeser and also donating partners.

And the city also issued $21 million worth of bonds, which the transient lodging tax is paying back over time.

And this chart here shows that the transient lodging tax unfortunately is falling short.

And so when we reviewed the information, because it's it's much lower than we had modeled, but the model predated the pandemic, and the pandemic did take a hit on this particular industry.

At the time the pandemic hit, we had four hotels in the queue.

And because of the pandemic, they were delayed.

And so we were a little bit delayed in receiving our transient lodging tax from those new hotels.

And you can see that in the dip in this graph in 2021.

And so as those hotels got built, uh we be got a little curious this year.

We're like, that's weird.

If you see this little dip here in 26, like, well, why is that?

Come to find out that Washington County had coded one of the new hotels to unincorporate Washington County instead of within city limits.

And so we notified Washington County and said, hey, you know, we need that four and a half, that four percent um transient lodging tax for that new hotel.

So that we were made whole on that, um, but that came in late, just like last month.

And so um there was a little bit of an uptick, hopefully in 2027 with more heads and beds, as they say.

Um, in talking to um Travel Oregon, which I think is the Washington County Visitor Association new name, um, they have noticed a downtick, and um it they can contribute to Intel and Nike that those contractions in those private sector companies have decreased business travel, and so that is uh impacting the number of people who stay in hotels within the city of Beaverton.

So you can see here that in this chart we in the orange, that's the contribution that we make to the bent, we call it the building envelope, the security around the perimeter, some landscape, um, any central plant type of HVAC work that needs to be done.

That's roughly 300 or so thousand.

The gray bar is the debt that that we need to pay for that building, and then the blue bar is the um operating contribution, and you can see the green line is the revenue, and you can see there's a gap that the revenue has been coming in lower and it's not covering um these costs.

And so unfortunately, we did reach out to the PRCA and let them know that we were not able to sustain the current year's contribution of 1.6 that we had to drop it to 1.4.

And you can see that here in this um really super busy slide.

Of course, I think these tables are wonderful, but now that I'm looking at it from your lens, I can see how it might be a little busy.

But let's just walk through it really quickly.

We have the revenue side of the transient lodging tax compared to fiscal 26.

So we have the two revenue streams of the um city's 4% and the county 2.5%.

You can see the increase in fiscal 27, and you might think that contradicts what I just said.

Well, that's because this increase is based on the city's plan to come to the city council mid-year and increase that transient lodging tax with the intent of paying for the arts program, thereby reducing the transfer from the general fund for the arts program.

So that's what that 460,000 increase represents, and that would be dedicated to the arts program.

Um so we have, like I said, a little miscellaneous interest, that sort of thing, and then then here's the transfer from the general fund that's going down.

They don't match because the uh transfer from the general fund would have to go up to roughly $900,000 to fully fund the arts program.

Um so we kept it at about $550,000, making up that difference from the new uh potential increase to the transient lodging tax.

So here in the next line here, the PRCA operating contribution, you can see in 26 it's 1.6 million, and we are proposing to reduce that to 1.4.

We have communicated um to the PRCA, they've been so gracious about it.

Um the good news is they do have an endowment that they are um using some endowment uh earnings.

So um we'll be working with the PRCA you know over the next um several months and making a plan for 28 on and on into the future.

Here you can see the 300 or so thousand for the building support that we give for that building, and then the debt service, how that's about flat.

Um, that's the debt service installment payments.

It's gonna vary every year by a slight amount, but for the most part, it remains flat.

And then in the second um the sorry, the last third of the chart here, you can see the art program uh support that we give.

Um we've we purposely put the arts program in the TLT fund before the pandemic because we thought the TLT would grow to such a point that it could support the arts program.

But of course, COVID changed everybody's plans, and so that really just took a hit there.

Uh so overall, um, this is what our transient lodging tax looks like for the year.

And that is all for the TLT.

Well, any uh questions for Susan on the TLT.

Hi, uh I did leave a question earlier.

I just wanted to reiterate that.

Um, how does the city like have measurable metrics to to determine whether the TLT funded arts and cultural programs are effectively driving tourism in the area, visitor spending, and increasing logging demand.

And also with the PRCA, do we do we track that?

We do not we do not track that.

The travel Oregon, um, we do get statistics every so often from them, but the the way that the hotel um industry works is they go through Washington County to pay their taxes, and there's a a secrecy clause that uh we are not able to get that detail.

And so that detail does go to Washington County.

Um so we depend on on them to tell us about how heads and beds, as it were, um, were performing.

Okay.

Yeah, I mean, I mean apart from that, I mean, you know, maybe there's some other way to track uh, you know, if these programs are actually bringing in tourists.

So, you know, it can maybe we can use these funds to actually, you know, do something which might actually bring in more tourism to be written.

Is this a genuine question?

Yeah, Dan popped on majority.

Sorry, yeah, yeah.

We've um anecdotally and not scientifically, I I take your point, and I think you're right.

Um, but anecdotally, when we've seen um events that uh that have more of an overnight component to them, like conference-ish kinds of things.

We don't exactly have that space, a conference full-on conference space in the racer.

But when we've seen events like that, we have seen uh an uptick or have anecdotally heard about an uptick in visitor stays and those kinds of things and spending.

So I mean part of the a model uh ideally is that we have um more event space, right?

And more ability to uh to drive the heads and beds by uh you know, a nexus of having more reason to stay.

Um and and just because the RECER is more set up as just you know, a concert and and event there, you know, those kinds of things, it's not an overnight thing as much as it is a special night out.

So um, yeah, we're definitely looking at some options.

Sounds good.

Thank you.

Thank you.

Um Councilor Teeter.

Uh yeah, I've got two quick comments.

Uh to finish this point, it can be difficult to know exactly what programs drive how much lodging stays.

Uh, but the programs that do events or places like the REACER that receive some of this funding, they also track like where a lot of their customers are coming from.

And you try to use some of those metrics too to get a good idea of like are you coming from more than 50 miles away?

Do we think you'll stay in a bed here kind of thing?

Um so a lot of it isn't always precise, at least not that I've seen, but you try to get a good judge of what's happening.

Um the other comment I have is regarding the amount of revenue that we're bringing in.

I mentioned this to Elizabeth in our one-on-one weeks ago.

Uh the initial goal that council had set out or the initial estimate for the amount of revenue we might have brought in for the TLT increase was about 800,000.

But the reason why it's lower is because it would be approved later on in the year.

Half year.

Half year, yeah.

So future years, would we see that the full year revenue be closer to 800,000 if it's active for a full year?

That's what we're estimating, yes.

Okay.

Um, no, that that's helpful and it's helpful context for me.

Um I love that we're able to support the RECER with this revenue.

Um recognize that this is also very challenging for them, and they did send a letter to us.

Um so my hope is that we can get more heads and beds and support the research and offset some of the the burden and the cost that we feel with our own arts program.

Uh, but I think increasing the TLT is something that I've I've believed in.

I think we need to do um because we've added a lot of cost burden onto our own residents and businesses here locally, and I think it's only fair to uh ask the same contribution of people who are visiting Beaverton as well.

So I appreciate the detail you've given us, you all have given us tonight.

Um and I think that this is a good next step forward and helping make sure we fund uh the Reese and her arts work here in Beaverton.

Thank you, Kevin.

Counselor Hartmeyer Prague.

Um Counselor Teters question covered cool.

Um Kia, you're up then um I'm curious if what is the long-term plan for supporting um the Patricia Reeth Center for the Arts.

Is it the intent of the the city to always be um supporting that particular organization?

And if not, is have we considered other uses for the TLT funds to help support other ongoing operations for the city?

Right.

The city council uh passed a resolution uh a number of years ago, which um we characterize as a waterfall approach where the TLT revenue comes in.

The first use in the waterfall would be to pay the debt on the building.

The the second use of that money um would be the city's obligation to supply the what we call the building envelope.

This the security that I mentioned, the landscape uh central plant, which is around 300,000, and then the other part of the waterfall would be this operating contribution that I mentioned.

And within the resolution, there is language um that the operating contribution um would be until such a time the city council felt that the Patricia Research Center for the Arts was operationally stable enough with its independent sources of revenue that it would not have to necessarily lean on that, and it in the in the scheme of arts um programs, the PRCA is still relatively young, and so they're still getting um established in this community in in there in that niche community, and so um the city council at any point in time would go to the PRCA and say, hey, you know, let's have a presentation on your profit and loss and how you're doing and reevaluate um at that time.

But the TLT as a uh revenue source, those are not restricted funds.

So they are yes, they are.

I'm sorry.

Thank you for that clarification.

Yes, the state law does um limit there was a a recent change in state law that um says 50% of it has to go toward what they call tourist promotion, and then the other 50% can go to city services, and so that is another layer on top of um our own city resolution.

And does any of it now go to the city services outside of the arts?

It does not.

Thank you.

Ms.

Kia, uh counselor Kimmy.

Hi, um in the same kind of uh thought process with the um the uh budget member uh Kia, Kia where um I before I make the decisions to uh for the budget, I'll look to see uh where the almost clear almost close to million dollars for the arts program, and I want to see the details of where the money's going and spent uh just to make sure, just make me feel comfortable um regarding funding the program uh because I'm thinking about essential non-essential, as we mentioned before.

There are many other uh uh programs that we do, uh, and I'd like to see the data lens.

Not that I'm against any arts program, but I'd like to know where the money goes and what what's the return on investment in that?

Um cherished program that everybody wants, but there's so many things that we have to consider, but I don't know the details of what we're paying for.

So I'd like to get that information before next budget meeting, if that's possible.

Thank you.

Thanks, Councilor Kimmy.

Um, I don't see any more questions, so I do have one.

Um there was a new hotel, I believe, that opened up off Allen in 217.

How has that impacted our revenue this year?

Because that is a new facility, I believe.

And is that modeled going forward?

The county does not provide that breakout.

Um they were willing to confirm the list of hotels.

So I can I can tell you that hotel has been paying the city four percent since it opened.

If you average it out, it um the hotel that was missing, we we made up roughly 40,000.

Um for you know about eight or so months worth that it was missing that the county quoted it to unincorporate Washington County.

So they just give us lump sums, unfortunately.

Okay.

Yeah.

Um if I could just make one more comment.

Um on page in the budget binder, page 321.

I don't know why my alarm just went off.

That was weird.

Um on page 421 is the transient lodging tax fund.

And within that, within those pages is some more information about the arts program.

Cool.

So yeah, and we can provide more detail also, but I did want to make um note that that we have we do have a budget narrative in the budget book about the arts program.

Cool, thank you.

Uh, city manager, anything else you want to say before I close this?

Uh I've got a couple of reminders for folks, but okay, cool.

Well, thanks everybody for the great questions and the great first night of budget committee.

Um for those of you who are new to this, this is way less painful than it used to be.

Um so thank you to city staff for that.

Next meeting is the one where you're likely to see a lot of action after the presentations as a friendly reminder.

Uh the job of the budget committee is to validate the budget and the dollars, uh, not the city city policy that underlines those numbers.

That's kind of the purview of the city council.

Um, and as a last uh item, um, if you do have questions, this was mentioned earlier, or amendments you'd like to make to the budget, uh, that'll all happen in the next meeting.

I think uh uh they asked that we email Susan Cole and she sent out a few questions already, answers.

You can just respond to those, don't respond all, just respond to her.

Uh so and she'll help you craft those amendments or answer those questions and um uh craft those questions in a legal way.

Um so just make sure you do that.

But um I suppose let me pull up uh the agenda.

I think that's it until June 2nd.

Um so we will all I'll I will adjourn the meeting tonight and we'll see you all the evening of June 2nd.

Thank you.