Binding City Policy
The City shall maximize and diversify its revenue base to raise sufficient revenue to support essential City services and to maintain services during periods of declining economic activity. City services providing private benefits should be paid for by fees and charges as much as possible to maximize flexibility in the use of City general revenue sources to meet the cost for services of broader public benefit. The City's overall revenue structure shall be designed to recapture some of the financial benefits resulting from City economic and community development investments. Revenue collection efforts that produce positive net income for City service delivery shall be the highest budget priority.
The City shall obtain and use resources according to the following principles:
1. The City shall use as efficiently as possible the resources that it already collects.
2. The City shall collect as efficiently as possible the resources to which it is already entitled.
3. The City shall seek new resources, consistent with its financial policies and City goals.
4. The City shall strive to keep a total revenue mix that encourages growth and keeps Portland competitive in the metropolitan area.
5. The City shall enforce its authority to collect revenue due the City, including litigation if necessary.
The City shall avoid using one-time grant revenues to meet ongoing service delivery needs. Prior to a grant application submittal, or acceptance if an application is not required, all grants shall be reviewed by the OMF Grants Unit to ensure compliance with state, federal, and City regulations. The City shall budget expenditures for grant-funded programs only after receipt of the grant award or letter of commitment or approval from the Grants Unit. The budget shall only include appropriation for the amount of the grant award to be expended within the fiscal year.
The City shall oppose state or federal actions that mandate expenditures that the Council considers unnecessary and are unfunded. The City shall pursue intergovernmental funding to support the incremental cost of such mandates.
City services that benefit a specific user and whose quantity, quality, and/or number of units may be specified should be paid for by fees and charges. All bureaus charging fees are required to complete fee studies based upon cost-of-service principles. These studies are to be updated at a minimum of every three years and provided to City Council and the City Budget Office in the Requested Budget submission. Bureaus that provide water, sewer, storm water, and solid waste services shall update their fee studies in their annual rate ordinances.
The fee studies and structures shall take into account:
• The degree to which a service provides a general benefit in addition to the private benefit provided to a specific business, property, or individual.
• The economic impact of new or expanded fees, especially in comparison with other governments within the metropolitan area. Business service activities that recover costs through rates and interagency agreements will periodically compare the cost of their fees and rates with other comparable agencies and/or businesses, and report these findings to their customers.
• The true or comprehensive cost of providing a service, including the cost of fee collection, administration, and other indirect costs. Bureau indirect rates will be established annually by the City Budget Office.
• The impact of imposing or increasing fees on economically at-risk populations and on businesses.
• The overall achievement of City goals. The City may subsidize the services funded primarily by user fees based on other City objectives.
All fee revenues are dedicated to the bureau that generates them.
Revenue Projections, Surpluses and Shortfalls
• Bureaus shall conservatively forecast revenue.
• Bureaus shall retain all excess bureau-generated revenue. Revenues collected in excess of program expenditures shall be available to the bureau for appropriation through the budget monitoring process. Additional appropriations shall be used for activities that support the function or program generating the additional fees. Bureau-generated revenue shall be defined as licenses and permits, fines, fees, intergovernmental, and specific program revenues (miscellaneous sales). They shall exclude all interagency and General Fund discretionary or overhead resources.
• Overall bureau revenue shortfall requiring additional discretionary General Fund resources shall result in a bureau current appropriation level reduction. The reduction shall be equal to discretionary resources above budget amounts and shall be made in the following fiscal year and only for that fiscal year. In the event of a current fiscal year projected total revenue shortfall, the bureau is required to document other offsetting revenues or reduce its budgeted expenses within the regular budget monitoring process. See FIN 2.04 Budget.
The CBO shall oversee compliance of this policy with the participation of all revenue-producing bureaus and shall issue roles and responsibilities for the bureaus. See FIN 2.06.01 Roles and Responsibilities for Revenue.
Resolution No. 35005 and Resolution No. 35006, adopted by City Council June 17, 1992.
Replaced by Ordinance No. 181829, passed by City Council May 14, 2008 and effective July 1, 2008.
Amended by Ordinance No. 182377, passed by City Council November 26, 2008 and effective December 26, 2008.
Amended by Resolution No. 37086, adopted by City Council August 6, 2014.