Metro started a new fiscal year on July 1, and the Metro Council's $636 million budget for 2016-17 is in place.
The regional government expects to spend $382 million in the coming fiscal year, with most of the remainder in contingency and set aside as an ending balance for fiscal year 2017-18.
But where does greater Portland's $382 million investment go? As always, the bulk of the money will be spent on running and staffing day-to-day operations of the regional government, at visitor venues including the Oregon Zoo, the convention center and performance spaces, as well as on buying and restoring land and construction and maintenance projects.
Metro finance director Tim Collier said notable expenditures for 2016-17 include issuing $60 million in bonds for the Oregon Convention Center hotel and continued spending at the zoo to finish building the education center.
Other big capital projects this year include the River Walk at Willamette Falls.
But how and where money is spent also reflects the policy goals of the Metro Council.
“The budget is our financial plan for achieving our operational plan. The budget is only as good as our strategic plan for what we’re trying to accomplish,” said chief operating officer Martha Bennett, who identified three areas of focus for 2016-17.
This year, Bennett said, Metro will spend more on programs and activities that engage people of color and underserved groups in the region. Patty Unfred, Metro’s diversity, equity and inclusion program director, gave an example of what this looks like on the ground: Metro is working with Native American community members to plant and harvest camas - a starchy root, once a staple food – on Metro-managed land.
Another example involves Portland’5 Centers for the Arts' work to bring students from high-poverty schools to watch performances by musicians such as Black Violin who play a blend of hip hop and classical music.
Metro is also upgrading its technology to comply with new credit card security standards. It's an effort to make sure that customers at places like the Oregon Zoo and Expo Center can continue to use credit cards and know their data will be secure. Metro is spending $1 million to meet new industry standards for data security, to plan for new business and information systems at the zoo, and to hire an additional database administrator.
The third priority for 2016-17 is to invest in building and property maintenance that was deferred during the recession. That, Bennett said, includes projects like replacing the roof at the Keller Auditorium.
“That’s a big project that’s been on hold for five years," Bennett said.
Other projects, like the Oregon Convention Center hotel, show up on the ledger this year, but will be paid back over time. The $60 million in bonds Metro expects to issue will be paid through room taxes on visitors to the hotel. Bonds to pay for projects at the Oregon Zoo, or to acquire natural areas, are paid through property taxes approved by voters.
Where the money comes from
Only about 10 percent of Metro's revenue comes from property taxes on greater Portland residents. About $59 million is expected to come from Metro's base property tax rate and the voter-approved bonds and levies.
Most of Metro's revenue comes from fees for Metro services – money people spend to use the Oregon Convention Center, visit the Oregon Zoo, attend a show at one of Metro's performing arts venues or dispose of solid waste at a Metro transfer station.
Overall, about $147 million comes from those so-called "enterprise revenues."
Challenges for 2016-17 and beyond
In the near term, Metro is anticipating and planning for large increases in retirement and health care costs, Collier said. Both Bennett and Collier noted that expenses continue to grow faster than revenues.
“Governments,” Bennett said, “are slow to go into recession and slow to come out.”
The forecast for the next five years is closely tied to how growth in the Metro region will affect revenues and expenses. And the outlook is mixed.
Growth in the region is good for Metro’s solid waste fund, said Collier. Revenues are robust because of an increase in the amount of taxable waste being generated in greater Portland. The forecast for the Oregon Convention Center, where many events are booked, is also rosy.
Portland's hot real estate market is also good for property tax revenues, since new development is taxed at a higher rate than older buildings. But all of the new construction is also driving up contracting costs, so projects like the Keller roof replacement cost more than they would have five years ago. The "real market value" of all of the property in greater Portland increased $21 billion in 2015-16.
The budget ensures that Metro’s programs are sustainable and resilient.
“That’s the essence of public trust, right? That if you head to the zoo today, you can be sure it will be open… we have the luxury of having sufficient revenues but not so much extra that we could add programs," Bennett said.
Considering all this, Bennett said the budget for 2016-17 can be summed up in one word: prudent.