Council presses city administrators for clearer reporting after revelations of ARPA carryover and encumbrances

PORTLAND — Portland city councilors pressed the City Administrator and finance staff on Oct. 1 for clearer, more timely disclosures about leftover fiscal-year funds and encumbrances after a city memo identified carryover money not widely known across the council.

Council members raised questions during the city administrator’s monthly report about how the executive branch identifies and proposes uses for unspent appropriations. City Administrator Mike Jordan and Chief Financial Officer Jonas Birri described the mechanics of encumbrances — funds tied to contracts and continuing work from the prior fiscal year — and said a fall “tau” (fall budget package) will present a fuller accounting for council consideration.

The exchange began after Councilor Amanda Smith flagged a memo that directed $883,975 in ARPA (federal American Rescue Plan Act) carryover resources and $2.5 million in general-fund encumbrance carryover toward shelter-related expenses. “It was shocking to me,” Smith said, describing colleagues and community members who had been surprised by the memo’s disclosures. Other councilors said they had first learned about portions of the city’s year-end balances from news reports rather than from regular briefings.

Jonas Birri, the city’s chief financial officer, told the council that encumbrances “reflect contracted dollars that are appropriated in a fiscal year” and that many of them exist because work on contracts and projects continues past June 30. He said staff will present a longer list of proposed encumbrance rollovers and other reconciliation items as part of the fall budget package and at the Oct. 22 work session.

DCA (deputy city attorney) Sarah Morrissey explained federal rules for ARPA funds. “All ARPA funds had to be committed by 12/31/2024,” Morrissey said, and therefore the city cannot reallocate those federal dollars to new programs.

Councilors pushed for clearer monthly reporting. “I appreciate that we can do better on a monthly basis being able to put as much financial information into my report as possible,” Jordan said, adding that staff would work with the Budget Office and the CFO to supply more real-time financial detail in future administrator reports. Jordan and Birri said that while the fall tau is the historical point for compiling final reconciliations, they will explore ways to get more information to the council earlier.

Councilors emphasized the policy stakes—several said they felt the mayor’s office had already decided how to use the carryover funds before the council saw the memo. Jordan responded that proposals from the executive branch are for council consideration and that council can reallocate or change encumbrances when the tau arrives. Birri added that some encumbrances represent work already performed and paid out after June 30, which complicates any attempt to repurpose those dollars without replacing them from another source.

Next steps: staff said they would (a) add more budget detail to the city administrator’s monthly report where feasible, (b) continue fall-tau work and present proposed encumbrance items to council in October, and (c) follow up on specific items councilors requested, including the federal-grant balances that run through PBOT and details about particular encumbrance line items.

Why it matters: Councilors said timely disclosure matters because the council holds appropriation authority. Several members said they worried that not knowing about encumbrances or carryovers until the tau or a press report undermines the council’s ability to set policy and priorities.

What staff said they will do: Birri and Jordan asked for patience while staff gathers year-end accounting, but they committed to producing more frequent, clearer information and to a public work session in October that will walk the council through encumbrances, carryover requests and proposed use of funds.