City operations and finance outline SAP upgrade, fleet reductions and insurance change in mayor's proposed budget

Interim Deputy City Administrator Sarah Morrissey and Deputy City Administrator/Chief Financial Officer Jonas Beery presented the city operations and budget/finance components of the mayor’s proposed budget and answered council questions about investments and reductions.

Morrissey described city operations as “the internal engine that propels the city of Portland from trucks to technology purchasing to professional development and community customer service,” and said the newly aligned city operations portfolio is budgeted at about $1.02 billion with 743 employees in the new FY25‑26 configuration. She said city asset management work is staffed currently by one employee and that the city is implementing an iterative strategy to establish governance, a decision‑making process and a long‑term funding approach; staff said quarterly updates will be provided to council.

Key items highlighted: - SAP human capital management (HCM) upgrade: The budget includes one‑time resources for an upgrade to the city’s SAP employee central, time and payroll modules; administration said the current platform is aging and requires modernization. - Fleet reductions: City staff identified just over 30 vehicles across 10 bureaus that were driven less than 1,000 miles per year (roughly 4% of the city fleet). Staff estimated those reductions could generate about $1.6 million to the general fund. Facilities will also shift Sears Building operations costs to Portland Solutions where appropriate. - Asset management: The city is building a citywide asset management office with staff transfers and collaboration between facilities and the City Asset Management Group (CAMG); workshop work is slated for fall as staff develop a strategy. - 3‑1‑1: No cuts to hours; an ad requests funding for Zendesk licenses and an additional 1.25 FTE to address rising constituent inquiries and new programs such as Cooling Portland. - Technology: The Bureau of Technology Services (BTS) is funded via interagency rates and staff proposed an 8% reduction in the service area through a combination of contract renegotiations, license reductions and other efficiencies. Staff reported an ongoing contract with a vendor that has already produced $1.5 million in savings by adjusting cell phone plans. - Earthquake insurance: Risk management recommended reducing the city’s excess earthquake coverage from $75 million to $60 million to find budget savings; staff said it was identified as a coverage change that could be made without “unreasonably altering risk” under a requested reduction exercise. - Small donor elections: The small donor elections program is funded across a two‑year cycle; councilors were told the Portland Election Commission recommended a target funding level of approximately $2.2 million for full capacity. The proposed budget reduces this program by about $113,000 (8% of the program in the off‑cycle presentation) and staff said that reduction would modestly lower match capacity and temporary staffing support.

Beery said his team had modeled reductions “without limits” to see what could be trimmed without breaking core functions and then refined those options to produce the suggested package carried forward in the mayor’s proposed budget. He told council that most financial services in the proposed budget are unchanged or reduced and that the enterprise efficiency work may lead to future adjustments in service delivery and cost structures.

Councilors asked for more granular baselines and metrics (for example hiring cycle times and procurement cycle times) that staff agreed to compile; councilors also asked for additional detail on earthquake coverage, internal service fund methodologies and the composition of FPDR (Fire & Police Disability and Retirement) funding.

Why it matters: The package combines targeted investments (SAP upgrade, asset management planning, contingency for Cutter garage) with reductions and efficiency measures across internal services; several items (SAP modernization, fleet electrification and earthquake insurance) carry budgetary and operational implications for city service continuity and long‑term fiscal exposure.

Staff committed to provide follow‑up materials on procurement and technology procurement reforms, internal service fund methodology, detailed job classifications and asset management timelines.