Multnomah County presents FY2026 capital plan, warns available one‑time funds will fall short

Multnomah County officials presented a draft fiscal‑year 2026 capital plan on the record and told the Board of Commissioners that the list of proposed projects exceeds the county’s near‑term funding capacity, creating potential trade‑offs for services and future budgets.

The county’s interim chief operating officer, Travis Graves, and Department of County Assets Director and Chief Information Officer Tracy Massey described a prioritization process (CAP‑1) that gathers major facilities, transportation and IT projects for county‑wide review. Chief Financial Officer Eric Arellano presented a five‑year funding analysis showing that the combination of projects in the draft plan would require some mix of debt financing, outside grants, or other resources to complete.

Staff said the county historically used a combination of “pay‑as‑you‑go” funding (including internal service fees and one‑time general fund allocations) and targeted financing. Arellano told the board “we cannot finance operations,” emphasizing that debt is appropriate only for long‑lived capital items and that the county has historically mixed outside funds to limit general‑fund exposure. His modeling showed that under current county policy — which limits general‑fund‑supported debt service to 5% of general fund revenue — the county would have room for additional debt service but that issuing bonds would commit future surpluses to repayment.

Tracy Massey outlined recommended projects in the draft capital plan, including ongoing multi‑year work such as the Justice Center bus duct replacement and Juvenile Justice Center security foyer; new requests including a Department of Community Justice (DCJ) East Campus development and potential downtown real estate acquisition or lease; continued work on the Hansen Complex deconstruction; several shelters and distribution‑center options; and IT investments such as a website transformation, enterprise resource planning/data retention planning, and a homeless management information system replacement.

Eric Arellano’s five‑year funding scenario used the prioritized list and current revenue forecasts to show fiscal year 2026 funding that could support many of the first‑year requests if one‑time resources remain near recent historic levels (staff cited roughly $17.5 million available for FY2026 under a conservative forecast). But staff cautioned that one‑time general fund resources are projected to fall significantly in later years (the presentation used a conservative $3 million per year estimate for 2027–2030), creating a projected $25.3 million unfunded gap over the five‑year window in the base scenario and larger aggregate unfunded needs across the plan (staff summary cited total unfunded need on the order of $110 million across the full list of projects).

Board members pressed staff for additional detail and raised several concerns during the discussion. Commissioners asked for clearer documentation of how cost estimates were developed, which projects are already “in flight,” and which are placeholders. Commissioner questions centered on shelter capacity (several projects on the plan were described as placeholders for congregate shelter replacements but staff said the current remaining capital set‑aside would not be sufficient to replace two congregate shelters slated to close), downtown acquisition/lease cost assumptions, and the timing and governance of large projects (including requests for additional board check‑ins at defined procurement/price‑certainty milestones such as guaranteed maximum price approvals).

Staff commitments and next steps: county leaders said they will use the board’s input to refine a base funding scenario, provide more detailed cost breakdowns for high‑priority items, and return with a prioritized list of unfunded projects that could require financing or external funds. The chair directed the Department of County Assets to review the capital process in light of the fiscal outlook and asked staff to present the capital items that would be included in the Chair’s proposed FY2026 budget when it is released.

Board members and staff emphasized that financing decisions would be a future board deliberation. Arellano presented illustrative financing scenarios (full faith and credit bonds and other instruments) and noted trade‑offs between issuing general obligation bonds, full faith and credit debt, using interfund loans, or seeking grants and partner funding. Example figures used in the briefing included an illustrative 20‑year financing estimate (a ~ $335 million bond estimate tied to a $36.5 million annual debt service capacity at current policy limits) and incremental annual debt‑service estimates per financing tranche shown in staff slides.

The briefing concluded with staff offering to return with more refined cost estimates, documentation of prior year commitments for ongoing projects, and a clearer schedule for budget‑phase decisions. The board had no formal vote during the briefing; staff treated the session as informational and as direction to continue refining the plan.