Finance committee advances city manager's recommended budget amid debate on benefits, cruise-ship tariff and parking changes

The Portland Finance Committee on Thursday voted unanimously to advance the city manager's recommended FY27 budget to the full council after approving an amendment to the cruise-ship tariff. The package includes department reorganizations, program funding changes and a notable increase in the benefits budget.

Finance director O'Connell summarized key elements: the city-wide benefits budget is projected to rise by about $7,100,000 (roughly 27.43%), driven primarily by health insurance costs and an increase in high-cost claimants. "The real massive big one that we have is the benefits budget," O'Connell said. He also noted a projected pension-budget increase of about 4.34%.

HR Director Anne Torregrosa told the committee employees should expect about a 10% premium increase; she also announced the city will remove GLP-1 drugs for weight-loss coverage effective July 1 while continuing coverage for diabetes treatment: "We're removing GLP ones for weight loss from our plan effective 07/01," she said, citing rising pharmacy spend and large claimants as a driving factor. Torregrosa said staff are pursuing a PBM RFP and other measures aimed at reducing pharmacy costs and are working with unions on plan design changes for 2027.

Other budget changes flagged by staff included increases in procurement bid thresholds (from $25,000 to $550,000) to reflect inflation since 2010, doubling P STEP funding from $300,000 to $600,000 with an application deadline extension to June 30, and continued budgeting for sustainability positions and renewable energy credit (REC) revenue. Finance director O'Connell said the budget currently shows about $127,000 of REC revenue in the operating budget but external projections estimate over $350,000 in REC sale proceeds, leaving roughly $220,000 to go into the separate Climate Action Fund.

Councilor Pelletier moved an amendment to eliminate a discount in a cruise-ship tariff that had previously offered an incentive for cleaner fuels or scrubbers; the committee approved the amendment and staff said the manager would instruct the relevant department to remove the discount for FY27 (tariffs are posted a year in advance to give cruise lines notice). The committee discussed but did not finalize a proposed extension of weekday paid parking hours and the addition of Sunday paid parking, with several members favoring a phased approach and staff directed to return with impact analyses.

O'Connell said the manager's recommended budget as presented would result in roughly a 5% tax levy increase and about a $0.60 increase in the tax rate (from $11.98 to $12.58). The committee voted to move the budget package, including the Pelletier amendment, to the full council where additional amendments may be offered.