192197

The City of Portland ordains.

Section 1.  The Council finds:

1. The Portland Hydroelectric Project (PHP), located below Dam 1 and Dam 2 at the Bull Run Watershed Reservoirs, began operations in 1982 and has now operated for more than 40 years.
2. Managed by the Bureau of Hydroelectric Power, the PHP is legally separate from the City's Water System under the provisions of the City's Water System Revenue Bonds governing bond documents and its financial activity is recorded in the Hydroelectric Power Operating Fund, established under City Financial Policy No. 352. The resources that support this fund come primarily from the sales of power generated at the PHP.
3. Power from the PHP is sold to Portland General Electric and fed into the regional power grid.  The amount of power generated varies, but the average generation is enough to meet the annual needs of about 10,000 households.
4. On January 1, 2018, the City entered into a new 15-year Power Purchase Agreement (PPA) to sell all power generated at PHP to PGE.
5. Hydropower sales revenues have been less than planned due to powerhouses being offline for repair and weather impacting water flow to sufficiently produce hydropower. Weak hydropower sales revenues have been occurring in recent years, which has been offset with the fund's reserves being drawn down.  FY 2025-26 expenses are projected to exceed revenues based on conservative projections and the fund lacks adequate reserves to pay all expenses for the year.
6. Oregon Local Budget Law requires that fund balances not be negative at the end of a fiscal year.
7. U.S. Generally Accepted Accounting Principles (GAAP) requires that governmental funds not end the year with negative cash assets.
8. Per Oregon Local Budget Law (ORS 294.468), the City may loan money from one fund to another for operating purposes for up to one fiscal year.
9. The Parks Capital Fund (Fund 402) has sufficient resources to lend monies to the Hydroelectric Power Operating Fund (Fund 601) temporarily until sufficient power sales revenues or other resources are available to repay the loan.  Loaned funds will be repaid with interest by no later than June 30, 2027, the maturity date of the loan.
10. If a loan from the Parks Capital Fund to the Hydroelectric Power Operating Fund is approved by the City Council, resources and expenditures relating to the loan will be included in the Over-Expenditure Ordinance for the City's FY 2025-26 budget.

NOW, THEREFORE, the Council directs:

1. The City hereby authorizes a temporary interfund loan in an aggregate principal amount of not more than $600,000 from the Parks Capital Fund to the Hydroelectric Power Operating Fund in accordance with City financial policy FIN 2.18 and the terms shown in Exhibit A.

Section 2. The Council declares that an emergency exists in order to avoid negative cash balances in the Hydroelectric Power Operating Fund at the end of FY 2025-26, which would violate State budget law and GAAP; therefore, this ordinance shall be in full force and effect from and after its passage by the Council.