This legislation authorizes a temporary interfund loan from the Parks Capital Fund to the Hydroelectric Power Operating Fund. The loaned funds will not exceed $600,000 and will be repaid no later than June 30, 2027.The Bureau of Hydroelectric Power (BHP) is responsible for the City's Hydroelectric Power Production Program and the Dam Safety Regulatory Program. 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. Hydropower sales revenues have been less than planned due to powerhouses being offline for repair and weather impacting water flow to sufficiently produce hydropower. The lack of hydropower sales has been for multiple years, therefore, reserves have been drawn down. FY 2025-26 expenses are projected to exceed revenues based on conservative projections and lack adequate reserves. Oregon State Local Budget Law requires that fund balances not be negative at the end of a fiscal year. U.S. Generally Accepted Accounting Principles (GAAP), the standard of which the City is legally required to report its financial information, requires that governmental funds not end the year with negative cash assets. An interfund loan can provide resources necessary to comply with Local Budget Law and U.S. GAAP. Per Oregon Local Budget Law, the City may loan money from one fund to another for operating purposes for up to one fiscal year.The Park Capital Fund has sufficient resources to temporarily lend money to the Hydroelectric Operating Fund temporarily until resources are received to repay the loan. Loaned funds from the Parks Capital Fund will be repaid with interest until no later than June 30, 2027, the maturity date of the loan.
Official proposal and impact statementShould Portland authorize a temporary interfund loan not to exceed $600,000 from the Parks Capital Fund to the Hydroelectric Power Operating Fund to provide interim…
This legislation authorizes a temporary interfund loan from the Parks Capital Fund to the Hydroelectric Power Operating Fund. The loaned funds will not exceed $600,000 and will be repaid no later than June 30, 2027.The Bureau of Hydroelectric Power (BHP) is responsible for the City's Hydroelectric Power Production Program and the Dam Safety Regulatory Program. 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. Hydropower sales revenues have been less than planned due to powerhouses being offline for repair and weather impacting water flow to sufficiently produce hydropower. The lack of hydropower sales has been for multiple years, therefore, reserves have been drawn down. FY 2025-26 expenses are projected to exceed revenues based on conservative projections and lack adequate reserves. Oregon State Local Budget Law requires that fund balances not be negative at the end of a fiscal year. U.S. Generally Accepted Accounting Principles (GAAP), the standard of which the City is legally required to report its financial information, requires that governmental funds not end the year with negative cash assets. An interfund loan can provide resources necessary to comply with Local Budget Law and U.S. GAAP. Per Oregon Local Budget Law, the City may loan money from one fund to another for operating purposes for up to one fiscal year.The Park Capital Fund has sufficient resources to temporarily lend money to the Hydroelectric Operating Fund temporarily until resources are received to repay the loan. Loaned funds from the Parks Capital Fund will be repaid with interest until no later than June 30, 2027, the maturity date of the loan.
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*Authorize a temporary interfund loan not to exceed $600,000 from the Parks Capital Fund to the Hydroelectric Power Operating Fund to provide interim funding to avoid negative cash and fund balances at 2025-26 fiscal year-end
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Official matter classification and recordThis is an administrative action to authorize a temporary loan to the Hydroelectric Power Operating Fund. No direct community impact or involvement is anticipated.
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Passed · 12–0
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Final action on 2026-198: *Authorize a temporary interfund loan not to exceed $600,000 from the Parks Capital Fund to the Hydroelectric Power Operating Fund to provide interim funding to avoid negative cash and fund balances at 2025-26 fiscal year-end
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Hydroelectric Power Operating Fund will repay the Parks Capital Fund borrowed funds with interest no later than June 30, 2027. The interest rate will be equal to the City's Investment Portfolio monthly average yield, resulting in a neutral economic impact to the Parks Capital Fund. The loan may be prepaid in whole or in part at any time. Partial prepayments of the interfund loan, if any, will be applied first to accrued interest on unpaid principal and then to the outstanding principal balance. If projections of the Hydroelectric Operating Fund are not realized during Fiscal Year 2026-27 and its resources are insufficient to repay the loan prior to maturity, an alternative repayment source will be identified.
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The City of Portland ordains.Section 1. The Council finds: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.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.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.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.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.Oregon Local Budget Law requires that fund balances not be negative at the end of a fiscal year.U.S. Generally Accepted Accounting Principles (GAAP) requires that governmental funds not end the year with negative cash assets.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.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.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: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.
Meetings, motions, amendments, and votes3 meetings · 1 votes
Final Council action · Jun 17, 202612 yes · 0 no
Final action on 2026-198: *Authorize a temporary interfund loan not to exceed $600,000 from the Parks Capital Fund to the Hydroelectric Power Operating Fund to provide interim funding to avoid negative cash and fund balances at 2025-26 fiscal year-end
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- First discovered
- Aug 13, 2026, 1:04 PM PDT
- Last checked
- Sep 13, 2026, 2:23 AM PDT
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