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As the Portland City Council spent nearly 15 hours approving an $8.5 billion preliminary city budget last week, much of the media attention focused on debate over whether a police funding increase should be diverted to plug a hole in parks maintenance.
But it was another means the council used to fund parks that could have more lasting ramifications.
In the opening hours of the May 21 hearings, the council passed two amendments, both proposed by District 3 Councilor Angelita Morillo. They diverted a total of $1.8 million from the city’s Golf Fund to bankroll parks maintenance and subsidize the city’s public campaign financing program.
The Golf Fund uses revenue generated by the city’s five golf courses, such as green fees, to maintain those facilities. It’s what’s known as an enterprise fund: That means it’s self-sustaining and, theoretically, doesn’t need to tap into the city’s general fund to support program costs.
In total, financial documents show, the city has nine enterprise funds. The water and sewer funds are by far the largest, with the Water Fund bringing in $271 million in fiscal year 2024 and the Sewer System Operating Fund bringing in $417 million. The other seven enterprise funds—including the Golf Fund—are far more modest, altogether totaling $71 million in operating revenues in fiscal year 2024.
City Attorney Robert Taylor told Councilor Morillo that a diversion from the Golf Fund was legally allowable, although neither of them would provide WW with a written copy of his opinion.
Taylor’s legal opinion itself wasn’t called into question. But a handful of councilors warned that using specialized funds to fill budget holes in the general fund was a dangerous precedent to set—while others argued the city should be allowed to divert restricted funds when it faces massive cuts to its services.
“Using program revenues for a totally different purpose, it seems like a slippery slope,” Councilor Dan Ryan said during the May 21 meeting. “And this council in the past has gotten in trouble for doing just that. And so it doesn’t pass the smell test for me.”
Councilors such as Morillo said Taylor’s legal green light was good enough for them—and in a time of belt-tightening, it was the council’s job to make tough decisions.
“People can hem and haw,” Morillo said, “but we don’t have a lot of good choices before us.”
One of the few city facilities that didn’t suffer from the pandemic was golf courses. In fact, the Golf Fund now has north of $7 million in its contingency account—a stark departure from its financial woes in 2017, when the city bailed it out with $800,000 from the general fund.
The first amendment presented by Morillo on May 21 proposed to divert $825,000 from the Golf Fund’s contingency reserves to help fund the city’s Small Donor Elections program, which struggled last year to finance the campaigns of over 100 candidates for city office. (Program director Susan Mottet warned the council that, if not subsidized, it will have to even further decrease the amount of matching dollars it could provide to council candidates in the 2026 election.)
“We’ve cleared it with the city attorneys that it’s OK to move those” funds, Morillo said. “We’ve seen a level of engagement and a different type of person being able to come into office because of this program. This is a very small amount of money to ask for in exchange to preserve our democracy.”
Councilor Eric Zimmerman wasn’t convinced.
“Golf is funded by the people who play golf,” he said. “They know that fee goes to maintenance of that asset. And we are now going to rob that asset to pay our own election coffers, and I think that’s wrong.” He contrasted the council’s willingness to raid the Golf Fund against its reluctance to touch the Portland Clean Energy Fund’s $100 million contingency; the tax has collected more than $1.6 billion for climate projects. “We have other contingency funds that some of you are willing to lay yourself out on the dais for.”
No matter: The amendment passed on a 7-5 vote.
The very next amendment from Morillo proposed taking an even bigger chunk of the Golf Fund’s contingency—$4 million—to fund parks maintenance. Councilor Olivia Clark balked, saying it looked like the council was punishing Portland Parks Golf for exercising fiscal prudence. “I hate the thought that we’re penalizing them.”
It was Zimmerman who raised a larger question: What was the point of an enterprise fund if it could so easily be spent elsewhere?
Taylor said the purpose of such a fund “is to have a self-sustaining source of funding to run an ongoing operation.” But he stuck by his legal determination that the money could be diverted anyway.
The debate is a fiscal planning one, but it’s also a question of policy: When Portlanders play golf, say, and pay a tee fee, they expect that money to flow back into the golf courses. They don’t expect it to end up in a City Council candidate’s campaign coffer.
Councilor Ryan says the council’s diversion of Golf Fund contingencies “breaks trust with our residents” even if it is legal.
“[This] opens up this discussion across city funds,” Ryan says, adding that the city should “establish clear guardrails for dedicated use funds going forward.”
Councilor Mitch Green says the city has hampered itself by creating so many restricted funds with little flexibility to divert them elsewhere when needed in a pinch.
“When you’ve done that hundreds of times, and you’ve got significant amounts of money flowing through a municipality that are spent at different rates, it hamstrings us from saying we need some fungibility here,” Green says. “It seems absurd to cut your permitting staff by 60 when you’ve got millions of dollars sitting over there.”
A similar debate, on a much larger scale, continues to take place over the Portland Clean Energy Fund. Last year, the City Council voted to divert $623 million in unanticipated revenues to a variety of climate-related projects within city bureaus over the next five years. Critics said it undermined the intent of the tax measure, which was to fund climate-related projects with a specific focus on employing workers from underrepresented communities.
Councilors in the new form of government have proposed using PCEF reserves to fill budget holes in the upcoming budget. Green proposed borrowing $10 million from PCEF to fund parks maintenance. Zimmerman, meanwhile, has gone much further, saying that PCEF’s contingency should be used to plug budget holes without a payback plan. (“We don’t have a budget problem, we have a priorities problem,” Zimmerman said in March.)
The crux of the argument is whether the city should open the door to use restricted funds for whatever purpose it pleases.
Longtime observers of City Hall remember the last time Portland tried that. The result was a yearslong lawsuit filed against the city in 2011 over its use of water and sewer ratepayer dollars to pay for a variety of programs, both related and unrelated to the utilities. Two of the unrelated beneficiaries were the city’s public campaign financing program and the parks bureau.
The plaintiffs, represented by attorney John DiLorenzo, reached a $10 million settlement with the city in 2017.
The parallel isn’t a clean one: The use of water and sewer funds are restricted specifically within the city charter. Some of the smaller enterprise funds, including Golf, Portland International Raceway, Parking Facilities, and Spectator Facilities are not specifically mentioned in the charter—an important distinction that could leave them vulnerable to rerouting.
Still, the money in those smaller funds is not nothing. In fiscal year 2024–25, operating revenues from the seven funds totaled $71 million. (Some of the nonmajor funds are tied to water and sewer, likely making them inflexible.)
WW asked if the City Attorney’s Office had issued legal opinions on the diversion of money from any other smaller enterprise funds. Taylor declined to comment.
Ultimately, the council scaled back Morillo’s amendment, diverting $1 million from the Golf Fund to parks, instead of $4 million. Overall, the Golf Fund’s contingency account is set to take a $1.8 million cut in the upcoming budget.
Green, an economist, says the Golf Fund discussion opens up some “uncomfortable reckonings” about how the city funds services.
“Our next task: We should think twice about saying, ‘This tax is earmarked for this specific use,’” Green says. “The next tax I vote for will go to the general fund.”