Analysis says good job so far but suggests more oversight, input

The voter-approved Portland Children’s Levy is living up to its goals of providing millions of dollars to proven programs that benefit young people with little administrative overhead.

However, an analysis conducted by the City Auditor’s Office says that the council should play a stronger role in setting priorities for how the money is spent. Although the council approves the grants, the recommendations are made by a volunteer citizens committee that is not well known.

The analysis conducted by the City Auditor’s Office did not find fault with how the millions of dollars of public funds have been spent over the years, but it did find that the spending recommendations have been made with little council oversight, and it questions whether the public is aware of who made them and how.

“A framework adopted by the City Council for the Children’s Levy would do two things: specify the city’s goals and desired outcomes for the levy, and clarify roles and responsibilities,” the audit says.

The Portland Children’s Levy is unique in city government because it does not appropriate money to an agency that provides service. Rather, it raises property tax dollars that are then provided to existing nonprofit organizations that serve children. It is currently funding 59 different programs for children age birth through 24.

The programs are located throughout the city and run the gamut from Friends of the Children to Neighborhood House, Albina Head Start, Meals on Wheels and Self Enhancement Inc. Their services are found in preschools, home-based childcares, elementary, middle and high schools, community centers, nonprofit organizations, soccer fields, basketball courts, music auditoriums and parks.

The spending recommendations are made by a five-member volunteer Allocation Committee chaired by a single council member — Commissioner Dan Saltzman, who has sponsored all the ballot measures. The committee staff is based in Saltzman’s office, but staff members are paid by the program and are not city employees. The audit says this situation could cause problems.

“Information on the Children’s Levy could be hard for a resident to find — it is not listed as a bureau on the city’s web page, and residents must know to look to the commissioner’s web page to find a link. Under the city’s commission form of government, commissioner assignments may change at the mayor’s discretion. It is not clear whether the existing staff would follow a change in assignments. There is a risk of the loss of staff expertise and institutional knowledge if the city does not have a defined structure for administering the levy,” the audit says.

Saltzman proposed the first levy to the council in early 2001. At the time it broke with the relationship that had been established between the city and Multnomah County. Under an earlier agreement called Resolution A, city government was supposed to provide urban services such as water and sewer, and the county was supposed to provide social services. But Saltzman did not think enough was being done to help children, especially low-income children, and he persuaded the council to place a levy on the Nov. 5, 2002, ballot to raise millions of property tax dollars for existing nonprofit children’s programs.

The voters agreed with Saltzman and approved the levy — formally known as the Children’s Investment Fund — by a margin of 106,604 to 83,380. The margin of victory increased with the two renewal measures, culminating in the passage of the November 2013 measure by a margin of 119,026 to 40,115. According to the audit, the program has distributed $57 million to organizations that provide services to children over the past five years. Administrative costs have averaged 5 percent a year, as required by the levy language.

At first, the city had an agreement with the county to cooperate on the allocation of the funds.

According to that audit, the agreement “provided the initial framework in 2003, with goals, criteria for selecting grants, and defined responsibilities for Children’s Levy staff, the Allocation Committee, City Council and County Board of Commissioners.” That agreement expired in 2008, however, and was not replaced with a similar framework.

In its absence, the Allocation Committee has developed its own goals and strategies to guide funding decisions, the audit says. Although the audit does not find fault with any of the decisions, it says the council should show more leadership.

“(W)ithout long-term goals adopted by Council, it may be difficult to ensure funds address the highest priority community needs, or to document the levy outcomes over time,” says the audit, which also calls for more transparency of the funding decisions.

Saltzman says he supports the recommendations and notes the Allocation Committee spent much of its most recent meeting discussing how to increase public involvement. It will soon seek public comment on recommendations to ensure that the programs it funds serve all children effectively, Saltzman said in a Feb. 12 letter to City Auditor Mary Hull Caballero co-signed by Portland Children’s Levy Director Lisa Pellegrino.

Portland is not the only local government with such a program. They also exist in Seattle, Oakland, San Francisco and two Florida communities, Jacksonville and Broward County. Some were inspired by Saltzman’s example.