Layoffs at Portland’s building permit bureau

Megan Sita Walker won’t be traveling to see family this holiday season. She’d rather preserve her paid time off for a larger payout in case she loses her job in January.

Walker is a city planner and one of 57 workers in the City of Portland’s Bureau of Development Services (BDS) who received a layoff notice Nov. 30. The bureau is cutting 15% of its staff — almost all of them union-represented workers — to slow the drain of its budget reserve during a significant downturn of new construction in Portland that local economists expect to last at least 18 months. Of the workers who received a notice, 23 are members of AFSCME Local 189, 19 are members of PROTEC 17, and nine are members of City of Portland Professional Workers (CPPW). The rest are represented by building trades unions.

BDS can’t keep depleting its reserves

Virtually all of the bureau’s funding comes from the fees it charges for development activities, including building permits and land use review fees, said bureau spokesperson Ken Ray. The bureau collects bigger building permit fees for bigger projects, so when construction plans for office buildings or apartment complexes slowed during the pandemic, the bureau made less money. Between July 2022 and June 2023, it pulled $1 million a month from its reserve to cover operating costs, Ray said.

Ray said rising interest rates, stricter lending requirements, and a negative public perception of Portland caused developers’ interest in big projects to continue dropping. Starting in July, the bureau was transferring $3 million monthly from its reserve. By October, only $33.8 million remained in the backup fund. Ray said the bureau wants to manage the draw on its reserve fund so it can outlast the downturn.

“Most of our expenditures are for salaries and benefits, so unfortunately that means layoffs,” he said.

Local 189 President Rob Martineau said the cuts could be an early sign of more job losses to come resulting from Portland’s reputational damage.

“When as a community we are willing to pile on and sensationalize the tragedy and traumas that play out on our streets, it has an effect … to the point that the bureau has said nationwide there is a quiet or not so quiet disinvestment in Portland real estate,” Martineau said. “If people aren’t asking for permits, no one is going to be pulling wire or hanging pipe or pounding nails.”

Bumping creates cascade

Walker, the city planner, first learned of the bureau’s financial trouble in an Oct. 9 meeting when managers said they needed to take “cost savings measures.” Walker is a member of PROTEC17 and has worked for the city for eight years. Managers said the cost savings measures could include a hiring freeze, reduced hours, and stricter rules for buying supplies. They made no mention of layoffs until a second meeting Oct. 26, she said. Two weeks later, bureau leaders confirmed that 57 union-represented positions would be cut.

Though workers received layoff letters Nov. 30, exactly who is losing jobs is not yet final. Most are covered by union contracts that provide “bumping rights” — the opportunity for workers with more years of service to move into positions held by less-senior employees. Bumping rights can create a cascading effect: When one worker bumps another from a job, that worker can then bump a third person from their job, and so on. It also means workers outside of the Bureau of Development Services could lose their jobs as a result.

City HR had not worked out bumping details before issuing the layoff letters, and union leaders are still figuring out how positions might shift.

“I’ve been on with member after member after member asking, ‘When will I know if I’m bumped?’ and I can’t tell them because the bureau hasn’t told us,” said PROTEC17 Rep Rachel Whiteside.

Martineau, the Local 189 president, said the city’s approach to the layoffs seemed fast and messy. Of the 20 Local 189 members who received layoff notices, 17 had bumping rights within the bureau, meaning they won’t lose their jobs because there are positions they’re eligible to fill. A 15-minute check of hiring dates could have shown that — and saved those workers the stress of receiving an unnecessary layoff notice — Martineau said.

Managers also overlooked bumping options for some workers. For example, Walker is eligible to bump into another position, but her layoff letter didn’t tell her that. PROTEC17 checked the list of jobs and found her a potential landing spot, she said. The job is a temporary position that lasts through June 2024 and pays $9,000 a year less than she makes now.

“I’d be grateful to have that, but in the long term it’s not financially viable,” she said.

And depending on how the bumping cascade works out, someone more senior might get the position before she does. If that happens, her last day with the city will be Jan. 3, 2024.

Originally, city HR planned to lay off workers Dec. 15, but Commissioner Carmen Rubio, who oversees the bureau, pushed the date back so workers would retain health care coverage through the end of January and stay employed through the holiday season.

“We’ve been repeatedly surprised at how clunky the process was,” Martineau said. “You almost have to laugh to keep from crying and say, ‘At least they are not really good at laying people off,’ … but it’s small consolation when you’re the person that’s facing a significant life change at a challenging time.”