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Thursday, May 26, 2005

PDC: Pretty Darn Comical

I see that the capable folks at my favorite quasi-accountable public money slush fund, the Portland Development Commission, are at it again. Outed for entering into a series of highly questionable no-bid contracts for "management coaching," and "consulting" by a recent college grad with no relevant experience, now they're commissioning an "audit" of their own contracting practices.

And who will perform the "audit"? An experienced national accounting firm, hired in a transparent competitive bidding process, with no previous ties to the PDC?

Bwahahaha! Surely I jest. It will be the same folks who already audit the PDC's financial statements. And as far as I can tell, they were hired for the latest "auditing" job by, you guessed it, a no-bid contract of the very kind that they're supposed to be scrutinizing.

The PDC version of "process" is funny. Appeals of the agency's actions -- including protests on issues of alleged conflicts of interest -- are decided by the same people who made the original decision. Now the audit of their contracting practices is being conducted by a firm with pre-existing ties to the very group they're supposed to be checking up on. It makes you wonder if there isn't something ugly under every rock that a thoughtful investigator would turn up.

You know who ought to be auditing the PDC? Someone with criminal jurisdiction.

Of course, the prospect of having Teddy's ODOJ or Team Goldschmidt Field General Schrunk do it is laughable. But where is the U.S. attorney? Too busy authorizing illegal searches of Muslim homes, I guess.

Comments (20)

I'm not trying to be too naive, but having worked with TKW in an auditor/auditee relationship, I think your suggestion that that they are not experienced is flat out wrong. They are a very well respected local firm that has made a firm commitment to performing local government audits at the same time that most "experienced national accounting firms" are pulling out of the business.

Also, as I'm sure you know, remember that financial audits are a unique beast. The main question they answer is whether the financial statements are "presented fairly" with "no material misstatements." It is not a fraud audit or designed to evaluate internal controls in a comprehensive manner.

If the PDC is following the law (which is a pretty low bar with lots of wiggle room) and their own internal policies (no matter how stupid so long as they're legal) the auditor doesn't have a lot of discretion.

Keep your sights trained on the PDC - TKW is a great firm that takes their independence very seriously and wouldn't be working in Oregon if they were hacks.

I never said, or even implied, that they were hacks. I have no grounds to judge whether or not they'll do a good job. But in the current circumstances, someone with no previous ties to the PDC would have been infinitely better, if for no other reason than the absolute assurance of independence.

Moreover, even assuming that TKW is as competent and rigorous as can be, it doesn't change this fact: Whatever advice TKW has given the PDC so far, it hasn't stopped a series of highly questionable practices that scream for outside scrutiny.

In any event, the bottom line is that there ought to be more than a couple of private CPAs looking at this mess. How many more news stories about flaky PDC contracts should it take to get a criminal investigation started?

The notion that only the best and brightest work in Oregon is kinda funny. That is what the Goldschmidt clilque used to bill itself during its mountain retreat days. They had to get away from the rest of us stupids to figure out how to protect us from ourselves. I think, rather, you have to pass the "good old" test to fit in here. Competence and excellence are really scary concepts for many good olds. I spent 7 years practising land use law in Oregon and can say that administrative law and procedure are not quite as fast and loose as some of those interpreting them would have us believe. When I think of PDC, I think "pretty darned criminal".

Or "Pretty Damned Crooked".

Don't worry Jack, the Willamette Week will be ALL OVER this story...in about 25 years.

I've worked with government bureaus for years and have seen more than my fair share of audits and consultants. And I have to say, I think Jack's right on here.

Take the upcoming Revenue Bureau, for example. Now, someone somewhere decided that the Water Bureau, License Bureau, and a few other bureaus were not as “accessible” to the public as they should be (please keep in mind that, to the best of my knowledge, at no time was the public actually invited to any of these project meetings, interviewed concerning these issues, or even asked what in the hell they thought about whether or not they wanted the bureaus to become another City Super-Bureau). So Potter and the other Commissioners (with the exception of Leonard) got on-board and hired a group of consultants to interview various employees in various bureaus to see whether or not this was a direction they wanted to take.

Funny enough, ask anyone who was interviewed and they’ll tell you – the decision was already made. The consultants were hired as procedural only. They knew the direction their bosses (read, whomever paid them to do this in the first place) was to install the new Revenue Bureau – so they worked to ensure this goal, not to take an unbiased position throughout.

So it has become obvious that the city – or any government entity – works in this fashion. And, in a way, it makes sense. I’ve said before, the best way to get your idea made into reality is to hire and surround yourself with people who share your ideals – ignore and fire the rest. And, most importantly - and especially if you work as a public entity, never, ever ask the public for their input. They’ll just throw a wrench in your pretty plan and whine about low-income housing or some other bleeding-heart issue!

So (and back to the point) this “audit” will show little to no genuine facts. It will, however, show the public how hard-up PDC really is and that they really don’t have any money for the various projects they should be working on.

Thank God they got their multi-million dollar bump to turn the old Meir and Frank building into another Hotel! Yay!

TTM, tell us more about the "multi-million dollar bump." Is that out of the city budget?

This is what I am talking about. This is an article in the Oregonian concerning the PDC's newest endeavor.

Although I am all for restoring and maintaining our historic downtown, I still think the money in these "low interest loans" could have been more wisely spent elsewhere.

“The Portland Development Commission on Wednesday approved $13.9 million in low-interest loans for a project that will renovate the downtown Portland Meier & Frank, transforming its upper floors into a swank hotel.

After a brief presentation, the commission voted unanimously to provide Denver hotel developer Sage Hospitality Resources Inc. with three loans.

The PDC made a $3.3 million, 15-year loan to Sage that will be interest-free for the first three years and then grow to 3 percent in the fourth year, according to the contract. The loan reverts to interest-free in the 10th year with a balloon payment in the final year.

Of the $3.3 million, $500,000 will go to May, a loan the commission said it may forgive in light of the 10 management and 90 full-time equivalent jobs that are expected to remain in Portland if the department store stays open. That money is a reimbursement for May's recent purchase of a piece of land beneath the building.

The commission also made smaller low-interest loans to Sage subsidiaries, including $8.6 million to Urban Heritage Portland Hotel and $2 million to Portland Hotel Investment Fund. Urban Heritage's 25-year loan carries 3 percent interest-only payments for the first three years with 3 percent interest and principal payments beginning in the fourth year. Portland Hotel's loan carries the same terms over eight years with an added $100,000 annual principal payments starting in the fourth year.

As part of the contract, Sage also agreed to reattach the building's original terra cotta facade and has aimed to meet federal environmentally friendly building standards.

May agreed to pay $30 million to morph the building's lower third into a glossy new five-floor department store, and plans to keep Meier & Frank open through the remodel.

May officials have said the new store, which the agreement said could open in the fall of 2007, is likely to stock similar types of merchandise to those currently carried at Meier & Frank.

To brighten the sidewalks hugging the more than century-old building, plans call for short glass awnings. Designs also call for smaller retail spaces, such as a florist or coffee shop, on the main floor at Southwest Fifth and Sixth avenues, where entrances once led inside Meier & Frank.

"This building is an icon for Portland," said Michael O'Connell, the commission's development manager for the project. "This is going to restore the building to its glory days."

The decision caps years of PDC work to find a way to revive the historic building on Southwest Fifth Avenue at the heart of downtown Portland's retail core. Meier & Frank's parent company, May Department Stores Co., and Sage have both said they would like to begin construction early next year, but first have to reach a final sales agreement and gain city approval.

The developers say the project will cost $137.3 million -- including $107.3 million for the hotel and $30 million for department store renovations.

Though St. Louis-based May has agreed to be purchased by competitor Federated Department Stores Inc., company officials have said a change of hands should not affect the renovation plans. Stockholders for May and Federated are expected to meet separately July 13 to vote on the $11 billion buyout.

Even with the remaining hurdles, commission members expressed confidence after the vote Wednesday.

"This is a move forward for downtown Portland and the region," said Matt Hennessee, chairman of the five-member board. "This is very, very important."

The Portland Development Commission is a semi-independent city agency that manages most of the city's economic development.

This fall, Sage plans to buy floors six through 16 from May for the 334-room hotel, which it intends to open as a Marriott Renaissance in early 2008. Sage estimates the project could provide 200 full-time equivalent construction jobs over nearly four years, and ultimately, 175 hotel positions.

Portland Development Commission's loans, which will help pay for seismic and other safety improvements needed for the project, make up a little more than 10 percent of the four-star hotel project's $107.3 million price tag.”

Again, the idea of restoring this historical building is excellent but I have my concerns from a commission that has been taking to shady practices with its contracts and instant lacks of fends when coming to certain neighborhood redevelopment efforts.

I’m usually not this outspoken but this rubbed me the wrong way for some reason.

I like the idea of improving the Meier & Frank building, but I wonder how many of that building's problems are due to the building itself, and how many are due to the less-than-savory conditions around it? The sidewalks on that block are pretty scuzzy for what should be one of the prime foot-traffic areas in all of downtown. I'd be interested to know if these agreements being signed carry with them any increased committment from the city to clean up Pioneer Square.

The city has committed to remove all dead bodies from the sidewalks around the store within three hours of being called -- two during Christmas shopping season.

Actually, I don't mind a little pork going to that property. It's a nice building, and a Portland landmark. Given that we are throwing away hundreds of times that much for ugly towers, straight out of Soviet Romania, which are the antithesis of Portland, some giveaways to save M&F are probably in order.

"[...] it has become obvious that the city – or any government entity – works in this fashion. And, in a way, it makes sense. I’ve said before, the best way to get your idea made into reality is to hire and surround yourself with people who share your ideals – ignore and fire the rest."

That's not an uncommon feature in private industry either, in my experience. A previous employer of mine (a local family-owned manufacturer) was guilty of the same tricks... lord help you if you told the owner his design ideas were physical impossibilities, let alone that they would be unprofitable to manufacture.

This problem seems to be endemic to human nature, not just government. The only way to combat it is with good process, which the PDC apparently does not understand.

I was just looking through the City Club report on PDC, noting the reports about the make-up-the rules-as-you-go process during the S. Waterfront hearings. In my experience, this way of doing things is not limited to PDC. I have seen developers make end runs around legitimate process in front of more than one local government and special district tribunal. Washington County comes to mind. Recall in the 1990s former Washington County DA, Scott Upham lost his job for trying to instigate a criminal investigation. Is there any real hope for this place??????????

The "boys" in council for example know for sure..as long as B!X REPORTS IT ........AND DAVE LISTER,AND JACK BOG, JUST COMMENT ON IT.....their jobs are safe!

Jack, it's sure safer too be behind an issue, then out front on one...isn't it?

Step out front and run and make a difference.

I re-read a bunch of these posts....some go against my grain so bad it hurts. But some ladies and gentlemen are great commonsense thinking.

May I prepose a truce for me and can we sit down somewhere and find a list of people who could and should run for both city an county posts.

Its time these people really heard from us,if we take back the power base from full time elected types and get some blue collar basic ideas that pay the bills with the money we have... How about the idea of a roundtable group too focus on two people outside of the ususal fare and do more then just talk about it.

Don't move again Jack!

Jack Peek,

Swapping Caudillos won't solve a thing.

Think of the power to borrow and spend as the same as the power to extract silver from a mine in Peru.

Everyone can come up with their own plan for how to spend. So long as the notion that the resource is cost-free then no one will focus on the true cost.

A structural remedy would be to confine anyone's power, in government, to negotiate wild bonds that the lowly citizens will be forced to cover at the point of a gun. Think of the bond deals as if they were a public storehouse of silver and the current Caudillo's noble job was to empty it out.

How fast can we create a Viceroyalty?

Here is a random link I found when hunting up Caudillo. Skim and find parallels, from nearly 200 years ago.

Talk, talk, talk . . . just purge the past debts by unincorporating (at least for a day or so) and getting a fresh start. But it would do no good if we still looked at debt like it was a storehouse of silver.

Ron: No thanks, I'll take a change of underwear where the current electeds in city and county are concerned.

We have a problem ...they all, and I do mean all...STINK.

But where is the U.S. attorney? Too busy authorizing illegal searches of Muslim homes, I guess.

AHH...Jack, All Muslims are not terrorist, but all terror acts that we have recorded before,an to 911, and since...were done by Muslims.

And before one of you mentions Timmy in Oakey City, that may have been connected. So don't you dare give them all a pass.

This is non-political and simply nostalgic.

When I was a child in Portland Meier and Frank was the tallest building downtown. At that time, they still had elevator operators. I can remember them calling out "seventh floor, ladies foundations" or "eighth floor, linens and bedding". Some of them were hot-shots. They used to get a thrill putting your stomach in your throat, or vice-versa, as they slammed the throttle up or down.

Jack, I do indeed know sh--. Have had it thrown on me, clean it up on a daily basis at work. Not just actual sh--, either. Have you ever been assaulted by someone mentally ill, or had someone threaten to kill you? I have. And there are group homes for mentally ill people, and registered sex offenders, in my neighborhood, too. Is your beef that insane people exist at all, that they're in Portland's neighborhoods (in every one), or that they're inadequately supervised? If the first two, we disagree. If the latter, we should help figure out what to do about it, i.e., (desperately trying to return this topic to the original thread), how to pay for better/more social services. So sayth AMANDA.

Amanda, Besides a class on the difference between "JUST" mentally ill,-an - sex offendors, maybe one on reading for content might help you.


2.Until "DO-GOODERS" like you separate them....you will help one of them kill someone in the future.....Too much data available on that point.

3. My former idiot,do-gooder/ex wife/nurse..who did nursing school training at U of O, told me years ago why she "feared" this segment of the mentally ill population and was taught too fear them for good reason. UNLESS YOU WORK AT SALEM AMANDA..YOU DON'T KNOW SH--!

3. Since currently there is no mass sex offendor notification,(unless its a certain distance in a neighborhood), the other do-gooders like you in Salem are "worried" about their rights". SO PERHAPS YOU CAN VOLUNTEER FOR THE MASS RELEASE OF ABOUT 300 CRIMINALLY INSANE CLIENTS IN YOUR NEIGBORHOOD..perhaps you can "flyer" your neighborhood giving your name and email and phone,stating that you support and have called PSRB(Know these folks?, I DO.)that your neighborhood wish's (5) of them. Then and only then can you tell me a thing about what research says about the potential for serious violence.

Is your beef that insane people exist at all, that they're in Portland's neighborhoods (in every one), or that they're inadequately supervised? If the first two, we disagree. If the latter, we should help figure out what to do about it, i.e., (desperately trying to return this topic to the original thread), how to pay for better/more social services. Said Amanda.

One your first asine statement:No kidding these folks are here. I freely admit to being a full-blown "Nimby" at the first look at this.

Unlike too many electeds, their staff, and people like you, I did a bunch research and could write a good paper on it. The fact is this, and it's not debatable....the criminally insane segment of this much needed debate on the placement of these folks near schools is a train-wreck, when compared to a lesser risk of some other clients. I'M NOT AGAINST TREATMENT OR PLACEMENT OF ALL MENTALLY ILL FOLKS....JUST THE ONES WHO CANNOT FUNCTION "SAFELY" UNLESS SOMEONE IN THAT GROUP HOME IN THE AM SAYS.."SAY AHH! and makes damn sure they swallowed the pill that serparates them from us and possible violence. Lastly, did you know that re-offense by the criminally ill segment far over shadows any other segment of the mentally ill population?

Bring them AMANDA...just get your own new neighbors, and make sure you let your friends know you made it happen.

On the management of these folks..GEE, you once again flunked local issue reading.

Same bunch that manages these people have a rather large lawsuit against them for the death of a woman client...and the lady wasn't even a danger to anyone but herself, and they left her alone too long and she died. The people in my group home are left totally alone for 90 minutes UNSUPERVISED. Think your neighbors would like that,you tell them the truth after you pass "CRIMINALLY INSANE 101.

An finally "getting this thread back to social service debate".

The afore mentioned PDX "ATM" people helped finance this social service at a less then market rate.....for "the placement of difficult to place" low income clients.

No frigging kidding their "difficult to place" for damn good reason. Low income alright, just out of a locked facility in Salem, placed there by court order.

Jack Peek,

So sell. And move. Find those pockets of the city where there are no group homes.

It is clear that the value that you place upon the issue is greater than others. While you may see your safety as the main issue, others may not give a hoot. So sell them your home, and capture the value you believe that you have lost.

If, after you move, you still believe that you have lost value, then sue the city for that amount. It would, of course, then be far closer to a reasonable objective measure of the lost value, if there is any, lost value that is.

If you still have a claim for 10 grand you can try and sue to get it back. But, you would have the thing that you place the value upon, your safety and your piece of mind.

Then again, such a rational choice might not suit you either, because you would either stick to the same issue or just find another to consume your energies. There are lots more issues . . . I can suggest some if you need help in diversifying. I could use your energies on issues I hold dear.

It is clear that the value that you place upon the issue is greater than others. While you may see your safety as the main issue, others may not give a hoot. Said Ron:

My safety???? People like you, who care only about your little corner of your neighborhood are the only ones who don't care. But, like the stupid lib nurse who get's excrement tossed at her each day who posts/whines here and on other blogs...she forgot her nursing training that certain groups of this issue are truly dangerous.

But again,until it nails you, of course none of you care...and to say you have a sex offender next door, or a group home...until you find out the sex offender is a level 3 and the group home is for kids who are "just mis-understood" OYA gang kids....none of you have crap.

Move???? Hell no, I'd rather move next door and go postal as I'm told I'm capable of and prove you all right. Have a nice day!

PS..Ask Jack why he moved..he knows why.


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