BTW, when we voted on the changes to the police and fire pension system last November, the unfunded liability was stated as $1.64 billion. And so it has increased by nearly 10 percent in the past year or less.

For years the political class of this city has been acting like everything will be okay. Unfortunately even though some of us are not skilled in such matter it has been obvious that the situation was grim. Meanwhile the dollar contiues to fall and a recession is on the horizon.
Hold on to your shorts.
MHW

First off, they jiggered the PFDR number so Randy could get his elegant solution of 30+ yrs of prop tac increases to pass. So I honestly believe no one (not even Randy whose only non-gov job was as a janitor) has an idea and that these are low estimates. The auditor just rolls over for them, so I don't believe him either.

If the average guys debt is $34K, thats about 8 yrs worth of prop taxes or 2 FY of CoP budget.

Hold on, Sam still has SoWa road improv ($100M) and then the Ashforth eastside development to pay for. Then when Cabaret goes bust and we pick up the Armory Theather debt (another $30M) . . .

I will read this, thank you for the public service. THis just shows what happens when you have people whose only job skill is getting elected running things.

Since pensions are what sunk San Diego, any update on them?

I like the legal challenge sections in those documents, where I can sometimes find things not otherwise reported in the news.

Are there missing legal threats in this document?

I got this in the mail the other day:

September 19, 2007

Thank you for your letter received by this office on May 29, 2007. The Attorney General Hardy Myers asked that I respond to you. I apologize for the delay.

I understand that you are dissatisfied with the process in which your name was left off the ballot as candidate for Portland City Auditor for the 2006 election. Regrettably, the Department of Justice is unable to assist you. Oregon law prohibits the Department from providing legal advice or conducting legal research on behalf of private individuals. ORS 180.060. In addition, the Attorney General does not have statutory authority over local governments, including the City of Portland or the electoral process governing it.

My two year time limit on some claims have not yet expired. Nor have the violations of state law that remain actionable by either the DA or the AG.

My single taunt of a substantive nature in my banter-by-letters was that my first public act upon taking office would instead be a private act of insisting on my individual right to opt out of any "voluntary" public plan to manage my retirement savings.

The State Treasurer ushers these bonds along and knows that I can, at a minimum, raise a legal challenge that can survive a charge that I have no "objectively reasonable" basis for asserting one or another argument.

The question I raise here is the timing of my receipt of this superfluous letter, after having already received a categorical brush-off by the Secretary of State long ago.

As with any criminal act by public officials, the biggest crime is usually related to cover ups . . .

. . . I haven't been able to find much news from our City Auditor in the recent past, as if he is hiding in some cave.

Our AG clearly does not view the re-election bid of a "public" official the same as a private individual, for purposes of preserving a neutral playing field in the election process (or perhaps any LESS SIGNIFICANT "process").

You also need to add the unfunded liability to the amount owning. This is the general fund money that the city has spent for their "share" of PDC development for streets roads, parks, etc, when that money should have gone to the repair maintaining the assets already existing in the City. Instead that repair and maintenance money went elsewhere. on page 65-67 of the CFAR your link in the body of your post. You will find the accumulated depreciation of the General Fund assets. This is $2.167 Billion with a B, as well. In a business this money would be in reserves and budgeted as part of the operating costs so there was money for major maintenance. Which Translates to $3852/ a head or $15,405 for a family of 4 like yours, and it is losing ground at $278/head or $1110/family per year, the COP portion of all the other taxes by overlapping agencies is on page 276 of the CFAR, that number is $264,070,310 or $469/head and $1877/family. So that adds $4598 to each head and $18393 to each family of 4. Bringing your head liability for City Operations up to $12,159 and $48,637 if we were to pay all the bonds and issue new ones to fix all the deferred maintenance, which is what Sam the Tram is trying to push to fix a portion of this deferred maintenance with in his upcoming streets bond. The people not only pay for all this new stuff, but pay for the neglect of basic maintenance so that they will someday have to pay an average of 30% more to replaces assets that are neglected as opposed to timely repairs and upkeep on the City Assets.

But the city is going to add 500,000 new residents in the coming years, so it will all be ok. The per capita debt load will hold steady....right?

No wonder the local push for more density - we need a lot more residents in this city to help us pay the credit card bills.

A land-use/sewer/infrastructure bond issue is one facing Damascus, not with actual residents but prospective residents (like vaporware in the software development business). The business of developing debt slaves is big, as we all know.

One can borrow from NEPA the need to include a "no action" option.

Orderly development -- or efficient delivery of urban level services -- is the principal public purpose to justify the distinctive UGB feature of Oregon's land use laws, but routinely gets conveniently severed. See this Sept 5 piece in the O: Sewer rates go up almost 50 percent next year. My single suggestion to Mom long ago was that with any such bid, just cut it in half -- which I learned from her, I suppose.

I think the word "density" has a double meaning in Portland, and those in charge are counting on both to bail them out.

And of course the push for more density is a plan-less agenda that fails to address the needs of growth in every conceavable way. All the while broadcasting model-for-thenation successes in the entire approach.

I just got a flier brochure from Metro which colors pretty the upcoming Milwaukie Light rail.
It could not be more insulting.
Yet it's hillarious in a sick way.

It calls for citizens to
"Imagine what a light rail station in your community might look like".

Metro doesn't offer an example of the many existing stations. Say the Beaverton Round, Cascade Station or Gateway.

No, the pitch wants the imagination to take over and Metro is only to willing to
provide the dreamscape.
"Is the station a distinctive center with housing, restaurants, shops and offices?"

"Does the station blend so seamlessly into your neighborhood that passerds-by would think that it had always been there."

Now what does this have to do with this blog aboud debt? Plenty especially with the next pitch from the brochure.

"In some locations, communities use light rail stations as a catalyst to encourage new development or redevelopment."

The punch line is "catalyst to encourage".
Translation: To provide an excuse to trigger massive municipal borrowing through Urban Renewal and other schemes to subsidize private development with free property, free infrastructure, tax & fee waivers and then alter the plans when revenues and public benefits both fall short.
The rest of the brochure is chuck full of
cute drawings and pretty photos of Sam, Brian and a couple other local politicians making the rose colored comments we've all heard before.

Comments which hold up no exisitng examples for the community to better "imagine" what's coming.

But Metro Councilor Brian Newman,(soon to be OHSU's new money finder), says "Metro is thrilled to see the light raill continue to advance" and reveals another interesting tidbit.
"the new [light rail] Willammette River
crossing will make new east-west links possible, not just for light rail but also for strettcar, pedestrians, bicycles and maybe buses".

Translation: Money is no object, congestion doesn't matter and if we can allow buses to drive on the new crossing we can put off forever replacing the Sellwood bridge which now prohibits buses and trucks.

This is a great thread Jack has posted but it is about current debt and the pandoras box of the runaway borrowing about to unfold throughout the region will add much to the instability and nonsustainable chaos it all represents.

Thanks for the public debt exposure, Jack. Sadly, Portland's electorate is easily snowed by these guys downtown. For instance, regarding, Portland's last public pension measure. I can't understand why the electorate thought it was a good idea to raise their property taxes for 20 years so they could have marginally lower rates for 10 years thereafter. A lot of the electorate might either have moved away or died in the course of 20 years. Yet the measure passed. The chart in the accompanying voter phamplet on this measure was probably also dubious.

The answer to all of these pressing issues is obvious:

Let's build more train lines, streetcars, and "couplets!"

Oh, and as expected, METRO has decided to continue "study" on its "CONvention center hotel". They found a $600,000 pot of money someplace.

To pdxnag:

Apart from what the Oregonian reporter said in the linked article,I don't think Damascus is in CCSD No.1. See map here:

http://www.clackamas.us/wes/cip_5.htm

Like most development in Clackamas County (where I do live), the development takes place prior to the planning for the necessary infrastructure. In this case, it is primarily the growth along the Sunnyside corridor and in Happy Valley that is within CCSD #1 that will soon be overloading the sewer treatment facilities.

Jack, thank you for your research and repeated remarks that bankruptcy for Portland and surrounds is possible. Some of us say this in committees, meetings, hearings, and are laughed at, but your research and analysis is right on and gives credence.

Would it be timely to be looking for a fiscal conservative to run as Mayor??

Pretty dismaying to see the cold, hard facts.

I wish I had any confidence that this kind of info would be picked up and treated seriously by the local media.

Jack, your $122 million figure for Metro's debt is way low.

Per their 2006 CAFR, at June 30, 2006 Metro had $185.4 million in debt: $133.8 M in general obligation bonds; $51.1 M in revenue bonds; and $.5 M in "loans".

But wait! These figures do not include the amount of debt from the open spaces acquisition program approved by voters in November 2006. The general obligation bonds arising from this program should be around $227 million. Therefore, Metro's gross debt is about $412 million today.

Our streets may not be very smooth or safe for autos in the future, but at least we'll be able to bike out to far east Multnomah County and watch marbled butterflies frolic in the newly "protected" open spaces.

So the debt per man woman and child has increased about $2,000 since the year 2000.

I was running for Portland city council back then and was constantly talking about the debt load on city residents and per my calculations back then it was about $5,000 for every man woman and child and if I remember correctly $10,000 for every adult.

Jack, I don't know if your numbers also include the dirty little secret of COPS. That is Certificates Of Participation. Perhaps that is what your document is. But COPS are really just a way for the City to run up debt without asking voters. It is even scarier when you also look at the COPS that Multnomah County is accruing.

I remember debating Charlie Hales in a WWeek endorsement interview and said at the time that the city is going deeper in debt and that the spending was increasing at an alarming rate. That the city would, if they did not quit increasing spending, go dangerously into debt unless they came up with new funding. (at the time Hales was promising all kinds of new spending projects). That the city was engaging in deficit spending.

I think it was Zusman who turned to Hales and said "is that right Charlie?" Charlie himmed and hawed for a moment but was pressed for a direct answer to my assertions. In the end Hales had to say "yes it is correct."

I predicted at the time that if the city did not find new funding (they tried with the water sewer rate increases but were pushed back by the business community in 2001 I believe.) then Hales could do nothing that he was promising. I my usual snide manner, on the stump, I suggested that Hales would probably become frustrated and leave the council.

Wha... Golly I had no idea as to how precient that was at the time.

Now thanks to Jack we learn that the city learned nothing.

Take a look at how the city will pay back the bonds for the north interstate light rail project. THAT is scary.

yip yip

The debt numbers for the other jurisdictions are what the city calls "property-tax backed debt." I have no doubt that there is lots more.

Anyone know if Portland City Hall's booking keeping standards meet the requirement of the Government Accounting Standards Board, or is that ax still yet to fall?

Michael Wilson

Portland has to follow GASB in order to get people to buy their bonds. Their audited annual financial statements "CAFR"s are posted on their website, accompanied by the proverbial auditor's opinion letter. Interestingly, I don't think there's anything in the ORS that requires Oregon municipalities to follow GASB (somebody please correct me if I'm wrong about that).

Anyone know how this debt load compares with other cities like Seattle or maybe cities the same size as Portland?

Jack or Frank, do you know in San Diego's bankruptcy case what was each citizen's debt? I imagine there were several figures, just like you have in Portland, depending what one includes.

I don't know, and I'm not sure that I care, where other cities stand on the per capita debt burden. This whole country is living in an absurd fantasy about money, and if other cities are just as bad off, I would not be much comforted by that fact.

Jimmy Fran, is that you? The only conservative in the entire Portland area? Nice of you to visit!

"Would it be timely to be looking for a fiscal conservative to run as Mayor??

Posted by pdxjim"

Frank prehaps I should have worded that better, to say the least. There was an article in the N.Y. Times earlier this year about how many cities failed to adequately report their pension obligation and how GASB was working to get that corrected. My error. Sorry! I'll hope that is stating the issue correctly.

If that is the case where is Portland on this issue?

Michael W.

Jimmy Fran May Be The only Conservative in Portland Soon. I Am Getting out These Moron's have just about Gutted My Bank Roll.

Nope, this is not Jimmy Fran! Just a concerned Jim.

A fine piece of work, Jack. Don's money rule: You only have to pay for what you spend. Unfortunately, the City Hall Gang and the folks at Metro, the County and TriMet don't consider my modest retirement income. They just keep on buying fun things and commitments against my money.

And then there's the State and most of all the Federal government. So we need to add the local per capita debt the debt for Iraq, etc, etc and see how bad it scares us.

Political conservative does not equal fiscal conservative. The political conservatives of the last 26 years running the country, the last six years in particular, have proved that.

I don't know what the debt load was in San Diego - but I know they have a lot more households and businesses to abosorb the debt burden than does Portland.

Did you see the article about Superfund the other day? It's gonna cost a bundle to clean about that toxic wasteland known as the Portland Harbor. Guess who's lining up first to pay the bills? You guessed it, the City of Portland. It's only in the investigatory stage at this point. Once it gets to the cleanup stage, get ready to open your wallet a lot wider to start shelling out for "your share" of the cleanup costs.

I don't see anything fundamentally worrisome about a little structural debt. After all, we have assets in the form of infrastructure -- streets, sewers, buildings and such (ok, streetcars and trams, too) on the other side of the balance. But if we don't maintain that stuff, and as we borrow to fund operations (including fire and police retirement benefits), we're circling the drain.

Jack - I really like the fact tha you are prominently featuring the long term debt table on your main page. How about a catchy title like "Portland Hock-o-Meter"?

Lucky for Portland taxpayers Jack, there are about 60,000 Clark County residents who work on that side of the River who kick in enough money every year to knock that average back quite a bit. My wife and I paid well over $1100 to the State of Oregon in non-resident income taxes last year, and her employer deferred a portion of her salary and paid it to Trimet instead of her, as well.

I would be interested in some help deciphering the financials for America's The 'Couv for the first six months of this year, and attempting to figger our how far in hock we are, since the statements they release are nearly as cryptic as Portland's are, and we already know that "Rolls" Royce is looking to leverage everything in sight over here for the sake of Gramor Development, Ellie Kassab, Loot Rail, Al Angelo Co, a "cap" over I-5, et al...lemme know if you'd like a copy...

Stout hearts...

My wife and I paid well over $1100 to the State of Oregon in non-resident income taxes last year, and her employer deferred a portion of her salary and paid it to Trimet instead of her, as well.

None of that money went to the City of Portland. And the Tri-Met payroll tax is less than 1 percent of wages.

BTW, the $1.8 billion number for the police and fire pension unfunded liability is as of July 1, 2006. That's 15 months ago. You would think they'd have a more up-to-date figure for the nice folks who want to lend $12 million.