This page contains a single entry from the blog posted on March 16, 2007 9:26 AM. The previous post in this blog was Alberto starts to twist slowly, slowly in the wind. The next post in this blog is Erin go bragh. Many more can be found on the main index page or by looking through the archives.

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Friday, March 16, 2007

It isn't just the tram

Now that it's all said and done -- just the way Neil Golsdchmidt, Peter Kohler, and Homer Williams wanted it -- Mayor Potter is starting an independent investigation of the OHSU health club aerial tram [rim shot] budget scam. With all due respect to the mayor, that gondola has left the station.

Much more interesting at this point are the continuing scams involving other aspects of the infrastucture for the cold, sterile tower jungle of SoWhat. So many other parts of this development have been sold with outright lies, with financial problems that now get worse by the month, that they make the tram's $45 million overrun look small.

What about these other budget whoppers, Mr. Mayor?

Neighborhood park - Budgeted at $1.2 million, already up to $8.5 million, and counting. Seven million for land acquisition alone.

I-5 pedestrian and bike bridge - Budgeted at $1.6 million, currently sitting at $11 million.

Greenway - Budgeted at $6 million, now at, what, something like $38 million?

Not to mention the I-5 ramps, more streets, the list goes on and on. And wait 'til we're told we need a new sewage treatment facility down there to deal with all those recently relocated California retirees flushing all that fiber.

It would be interesting to take out the original "North Macadam" public money budgets and update them for actual expenditures and revised estimates. But of course, given the obfuscation that's characterized this mess from the beginning, that will never happen. Never.

There's a systematic problem here that goes much deeper than the Kohler Coaster. A post mortem on that piece of the SoWhat debacle is like what the city did last year toward "fixing" the impending police and fire retirement disaster -- namely, nothing much. Thanks for the investigation, Mayor, but if we're not going to ask the right questions, it's just political posturing. And it won't work, because people are catching on to the totality of what's going on down there.

Comments (36)

YABUT, they just keep voting the dead-heads back in.
Somewhere I read 65¢ out of every tax dollar goes to schools. Oh well, "save the children", always works.

The Mayor says, "The only way we can learn from this is to know what we did wrong." But that's just it. That's the problem. Nothing really went wrong here. OHSU and the developers got a gigantic gift and the taxpayers got screwed. This wasn't our system making a mistake. This was our system working.
Now, it's just a matter of feigning shock and outrage for a while, before we move onto doing it all again.

Jack, you are probably right, updating the budget, the list of projects for SoWhat, "will never happen" with the "right questions" being asked.

But there is major dissention occuring in the SoWhat Urban Renewal Advisory Committee (URAC). The URAC has been asking the PDC staff for a realistic, updated 5 and 20 year budget reflecting all the additional projects and enormous cost overruns for the past two years. PDC just ignores the pleas. There is even talk from members of quiting the URAC. Why serve when one has no imput, and sees the reality of bankruptcy. The last URAC meeting last week brought this all to a head, but PDC just emailed a reply that they will consider the comments.

What will be the "straw" for SoWhat is the transportation projects. They are not funded, only a hope, and totally under budget. What is worse, they constitute the largest public expenditures in SoWhat. State law requires infrastructure (streets, access) to be in place before development-why is Portland ignoring this requirement? Portland certainly requires infrastructure before they approve private development projects.

They will keep voting them back in and here is why. When this state relies solely on an income tax you have a situation where the top 50% of wage earners pay over 96% of the taxes. This gives the other 50% a virtual free ride. It doesn't take much of a swing vote to pass any spending (taxing) measure because these people can vote with impunity. They will never pay for it themselves. "Tax the rich"is their mantra.
Just as long as it benefits them, ( subsidized housing, health care, transportation, recreation) it is a no brainer. The compounding result is Oregon encourages its most productive citizens to move out, and at the same time makes this state an attractive place to relocate to if you happen to be a low or no income person with a socialistic philosophy that expects government to take care of them. These are the people who want a $50 dollar mayor and voter owned elections. They have no stake in government spending, ergo; mismanagement is not an issue.

Estimated costs of projects: - $15.8 million
Actual costs of same projects: - $93.7 million
Cost Overrun - 593% !!!
Probable Private Sector firings for such overruns - 99%
Probable Public Servant firings for such overruns - 0%

I hope the Portland citizens understand that this money is no longer available for Safety, Education, Health, Infrastructure, etc.

I think it is about time to tell Tom Potter and his accomplices to ... "Go Fly A Tram".

Sounds like a job for the Fritzy-Listerinos :)

This reminds me of "Police Story" when Leslie Nielsen says, "I will not rest till we get to the bottom of this. Okay, now let's get some lunch." Only here it's, "I've been in office 2 years and I still have no clue what happened here. That is unacceptable and it's time we get to the bottom of this. Okay, everybody, let's take a break till May 15th."

Jack and Lee are right - the tram cost is a minor issue compared to the transportation improvements that still need to be done in SoWa.

Hopefully, Mayor Potter will investigate these other issues, and a good place to start would be to meet with the members of the North Macadam URAC, most of whom, as Lee points out, strongly disapprove of PDC's shenanigans.

There are common-sense solutions to these problems, and the majority of the North Macadam URAC knows what these solutions are.

Maybe The Vision Aires could hold a benefit concert?

A double bill with The Potter">http://bojack.org/2007/03/if_they_rocked_1.html#comments">Potter Familias?

It's become abundantly clear that the PDC
sought to craft their project estimates and revenue projections to fit a predetermined outcome.
Once the low balled project estimates and inflated revenue projections were compiled PDC staff then determined the North Macadam Plan "feasible" and "reccommended approval" to their Commission and City Council.

Once approved, the plan, the numbers and feasibility became obsolete notions without anyone facing any consequences.

The fact that there is no running total accounting available for ANY official oversight or public critiquing is outrageous.

If it is this easy to cook up numbers and push a tax payer funded pipe dream the system is broken, period.

If there is a genuine investigation then names must be attached to every project estimate, every revenue projection and why there is no complete budget readily available.

It isn't just the tram...and it isn't just SOWA

....anybody looked at the little problem in SW with the Vermont high pressure sewer line...and thje Mult Boulevard high pressure sewer line taht were put in a few years ago when the old low pressure pumping stations were de comissioned and replaced by a single high pressure sewerage pumping station...?

...the line is less than 5 years old...it was originally spec'ed out with steel sewer pipe withb a 50 year life...after winning the bid the contractor claimed he couldn't get the steel pipe and still make a profit, but he could still do the project with a variation on PVC pipe that would last just as long...so, with the help of a consultant, the city and the contractor re speced the deal with the PVC pipe (remember the PVC pipoe that was just as good as the steel/) ....with a whopping two year guarantee on the PVC....four years later the PVC pipe fails... every joint over a 4 - 5 mile or so stretch...

...the BES folks (the Sewer Department in plain English)held a couple of informational meetings the final one last Monday, the 12th, at Multnomah Center...
...The messasge from BES was simple...no body in the city bureaucracy is responsible...only the rate payers are responsible...it will cost $ 18 million to fix...dig deeper for your sewer bills (pun intended) bercause we don't think we can get it back from the contractor or consultant.

To questions about the identity of the city BES folks who agree to the pipe substitution; who agreed top the 2 year guarantee; who engaged the consultant, we were told that that is "confidential personnel information" and can'rt be disclosed...same response to the question if any city employee who participated in the approval of the substitutions was still employed by the city...same response to the question whethjer any one who participated in the approval of the substitution has become employed with the consultant or contractor...

I think I'm going to ask the city some embarassing questions at the point of the Public Records Act....

One thing I don't understand is, why is the mayor planning to hire an outside auditing firm to look at the Tram project when the city already has an independent auditor with seven or eight full-time employees who could do this review? Is it because the city auditor doesn't have the courage to look at this project? Or is it because the mayor wants to manage the audit contract so he can restrict the auditor's independence and control the information that's included in the auditor's report?

You wouldn't actually trust Gary Blackmer to look for graft, corruption, fischal deceit, and public employees who are serving two masters (the CoP and Homer, AT THE SAME TIME) despite the OBVIOUS conflict of interest?

Would you?

Potter wants to wait until after the May 15 vote on proposed changes to the structure of city government, "so this doesn't become a question of whether the form of government was to blame."

Holy mother of crap is Potter a FRICKIN HYPOCRITE. It's him and his Team Potter cronies who have been running around since January mentioning the tram in their Charter reform campaign speeches and appearances, despite it being a bogus and irrelevant "connection". That's at least two and a half months of pimping that idea out whenever they got the chance.

Suddenly he tries to play the above? Give me a break. Does he really think no one sees through this kind of crap?

Nonny - please post some specifics about the plastic sewer line.

Another demonstration of Potter's real self is his vote, with Sten, in favor of the Alexan Tax abatement in SoWa.
The application failed on a 3 to 2 vote but it would have added another $10 million loss/cost to SoWa with not a shred of public benefit in return.

If he limits the audit to the Tram only in SoWa then he's a lost cause.

Heck, even a list of all monies, for all reasons, paid to or promised to OHSU would be interesting. There's been quite a collection of line items which channel money to OHSU.
Most of which came during the "negotiations" for shares of the rising Tram costs.

why is the mayor planning to hire an outside auditing firm to look at the Tram project when the city already has an independent auditor

I have no idea what the Mayor is thinking, but Auditor Blackmer is hardly independent. Regarding Local Improvement Districts, the financing mechanism for the tram, it was Auditor Blackmer who turned over his oversight authority to...Matt Brown and Vic Rhodes in the Office of Transportation. He's totally complicit, and all in the name of "reform" and making the process more "efficient."

Vic Rhodes, as head of PDOT, and I as Assessments Manager in the Auditor's Office, had bumped heads many times, and while Blackmer's predecessor Auditor Barbara Clark had been a strong proponent of maintaining the Auditor's independent role, Gary was happy to give that up, over my strong protestations.

I would hope that the outside auditor is directed to talk to folks like me, who have a lot of history working with PDOT and PDC staff like South Waterfront project manager Larry Brown. Low-balling project costs is nothing new, nor are the financial shenanigans. It's funny but I'd complained about an earlier project of PDC's Larry Brown to Blackmer, back when we were theoretically providing project oversight, and the response I got back was "well, we can't be everywhere."

It is totally appropriate for the Mayor to seek an outside auditor, and I applaud him for doing so.

Frank, a very interesting and informative posting. It's disturbing to learn that Mr. Blackmer may not be as independent and aggressive as one would hope he'd be.

One point of clarification, though. Mr. Blackmer as city auditor, does not have oversight responsibility for any of the city's projects or departments except for his own department. Oversight is a Council/management function, not a function of an independent auditor's office. Mr. Blackmer's primary role is to determine if the city's oversight systems are adequate and working effectively, and to report his findings on these matters to the public. Giving him any kind of general oversight authority would create a conflict of interest.

One can only hope that Mr. Blackmer will read what Jack and others have written here and be embarrassed into looking at the apparent pattern of cost overruns and budget changes that have plagued the South Waterfront project. Unfortunately, I'm not optimistic about that.

If "oversight is a Council/management function", then who is overseeing the City Council?

Nobody? Surely you can't believe the voters have any effective means of evaluating bureau incompentency and fraud if the Commissioner in charge is complicit in shielding it from public view.

If only the FBI had a mole.

Mister Tee, the Council and bureau heads should be overseeing the bureaus, and the voters are the ultimate overseers of the Council.

As far as shielding information from public view, it's the job of the press and the auditor to prevent this from happening and theoretically, to provide the public with a balanced and complete perspective about how projects and programs are performing. Obviously, this system doesn't always work very well because the press and auditor often are not diligent, competent and courageous. Ultimately, it's up to the public to demand that they possess these attributes.

Frank, this couldn't be the same Larry Brown of PDC that told the SoWhat URAC and its Budget Subcommittee that "financing costs are not part of the hard costs for projects in an Urban Renewal area"? Nor that "staff time, architectural/engineering costs, design competitions costs, land costs, etc. are not part of the $57M tram cost"?

It will be interesting if Potter's audit covers all the other costs that are normally covered in audits. I agree with you, Blackmer is not independent.

Time for a ward system. It wouldn't get rid of all this extravagant pork. But at least the pork would get more equally distributed. I would love to see a map that showed percent of household income paid in taxes, vs percent of public spending. Let's make it by Oregon House district. Let's call that ratio the Help Oregon Spend Equitably, or HOSE Index.

Oversight is a Council/management function.
They simply do not do their job.
How can they when they don't even demand and get a complete accounting?

There isn't a council member or manager who can show anyone a copy of any full accounting for SoWa. I'm sure it's the same for other UR districts and projects.

Not one of them can even say they have seen anything close to a full budget.

Despite the reluctance of so many to believe it there is nobody watching the money. Nobody. Nobody takes reponsibility, nobody steps up, nobody leads and nobody admits it. The press is the same way.

The voters have zero effective means of evaluating bureau incompentency and fraud. That's why it is so out of control. It's been this way for many years.

City hall defenders, and we all know who they are, blindly provide a bulls**t ushering service for each and every new plan.

I have a copy of a letter from Blackmer to a citizen who requested that he audit the tram project back in 2003. Blackmer said he was "too busy". I think Jack posted it some time back.

Maybe it is time for Blackmer to be audited? When has Blackmer fully audited one of the eleven URA as each is required by state UR law?

One point of clarification, though. Mr. Blackmer as city auditor, does not have oversight responsibility for any of the city's projects or departments except for his own department. Oversight is a Council/management function, not a function of an independent auditor's office.

I don't know why you say that, but that's inaccurate. It used to be that we --back when I was Assessments Manager in the Auditor's Office-- proposed the assessment methodology for projects. This was a significant oversight function, deciding who paid what based on how they benefitted from a project. State law is very explicit that, in a Local Improvement District, you charge people based on how they benefit from that project. This is boring, wonky kind of stuff, but it is where the rubber meets the road in terms of making sure people who don't benefit don't subsidize those that do. The tram is a perfect example. There used to be "Assessment Analysts" in the Auditor's Office, four when I started with the City... now there are none. None. Auditor Blackmer eliminated that oversight function, as he eliminated the last of these positions, --as well as that of Assessments Manager-- at the request of people like Vic Rhodes who found that oversight annoying. This despite the fact (or, really, because of the fact) that the City will be assessing over $40 million in new assessments in South Waterfront alone.

The other significant and very important oversight function was making progress payments to contractors. The Auditor's Office didn't used to just turn over millions of dollars to the bureaus, as they do now, taking them at their word that payments are being made properly.

If you look at the Charter, its clear that citizens wanted an independent elected official that oversaw how money was spent. A very clear and direct role of oversight.

Blackmer said he was "too busy".

I can't tell you, Dave, how I personally agonized over how to report to Blackmer that there was a "secret meeting" --a meeting I heard about by accident when someone left me a message thinking I was someone else-- orchestrated by PDC around the SE Water Avenue Local Improvement District. I showed up at the meeting, uninvited, to find the previous Assessments Manager still working on how to charge people for that street LID.

After I reported to Blackmer that the meeting was not only inappropriate, but deals were being cut and made by PDC off the record, deals that made no sense and were essentially illegal...the response that "well, we can't be everywhere" told me MY career was done there. (OMSI, whose property the improved SE Water Avenue went through --and benefitted from-- went from a potential cost share of hundreds of thousands of dollars to...zero.)

For bureaucrats like me, who live paycheck to paycheck, we count on a place where we can speak truth to power...especially when it's in our job description. Take that away, as when you take away the independent oversight function of an elected official (surrendered as much as "taken away") then where DO you turn?

Frank, by "oversight" I meant managing, directing or supervising a program, project or department. I said that Blackmer should not oversee any functions except those that report directly to him. There should be a system whereby the functions that Blackmer directs are audited, but apparently there isn't. That is definitely a flaw.

As to Blackmer's decision to eliminate his review of contract payments, I agree with that. Every bureau should have an effective system for ensuring that vendors are paid only for what they've earned and what they are owed. Blackmer's past involvement was, in a sense, a redundancy. However, he should have an audit plan in place to ensure that bureau payment processes are audited periodically so that internal control weaknesses are identified, "outed", and corrected.

With regard to Blackmer's comment that he cannot be everywhere, that is literally true. That's why he should have an ongoing process for assessing the city's risks and an audit plan that provides the best audit coverage given the size and capabilities of his audit group. Based on what you and others have said here, I seriously wonder if his audit planning system is any good.

Metro watcher -- thank you for your informed and on-time posts on this issue.

I agree that no one can be everywhere, always. I also agree that the systemic relief from this issue is to have a system that addresses all concerns on a more equitable basis than just – when/if they are/happen to be raised -- and then apportions them into the threat level color coding they deserve.. hee hee.

But really, imagine you're the guy who's supposed to keep the motor of the 747 jet running (isn't that how Gary describes it?) and the jet mechanic comes to you and says -- it's making funny noises and I think we need to check it out before we clear all those people (or all their tax dollars) for the runway.

And you say, well we can't be everywhere...

And, that's ok?

And for those of you who are saying, well we love OMSI and it does a great service and it was struggling and so it's ok we forgave it all its LID obligations -- I give you the West Women and Children's Shelter in NW Portland, (or several other similar institutions) they had to CUT services to abused and destitute women and children so they could pay their streetcar LID assessment.

No secret meetings to cut deals to give them relief. Oddly. Perhaps because no one doing secret deals knew anyone needing to go to "summer camp" at West Woman's. Or if they did, they wouldn't admit it. Or, let them go.

It's been several years since that happened, but to this day, it makes me furious. And the thing I have learned most from that whole sorry embarrassment is that the folks who most understand why I feel furious about this are city bureaucrats who see what's happening, and have no place to go with their concerns.

That was what Frank was talking about -- where do you go if you believe in the system and want to do right? Where do you go and how can you be safe if you do go there?

I am hoping that Potter's "independent audit" investigates the past history of PATI and it's subcommittees. Several times members, and a few times collectively, they questioned and voted to contest premises concerning the tram.

Review the major discrepancy of "fixed" numbers concerning the costs for different modes of transport between OHSU and SoWhat.

Investigate the advocacy of PDOTs Vic Rhoades and Matt Brown . They should have been impartial, fact finding, and honest with PATI, City Council, and the media. They weren't. They should be held accountable. And if they were getting their "instructions" from Mayor Katz, PDC, city commissioner(s), they should be named and held accountable.

Review the Planning Commissions strong rejection of the tram and ask why the present City Council and the mayor rejected their vote. Hold them accountable.

Examine the slanted advocacy of the PDC for the tram without acknowledging the numerous negative questions from numerous city-wide groups on all aspects of the tram. Hold them accountable.

And hold the media accountable, because without even seeking the other side, they certainly heard some of the questioning and did nothing to expose the contrary opinions. They'll claim they did, but usually if was after the next in-line decision along the tram's path was made.

I forgot to add in OHSU. Several of their representatives were on the ground floor of the tram scam-serving on the PATI, URAC, and lobbying PDC and all. Investigate their participation of deceiving the tram process.

The funniest thing to me about this whole discussion re the tram is that we talk like this is over. The fun has only just begun. Later this month is when we actually assess properties for the cost. And we're about to give birth to a new financing mechanism for paying assessments, the "Substitution of Security Program (SSP)". It allows a property owner who has multiple properties to satisfy the assessment on one property by securing the obligation on another. (Also known as paying your Visa bill with your Mastercard.)

Anybody want to guess who benefits? Could it be the same guy who City Council obliged by moving all his condo streetcar assessments in the Pearl to a vacant lot?

Anne and Frank - without knowing the specifics of how Blackmer decides what to audit, I can't say whether or not he is giving Portland taxpayers the best bang for the audit buck. I do know that he's been in city and county government for a long time, and the friendships he's developed with the other elected officials may cause him to shy away from auditing certain programs in order to protect them. Blackmer is very smart, but he's human, and like most of us, he is fallible.

As to where to turn, I think that if you can clearly document a problem in government and its effects on taxpayers, you will be able to convince a good reporter to cover the story and shine a bright light on the issue. Many reporters seem to want stories given to them on a silver platter, so you've got to do the legwork and be convincing. These days, the Portland Tribune has the most aggressive reporters, so I'd start with them.

And by describing some of the issues here on this blog, you've already made a number of people aware of potential problems and have influenced how they will vote and what they'll discuss with their friends and neighbors. Keep trying. There'll be no brass band playing for you at the finish line, but you'll have the satisfaction of knowing you did the right thing. That's more than most folks will experience.

This blog consistently flips the switch....but the bright light that a good investigative reporter might shine on the many questionable shennanigans (crimes?) that get pulled around this region never seems to fall on the questionable subjects. 7 days a week/twice a week/once a week....the 3 Portland newspapers are missing the boat....wish it weren't so. So much to expose....so little interest.

Loner -

Detail about the plastic pipe / steel pipe Multnomah Blvd. problem appears in the March 22, 2007 Big O, In Portland Section, page 8 , under a Fred Leeson byline.

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