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This page contains a single entry from the blog posted on October 11, 2007 3:55 AM. The previous post in this blog was Blazers win!. The next post in this blog is Feeling lucky?. Many more can be found on the main index page or by looking through the archives.



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Thursday, October 11, 2007

Portland debt series takes a breather

Over the past couple of weeks, we've been digging each weekday morning into another aspect of the huge long-term debt that's being racked up by the City of Portland. There's a lot to think about in what we've reported so far, and while we've still got more in the works, this seems like a good time to knock off writing for a time and keep researching.

Goaded by readers who insist that we compare Portland's debt to that of other cities, we're now checking into the situation in Seattle. Not that it's all that relevant -- I don't see how some other municipality's decisionmaking should be judged any better or worse than ours -- but we heard from at least a couple of different commenters that the Portland numbers are not meaningful to them without something to compare them to.

Fine and dandy.

Alas, there's not as much openness with the public documents on the internet in the Emerald City as there is down here in Portland, and it's going to take a while to get to the level of detail we have achieved for the Rose City. A little preliminary sleuthing, however, indicates that the debt burden per capita up there is going to be lower -- much lower -- than the $7,842 that's weighing each of us down here in Portland. More on that later.

Before moving off the debt topic, we'd like to use this post as a placeholder for links to the various writings that we've generated in the series so far. Here's the list, to which we'll add in the future as we write more:

1. Portland: A city deep in hock (9/28/07).

2. Grampy's payday loan (10/1/07).

3. These numbers crunch you (10/2/07).

4. The saddle's about to get heavier (10/3/07).

5. Buying white elephants on time (10/4/07).

6. Drop in the bucket (10/5/07).

7. City of Portland debt update (10/8/07).

8. City of Portland debt is rising faster than condo towers (10/9/07).

9. While City of Portland's debt rises, its tax levy falls (10/10/07).

In the meantime, just remember a simple executive summary: $4.4 billion of debt, and rising five times as fast as the population.

UPDATE, 4/15/08, 2:08 a.m.:

Additions to the series:

10. Portland tax levy appears back on the rise (10/12/07).

11. Portland vs. Seattle city debt: It's not even close (10/15/07).

12. Portland Debt-O-Meter: New and improved! (10/29/07).

13. Take it to the limit one more time (11/6/07).

14. Portland population growth continues to slow (11/19/07).

15. Where's the new PDC debt? (12/4/07).

16. Portland debt clock ratchets back slightly (12/28/07).

17. How to borrow $277 million from B of A, very quietly (2/1/08).

18. Bond market and bond insurance implosions can't be helping Portland (2/14/08).

19. Portland to put another mid-nine figures on plastic (2/15/08).

20. Has Portland's credit card expired? (2/16/08).

21. Back over $2 billion (2/22/08).

22. Like I've been saying... (2/23/08).

23. City of Portland to borrow $750 million in April (3/24/08).

24. Portland sewer debt climbs 21.63% over 13 months (3/25/08).

25. Portland bond sale still behind a curtain (4/1/08).

26. Sold (4/3/08).

27. City of Portland bond refinancing put off (4/14/08).

UPDATE, 4/15, 2:27 a.m.: Given that this will be a topic of continuing interest to us, we've created a separate blog category for it. This way, the computer will do the work of keeping the list of series links current. For the complete list, go here.

Comments (14)

Alas, there's not as much openness with the public documents on the internet in the Emerald City as there is down here in Portland

Wow, it must be really bad in Seattle, considering how much digging is required to find out this information in Portland.

Thank you for posting this series, Jack. Excellent work. Portlanders may come to different conclusions after reading the numbers, but everyone should have easier access to the facts. And the Council should consider input from citizens on the level and length of indebtedness, every cycle before the specific projects in the Budget are discussed. Deciding how much to pay in interest should be part of the cost-benefit analysis when making other decisions.

I think the line "Portland: The City Deep in Hock" is bumper sticker like material. It conveys the message why some in the glitzy downtown area may be feeling so good while the rest of us worry about how much we're going to have to fork over in higher taxes in future years. Most Portlanders don't benefit all that much from the escalating spending by the local governments but are on the hook for the future bills.

Nice shot Bob,
It could replace the current slogan
"Portland, The City That Works" to

"Portland, The City That Hocks"

I don't want to goad you into more extraneous work than you've already taken on, but this series of posts is great. Perhaps you ought to submit them to the local rags as a series of guest editorials. Really excellent work.


I was one of the commenters, but let me add to Amanda's comment. Kudos to you for raising the profile on this issue. I just wish I had an enterprising thesis student this year who could do the comparative analysis!

Is there really no published source on urban indebtedness? Maybe one of our enterprising local journalists will pick up the story?

Yes to all of the above. Thank you, thank you, thank you!

"the Council should consider input from citizens on the level and length of indebtedness, every cycle before the specific projects in the Budget are discussed. Deciding how much to pay in interest should be part of the cost-benefit analysis when making other decisions. "

Why might the Business Judgment Rule, applicable to judicial review of private corporate acts, not be suitable to judicial review of government acts?

Thanks, folks. It's a series that shouldn't have been necessary. Stay tuned.

And while all that is going on we have this
"Our aging city"
"100-year-old fire hydrants. Crumbling streets and bridges. An obsolete emergency communications system. And the tab to fix it all -- now at a staggering $650 million -- just keeps growing"

And what's the current priority?

To build a new bridge over the Willammete for a light rail extension.

PDXnag: When you have PDC staff saying that "debt service cost is not a part of a project's cost", like they have with the tram and the whole SoWhat and other URAs, then you know we are in trouble. This mindset is throughout city council and other regional governmental bodies. It is nice to have Wheeler of Multnomah Co. and a few others beginning to include the real costs of projects. Thanks Jack, again. I hope Amanda and other candidates begin to talk in real dollar amounts. Sam doesn't.

Dear Jack,
You have done an excellent job on this series. I agree that this should be published to a wider audience. Anyone who pays any taxes to the COP needs to know how much they owe.

Lee, I tried to argue that with Pension Obligation Bonds the debt service should be paid from the bond proceeds. They are placed in investments that are in some cases as liquid as SPY. I also thought that the bond issuer should obtain a surety bond, paid again from the proceeds, to cover the risk that the dreamed-up prospective gains would not materialize. This could be substituted with an agreement that the bond buyer limit any recovery to the investment fund which holds the bond proceeds for investment. This way the risk of loss from the State Treasurer's insatiable desire to dally in equities (and explodable leverage/hedges?) does not fall on the heads of taxpayers. It would vindicate the notion of "entrustment" as when you drop off a car for repair.

Looking at Seattle might be interesting, but I wouldn't spend too much time digging for info on just one city. You might have better luck finding a professional organization or interest group that has already done the work for you.

Two options for professional orgs: Government Finance Officers Association (GFOA) and International City/County Management Association (ICMA). Both of these are membership orgs for government finance managers -- so have some grains of salt handy when looking at their stuff. But it still might be a start.

As for interest groups, the anti-tax organizations have almost certainly done some research on local debt from the conservative perspective. And whenever the anti-tax groups publish something, you can be sure there's a liberal group publishing a rebuttal. Perhaps the Urban Institute in DC, or the Brookings Institute?

Someone, somehwere has published a "rule of thumb" for municipal government debt limits. If Portland is above the limit, this could actually become a real issue in the upcoming campaign.

Government Finance Officers Association (GFOA) and International City/County Management Association (ICMA)

Their pronouncements would be so suspect, even asking for them would be a waste of time.

Someone, somehwere has published a "rule of thumb" for municipal government debt limits.

Help me find it; I'm not locating it. At 4 percent and 20-year amortization, $4.4 billion takes around $324 million a year to retire. My thumb says that's too high, especially since the entire property tax levy of the city is only $378 million and constitutionally restricted from growing too quickly.

If Portland is above the limit, this could actually become a real issue in the upcoming campaign.

What campaign? Adams and Leonard will waltz in essentially unopposed. I guess Amanda vs. the Streetcar Dude vs. the Floating Bus Dude might spend two minutes on it at the City Club.

The ostriches of Portland are not going to pull their heads out for very long on this one. Fine -- see you all at the bankruptcy.


As a lawyer/blogger, I get
to be a member of:

In Vino Veritas

Lange, Pinot Gris 2015
Kiona, Lemberger 2014
Willamette Valley, Pinot Gris 2015
Aix, Rosé de Provence 2016
Marchigüe, Cabernet 2013
Inazío Irruzola, Getariako Txakolina Rosé 2015
Maso Canali, Pinot Grigio 2015
Campo Viejo, Rioja Reserva 2011
Kirkland, Côtes de Provence Rosé 2016
Cantele, Salice Salentino Reserva 2013
Whispering Angel, Côtes de Provence Rosé 2013
Avissi, Prosecco
Cleto Charli, Lambrusco di Sorbara Secco, Vecchia Modena
Pique Poul, Rosé 2016
Edmunds St. John, Bone-Jolly Rosé 2016
Stoller, Pinot Noir Rosé 2016
Chehalem, Inox Chardonnay 2015
The Four Graces, Pinot Gris 2015
Gascón, Colosal Red 2013
Cardwell Hill, Pinot Gris 2015
L'Ecole No. 41, Merlot 2013
Della Terra, Anonymus
Willamette Valley, Dijon Clone Chardonnay 2013
Wraith, Cabernet, Eidolon Estate 2012
Januik, Red 2015
Tomassi, Valpolicella, Rafaél, 2014
Sharecropper's Pinot Noir 2013
Helix, Pomatia Red Blend 2013
La Espera, Cabernet 2011
Campo Viejo, Rioja Reserva 2011
Villa Antinori, Toscana 2013
Locations, Spanish Red Wine
Locations, Argentinian Red Wine
La Antigua Clásico, Rioja 2011
Shatter, Grenache, Maury 2012
Argyle, Vintage Brut 2011
Abacela, Vintner's Blend #16 Abacela, Fiesta Tempranillo 2014
Benton Hill, Pinot Gris 2015
Primarius, Pinot Gris 2015
Januik, Merlot 2013
Napa Cellars, Cabernet 2013
J. Bookwalter, Protagonist 2012
LAN, Rioja Edicion Limitada 2011
Beaulieu, Cabernet, Rutherford 2009
Denada Cellars, Cabernet, Maipo Valley 2014
Marchigüe, Cabernet, Colchagua Valley 2013
Oberon, Cabernet 2014
Hedges, Red Mountain 2012
Balboa, Rose of Grenache 2015
Ontañón, Rioja Reserva 2015
Three Horse Ranch, Pinot Gris 2014
Archery Summit, Vireton Pinot Gris 2014
Nelms Road, Merlot 2013
Chateau Ste. Michelle, Pinot Gris 2014
Conn Creek, Cabernet, Napa 2012
Conn Creek, Cabernet, Napa 2013
Villa Maria, Sauvignon Blanc 2015
G3, Cabernet 2013
Chateau Smith, Cabernet, Washington State 2014
Abacela, Vintner's Blend #16
Willamette Valley, Rose of Pinot Noir, Whole Clusters 2015
Albero, Bobal Rose 2015
Ca' del Baio Barbaresco Valgrande 2012
Goodfellow, Reserve Pinot Gris, Clover 2014
Lugana, San Benedetto 2014
Wente, Cabernet, Charles Wetmore 2011
La Espera, Cabernet 2011
King Estate, Pinot Gris 2015
Adelsheim, Pinot Gris 2015
Trader Joe's, Pinot Gris, Willamette Valley 2015
La Vite Lucente, Toscana Red 2013
St. Francis, Cabernet, Sonoma 2013
Kendall-Jackson, Pinot Noir, California 2013
Beaulieu, Cabernet, Napa Valley 2013
Erath, Pinot Noir, Estate Selection 2012
Abbot's Table, Columbia Valley 2014
Intrinsic, Cabernet 2014
Oyster Bay, Pinot Noir 2010
Occhipinti, SP68 Bianco 2014
Layer Cake, Shiraz 2013
Desert Wind, Ruah 2011
WillaKenzie, Pinot Gris 2014
Abacela, Fiesta Tempranillo 2013
Des Amis, Rose 2014
Dunham, Trautina 2012
RoxyAnn, Claret 2012
Del Ri, Claret 2012
Stoppa, Emilia, Red 2004
Primarius, Pinot Noir 2013
Domaines Bunan, Bandol Rose 2015
Albero, Bobal Rose 2015
Deer Creek, Pinot Gris 2015
Beaulieu, Rutherford Cabernet 2013
Archery Summit, Vireton Pinot Gris 2014
King Estate, Pinot Gris, Backbone 2014
Oberon, Napa Cabernet 2013
Apaltagua, Envero Carmenere Gran Reserva 2013
Chateau des Arnauds, Cuvee des Capucins 2012
Nine Hats, Red 2013
Benziger, Cabernet, Sonoma 2012
Roxy Ann, Claret 2012
Januik, Merlot 2012
Conundrum, White 2013
St. Francis, Sonoma Cabernet 2012

The Occasional Book

Marc Maron - Waiting for the Punch
Phil Stanford - Rose City Vice
Kenneth R. Feinberg - What is Life Worth?
Kent Haruf - Our Souls at Night
Peter Carey - True History of the Kelly Gang
Suzanne Collins - The Hunger Games
Amy Stewart - Girl Waits With Gun
Philip Roth - The Plot Against America
Norm Macdonald - Based on a True Story
Christopher Buckley - Boomsday
Ryan Holiday - The Obstacle is the Way
Ruth Sepetys - Between Shades of Gray
Richard Adams - Watership Down
Claire Vaye Watkins - Gold Fame Citrus
Markus Zusak - I am the Messenger
Anthony Doerr - All the Light We Cannot See
James Joyce - Dubliners
Cheryl Strayed - Torch
William Golding - Lord of the Flies
Saul Bellow - Mister Sammler's Planet
Phil Stanford - White House Call Girl
John Kaplan & Jon R. Waltz - The Trial of Jack Ruby
Kent Haruf - Eventide
David Halberstam - Summer of '49
Norman Mailer - The Naked and the Dead
Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 5
At this date last year: 3
Total run in 2017: 113
In 2016: 155
In 2015: 271
In 2014: 401
In 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269

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