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Friday, February 29, 2008

Another back-room deal on the aerial tram

Remember the deal whereby OHSU was going to pay its fare share of the operational costs of the OHSU aerial tram [rim shot]? Well, the deal's been revised. In secret, of course.

Hey, Mayor Potter! Do you still work here? What's the deal, dude?

Comments (17)

Even more curious, apparently there's some sort of arcane distinction being made between "operational" costs and "maintenance" costs:

The figures were based on expectations of usage of the tram. Eventually, OHSU officials agreed the city could use all fare revenue to meet its 15 percent of operation costs. Any excess revenue from fares first goes to pay the city’s required portion for tram maintenance, then -– if there’s even more left over -– defrays some of OHSU’s operational costs.


This explains why Mayor Adams felt so strongly about putting a gas tax on our water bill. Or, as the Bible puts it, "Robbing Peter to pay Paul".

If you've already promised Paul that you're going to rob Peter, you can't just walk up next to him, stick a gun in Peter's face, and then ask him what time it is.

Ummmmm, no Pete, we wasn't gonna rob you, we're just working on an emergency funding solution for Paul's fiscal crisis.

We wouldn't rob you without your permission and (besides) we've decided to send it back to the committee that recommended we rob you and ask them if there isn't somebody else we should rob unstead.

But we don't deny you may be robbed at some point, Pete, if staff determines that highway robbery is still the only effective funding mechanism.

Peace out.

Here's a thought...make everyone pay to ride it. Problem solved. Even if they gave a discount to the OHSU people it would be better than it is now.

I like how the Tribune article, cited above, ends with the family trying out the Tram for first time for an adventure, and the dad saying "it was kind of fun" and the son saying, (kind of fun) "once." Maybe next we'll find out OHSU is writing an I.O.U for its share of operating expenses. Sounds like PDX government is actually just operating an elevator for one of its favorite businesses at little or no cost to the business.

The state of Oregon also help in the fleecing of Joe and Mary taxpayer. Let's see. Would I rather spend state tax dollars fixing the Sellwood bridge (which comes in handy once in a great while for me) or on a ski lift that is not so easy to get to even with the streetcar?

Could someone please explain the exact leverage OHSU brought to bear to essentially renegotiate the sharing arrangment, and cap it? I realize the City of Portland wants to maintain a good relationship with OHSU, but is there some contractual reason why OHSU claimed it should be able to cap its share??

Since he is irrlevent in his own mind, he should be in ours as well. How much longer till he is gone? It is like waiting for GW to leave.

A few facts might add something to this discussion.

In the spring of 2006, while the tram was still under construction, the City Council ratified a 20-year collaborative arrangement with OHSU governing tram operations. It stipulated that 85 percent of the tram’s net operating costs would be allocated to OHSU and 15 percent to the City during the first two years of operation. That formula was based on our best estimates of what the actual split between public users and OHSU-associated users actually would be once full operations began. It was stipulated that the formula would be adjusted after the first two years and periodically thereafter based on actual documented usage. It also was stipulated that fare revenues would go to defray the tram’s entire operating costs and that any remaining costs not funded by those revenues would be divided according to the 85-15 formula.

Joe Robertson, OHSU’s president, in a letter to Commissioner Adams on October 2, 2006, offered to donate to the City during the first year of tram operations OHSU’s share of farebox revenues while ridership and revenue data were being gathered. That donation was intended to help defray the City’s share of operating costs as well as for equipment upgrades, replacements and other necessary transportation investments in South Waterfront. Farebox revenues in excess of the City’s share of operating costs were to be divided according to the 85-15 formula--85 to OHSU, 15 to the City.

On Jan. 24, 2007, the Tram Executive Management Committee essentially adopted Robertson’s proposal when it finalized the tram fare structure—with one exception. The 85-15 formula was extended at the City’s request from one year to five years, as was the agreement that OHSU would donate its share of farebox revenues to cover the City’s 15 percent share of operating costs.

All of this was done in full public view. The details were announced in a Portland Office of Transportation press release. There was no back-room deal. Executive Management Committee meetings are open to the public. Nothing was done in secret.

Another thing: OHSU employees and others associated with OSHU do not ride for free, as almost every news story about the tram reports. Their passage is subsidized by the university. It's an important distinction.

Finally, the tram's value as a tourist draw during the summer months and as one of the city's more enduring icons has yet to be measured.

Harry Lenhart
Senior Communications Coordinator

And OHSU receives no public tax dollars, helping to subsidize its employees free tram rides?


Interesting communication.

Perhaps you can share with us the amounts OHSU has been paid duing the Tram negoiations and that donation of the fares?

It would certainly explain OHSU's motivations and genrosity.

Is it not true that OHSU has already been paid millions from the city under various line items in the SoWa budget?

It is my undertsanding that OHSU has been paid many millions for things such as future parking spaces, biotech research, jobs accelarator, economic development etc. amounting to nearly $15 million.

All of which was sort of out in the open yet obscured along the way.

But why speculate?

Can you please provide a full list of all money paid to OHSU as well as future scheduled payments.

How is the University subsidizing Tram rides for OHSU employees and others associated with OSHU?

I would think getting paid milions from the city makes that an easy subsidy.
That's also an important distinction.

Those millions help OHSU make those yearly LID Tram payments too. Especailly since OHSU got millions now and the their Tram share is ammortized ove 20 years or more.
Many folks out here are aggrivated by the bits and pieces of information we get which often seem cherry picked to calm or muddy the waters.

It would be far more useful to see what's going on with the millions changing hands than your specualtion on the tram's value as a tourist draw.

Someting which will likely never rise to the level an enduring icon.

Shoulda jus' rented some jitmeys. All this welfare for the well-to-do is gittin' to be too much.


Radmacher; no, there is no contractual obligation for the city and OSHU to renegotiate the agreement in regards to how the city has to allocate the revenue from paying customers. Sam and the city made the decision of when to start and how much to charge paying passengers. He even blogged on his site for imput on what and who to charge. In the media and to neighborhood associations Sam made it clear that passenger revenue was to pay for maintenance/operations based on a 85/15% split for one year, then renegotiated after passenger counts analyzed. There was no distinction (and hard to make a distinction if one is simple minded) made between these co-existing words.

Harry Lenhart certainly has spun the facts. If Joe Robertson's complete letter is like Lenarts interpretation, then neither Sam nor the media reported such. I would like to see the proof and why the city might have extended the evaluation period from one year to five, again contrary to what Sam said and reported. Those changes were not in PDOT's press release.

I have a hard time understanding how Lenhart reasons that OHSU employees and affiliates do not ride for free. They do not pay at the gates. Since the operations/maintenance costs are $1.lM, the OHSU obligation for this one year is $935T. OHSU doesn't charge the employees/patients in any fashion.

At several city council hearings, neighborhood meetings, testimony of all sorts from Matt Brown of PDOT, etc., it was policy that the tram was a means of moving OHSU staff/users from Pill Hill to NM and not to be a tourist attraction. It was a substitute for the bus shuttle system. This is in the record. Rightfully, PDOT and Portland Planning felt that it was not good urban planning to make prime riverfront land a parking lot for Pill Hill OHSU. The neighborhood assn. has expressed this major concern for over 15 years in all the SoWhat committees and hearings.

The paying riders of 137,643 for the first year created $550,572.00 of revenue that by agreement is to be applied to Portland's taxpayers obligation of $165T for operations/maintenance based on the 15% obligation. What is not elaborated in the Tribune article is the difference between the ridership difference between 15% vs. 10% (actually 91% average of all 12 months). If the O/P charges were fairly charged on ridership the taxpayers obligation would be $65,000 less. But an agreement is an agreement. But why didn't the city attorneys write an agreement that portioned the monthly costs at the 85/15% split, then readjust costs after one year ridership numbers?

It hasn't been reported (yet) but OHSU is lobbying to apply the difference between the city's O/P obligation of $165T and it's full ridership income of $550.5T, a $385.5T difference, to a separate maintenance fund not in the present agreement. The $385.5 T could go a long ways in filling potholes or building a dilapidated bridge in Marshall Park, or helping to pay for the estimated debt costs of $800,000.00 per year for the $16M as Randy Leonard has estimated the tram cost the Portland taxpayers.

If you take the $440.5T (assuming 10% paying ridership-$555.5T income less O/P CoP cost of $110T) that OHSU is claiming should be applied to a new O/P fund, then over 25 years that equals $13.2 MILLION taken from the taxpayers that would go a long way of paying down their debt costs.

One other factor not highlighted in the Tribune is the paying ridership this past year is probably higher than the coming yea(s) because of the Trams novelty this first year and as succinctly demonstrated when Ben Hadle said to the the question "Was the trip worth $4 each?"-"Once." Assuming Lenhart's notion that the 85/15 split was extended out to 5 years, that is additional stealing from Portland taxpayers when paying ridership is 10, 9, 8% in the coming years.


One of the stated objectives for the City's generous investment in South Waterfront was 10,000 new medical/biotech jobs that would be created.

Can you identify a single "new" medical or biotech job that was created in South Waterfront (excluding positions transferred from other Metro locations, and ignoring the health club employees).

Do you believe that a conflict of interest was created when you entered into an agreement with a municipality in Florida to achieve the same objective described in Senate Bill 832 (signed into law in 2001, it allocated $16 million per year of tobacco funds to OHSU) Kitzhaber called the funding a "once in a century opportunity" to put Oregon in the position to take advantage of human genome research. The "GTI" in VGTI is Gene Therapy Institute. I'm not an M.D., but I have to assume a correlation between human genome research and gene therapy.

See: http://portland.bizjournals.com/portland/stories/2001/08/06/daily30.html?

If State of Oregon and City of Portland taxpayer's "bought" future employment growth by offering generous subsidies in South Waterfront, would it be fair to say that OHSU didn't stay bought? Perhaps it would be more accurate to say that Florida outbid us?

In my opinion, the Tram is simply the most expensive Park & Ride in the country. The associated improvements in transit time (and conveniently located condos) would improve quality of life for OHSU personnel, but was unlikely to lead to new job creation.

See how this works folks.

OHSU chimes in with a professional "Senior Communications Coordinator" posting some carefully selected communications and won't take questions.

OHSU, like the city doesn't want full transparency.

Neither the PDC or OHSU will provide a complete accounting.

OHSU has already been paid millions from the city under various line items in the SoWa budget.
Exactly how much?
In exchange for exactly what public benefit?

Harry Lenhart, Senior Communications Coordinator OHSU- is obviously reading this.
Harry, answer the questions.

Please provide a full list of all money paid to OHSU as well as future scheduled payments.

PDC checks in here too so they should provide documentation for ALL money spent in SoWa. Without an official public records request game.

Enough of the PR games.
I realize the PRs are good enough for the PDC commission, OHSU board members and city council.
They're insulting to the public.

Harry said: "Finally, the tram's value as a tourist draw during the summer months and as one of the city's more enduring icons has yet to be measured."

You betcha Harry, I can hear folks scheduling their vacations now. 'Kids, do you want to go to Disneyland or Portland?' 'Oh, Portland please daddy. I just can't wait to ride the tram.'

Which do you think is a bigger tourist draw Harry? The tram or the St. Louis Arch? I vote for the arch, yet the ONLY reason I saw it was I was in that area on business; I sure as heck wasn't going to arraign a vacation around it. This nonsense about 'tourist draw' kills me. Anyone remember that last 'tourist draw'? I think it was millions spent on something called the Oregon Gardens. Nice place, but folks don't schedule a vacation around it, never did, never will.

Listening to Book-TV as I read this. David Cay Johnson is being interviewed about his book "Free Lunch", on the use and abuse of government subsidies.

One of his points is the extent to which TIF has been discovered by the lobbyists and other high powered sharks of commerce, and is being exploited by same at the direct expense of garden variety public goods such as road repair, public parks, bridge replacement, etc.

Sounds eerily familiar, eh? Jack, what is your take on Johnson?

On OHSU and the tram, I am glad it is getting used. But OHSU should have paid for the whole thing. I don't mind the city running it, at OHSU's expense. As others have said above, we're not getting the benefits we were told we'd get back in return, yet our services are short.

Notice there's no effort to inform the public as to who is using the Tram and why?
If much or most of it is park and ride shuttle use as I suspect it's been an enormous waste of money.
Regardless there's little use for the it by tower condo owners and the few businesses slowly starting up in SoWa.

The Tram Scam lives! Despite the embellished significance of the ridership.

The city and OHSU are stuck in perpetual spin mode on all fronts.
All the principals are in CYA mode and on BS auto-pilot without a shred of credibility.
Everywhere one turns in the region it's the same story.

And all the while the Metro Myths survive.

"OHSU chimes in with a professional "Senior Communications Coordinator" posting some carefully selected communications and won't take questions."

SENIOR communications coordinator!!


as opposed to JUNIOR communications coordinator!

Bureaucrats, don't ya just luv em!

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