Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.



For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.







Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!






E-mail us here.

About

This page contains a single entry from the blog posted on April 3, 2008 3:50 PM. The previous post in this blog was I'm asking you, Sugar, would I lie to you?. The next post in this blog is More Busse-gate. Many more can be found on the main index page or by looking through the archives.

Archives

Links

Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
TaxVox
Tax.com
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Conglomerate
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
myCorporateResource.com
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Utterly Boring.com
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
HinesSight
Onfocus
Jalpuna
Beerdrinker.org
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
Sansego
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
Mireio
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
{AE}
Cat Eyes
Rhi in Pink
Althouse
GirlHacker
Ragwaters, Bitters, and Blue Ruin
Frytopia
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
StumptownBlogger
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and Drink.com
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion
LoveSalem

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Misterblue
Two Pennies
This Stony Planet
1221 SW 4th
Twisty
I am a Fish
Here Today
What If...?
Superinky Fixations
Pinktalk
Mellow-Drama
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Rosenblog
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Blort
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Maukie
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
KGW-TV
The Oregonian
Portland Tribune
KOIN
Willamette Week
KATU
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB
Topix.net - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
KPTV
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

Music-Related
The Beatles
Bruce Springsteen
Seal
Sting
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Thursday, April 3, 2008

Sold

The City of Portland's bond auction this afternoon appears to have been a hit. The best bids were 4.3675% interest for the $340 million of first lien sewer bonds, and 4.6087% interest for the $214 million of second lien sewer bonds. Since the interest on the bonds is tax-exempt, the equivalent rates for taxable bonds would be much higher. Assuming a 40 percent combined state and federal corporate taxrate, the first lien bond rate would work out to around 7.28%, and the second lien bond rate to around 7.68%. Not a bad return for the investors (folks like Citigroup and Merrill Lynch).

Meanwhile, the city's issued the offering document for next week's sale of "downtown waterfront" urban renewal bonds, to the tune of another $50.2 million. We were hoping it would include updated figures for the city's overall debt load, but it appears on a quick first reading that that information isn't included for prospective investors in these bonds -- we suppose, because the source of repaying these bonds is limited to the downtown urban renewal area's property taxes.

In any event, the new bonds are rated Aa3 by Moody's. In the past, bonds for this urban renewal zone were rated much higher, at Aaa, because they were insured. Now that the bond insurance companies are toast, that rating boost is no longer available. The new bonds will bear taxable interest for federal tax purposes, and so look for rates much higher than those being paid on the sewer debt auctioned off today.

The proceeds of the urban renewal bonds will be used to pay off $14.4 million on an existing line of credit -- money that was borrowed from B of A a while back -- but another $34.4 million or so is identified as "new money," including $4 million for "parking development." With the new borrowing, the "downtown waterfront" district will be in hock in excess of $100 million.

Finally (for now), the city still hasn't got a number to show for its actuarial liability for health insurance benefits for its retired employees. The city will be required to compute this for its fiscal year ending June 30, 2008, and it keeps telling the Wall Street types that it has an actuary working on the number, but it sure is taking a long time for that figure to see the light of day.

Comments (15)

So this is TIF financing? ANy statement on what happens when there is no "I" in the TIF?

I mean the base prop tax rate doesn't pay these, the increase in valuation pays the bonds. So if prop tax assesed value doesn't go up due to a bazillion condos being avaialble for the next 10 years, how exactly do thes get paid back?

Jack,

Are you sure that Citi and Merrill hold munis in their own accounts? I thought they are in the business of reselling them to investors?

If unsold bonds are "inventory" to the underwriters, it's unlikely to be considered a desirable holding on their own balance sheets. Particularly given the recent emphasis on maintaining cash liquidity during a credit crunch.

Given the unlikely possibility that ratepayers decide to live without water/sewer services, it appears that vacant homes are the primary risk to revenue bonds (or bad billing/collections management).

I'd rather have Portland ratepayers as a debtor than the U.S. Government or State of California.

As long as AV keeps rising on existing properties in the UR, there is TIF. The bond buyers know that, and are probably counting on that alone as the cash-flow stream for repayment of the bonds.

If the earthquake comes, that may not be such a good bet.

I am breathing as in sleep with a rough hoarse noise due to vibration of the soft palate.

This is like watching a fan dance.

Yes as Frank said all property assessed value and taxes go up every year.

Most residential property is automatically increased 3% as that is the maximum allowed. Commercial property similarly.
Add in new construction, renovation and other typical changes and the average property tax increases for the region is 5% per year. That's without any Urban Renewal TIF schemes.


The TIF scam tells the public the said project or plan is a pay as your grow & pay for itself funding method.
It's a bald faced lie. Pick any district. With SoWa the plan calls for 130 acres of new development over 20 years. But the SoWa (North Macadam) UR TIF district consists of 409 acres. Meaning every regular yearly property tax increase for all 409 acres, since 1998, goes not to basic services but to pay for the big plan. With this particular UR plan running wildly over budget it will likely be 35 or more years before the mounting debt is paid and the property taxes return to the basic services long starved by this scheme.

Now multiply this out to cover the 12,000 acres of UR districts city wide and the problem is severe. Then realize the expansion and increase in TIF debt spending increases faster than any portions return to the taxing jurisdictions and you'll know that TIF is debt servicing in perpetuity.

Every elected official in sight has contributed to the public deceit this funding mechanism thrives upon.

Districts are regularily extended in size, expanded in time and borrowing capacitites are re-calculated higher to allow more debt spending.

New UR development does not returm new taxes that never would have happened without the public subsidies. Theres just more spending and grwoing debt to be serviced by property taxes.

It's important for people to understand the realities of TIF and know the official stories misinformation.

Thanks to my job at Portland Public Schools, I've gotten a recent education in urban renewal financing as they consult with local jurisdictions affected by tax increment financing.

There are actually two types of urban renewal areas in Portland -- three formed before Measure 5, 47 and 50 changed the landscape of Oregon property tax law, and the other 8.

Those eight URAs, including the River District that includes the Pearl, operate just as Steve and Frank say. The taxable assessed value (TAV) going to pay for all local government jurisdictions (city, county, schools being the biggest taxers) are frozen. The amount of taxes collected on the increase in TAV -- the increment --goes to pay off the PDC debt that financed the city urban renewal projects.

But the oldest three, Downtown Waterfront (1974), South Park Blocks (1985) and Airport Way (1987), operate differently. There are four components to financing in those:
1)The base is frozen and goes directly to the local jurisdictions. That's the same.
2)Taxes on another flat and unchanging amount of the TAV go directly to the PDC.
3) A set amount of financing comes from a citywide urban renewal tax to help pay off these old districts. That's why, for example, I personally paid about $1.70 per $1,000 on my home property taxes to "urban renewal" even though I live nowhere close to an urban renewal area.
4) Finally, in these districts, revenue from the growth in taxable assessed value DOES go to local taxing jurisdictions.

So even though the Downtown Waterfront urban renewal area will be 50 years old by the time it finally pays off its debt in 2024 (that's with the new $50 million), schools, the county and city don't forgo as much revenue as they do with most urban renewal districts. That complicated financing is also why those older districts can take longer to pay off. And it's why local jurisdictions lose future revenues when properties are shifted from old URAs to new ones -- as in the proposed Waterfront and Park Block URA shifts to the River District.

I hope I got that right (it's way complicated). And enough boring tutorial for one evening. Not everyone finds this as interesting as I do. . . .

Sarah Carlin Ames

Mister Tee,

Citi and Merrill could hold the bonds in inventory, but will more likely place them with institutions and retail.

Don't worry. If they go bad, we'll all hear from whoever actually winds up owning them.

Sarah,

Your explanation (of little harm done to schools funding by the Pearl and SoWhat) only holds true if you believe that NO development would have been possible inside the URA without benefit of subsidies.

In fact, large parcels of prime real estate within walking distance of downtown would have been developed without the URA and TIF scams (thereby leaving their rising property values on the tax rolls). The Urban Growth Boundary makes these close in parcels even more desirable.

The only tangible advantage of the URA/TIF scheme is their ability to allow politicians to take more credit for these projects than they deserve (after funneling projects to their preferred developers), and to provide a funding mechanism for the Streetcar Mafia.

Mister Tee,

My comment about local taxing jurisdictions not losing a lot to urban renewal districts referred ONLY to the old-style districts, such as Downtown Waterfront and South Park Blocks, where the incremental taxes do go to schools, the city, county etc.

The PDC and others can debate forever about how much development there would have been "but for" their urban renewal projects . . . . but there is NO question that local governments and schools forgo much more potential revenue as time goes on in the newer districts such as North Macadam (SoWa) or the River District (the Pearl).

The proposed expansion of debt in the River District, for example, is expected to mean well over $100 million in forgone Portland Public Schools property taxes, for example (final figures aren't calculated yet). The direct hit to local schools is far less because roughly 70 percent of our local school property taxes go to the State School Fund and are divvied up statewide. If most of the money would have beefed up the state budget for support for all Oregon schools, there's not as big an impact on PPS operations.

Sarah Carlin Ames

"That's why, for example, I personally paid about $1.70 per $1,000 on my home property taxes to "urban renewal" even though I live nowhere close to an urban renewal area."

Oh good, we all get the opp to pay for empty condos in SoWa!


"4) Finally, in these districts, revenue from the growth in taxable assessed value DOES go to local taxing jurisdictions."

AFTER it services these bonds that just got floated. If you look at SoWa expenditures pushing $500M (after I-5 access and riverfront), forget about upside out of that disctrict.

"$100 million in forgone Portland Public Schools property taxes, for example (final figures aren't calculated yet). The direct hit to local schools is far less because roughly 70 percent of our local school property taxes go to the State School Fund and are divvied up statewide."

You miss one thing - $100M is gone out of the school system to subsidize developers of $500K condos in the River District. Does it matter if the hurt gets spread state-wide?

I think part of the reason these are complicated deals is to perform some sort of ledgerdemain on the public. I must give Mr Bog some props for wading thru all the smokescreens that get set up.

Sarah,
When one compares the old UR-TIF portion returning to taxing jurisdictions to the newer far greater abuses it's almost insulting to even bring up the old ones. And it serves only to cloud the enormity of the UR/TIF addiction and abuse.

More important is that people grasp the ongoing misrepresentation by public officials regarding TIF. The expanding Peter to pay Paul shell game and reckless misappropriations are malfeasance.

The lack of audits, accountability and consequences makes this fiscal quagmire a mess where heads should roll.
Yet they are instead re-elected.

How is that?


Sponsors


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

In Vino Veritas

Chloe, Pinot Grigio, Valdadige 2013
Edmunds St. John, Bone-Jolly Gamay Noir 2013
Kirkland, Pinot Grigio, Friuli 2013
St. Francis, Red Splash 2011
Rodney Strong, Canernet, Alexander Valley 2011
Erath, Pinot Blanc 2013
Taylor Fladgate, Porto 2007
Portuga, Rose 2013
Domaine Digioia-Royer, Chambolle-Musigny, Vielles Vignes Les Premieres 2008
Locations, F Red Blend
El Perro Verde, Rueda 2013
Chateau Ste. Michelle, Indian Wells Red 2
If You See Kay, Red 2011
Turnbull, Old Bull Red 2010
Cherry Tart, Cherry Pie Pinot Noir 2012
Trader Joe's Grand Reserve Cabernet, Oakville 2012
Benton Lane, Pinot Gris 2012
Campo Viejo, Rioja, Reserva 2008
Haden Fig, Pinot Noir 2012
Pendulum Red 2011
Vina Real, Plata, Crianza Rioja 2009
Edmunds St. John, Bone/Jolly, Gamay Noir Rose 2013
Bookwalter, Subplot No. 26
Ayna, Tempranillo 2011
Pete's Mountain, Pinot Noir, Haley's Block 2010
Apaltagua, Reserva Camenere 2012
Lugana, San Benedetto 2012
Argyle Brut 2007
Wildewood Pinot Gris 2012
Anciano, Tempranillo Reserva 2007
Santa Rita, Reserva Cabernet 2009
Casone, Toscana 2008
Fonseca Porto, Bin No. 27
Louis Jadot, Pouilly-Fuissé 2011
Trader Joe's, Grower's Reserve Pinot Noir 2012
Zenato, Lugana San Benedetto 2012
Vintjs, Cabernet 2010
14 Hands, Hot to Trot White 2012
Rainstorm, Oregon Pinot Gris 2012
Silver Palm, North Coast Cabernet 2011
Andrew Rich, Gewurtztraminer 2008
Rodney Strong, Charlotte's Home Sauvignon Blanc 2012
Canoe Ridge, Pinot Gris, Expedition 2012
Edmunds St. John, Bone-Jolly Gamay Noir Rose 2012
Dark Horse, Big Red Blend No. 01A
Elk Cove, Pinot Noir Rose 2012
Fletcher, Shiraz 2010
Picollo, Gavi 2011
Domaine Eugene Carrel, Jongieux 2012
Eyrie, Pinot Blanc 2010
Atticus, Pinot Noir 2010
Walter Scott, Pinot Noir, Holstein 2011
Shingleback, Cabernet, Davey Estate 2010
Coppola, Sofia Rose 2012
Joel Gott, 851 Cabernet 2010
Pol Roget Reserve Sparkling Wine
Mount Eden Chardonnay, Santa Cruz Mountains 2009
Rombauer Chardonnay, Napa Valley 2011
Beringer, Chardonnay, Napa Reserve 2011
Kim Crawford, Sauvignon Blanc 2011
Schloss Vollrads, Spaetlese Rheingau 2010
Belle Glos, Pinot Noir, Clark & Telephone 2010
WillaKenzie, Pinot Noir, Estate Cuvee 2010
Blackbird Vineyards, Arise, Red 2010
Chauteau de Beaucastel, Chateauneuf-du-Pape 2005
Northstar, Merlot 2008
Feather, Cabernet 2007
Silver Oak, Cabernet, Alexander Valley 2002
Silver Oak, Cabernet, Napa Valley 2002
Trader Joe's, Chardonnay, Grower's Reserve 2012
Silver Palm, Cabernet, North Coast 2010
Shingleback, Cabernet, Davey Estate 2010
E. Guigal, Cotes du Rhone 2009
Santa Margherita, Pinot Grigio 2011
Alamos, Cabernet 2011
Cousino Macul, Cabernet, Anitguas Reservas 2009
Dreaming Tree Cabernet 2010
1967, Toscana 2009
Charamba, Douro 2008
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Abacela, Vintner's Blend No. 12
Opula Red Blend 2010
Liberte, Pinot Noir 2010
Chateau Ste. Michelle, Indian Wells Red Blend 2010
Woodbridge, Chardonnay 2011
King Estate, Pinot Noir 2011
Famille Perrin, Cotes du Rhone Villages 2010
Columbia Crest, Les Chevaux Red 2010
14 Hands, Hot to Trot White Blend

The Occasional Book

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: 319
At this date last year: 172
Total run 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


Clicky Web Analytics