This page contains a single entry from the blog posted on December 8, 2010 3:59 PM. The previous post in this blog was Portland tax holiday!. The next post in this blog is Last of the mutts. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Wednesday, December 8, 2010

Tri-Met's Milwaukie MAX deal goes from stinky to stinkier

Not only did Tri-Met's delusional board of directors unanimously approve $722 million in new debt today for the Milwaukie light rail project, but they also abandoned all semblance of meaningful oversight by giving the transit agency's management carte blanche to buy up real estate for the project, no matter how high the price tag, without coming back to the board:

The passage of the property acquisition resolution has granted TriMet management the authority to purchase any property for the project.

TriMet management previously had been given authorization to acquire property valued below $500,000 without board approval. The new resolution effectively removes the $500,000 value cap and authorizes management to make any property acquisition for the project without board approval, with the exception of acquisitions that require exercising eminent domain.

And then, of course, fat cat construction projects were handed out to the Goldschmidt gang's favorite people -- on a no-bid basis, apparently. Among the giveaways:

To maintain the acquired property, the board passed another resolution authorizing a contract with Ramos Landscape, Inc. for property management services costing almost $1 million....

Kiewit Infrastructure West, Co. has been awarded the design-build contract for the Willamette River bridge. The contract is worth an estimated $127 million, including $8 million for change order allowance.

Design services for the construction of the bridge will be provided by HNTB Corporation for a total of $7 million, an increase of about $3 million from the original contract.

In all, the Tri-Met board voted unanimously to blow $947 million on this, in a single day.

Next up, Tri-Met will borrow mid-nine figures from somebody like Bank of America in a backroom deal, on a five-year term that will require a refinancing in 2015 or so. By then, Tri-Met, if it isn't already bankrupt, will have a credit rating in the toilet, and the long-term bonds five years from now will finally break its back.

Maybe President Romney will bail them out. Anything could happen, I suppose.

Bad times around here are not ending, people. They are just beginning.

Comments (23)

The contract is worth an estimated $127 million, including $8 million for change order allowance.

So when you're compiling the Liars Budget, this would still only count at $127M, right?

TriMet already has "hand shake" agreements with many property owners along the MLR route. We've known for a year how much my company is getting for property along SE 17th.

What's wrong with Kiewit? Didn't they kick ass and come in under budget and ahead of schedule on the big pipe?

Jack, I think in some respects the $159 million bond sale (which will cost a lot more than that over time) is actually the most objectionable of the 3 because it will be paid off primarily with federal "flex funds" laundered through Metro during the years 2012-2027.

In September Metro approved $210.8 million in future regional flex funds to pay off bonds for PMLR (a small amount was allocated to WES as well). By definition, these funds could have been appropriated for something actually useful -- you know, like the Sellwood Bridge -- had they not been grabbed by TriMet.

Metro will start paying TM $3.7 million per year in 2012, then up it to $16 million per year in every year from 2016-2027 to pay off P&I.

Future elected officials will have fewer options about what to invest in because TM has chosen today to take all that money for a slow train to Milwaukie.

I wonder if the motive behind this massive and mistimed funding diversion isn't part of a broader plan to stall the replacement of the Sellwood bridge, similar to Adams virtual nonstop filibustering of the I-5 replacement bridge. Eventually both will be starved of funding.

It's worth noting that the new Milwaukie MAX bridge will support everything BUT personal motorized vehicles. Does that qualify for Federal transportation funding?

So, Metro and TriMet are banking on the federal government lavishing more "flex funds" on them in the future so as to meet local government's matching funds, if I get what John Charles is saying. The concept of local matching funds is a hoax then because TriMet is mostly using more federal funds diverted from other routine uses to meet their end of the matching. I wish someone in Congress would call the Federal Transit Administration on what really is corruption and unrepresentative TriMet governance. I've written to Representative Walden about this without so much as a response.

These kinds of things are what gave rise to the Tea Party movement. There's no check on the federal government's bankrupt policies. Big government Bush 2 is followed by big government Bama. Reset the state government? How about the most needed Reset being with respect to Federalism. Cut federal taxes to just security matters and interstate commerce projects, and raise state and local taxes proportionately. Than local taxpayers are on the hook for all local project costs, not being sucked into things by the "drug dealer" like federal government.

What's wrong with Kiewit? Didn't they kick ass and come in under budget and ahead of schedule on the big pipe?

Then they should have no trouble bidding and competing for projects, just like the rest of the industry.

Update on petition?
Can this be stopped or some of this be stopped?

This thing is so complicated legally that a team of lawyers could probably dig in there and find serious flaws in the contracts and actions of the parties. Class action suit? Some other approach?

Mayor Ferguson of Milwaukie is a TriMet employee

Lynn Peterson, Chair of the BCC for Clackamas County, has worked extensively for TriMet; also on Portland Streetcar

Standing joke at Trimet

when you take the new light rail over the Willamette you can watch the Sellwood fall into the river!

Stopping it isn't likely. Twice the people of Portland voted to stop the tram from being publically funded and the City thumbed its nose at them and did it anyways and then sent out the bill. And that's just one instance of the amazing indifference they have for the people who live here, unless there's a politically correct photo-op involved.

There's a lot of bitterness among the local electorate who've lived here any length of time. The only ones who don't seem to complain are the ones just off the boat, who I assume either haven't gotten the picture yet or who are desperately in denial.

I wish Maxine would take an interest in TRI-MET.

Stopping it is likely. The two petitions for Clackamas Co. and Milwaukie will be asking for voter approval of urban renewal, both new districts and revisions of any existing. They both have publicly said UR is their means of financing MLR. They are both broke with no bonding capacity.

Since Clackamas has to contribute $25 Million and Milwaukie $5 Million to MLR by creating two new UR districts, it seems politically unlikely that Metro, TriMet, or Portland would lend or contrive someway to make up the $30 Million difference. If fact those entities can't meet their obligations without contrivances.

Light rail has been shot down every time it has come to a vote. They built it all anyway. The petitions will mean nothing.

Money is always easier to spend when it is not yours. They need to sell Tri Met to private operators and spend their money subsidizing the right for people who cannot afford the higher tickets. I am sure it would be alot less expensive.

More people appear to be understanding that TriMet and their scoundrel partners are not conducting business as usual.

Far from it.
TriMet has breached the precipice and is tumbling into the fiscal abyss.

Their future revenue pales in comparision to their comittments.
There is nothing they can do to back up or avoid the inevitable.
The only question is when the tumble collides with the bottom.

This Milwaukie Light Rail plan is an acceleration and that's why it has been labeled a "suicide pact".

In their madness and tumble towards that crash they are extremely weak and vulnerable.

Any slight nudge by either a mass uprising or bond purchasers looking at their true financial picture could freeze the operation and save countless millions from needlessly being lost in their demise.

This is re: streetcar.
Does the FTA insist on light rail comparisons against a high-end bus system?

The Federal Transit Authority’s assistance and acceptance of the EA is another piece of evidence that they want to fund the project. We are still at a rating of Low-Medium and need to continue to work on getting that rating to a Medium. We are working almost daily with the FTA in trying to improve this rating. The bottom line is there must be a cost-effectiveness of $23.99 price/benefit ratio. We are at $29.00 right now. . . . .
The FTA insists that we do all our comparisons against a high-end bus system that is actually higher than we would actually make or get the support to make. If we can get the FTA to agree that the demand numbers are higher than the model predicts, we will make our rating of Medium.

A recent bill introduced by Congressman Blumenauer prohibits the use of travel time savings in evaluating streetcar projects.

Think many of us know that Blumenauer is heavily involved in all of this. Have called his office and asked what he has done re: the oath he took to uphold our constitution, and that there are far more serious issues than his focus on the rails. In my opinion, he might as well just be a lobbyist for this streetcar business.
Unfortunately, he got re-elected.

Light rail has been shot down every time it has come to a vote.

Do you stand by this assertion?

Jon: Light rail has been shot down every time it has come to a vote.

Aaron: Do you stand by this assertion?

If we were to hook up The Oregonian's PolitiFact Crap-o-Meter to this, it'd fall in the "mostly true" category.

The original light rail line between Portland and Gresham did not require or obtain a public vote; it was funded primarily with already approved federal funding for a freeway that was cancelled. (The feds won't let you do this anymore.)

The Westside Light Rail line between Portland and Hillsboro did require a public vote, of which WAS approved by voters.

In 1998, the infamous South|North ballot measure was on the ballot not just with Tri-Met's district but also in Clark County. According to TriMet's history website, it is worded quite interestingly:

An Oregon-only light rail project was placed on the ballot to replace the failed South-North extension, originally proposed to extend from Vancouver, Washington, to Milwaukie, Oregon. The bond measure had been approved by the voters in Oregon but failed in Clark County, Washington. This new proposal also failed in the region, although it was supported by voters within Multnomah County and the city of Portland.

TriMet, in its infinite wisdom, decided that since the measure passed in liberal Multnomah County, why not go ahead with the Interstate Line? Thus, the Yellow Line - sans voter approval - was built starting in 2000. Meanwhile, TriMet found a "private-public partnership" to build the Airport MAX - Red Line - again without voter approval.

The Green Line never involved a public vote; neither did the Streetcar or WES.

How can it be true at all? There are a couple instances where light rail came up for vote, and was passed by voters. His statement is patently false. He said every time.

There are a couple instances where light rail came up for vote, and was passed by voters.

I see one here, not "a couple."

I was under the impression that voters here passed North-South. (And that in a Clark county vote, it failed). If that's not the case, and it was perhaps only passing in the city of Portland subset of voters and it actually failed here too, my bad. I was all of.. 11 at the time and haven't read much on that particular nugget of history, although I do remember hearing some pretty negative commentary from my dad (we lived in Vancouver).

The other one is the blue line. That isn't exactly a small deal and alone is falsifies what he said.

A Chapter 9 filing by Trimet looks inevitable, sooner or later. It will be very intersting to see what a bankruptcy judge would do about MLR, etc.

Clicky Web Analytics