This page contains a single entry from the blog posted on November 9, 2011 7:48 AM.
The previous post in this blog was It's the bomb.
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According to the recent report of the city's finance office, which blasted the transportation bureau for reckless spending, the borrowed money "will primarily reimburse the Transportation Operating Fund for a series of capitally-eligible work dating back to February 2011." In other words, it's money that's already been spent. On what, we can only imagine -- but surely it was "green" and "sustainable."
That the city is sneaking around taking out eight-figure loans without publicly disclosing the deal in advance is a major red flag that things are amiss in the money department -- especially where transportation projects are concerned.
To our knowledge, the city has never before hocked future gas tax money to pay for current toy projects. It's another innovation of the lame duck Sam Rand Twins, apparently. Heaven only knows where the city will end up financially by the time the current administration leaves City Hall. But certainly it won't be a good place.
UPDATE, 10:08 a.m.: As a reader points out, apparently this innovation was first employed under Mayor Vera Katz, when Sam Adams was running her office.
Comments (20)
I guess the eastern suburbs will have to wait a while longer for those long promised sidewalks.
There is sure some financial funny business going on.
One interesting thing about the bond issue is that for the maturities around 2018 and 2019, the city is paying an above-market interest rate -- 5% or so -- so that it can sell the bonds at a premium to face value. The issue for one year sold at an 18% premium to face value -- about $180,000 on the $1 million (roughly) face -- because the interest rate was higher. Basically the city is borrowing that extra $180,000 in exchange for paying an extra $30,000/year in interest for 7 or 8 years: cash in today traded off against higher interest payments tomorrow.
They've sold bonds with a similar name at least three times previously. From the same MSRB website:
PORTLAND ORE GAS TAX REV REF-SER A 03/17/2005 2005 to 2016
PORTLAND ORE GAS TAX REV SER A 06/01/1998 1999 to 2018
PORTLAND ORE GAS TAX REV SER A 09/01/1996 1997 to 2016
According to the Oregon Bond Manual, state law requires that a preliminary official statement (POS) be issued 10 days before any bonds are sold. So, if the city has, in fact, sold bonds in this case, that's not just a major red flag, that's illegal.
The City now does the same as it's poor: go to the Cash/Payday Loan store. And the vast majority of the citizens don't realize what's happening and how they will pay later. They'll pay out of the money they make operating a food cart all winter.
One of those you list was a refinance of one of the other two. But you're right, it looks as though this is a Vera invention, pre-Randy but with Samster running her office.
And people question why "highways don't pay for themselves" and how badly subsidized highways are. It's because too many people take from the gas tax revenue (and then they claim gas taxes aren't dedicated to roads so it's OK to use gas tax funds for streetcars, light rail and the like). 20% of the federal gas tax goes straight into the "Mass Transit Account". Fortunately ODOT is restricted by Constitutional Amendment, but when ODOT dishes out the money to cities and counties, the cities/counties appear not to be bound to the same law and can do what they want.
According to our own Federal Budget Office posted in the Wall St. Journal several months ago, 100% of our highways are funded by gas taxes-both fed and state.
But many local critics claim otherwise that we subsidize roads. Remember in 2009/10 over $189 Million in STIP Oregon gas tax money was siphoned off for bike/ped trails, mass transit education programs and such. In reality gas taxes are subsiding the other.
UPDATE, 10:08 a.m.: As a reader points out, apparently this innovation was first employed under Mayor Vera Katz, when Sam Adams was running her office.
No surprise there!!
Wonder what else falls under innovation first employed under Katz/Adams?
Fascinating - They're selling revenue sources one by one. So they blow it now and in the future when we don't have enough money for roads or police, then Sam/Randy Jr (or whoever is mayor) can throw their hands up and blame our ancestors.
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
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
Familia Bianchi, Malbec 2009
Terrapin Cellars, Pinot Gris 2011
Columbia Crest, Walter Clore Private Reserve 2009
Campo Viejo, Rioja, Termpranillo 2010
Ravenswood, Cabernet Sauvignon 2009
Quinta das Amoras, Vinho Tinto 2010
Waterbrook, Reserve Merlot 2009
Lorelle, Horse Heaven Hills, Pinot Grigio 2011
Tarantas, Rose
Chateau Lajarre, Bordeaux 2009
La Vielle Ferme, Rose 2011
Benvolio, Pinot Grigio 2011
Nobilo Icon, Pinot Noir 2009
Lello, Douro Tinto 2009
Quinson Fils, Cotes de Provence Rose 2011
Anindor, Pinot Gris 2010
Buenas Ondas, Syrah Rose 2010
Les Fiefs d'Anglars, Malbec 2009
14 Hands, Pinot Gris 2011
Conundrum 2012
Condes de Albarei, Albariño 2011
Columbia Crest, Walter Clore Private Reserve 2007
Penelope Sanchez, Garnacha Syrah 2010
Canoe Ridge, Merlot 2007
Atalaya do Mar, Godello 2010
Vega Montan, Mencia
Benvolio, Pinot Grigio
Nobilo Icon, Pinot Noir, Marlborough 2009
Portuga, Rose 2011
Revelation, Chardonnay, Pays d'Oc 2010
Beaulieu, Cabernet, Rutherford 2005
Monte Alto, Tinto Reserva 2005
Chateau Ste. Michelle, Cabernet, Indian Wells 2009
Espiral, Vinho Rose
Vin-Koru, Pinot Gris 2011
14 Hands, Hot to Trot Red 2009
Rodney Strong, Cabernet, Sonoma 2009
Abacela, Vintner's Blend #11
Portuga, White 2010
La Bourgeoisie, Red 2009
Januik, Red 2009
Three Rivers, River's Red 2008
Kirkland, Alexander Valley Merlot 2008
Muga, Rioja Rose 2010
Quinta das Amoras, Vinho Tinto 2009
Mauro Molino, Barbera d'Alba 2009
Garda Chiaretto Rose
Columbia Crest, Two Vines Vineyard 10 White
Chateau Ste. Michelle, Pinot Gris, Columbia Valley 2009
L'Hortus, Rose de Saignee 2010
Maculan, Pino & Toi 2008
McKinley Springs, Bombing Range Red 2008
Trader Joe's Pinot Gris 2009
Montes Alpha, Cabernet 2007
Gran Sasso, Sangiovese, Terre di Chieti 2009
Garda, Classico Chiaretto Rose
Beaulieu, Cabernet, Rutherford 1999
Picos del Montgo, Tempranillo 2008
Chateau de Montmirail, Vacqueyras 2008
La Granja 360, Syrah 2009
Montgras, Carmenere Reserva 2009
Lange, Pinot Gris 2009
Columbia Crest, Horse Heaven Hills Cabernet 2008
Kirkland, Pinot Grigio 2010
Trader Joe's Coastal Syrah 2009
Columbia Crest, Horse Heaven Hills Merlot 2008
Trader Joe's Coastal Chardonnay 2009
Vieux Papes Red
Domaine de l'Aujardiere, Chardonnay 2009
Santa Rita, Cabernet, Medalla Real 2007
Penfold's, Koonunga Hill Shiraz Cabernet 2008
Guild, Red, Lot #02 2008
Dievole, Dievolino Sangiovese 2008
Laforet, Burgogne Chardonnay 2009
Columbia Winery, Merlot 2007
Bonterra, Cabernet 2008
Elk Cove, Pinot Gris 2009
Maquis Lien 2006
Scott Paul, Pinot Noir, Le Paulee 2007
The Occasional Book
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: 21
At this date last year: 52
Total run 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
Comments (20)
I guess the eastern suburbs will have to wait a while longer for those long promised sidewalks.
There is sure some financial funny business going on.
Posted by Portland Native | November 9, 2011 7:57 AM
They probably just needed the money to cover the severance packages for Ellis Mccoy and Lavinia Gordon.
Posted by Cass | November 9, 2011 8:23 AM
Curious ... that seems to be just about the same amount as PBOT's budget shortfall ...
Posted by Garage Wine | November 9, 2011 8:37 AM
What am I missing here? I thought gas tax revenue was at the state level, not the city's to offer up?
Posted by Mr. Grumpy | November 9, 2011 8:46 AM
One interesting thing about the bond issue is that for the maturities around 2018 and 2019, the city is paying an above-market interest rate -- 5% or so -- so that it can sell the bonds at a premium to face value. The issue for one year sold at an 18% premium to face value -- about $180,000 on the $1 million (roughly) face -- because the interest rate was higher. Basically the city is borrowing that extra $180,000 in exchange for paying an extra $30,000/year in interest for 7 or 8 years: cash in today traded off against higher interest payments tomorrow.
Posted by Isaac Laquedem | November 9, 2011 8:46 AM
Go by Credit Card!!!
Posted by Mister Tee | November 9, 2011 8:52 AM
Can we send the Sam Rand twins to the same prison as Bernie Madoff? Seems to me like this is the same sort of Ponzi scheme.
Posted by portland native | November 9, 2011 8:54 AM
They've sold bonds with a similar name at least three times previously. From the same MSRB website:
PORTLAND ORE GAS TAX REV REF-SER A 03/17/2005 2005 to 2016
PORTLAND ORE GAS TAX REV SER A 06/01/1998 1999 to 2018
PORTLAND ORE GAS TAX REV SER A 09/01/1996 1997 to 2016
Posted by Mister Tee | November 9, 2011 8:58 AM
Soon CoP will be selling bonds to pay off bonds that are paying off previously issued bonds.
Oh, that's what they are already doing.
Posted by Lee | November 9, 2011 9:09 AM
According to the Oregon Bond Manual, state law requires that a preliminary official statement (POS) be issued 10 days before any bonds are sold. So, if the city has, in fact, sold bonds in this case, that's not just a major red flag, that's illegal.
Posted by Peter Apanel | November 9, 2011 9:23 AM
The City now does the same as it's poor: go to the Cash/Payday Loan store. And the vast majority of the citizens don't realize what's happening and how they will pay later. They'll pay out of the money they make operating a food cart all winter.
Posted by Don | November 9, 2011 9:27 AM
Portland needs an intervention. To end the cycle of financial abuse and addictions.
Posted by Mojo | November 9, 2011 9:51 AM
at least three times previously
One of those you list was a refinance of one of the other two. But you're right, it looks as though this is a Vera invention, pre-Randy but with Samster running her office.
Posted by Jack Bog | November 9, 2011 10:06 AM
And people question why "highways don't pay for themselves" and how badly subsidized highways are. It's because too many people take from the gas tax revenue (and then they claim gas taxes aren't dedicated to roads so it's OK to use gas tax funds for streetcars, light rail and the like). 20% of the federal gas tax goes straight into the "Mass Transit Account". Fortunately ODOT is restricted by Constitutional Amendment, but when ODOT dishes out the money to cities and counties, the cities/counties appear not to be bound to the same law and can do what they want.
Posted by Erik H. | November 9, 2011 10:23 AM
According to our own Federal Budget Office posted in the Wall St. Journal several months ago, 100% of our highways are funded by gas taxes-both fed and state.
But many local critics claim otherwise that we subsidize roads. Remember in 2009/10 over $189 Million in STIP Oregon gas tax money was siphoned off for bike/ped trails, mass transit education programs and such. In reality gas taxes are subsiding the other.
Posted by Lee | November 9, 2011 10:30 AM
The biggest crooks wear suits.
By the time the general populace wakes up and realizes they let this crap go down, it's going to be way too late.
Greece here we come!
Posted by Ralph Woods | November 9, 2011 10:55 AM
Damnit people don't you know there are bicycle lanes and light rail lines to build !
Get with the 19th century and stop whining !
Posted by tankfixer | November 9, 2011 11:07 AM
UPDATE, 10:08 a.m.: As a reader points out, apparently this innovation was first employed under Mayor Vera Katz, when Sam Adams was running her office.
No surprise there!!
Wonder what else falls under innovation first employed under Katz/Adams?
Posted by clinamen | November 9, 2011 11:38 AM
Fascinating - They're selling revenue sources one by one. So they blow it now and in the future when we don't have enough money for roads or police, then Sam/Randy Jr (or whoever is mayor) can throw their hands up and blame our ancestors.
Posted by Steve | November 9, 2011 12:49 PM
"blame our ancestors". Sounds like someone I know in the White House, or most other politicians.
Posted by lw | November 9, 2011 12:55 PM