The City of Portland's secret money room
The City of Portland is huddling behind closed doors today to decide among four proposals that it has received from banks for lending the city $12 million for as long as five years to renovate PGE Park for Little Lord Paulson's "major league" (by U.S. standards) soccer. Eric H. Johansen, the city's debt manager, who usually tries pretty hard to answer our questions, informs us that the city has received four proposals from prospective lenders. But beyond that, he won't tell us whom they're from or what they say.
According to the city's solicitation of bids, which we unearthed earlier this week, they're going to pick a bank today and close the deal by a week from today. Maybe at that point, we'll be deemed worthy to know the terms of the deal, to find out which other bidders were rejected, and to learn why. Or maybe not.
It's interesting that the city, which so often touts the awards it wins for its budgeting and accounting, is secretive when it comes to its back-room borrowings, which amount to hundreds of millions of dollars, on these "temporary" lines of credit. When they go out for bid, nothing is posted anywhere on the city's website. Johansen's office quietly sends the request for proposals to a list of banks that it maintains, posting a paid notice in one or both of the city's financial newspapers, the Daily Journal of Commerce and Portland Business Journal. Without a paid subscription to those journals, the public cannot see that the borrowings are under way.
When the bids come in, as has happened in this case, they are opened, reviewed, and accepted or rejected in secret. The City Council never passes on the lines of credit, and so they never see the light of day. It takes some pretty determined digging even to find out that they exist.
That's not right. We'll keep bird-dogging this particular deal, but it and all similar transactions should get a much more thorough airing -- before, during, and after the negotiations and closing -- where the public can see it, on the internet. Only then will the city's bragging about its opennesss be justified.
| Posted at 4:44 AM | Permalink |
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Comments (17)
Sorry, stuff like this just convinces me more that when they say they are out of money, that they haven't told us about the secret stashes whether its city, county or state.
They can always find money for streetcars, soccer stadiums, solar panels, green buildings, but funny how we never, ever have enough to run schools right.
Posted by Steve | January 29, 2010 8:14 AM
Also, in the current economy; the City's bond ratings have to be going into the toilet. In addition, most local governments have had a downgrade in their bond ratings due to lower tax revenue and outstanding debt.
Posted by Dave A. | January 29, 2010 8:43 AM
Jack, I don't understand your criticism with this. Didn't you hear Sam bragging about his commitment to transparency in city government?
Are you suggesting he was being less than truthful?
Posted by Bill McDonald | January 29, 2010 9:11 AM
Wouldn't lender proposals sent in response to an RFP fall into the "Proprietary Information" category?
Posted by Roger | January 29, 2010 9:27 AM
If the Daily Journal of Commerce and the Portland Business Journal are not reasonably available to the general public, perhaps the City has violated public notice law.
Posted by Don | January 29, 2010 10:08 AM
Dear Portland City Transportation Commissioner: If you are never going to repave Burnside street in any direction, could you at least find the money to spay-paint some bright yellow circles around the potholes so I might steer around a few of them at night?
Posted by RANZ | January 29, 2010 10:09 AM
Forgive me if I seem obsessed with this deal as a microcosm of the Wall Street/TARP/derivatives fiasco that has put taxpayers on the hook for trillions in backing dubious investments...
Maybe it's that AIG sounds sort of like PGE.
Maybe it's that the same man, Henry Paulson, Jr. is involved as a minority owner of the Timbers.
Today's synchronized detail is the lack of a list of the institutions involved which reminds me of the lack of the list of institutions that received backdoor bailouts through AIG. All these slick little details: Construction contracts awarded to the same guy as the team owner? Did I get that one right?
Not every detail fits of course. But there is a story of financial chicanery in this city that's going to sum up Wall Street's greedfest in a nice way.
Jack's in the role of Portland's Matt Taibbi.
The Timber Army? Hmm...did the SEC wear scarves by any chance?
Posted by Bill McDonald | January 29, 2010 10:31 AM
As a contractor I read the DJC daily. I spotted the RFP for short term line of credit two weeks ago. DJC is available on line and selected new stands around town. Nevertheless I agree that they should have posted it on the city's website. Does the City post all their RFP's on their website?
Posted by Dean | January 29, 2010 12:15 PM
DJC is available on line and selected new stands around town.
The classified ads aren't in the online version, though, are they? And that's where the RFP winds up.
And a subscription to the hard-copy edition runs how much a month?
Does the City post all their RFP's on their website?
No. For lines of credit, it posts nothing.
Posted by Jack Bog | January 29, 2010 12:27 PM
I agree with comments by Bill McDonald. We need more transparency regarding the finances of our city. It does seem like the lack of transparency is on the local scene as on the national scene. The intermingling of public/private should not mean that facts are kept from us. It has come to the point that if our locally elected officials like to play in the private world, then they should have the courage to step out of the public arena and do just that instead of using our money to “play”.
We just need the basics taken care of, thank you. But I believe it is what Bill spoke about before, that these elected officials such as Sam and Randy are addicted to these pet projects. I would add, perhaps the games are payback to “their masters”. What are we as citizens who will end up paying going to do about it? Recall not only Sam, also recall Randy and Dan. We need to clean out city hall and the financial mess they are creating at our expense.
As for any comments towards Liberals here, those on the right and left, please stop using these labels. As far as financial accountability there are those on both sides who do not approve of the city agenda.
Posted by clinamen | January 29, 2010 12:38 PM
Your coverage of this story deserves a Pulitzer Prize.
Posted by al m | January 29, 2010 1:41 PM
I have some pullets available!
Posted by Lawrence | January 29, 2010 1:49 PM
Meanwhile, Henry Merritt Paulson, Jr, the erstwhile Bushleague Treasury Secretary who stands behind his spawn, HMP III, has been busy re-inventing his persona:
http://blogs.wsj.com/deals/2010/01/28/hank-paulsons-prayer-second-book-of-timothy-verse-17/
Nine (9) pages on his career at Goldman Sachs? Wonder how many on his training in the Nixon administration? And certainly I am curious about any description of his supervision of the collusive dismantlement of WaMu.
I doubt he offers much about his current, local, vexing endeavor. His face and pate were so florid during the Congressional hearing on Wednesday that the City of Portland should be concerned regarding his longevity in any contractual agreement.
Posted by Gardiner Menefree | January 29, 2010 2:04 PM
My understanding of the rules are that any temporary line of credit must be repaid in 13 months.
Another issue that you might find interesting is that decision against Portland over the citizens right to specific information about what bonds will pay for and the right to file a petition to put them on the ballot. Requires that they do so within 30 days and collect the required # of sigs.
http://friendsofreservoirs.org/pr-102704-revenuebondcase.html
http://www.portlandtribune.com/news/story_2nd.php?story_id=26891
Mark
Posted by mark | January 29, 2010 3:48 PM
Just when you need a good State Attorney General. I can't find any press releases about his grand jury or his internal investigation concerning PGE Park-why not?
Posted by Lee | January 29, 2010 5:57 PM
Regarding Portland’s Secret Money Room: Has anyone here ever attended their “faux”
budget meetings? Just for show folks and to adhere to any rule they may have to conduct a “public meeting”. We citizens sat there like children looking at pie illustrations and to determine what percentage ought to be determined for items on the pie. When I questioned about something I did not see on the list to consider, I was told to wait a minute and a city official came over to explain to me that item was not on “the list for the pie”. I asked what else wasn’t on the table for we the citizens to prioritize and I have not gone to their charades since.
Posted by clinamen | January 29, 2010 7:46 PM
Steve: They can always find money for streetcars, soccer stadiums, solar panels, green buildings, but funny how we never, ever have enough to run schools right.
Because the City of Portland doesn't operate a school system. Portland Public Schools, David Douglas School District, etc., are separate entities from the City of Portland.
That said...yes, we have plenty of money for things that we don't need - but we have many, many miles of unpaved neighborhood streets (a city responsibility), many neighborhoods lack sidewalks (a city responsibility), many streets lack streetlights (a city responsibility), poor response to snow storms and snow removal (a city responsibility), miles and miles of aging water and sewer lines (a city responsibility)...
But instead we're building streetcars (TriMet's responsibility), bike paths (nobody's responsibility, except MAYBE Park & Rec, but the money is coming out of transportation), soccer stadiums (private sector responsibility), solar panels (PGE/PP&L's responsibility), Sustainability Centers (what the heck is that, and it certainly isn't the city's responsibility!)...
Posted by Erik H. | January 31, 2010 9:14 AM