Portland long-term bonds crack $3 billion mark
This week, the City of Portland went to the Wall Street well again, mortgaging some of the IOU's it has gathered from taxpayers who are paying over time for special assessments and system development charges. The new city debt, much of which will run for 20 years, is around $22.1 million. Combined with $160 million of new sewer debt that it racked up, unannounced and unnoticed, on March 31, the city's long-term debt and "interim" financing of major construction (which inevitably requires permanent long-term debt to replace it) now totals more than $3 billion:
| Unlimited general obligation bonds | $ 68,050,000 |
| Bonds paid and/or secured by general fund | 623,727,748 |
| Revenue bonds | 1,980,102,880 |
| "Interim" urban renewal and construction financing | 377,900,000 |
| New "tax improvement" bonds | 22,080,000 |
| Total | $3,071,860,628 |
There's lots more where that came from, with $71 million in new "urban renewal" bonds and a whopping $450 million in new sewer bonds about to sold this summer. It appears that we will be well over $3.5 billion by Labor Day.
Although it is a bit harder to get a handle on, our best estimate of the city's unfunded pension liabilities -- under its completely unfunded police and fire pension and disability fund, its newly discovered gap in funding its PERS plan, and unfunded health care for retirees -- is about another $2.9 billion. The last time the city's actuaries took a hard look at most of the retirement figures was as of June of 2008, when they changed all the assumptions and made it difficult or impossible to predict how fast that debt would grow. We've been using a growth rate of 6.5% a year, based on past history.
If we're right about the pension debt, and we know we're close, the city's total long-term liabilities now top $6 billion, which is more than $10,000 for every man, woman, and child in the city. Go by streetcar!
| Posted at 3:49 AM | Permalink |
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Comments (12)
Everywhere one looks in Oregon there's fiscal calamity.
The State, counties, every municipality, and TriMet is in ruin.
Every way one looks at Milwaukie Light Rail it's madness.
It's precisely the kind of enormous misappropriation which no one can afford.
$250 Million in state lottery dollars are headed that way soon.
$140 Million committed from TriMet general fund.
$30 Million from Portland SoWa Urban Renewal
$25 Million from Clackamas County
$5 Million from Milwaukie
$900 Million pursued from the Feds.
Stopping this insane boondoggle would be a relief for every budget.
Posted by Ben | April 22, 2010 7:27 AM
My family of 4 just moved the hell out of portland, so you guys are gonna have to handle our share (40 grand) yourselves. Sorry.
Posted by jed | April 22, 2010 7:29 AM
Pikers compared to those wonderful people in Washington DC.
Posted by David E Gilmore | April 22, 2010 7:32 AM
I might be relocating to Cincinnati, OH in the near future, so there's $10k you'll need to spread around amongst the condo crowd.
Go by Tram!
Posted by MachineShedFred | April 22, 2010 7:55 AM
Ben,
Another insane boondoggle:
Over a billion dollars including debt service for a public health problem that does not exist. (PWB projects for that EPA LT2 rule, a rule based on politics, not science)
Posted by clinamen | April 22, 2010 8:05 AM
Not every person in Portland city is tagged for this mounting debt. If you own property, you are the one likely to pay the price. Maybe one in four people in this city get tagged, and so this $10k figure is probably more like $40k for those actually paying the freight.
Cityhall could care less about this mounting debt. You've got Commissioner Saltzman when voting for the new billion dollar bike plan, saying effectively "I don't know how we're going to get the money for this new shiney bike plan but dog gone it we've got to have this new toy." We can't save you all unless we mortgage your futures. And the Oregonian supported this guy for his business sense!
Maybe Mary what's her name would make a more prudent commissioner than "Ozone" Saltzman.
Posted by Bob Clark | April 22, 2010 8:34 AM
Actually, everybody pays. Property taxes are passed on to renters, and a lot of this debt service is coming out of water and sewer bill revenues.
Posted by Jack Bog | April 22, 2010 10:07 AM
$450 in new sewer bonds? Wow, our bills are going to take a huge hike upwards.
Oh well, we'll just take more money from them "rich people." Okay, open up your wallets, richies.
Um, rich people? Rich people? Hey, where did they go?
Posted by Snards | April 22, 2010 10:29 AM
Someone else will be shouldering the 20k from my household soonish. Once I get a job out of the Portland area I'm gone!
Posted by Darrin | April 22, 2010 12:07 PM
Jack: Using your best guess, what would it take to see the city default, and get close to losing it?
Posted by JP | April 22, 2010 5:01 PM
As long as it can keep borrowing more money, refinancing old debt, jacking up water and sewer rates, and slashing essential services, the city will likely be able to scratch up the debt service every year and avoid default. But eventually, it's going to be so far in hock that even the fool bankers will be charging really high interest rates, and one day they'll stop lending altogether. Then we'll be talking bankruptcy.
Posted by Jack Bog | April 22, 2010 5:15 PM
jacking up water and sewer rates, and slashing essential services,
Posted by Jack Bog | April 22, 2010 5:15 PM
OK,that says to me, that even the "faithful" at sometime will balk, would you agree with that?
Posted by JP | April 22, 2010 6:11 PM