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Thursday, May 6, 2010

Can we afford Milwaukie light rail?

Republican gubernatorial candidate [rim shot] Allen Alley really hit a nerve the other day when he suggested that the Portland region should put aside, at least for now, the plan to build a $1.4 billion,* seven-mile light rail line from downtown Portland to the sleepy suburb of Milwaukie. (It works out to around $38,000 per foot of light rail track.) Alley suggested that any state and local money available to pay for a Max extension down that way should instead be spent on an immediate replacement of the rotting Sellwood Bridge. He also posted some telling photos of parts of the Sellwood span literally being held together with shrink wrap.

Alley's proposal makes too much sense to be accepted by the region's "planning" bobbleheads. Metro clone Rex "Founder" Burkholder screeched to a halt on his beloved bicycle and spoke in his robot-like planner voice: "But we would lose the federal subsidy. Thanks to Earl the Pearl, the feds are paying half the cost of building the line. And that money can't be used for the Sellwood Bridge."

Ah, the Colors of Money™ -- a Portland specialty. True in this case, as far as it goes. But even with the feds kicking in a hefty percentage of the construction cost, the local share of the liars' budget pencils out to something like $700 million. Where is that kind of jack going to come from in this economy, and why isn't that money available for a new Sellwood Bridge?

$250 million of it is going to come from state lottery money, which can be used for darn near anything, as best I can tell. That leaves another $450 million of Oregon greenbacks. $30 million of that is apparently supposed to come from the City of Portland -- out of increased parking charges on city streets; a citywide "system development charge"; and tax money from the SoWhat "urban renewal" district, through which less than a mile of the new Max line would run. That district is, of course, broke, due to the colossal failure of its real estate dreams, and many promised features of that high-priced ghost town will never be built. But hey, somehow it's got eight figures for light rail passing through. Leave it to Mayor Creepy -- he's got envelopes full of cash for friends in need.

There would supposedly also be new "urban renewal" shenanigans enacted down in Milwaukie and Clackamas County, to divert many years of future property taxes to the construction maw. Surely it would be a minimum of $30 million in front-end borrowing for Milwaukie, and another $30 million for the county.

Could that money be used for a new Sellwood Bridge? Heck, if it's o.k. to spend it on a new no-cars bridge from OMSI to Schnitzerland between the Marquam and Ross Island Bridges way the heck up in Portland -- the bridge being biggest expense in the light-rail pipedream -- it should be o.k. to spend it for a more traditional span a lot closer to Milwaukie.

Another $39 million is supposed to come from borrowing by Tri-Met, which is already careening into insolvency, particularly under the heavy weight of operating its doomed WES commuter rail line. And the Tri-Met part of the equation's got even the transit groupies up in arms. You know you're looking at a bad deal when Streetcar Smith, citizen face card for every mode of transportation other than the automobile, opposes it:

TriMet will issue bonds for about $39M for the Milwaukie project. That translates to about $3.2M/year for the next 20 years that will not be available for operations.

While I support the overall project, I'm adamantly opposed to this particular funding component. It's just over 2% of the overall budget. Surely we're smart enough as a region to avoid this.

I'm still not getting where all the rest of the money's supposed to come from, but even with what the proponents are showing at this stage, it's pretty clear that a lot of folks around this way who are about to be hit up to pay for the thing really don't want to buy more light rail right now.

There's still time to pull the plug on Milwaukie Max. But of course, that would disappoint the contractors who have long since divvied up their shares of the pork over scotch and cigars at the Arlington Club. Already Tri-Met's talking about making this a largely no-bid deal -- the same way it strong-armed the Airport Max contracts. The aroma of the Goldschmidt crew hangs heavy in the air. The West Hills boys could care less about some little old lady or teenager in Milwaukie who needs a ride to Portland. As always, it's all about the Benjamins, baby.

If Alley's mothball idea gains any real traction, I'm sure Earl the Pearl will offer up another $100 million or so from the federal printing presses. But even at $500 million in state and local dollars to build it, and all the local money it will take to run it (for which the feds provide no help), can we afford to go by rail yet again? Maybe we ought to just buy a dozen new buses and put them on the 31 line.

* - Preliminary liars' budget figure.

Comments (26)

geeze I could vote for Alley for no other reason than he opposes the lite rail!
And I'm a life long "dimmo" too!

There is evidence Alley's idea is gaining real traction. His proclamation was not surprising, but certainly a savvy political move.

The tide is turning, and smart politicians know it. Just a few weeks ago this was posted here..."The Tualatin City Council voted unanimously tonight not to extend the city's "urban renewal" program". I would bet public input had something to with this decision.

Folks in the metro area are paying more attention. Nice to see those running for office are getting it too.

What amazes me is how many of the same folks that are up in arms about the cost of the Columbia River Crossing project, don't have anything to say about the absurd cost of this project. It about 1/3 of the cost of the CRC, yet serves less than 5% as many people, with no freight, congestion or economic benefits.

I'm an independent and don't like either party, but I understand business and it seems that Alley is the only candidate with a calculator; the rest of them don't seem to know what that ISF on the checks means. Public transportation is a great municipal tool until corruption takes over. Rapid Transit would answer tons of problems for less than 10% of the cost. No more Forest Gump Railroads!

Can we afford it? No. Will it happen anyway? Yes.

The funny part of Smith's objection is that the TriMet funding problem he descibes is the same as the trouble with Urban Renewal.

Urban Renewal is how Portland, Milwaukie and Clackams County will be paying their collective $100 million-plus share.

Chris Smith Says:
"TriMet will issue bonds for about $39M for the Milwaukie project. That translates to about $3.2M/year for the next 20 years that will not be available for operations."

That is exactly what UR schemes do. They take revenue from operations for decades. School operations, library operations, Law enforcement operations, Park operations, Fire operations etc.

It appears that Chris is either unaware of this or he is only concerned about TriMet operations.

Whether it's the TriMet bonding, The Metro Bonding, the state Lottery $250 million or the Urban Renewal components they all essentially do the same thing.

They borrow against existing revenue streams which fund current services at every level.

Those revenue streams are already falling short of the challenge to keep pace with the rising cost of government so where does the MAX debt service come from?

The tooth fairy?

Frankly, I'm amazing the mainstream media has not picked up on this attempt to raid government services to fund more MAX.

What is wrong with our media?

The upcoming raid on basis services to pay the new MAX debt will deepen the hole we already see coming, for decades.

TriMet is facing insolvency and the Milwaukie Light Rail Line makes no sense.



Fringe benefits now cost 118% of payroll
TriMet's unfunded long-term liability for the union pension plan equals 197% of the cost of payroll.
TriMet's unfunded long-term liability for "other post-employment benefits" (OPEB) equals 484% of the cost of payroll. 4 times higher than the second place government entity in the State.
TriMet's $2200 monthly family health care premium is the highest reported in the 2008 US Transit Systems Survey.

TriMet is indeed a financial train wreck.

How much would it cost to provide the level of service MAX provides using buses instead?


First page compares LA Rapid bus/242,000 daily boardings to Milwaukie MAX/27,000 daily boardings.

Read the rest on the link. Every bus element fares better than MAX at a fraction of the cost.
Bus system serves 369 miles - Milwaukie MAX serves 7.3 miles

Capital cost Bus system 350K/mile - Milwaukie MAX capitla cost $194 Million/mile

Every previous MAX line reveals the same reality. The are neither rapid or high capacity.
They did little to nothing for the local community or the region at large. Gresham? Beaverton? Downtown Portland? Cascade Station? Interstate?
They are obstructions. A fixed transit line, wires, barricades etc running through the community. What has East Burnside got from it over 25 years? Worse than nothing.
Investment in MAX has proven to be a bad idea over and over again.

Adding more now with all of the financial ailments and funding travesties involved in outrageous.

I'm glad Alley studied this urgent issue and did the right thing.

The public would never vote to pay for this. Raiding current government services is unaccpetable.

Any sitting politician or candidate who can't figure this out should not be making public policy.

What does Mary think about this expenditure?

"I'm still not getting where all the rest of the money's supposed to come from"

You'll notice your pocket feeling lighter real soon...

The lottery cannot issue $250 MN in bonds because revenues are down and loan covenants require 4x coverage.

To document what Ben said above about TriMet's $632 million unfunded OPEB liability please see my article http://theoregonpolitico.com/blog/2010/04/27/looming-liabilities-oregonians-owe-3-billion-in-post-employment-benefits/

Bojack, I like you for this common sense reporting. You are not all bad as in preachie Bama.

Other notes:
The $250 million in lottery funds has an opportunity cost in that these funds are usually used for other public services, that will instead go wanting. Lottery funds have been crimped by the economy, too.

Representative Blumenauer is reportedly worth $8 million dollars, and the betting is his legislative position concentrated on rail transportation has had more than a direct way of aiding his net worth.

I am wondering why folks living in Milwaukee would want the tenacles of the city of Portland, with its high rise concrete condo building regime, reaching into their community. I think most Milwaukee folks do not favor this high cost massive social engineering project invading their community.

Speaker Dave Hunt backs this project because of its construction jobs. Yet these are temporary jobs, and the funding in effect is just moving these jobs forward in time as governments ability to fund future projects shrinks with ever mounting debt and unfunded liabilities. Better to keep debt and taxes down to nuture more financially sustainable jobs.

Pull the Plug, baby, and save Milwaukee and the taxpaying public!

Let's look at the Milwaukie LightRail implications as proposed by Sam on just the SoWhat Urban Renewal District.

Sam has obligated the City to pay $30M to the $1.4B bill. About a year ago Sam took $10M from a SoWhat's Transportation Service Development Charge (TSDC)area. This theft was executed by Sam without the SoWhat's URAC even knowing or voting on it.

Then more recently Sam once again raided another SoWhat's Pot (that is actually broke)-it's Tax Increment Financing (TIF) dollars. These are future property tax dollars that hopefully the broke SoWhat will someday generate. Again, Sam did this without the prior knowledge or a vote of it's URAC. In fact, just recently SoWhat's URAC wrote a terse letter to City Council and PDC disapproving of the theft:

"We feel that the North Macadam district is being asked to shoulder a disproportionate share of the financial burden of the project"

SoWhat is projected by PDC to generate $7 Million per year for the next five years in TIF dollars. That amount only is barely paying the debt cost of what has been "borrowed" from Portland's General Fund (streets, fire, police, basic services, etc. fund), and bonds sold to pay the approximately $135 Million that the public has so far invested in SoWhat. There is NO MONEY left in TIF dollars to pay even the $10 Million Sam has stolen. That is why only the Tram and a few streets, and the other 30+ identified public projects of SoWhat aren't completed.

So $20 Million has been taken from SoWhat. But less than 1/8th of the 7 miles of Milwaukie LightRail is in SoWhat, and it is paying 2/3 of Portland's obligation. MLR also goes through the Central Eastside URA, but Sam didn't obligate that district to pay. City of Milwaukie will have to set up its own urban renewal district in its downtown area to pay its share. And Clackamas Co. may have to set up another URA for its $25 Million share.

Both Milwaukie and Clackamas Co. officials have stated "we have no idea how we'll fund our share."

In total, close to $100 Million dollars in UR dollars will have to be sucked out of future tax payers to help meet the $550 Million of local matching dollars.

Additionally another LID(Local Improvement District) or TSDC is being proposed called South Central City/University District/Science and Technology Triangle around PSU to come up with $5 Million of the $10 Million shortfall to make up the $30 M for Portland.

Isn't it interesting how Sam seems to have creative ways to find the money when he says there is no money? Well, there is no money, it's all of our next generation's money, and they probably won't have it.

I commend Allen Alley for taking a dramatic stand on MLR that has over $550 Million affect for our state, and that isn't even including the debt costs added if spent and how. I'm glad Dudley and Lim agree, and Mary Volm, Chris Smith and others are joining in. But let's get beyond words.

Can we afford more of Earl Blumenauer?

Earl Blumenauer is the part of all of this with the federal dollars.
Willamette Week article:

East Coast, San Francisco and in other parts of the world are providing buses with wifi and comfort.

Am not saying this is what we should do, but at least have the conversation about options.

In our area, isn't it really all about the permanent tracks (very costly and not flexible) that facilitate the tax abated developments? That doesn't appear to be the best avenue for good mass transit to serve the public needs.

Reading my above post doesn't make it clear that the "takings" of $20 M from SoWhat for MLR by Sam is only on paper. It can easily be reversed just like the state's $250M lottery dollars. MW (from above post), the $250 M lottery bonds have already been sold-the obligated money is in the state treasury. In fact were paying bond interest on it right now.

Wow, check this out. What an excellent story and it details how SoWa cannot afford the Creepy's ludicrous idea to divert $30 million urban renewal dollars to Milwaukie MAX


This entire story, the Milwaukie MAX, the funding schemes that raid government revenue streams, SoWa, TriMet insolvency and Urban Renewal should all be front page of the Oregonian.

Yet not a drop of ink.

With the stockmarket crashing to 982 points down, we won't have to worry about Milwauikie Light Rail.

Perhaps we won't need to worry about the over a billion dollars with debt for the Bull Run Water System and Reservoir projects for a public health problem that does not exist!

With the stockmarket crashing to 982 points down, we won't have to worry about Milwauikie Light Rail.

Yes we will. They will do whatever they want.

Wait a minute, guys - this is too much math, and math is just too hard.

Book by Richard Florida
The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity


“In his usual lucid and compelling way, Florida argues that elected officials ‘need to get over their love affair with big renewal projects’ and steer money toward neighborhood ventures that improve people’s lives.” (—Harvard Business Review )

Just heard about this book, haven't read yet. But it goes along with what some I talk to are saying that we cannot wait and hope for someone else to take charge and fix things to go back to where we were. There is no going back, what we are facing may force us to make our way into "new ways" - uncertain yes, but then, why would we want to go back to an old system that is rotting?

What is missing the total amount for the city's portion, something I have posted here before. Environmental Services and Water Bureaus have utility relocates as a budget request for next year along this alignment. I know that the BES portion of utility relocates is estimated at $45 million. I have been unable to secure the water bureau portion because the Mayor has not yet released his proposed budget (this usually comes out in early April).

What I do know is this. The City of Portland ratepayers should not be paying for these utility relocates. Beyond the Fed's portion, the City has footed the largest part of the bill for light rail since it beginnings. In this economy, it is not what the city needs right now.

Thank you Mary! I would have liked you saying "it is not what the city needs" w/o the "right now". And, I cast my vote for you yesterday.

It seems that these pet projects and waste will continue so long as the votes in Portland keep electing the same dirtbags cut from the same free-spending, socially liberal, and prudent economically-challenged cloth. That includes many on this blog and perhaps even the big man himself (Jack).

We can keep bitching about republicans and non-progressives and the questions we have about their policies, but I would happily vote for a candidate of almost any persuasion who would guarantee an end to the waste. There is a dearth of those with common sense in the Sam / Randy / Fish / Saltzman crowd and that includes most of their popular opponents.

Let's remember that city and county officials don't really have the sway over hot-button issues like abortion, gun rights, affirmative action, and the other contentious issues. They are primarily money shufflers and administrators with higher authority. Why we keep voting for morons who know nothing of business and budgeting is beyond me.

I was looking forward to riding the Milwaukie Max. But now I foresee that it won't happen. The Perfect Storm is building against TriMet. WE will stop the Milwaukie line.

I hope that WE can also get a new Sellwood bridge built in it's place. One that can carry buses and fire engines again.

People keep throwing out these figures about how expensive Trimet's health payouts are.

My information says they are 7th highest in the industry, not 1st.

Yet nobody has actually shown us a chart of other transit districts policy coverages and charges associated with them.

I want to see some black and white proof on these claims.

Cut salaries if necessary, but not health care.

Don't drag us down to the same level as all the other poor Americans who have to suffer with our national criminal health insurance scam.

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