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Thursday, September 6, 2012

Rogue Clackamas commission takes shaky bond deal into back room

It's pretty amazing, but the Clackistani rebels' various legal maneuvers to try to stop their county from borrowing $20 million and handing it over to Tri-Met for pointless light rail have actually thrown a monkey wrench into the county's plans to do just that. Yesterday the county abruptly cancelled the public bond sale that was supposed to happen today. No reason was given, but it's pretty obvious that somebody -- bond counsel Harvey Rogers, or the underwriters, or the credit raters at Moody's, or county counsel, or the commissioners themselves -- has gotten nervous that the rebels' legal arguments against the bond issue may have merit. The legal action taken by the opponents appears to have, as the corporate folks say, "queered the deal" on the public bond sale.

It's amazing to us that the county could cancel the sale and not give a reason. Here are the politicians and bureaucrats, slinging $20 million around, and when they suddenly pull the plug on a major deal that was two days away from going down, they can just give the media and the public the brushoff? Ladies and gentlemen of county government, what the heck is going on?

But of course, the county isn't really giving up. Reports are that it is going to try to borrow the $20 million from a bank in a "private placement." Like the aborted bond sale, it will have to be negotiated and closed in an awful hurry, because county voters are already casting votes on a ballot measure that will either kill or mortally wound any loan deal. The votes will be counted a week from Tuesday, and there is every indication that the measure will pass. After that, the cloud over the bonds becomes a destructive tornado.

What do the rogue county commissioners, who are blatantly defying the public vote, gain by taking the deal private? First and foremost, secrecy. Unlike the public bond sale, which required detailed public disclosure of the details of the deal, the private placement won't be televised, as it were, on the internet. And if the rebels can't see what's going on, it's going to be harder for them to continue to challenge the proceedings in court. At last report, they're planning to take the matter all the way to the state supreme court, but with the negotiations gone private, it will be difficult for them to know exactly what they're complaining about until it's too late.

That being said, the fact remains that shifting the deal to a bank doesn't alleviate the county's serious legal issues. Whether sold publicly or privately, the county's IOU is invalid unless the county's highly aggressive reading of state law is correct. We won't repeat what we wrote here yesterday about that, but it's not at all clear that in the end, the county's reading of the law will be upheld. It got a favorable ruling from a trial judge yesterday, but the appeal of that decision has not even begun, much less be decided. In a climate of uncertainty, somebody is going to have to take some risk in order for the $20 million to appear. Yesterday's cancellation indicates that the risk is too great for the public market. Maybe a bank will be willing to step up, but one has to wonder.

Meanwhile, the legal issues multiply, the more the county flails around. Is it putting the loan deal out for bid? Does it have to? And with all these crucial decisions being made behind closed doors, are the county commissioners complying fully with the state public meetings law? They'd better hope they are, because they could be personally liable for a lot of money if they aren't.

The right thing to do, of course, is for the county to tell Tri-Met, "Hey, we tried, but we just can't get it done." This set of commissioners, however, won't do that. And that is why there are going to be two new members of the board come January. The incumbents up for re-election are, figuratively, dead men walking. And with a new regime may come new county bureaucrats. The staff people working on this -- particularly the county finance director and county administrator -- have got to be thinking a little about their own futures. Would you put your career on the line over light rail? What a way to go.

Comments (22)

Does this mean that the new construction underway near OMSI is truly the next "bridge to nowhere"?

I doubt it. Tri-Met will get the $20 million from somewhere. If the rebels actually win in the long run, Earl the Pearl or somebody at the state or Metro will find the money for Tri-Met elsewhere.

Ya gotta wonder...WHAT were these commissioners promised, paid, or threatened with, to keep up this insane charade?
I sure wish one of these people would be courageous and tell the truth!

In better economic times local politicians had carte blanche to spend as they like, and to bend the rules where needed. Most everyone else looked the other way with the exception of a few local watchdogs. The people we see in office now grew up in this system, and know no other way now that economic times have turned. Nowhere along the way did anyone ever slap their hands as they were grabbing for more cookies. Now they are suddenly confounded by any scrutiny or opposition, and can only suppose this insurrection must be from people against, rather than for, any forward progress. Confused, they simply choose ignore all outside input and forge full speed ahead. Their inability to recognize the difference between progressive/careless vs. progressive/careful makes them (economically) dangerous and politically antiquated. The problem remains however that this behavior is part of a culture deeply embedded in Oregon politics, and especially in the Portland metro area.

From the 'personally liable' link:

"The evidence shows that Sorenson's conduct was fully supportive and participatory in Handy's scheme," Gillespie wrote. "Not only was he the third and a necessary vote, his vote was organized and decided in the private discussions that took place. He needed to go along with the scheme in order to get the issue addressed and the vote taken with the least amount of public discussion. As the Chair of the Board, he was able to accomplish that - and he did so."

Just because a quorum of the board never met in person did not mean that a quorum of the board was deliberating toward a decision outside of a public meeting.

"The evidence did not show that any three commissioners were ever in the same room at the same time talking about this matter," Gillespie wrote. "That does not mean that the continuing multiple conversations were not a deliberation. All involved knew that a quorum of the board was working toward a final decision outside of the public meeting context."

This "multiple conversations" process happens all the time, to line up the votes beforehand and ram the decision through during the public session, often without much discussion. The "mean girls" were quite good at this. And legal counsel often encourage it.

Remember, the county commissioners, school board members and municipal board members are not the sharpest tools in the shed (SamRand). It would be good if more of that bad behavior was punished with actual personal financial liability that their E&O insurance did not cover.

I'm pretty sure that by taking it private, they'll end up paying a good amount of money for the risk they're proposing. Any bank has the county by the short and curlies in this situation and can jack interest rates as it pleases.

In reading all of the comments on the many Oregonian and Pamplin news stories covering the People vs. Clackamas County why is it light rail supporters avoid open discussion about the actual issue?

The endless attempt to obscure and deceive by swaying off into the irrelevant and absurd is indicative of their weak and dishonest position.

They can't talk about state law that requires revenue bonds be subjected to public challenge because in this case they don't want them challenged.

They don't want to discuss the county budget and revenue forecast because they don't care how this project will adversely affect it.

They don't want to discuss the broader weaknesses in the project funding because they have blindly placed this borrowing and spending above all other considerations. Including above TriMet, transit & Public Safety.

They can't discuss what the lawsuits are truly about, what the plaintiff and rebels really are, why there is a rebellion or the very real rejection of the agenda that has failed across the region.
Instead all of their deceitful rhetoric is aimed at forcing upon unwilling communities what they insist imust be and what they decree is the only version of progress possible.

"The very future of the county is at stake if voters prevent their agenda" ?

Many of the severe funding problems involving Portland, TriMet, Metro Milwaukie and Clackamas County could be remedied if the project were simply scaled back to Tacoma.

The juvenile delinquent tantrum-like refusal to accept this reality is leading to far worse outcomes than a prudently reduced project. Including the imminent collapse of TriMet itself.

Everything about this project has produced the perfect storm of malfeasance and misappropriation that will result in severe consequences and sweeping reform.

When the project also soars over budget by 10s of millions (or more) we'll see the ultimate panic with the rats scrambling from the sinking ship.

By then the ridiculous sermons about a lovely public gathering plaza at the Park Avenue Station and the rest of the foolishness will be no longer heard.

And TriMet will finally enter Chapter 9.

I'm disappointed about how this issue is widely interpreted as a conservative vs. liberal issue. The comments on Oregonlive are filled with "teabagger" and "Obamacare" invective. I don't see how opposing expensive, poorly-conceived public projects makes someone a republican, or vice versa, because if light rail to Clackamas county ends up costing more to build and maintain than it generates in new property taxes and fares, then that's all money that can't be spent on services.

"because if light rail to Clackamas county ends up costing more to build and maintain than it generates in new property taxes and fares, then that's all money that can't be spent on services."

This is not the first adventure with light rail.

Not even in Clackamas County.

The MAX Green Line that was forced upon the county generated nothing but millions more being misappropriated, ripping off of essential services to pay for it and more crime to deal with.

At the same time they used UR to paying $40 million for that light rail boondoggle the county gave the Town Center Mall $24 million in borrowed Urban Renewal money to help expand their shopping mall.

The Green Line was ushered along with the same bogus claim we've heard with Milwaukie Light Rail, WES and every other MAX line.

Finally the voting public in Clackamas County is fighting back against the Streetcar & UR Foothills in to Lake Oswego, Light Rail and UR on McLoughlin and Metro's assault on Damascus and Boring.

Clackamas County needs to opt out of Trimet and Metro all together.

The first could be accomplished by a simple ballot measure... and a modern county-wide transit system could be implemented for a fraction of what Trimet is charging.

The second would be a bit more complicated since state law requires regional "smart growth" type plans (I think), and federal transportation dollars are only given to regional planning agencies.

I'm disappointed about how this issue is widely interpreted as a conservative vs. liberal issue. The comments on Oregonlive are filled with "teabagger" and "Obamacare" invective.

Redefining the real issue as such and then applying that sort of rhetoric to it is probably the quickest way to automatically garner public support for just about anything in this region, few questions asked.

Just recently a major European newsmag discusses outright lies in American politics...
A Campaign of Lies-US Candidates Unabashed in Stretching the Truth

"I'm disappointed about how this issue is widely interpreted as a conservative vs. liberal issue. The comments on Oregonlive are filled with "teabagger" and "Obamacare" invective."

I agree.

But that is how many thoughtful people dismissed Bill Sisemore's ballot measures to curtail some of the more excessive union activities. In a few more years we should all go back and look at some of those ballot measures. When PERS is totally killing the school system, with class sizes through the roof, many people will be wishing that somebody had put a check and balance on the union benefits and activities. Back when there was still time to make a difference.

As they say: "That which can not continue, won't".

Be careful not to try and apply that bizarre Lane County episode as having any relevance to the Clackamas County Commissioners' extravaganza with Harvey Rogers, Esq.

Clackamas County Cmsrs. may or may not have violated the Oregon Open Meeting Law, but they were in some jeopardy because of the composition of the bond offering and their short-tracking which may have violated the 60-day notice rule relating to those kinds of financial deals.

And, besides, that Lane County case is not a precedent, and the facts are not applicable. Most of all, it was a bogus political (as opposed to legal) case. To wit:

False Accusations
Commissioner Sorenson has been unjustly targeted



Pete’s continued work is even more impressive when one reviews the list of serious but baseless charges that have been made against him and which he has been required to deal with. It is important that we all know about those charges which make up an alarming pattern of misconduct by his opponents on the right.

The first was the charge that Pete (and other commissioners) violated the Oregon Open Meeting Law raised in the action (reportedly financed by Seneca Sawmill/ Aaron Jones) filed by Eleanor S. Dumdi and Edward M. Anderson against Rob Handy, Peter Sorenson, Bill Fleenor and the Board of County Commissioners. The case was tried without a jury by Judge Michael Gillespie of Coos County, who “made a finding” that Pete (and other commissioners including Faye Stewart) violated the Oregon Open Meeting Law. The decision was wrong. However, since the trial, that “finding” has been repeated over and over, even by many who know better.

As a member of the Oregon State Bar since 1953 and continuing in active practice since returning from the Air Force in 1956, I never make criticisms of a court’s decision casually. But I am very familiar with the Oregon Open Meeting Law having prosecuted an action for violation of its provisions as early as 1978. Judge Gillespie’s opinion is inconsistent with the plain language of the statute. I am not alone in this view. The Oregon Legislature has its own counsel, the Oregon legislative counsel. He has the statutory duty to perform legal research for the Legislature and its members on issues of Oregon law. Upon request of a legislator he reviewed the ruling of Judge Gillespie and concluded: “the reasoning of the court [Judge Gillespie] does not support the conclusion that a public meeting law violation occurred.” The Feb. 10 Register-Guard editorial restated that conclusion. Also, among the many attorneys I have conferred with on that issue, all have agreed with Oregon legislative counsel.

It is not a violation for one legislator or one commissioner to talk to another about a matter being considered. One-on-one discussions are expected and often necessary. It is only a violation of the Open Meeting Law if a “quorum” of the body deliberates together in private.

It is unfortunate that Judge Gillespie’s opinion was not appealed. Apparently because of costs and risks to all, rather than an appeal, a compromise was arrived at. The written settlement agreement signed by plaintiffs, defendants and the county administrator states among other things: “Non-admission: no party admits liability or wrongdoing.”

So to repeatedly accuse Pete as “guilty of violating the Open Meeting Law” is grossly misleading and unfair to all.

What is your point?

The court ruling is what matters in that case. Not some collection of opinions in the aftermath by those who never participated in any court proceeding.

Nothing you provided diminishes any of the signs of impropriety by Clackamas Count commissioners.

Nah, you just missed the point 3-401: apples & oranges. Current Clacko Cmsrs are really up to some no good. Lane County matter is a red herring. That was the essence of my point, provided with some context for the benefit of all interested parties. We're good.

Mojo, you wrote "It is only a violation of the Open Meeting Law if a 'quorum' of the body deliberates together in private".

Are you citing case law in your use of "together"? Does that mean the quorum has to meet face to face, or is a conference call "together"?

federal transportation dollars are only given to regional planning agencies.

Fine. Once Clackamas and Washington Counties split from TriMet and Metro, they can form their own donut-shaped MPO. Problem solved.

Clark County has their own MPO that is totally separate from Metro.

I'm disappointed about how this issue is widely interpreted as a conservative vs. liberal issue. The comments on Oregonlive are filled with "teabagger" and "Obamacare" invective.

Agreed. Earlier today and yesterday a so-called "transit advocate" got into a pissing match with me and called me "ageist" for not supporting his call for the free Youth Pass to be given only to Portland Public Schools students (but not to students of any other district within TriMet's service district).

I tend to lean liberal on many issues but I'm fed up with TriMet. The current management knows the problems are internal but they are living it up in the Empire Building scheme - so they successfully masterminded a ploy to blame the union for all of the financial faults.

I presented to TriMet a specific proposal that would have not only resolved the budget shortfall, but would have created a large budget surplus making fare increases a non-issue. It was, of course, ignored. TriMet has been building up its management ranks, employs an entire "Service Planning" department whose only job is to plan MAX lines, and engaged in some rather stupid construction projects (Green Line and WES) - while neglecting the basic maintenance needs of its service. The result is TriMet has a bus fleet - the backbone and core of the transit district - that is older than most other agencies' (with some buses as old as 22 years old - federal guidelines call for the lifespan of a bus to be 12 years old), that break down frequently and cause riders to give up on the system (lower revenues, higher maintenance expense), and burn more fuel than newer buses.

TriMet, like most transit agencies, got a good share of "Stimulus" money. Most agencies replaced their old buses with new ones, thus REDUCING their operating expenses while protecting service. TriMet felt that was a poor use of money and instead repainted a couple MAX stations, installed air conditioning at its soon-to-be-remodeled-for-low-level-staff administrative offices, replaced some concrete here and there, built a new gas station and car wash at Merlo Garage, and installed streetlighting on the I-205 bike path (which TriMet neither owns, nor operates, nor maintains!)

So...TriMet gets to argue that the bus system is expensive to operate. However it's because of their own internal decision making. The union employees didn't tell TriMet to keep operating buses that should have been shredded and remade into beer cans. The union employees didn't force TriMet into the fuel hedge that lost money. The union didn't force TriMet into building the WES line - planned at $80 million, budgeted at $120 million, total cost of $165 million.

It's just a matter of time before TriMet runs out of excuses, and declares Chapter 9. I personally believe that's why TriMet is aching to build out light rail now. So it can default on the bonds...its management flee to Australia (like former GM Fred Hansen did), and us citizens get stuck with the mess.

Eugene Weekly is not a reliable guide for anything, except perhaps movie listings. They're hacks of the worst sort pushing whatever it is they're pushing, particularly on behalf of Pete Sorenson. Their hit piece on Andy Stahl was an abomination. If you want ridiculous legal antics, look to Rob Handy's recent lawsuits. Complete lack of self awareness.

Let me make it clear I'm no fan of the other commissioners or the county administration. Those fools collectively have allowed spending to run out of control on both costs and budget choices. Lane County is a good candidate to be one of the first counties to go belly up. Certainly the largest.

Lee: I quoted the author, the esteemed and knowledgable Oregon lawyer, Art Johnson -- but "together" means together, phone or face.

Andrew: take a deep breath, man -- Attorney Art Johnson of Eugene is former president of the Oregon State Bar, former president of the Oregon Trial Lawyers Association, and former Eugene city attorney. He is also a co-owner of Eugene Weekly.

Keep your eye on the ball, people.

Johnson has a pretty resume but the quality of EW's journalism comes out every Thursday for all to see.

There are a few salient facts to bear in mind:

Voters approved Portland/Gresham light rail.

Crime went up to the point that the Gresham mayor devoted police resources to the line.

Seeing this, voters declined to approve funding for Portland/Hillsboro light rail.

Our masters built it anyway. Crime increased.

Voters declined to approve construction of Interstate light rail. Our masters built it anyway. And then they decided to stop the charade of asking for voter input.

They built the line to Clackamas Town Center. According to data from the Clackamas County Sheriff's office, crime increased 32% in that area, even as it declined in the rest of the County.

For the price of the 7.3-mile light rail "extension" into Milwaukie, Tri-Met could have built a dedicated bus rapid transit lane-set. They could also have purchased around 40 state-of-the-art double-decker buses with reclining crushed-velour seats, head-rest high-definition television, wi-fi, and sufficient staff to maintain and run 16 of the buses every 15 minutes - 24/7, 365 (the remaining buses would be available for replacement, or in emergency situations, such as when 1/4" of snow brings light rail to a halt).

All riders would be charged nothing, and each would receive a free cup of coffee or tea.

There would be enough money left over to provide each incoming high-school freshman a free iPad.

And you could do all of that for the next 150 years.

Light rail: how "progressive".

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