Multnomah County goes deep in hole for Sellwood Bridge
Multnomah County is borrowing a whopping $128 million over the next week to pay its share of the cost of replacing the Sellwood Bridge. The official sales pitch for the deal is here. The bonds will be payable over 20 years (if they don't get refinanced, of course), and they'll be backed by the county's "full faith and credit," which is fancy talk for putting property taxes at risk. Interest costs alone are projected to run about $71.5 million over the life of the deal, and the interest the banks and other bondholders get paid will all be exempt from income taxes.
Of the $128 million, the county has already borrowed and spent $40 million under shadowy lines of credit that come due in the next few weeks; the new bonds will pay off these lines, and the rest of the loan will go into the kitty for the much-delayed bridge replacement. But of course, not before a bunch of hangers-on get paid: Portland bond lawyer Harvey Rogers and the money consultants at Seattle-Northwest Securities -- the crew that pushed through the rogue Mystery Train bonds for the now-dethroned Clackamas County commissioners -- have their hands in the till on this one as well.
The City of Portland will be going into hock quite shortly for its contribution to the bridge project, too. At last report, the city bonds were going to be for $70 million, in a deal that is scheduled go down in December.
The huge loan to the county gives observers a chance to take a look at the county's current financial picture. It isn't terrible, but neither is it great. The bonds are rated Aa1 by Moody's, which is three rungs below a top rating of Aaa. Given that the creditors can come after property taxes for repayment, that's not exactly a vote of confidence.
As of the end of 2011, the county had an unfunded pension liability of about $292 million, and as of the end of 2010, it had other unfunded retirement liabilities, for retiree health care and the like, of $154.5 million. Since these costs are going up rather than down these days, one can be fairly confident that the current figures for those liabilities are at least $450 million.
As for bonds and other loans, without the bridge replacement debt the county is in the hole for about $217.7 million, which will now jump to $345.7 million. Thus, combined with the retirement burdens, the county's long-term debt stands at about $800 million. The county's population is about 742,000, which means that the long-term debt works out to about $1,100 per person.
Of course, we who live within the City of Portland are staring at a city debt load of more than 10 times that amount, and so this additional mortgaging of the future may seem pretty small by comparison. But the county's debt, including the loan for the bridge, is another log on an already big pile.
And clearly the county's moving in the wrong direction. When we examined its debt picture five years ago, the county's debt per resident was about $545 -- about half of what it now. Doubling down on debt over a mere five years is a bad sign.
| Posted at 9:45 AM | Permalink |
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Comments (12)
If Multnomah County feels that this bridge is Clackamas County's responsibility, then why in the world is Multnomah County borrowing so much money?
There is absolutely ZERO legal obligation that the county must keep the bridge. It could shut the bridge down, barricade it, even sell the bridge for scrap. It could sell it to a private operator if it wanted to.
The fact the county is WILLINGLY paying this...just underscores and boldfaces the fact it's a Multnomah County Bridge, and the elected officials of Multnomah County want to pay for and replace it. So if you are a Multnomah County resident who is still bellyaching how it is a Clackamas County problem - get over yourself. Your problem is with YOUR County Commission, not the good people of Clackamas County.
Posted by Erik H. | November 28, 2012 10:21 AM
They just need to buy a powerball ticket and win. Problem solved.
Posted by John Benton | November 28, 2012 10:39 AM
Right! 1 chance in over 175 million, that anything will change!
Posted by Portland Native | November 28, 2012 10:52 AM
So if you are a Multnomah County resident who is still bellyaching how it is a Clackamas County problem - get over yourself.
Are there really people seriously saying this?
Posted by Jack Bog | November 28, 2012 10:53 AM
Are there really people seriously saying this?
Don't know if you would consider the comment section of the Oregonian "serious" or not, but it is a major theme in any story about the Sellwood bridge.
Posted by Ex-bartender | November 28, 2012 12:02 PM
Shut it down?
But the West Hills crowd needs an easy way to get to Waverley CC.
Posted by m | November 28, 2012 12:28 PM
It would have made sense to shut it down, or at least turn it over to bikes and peds. Then we would find out who really wants the replacement.
Posted by Allan L. | November 28, 2012 12:31 PM
Seems to me that when the economic picture worldwide is questionable, that at least local communities would be very prudent about acquiring more debt. Keeping money circulating in the local area rather than be beholden to those we would be indebted to. This harms local businesses when property taxes and all else it seems increasing and less money available to support businesses.
Posted by clinamen | November 28, 2012 12:41 PM
Allan,
The Sellwood Bridge is a regional asset: it benefits employers in Washington and Multnomah Counties more than it benefits Clackamas County.
Why? Because the predominant flow of commuter traffic is from lower cost housing to higher cost employment centers, then home again to the suburbs.
Having lived near the Sellwood Bridge for 16 years, I can tell you the "inbound" commute was from the Eastside to the Westide in the morning, then reversed in the afternoon.
All businesses in the vicinity depend on freight transport which (when diverted from the Sellwood) shifted to the nearest alternatives (Ross Island or I-205) and added congestion/additional miles to many roads.
The fact that fire engines were prohibited from crossing the Sellwood just underscored the degree to which it had been allowed to deteriorate.
Converting the Sellwood Bridge to pedestrian use is a silly idea: I can only hope you were being sarcastic.
The bridge should have been expanded to include two automobile lanes in each direction, and Tacoma Street returned to it's pre traffic-calming four lanes (even if some housing had to be condemned).
Replacing the busiest (and oldest) two lane bridge in the state/metro area with another two lane bridge is incredibly short sighted and is a testament to the failure of regional "Transportation Planning". The Sellwood Neighborhood Association will endure a prolonged commute, morning and night, for the rest of their lives: all thanks to the perpetuation of an artificial bottleneck in the name of "sustainability" and multi-modal alternatives that have consistently failed to meet the planner's pollyanna objectives.
Posted by Mister Tee | November 28, 2012 3:48 PM
"Doubling down on debt over a mere five years is a bad sign."
Nah, it just means all those services we want and thought we paid for, like keeping the mentally ill off the streets, means we'll either pay some new taxes or we won't get them.
Because we are greedy.
See how simple? Maybe I should be a politician.
Posted by Steve | November 28, 2012 4:03 PM
Mister Tee: The residents of Sellwood didn't oppose a four lane bridge because they had some sort of "sustainable" fantasy, they opposed it because they were afraid it would have turned Tacoma into a defacto 4-lane highway for commuters from the burbs heading to and from downtown. It's the same reason why the Mt. Hood Freeway was killed many years ago, the residents thought a larger bridge would degrade the quality of life in their neighborhood and they decided that they prefer a lengthier commute if it means the character of the neighborhood is maintained.
Argue with that if you like, but you can't argue that the local residents were fighting a pro-bike/train fight, it's simply not true.
Posted by Nobody | November 28, 2012 4:49 PM
Nobody: I said nothing about a pro-bike/train fight. You must be thinking of another commenter. I did respond to Allan's whimsimcal proposal of closing Sellwood to automobile traffic and converting it to bike/pedo only access.
I doubt that "the residents" had any consensus about a 2-lane or 4-lane bridge: I'm sure that no public process sought out the opinion of all residents.
I also doubt that a legitimate 4-lane for cars Sellwood Bridge option (with a reversion to 4 lanes on Tacoma, as it was historically a 4 lane road) was seriously considered.
I do believe the duration of the peak commute (and smog) will more than double on a two lane auto access vs. a four lane auto access.
If the neighborhood wanted livability, then other options should have been considered (like a half mile long sunken on-ramp between the eastern Sellwood egress and 17th) for thru traffic. As it is, they're going to be choking on exhaust for longer and longer periods of time each day as the auto traffic increases over time.
Tacoma is IN FACT, a 4-lane highway with a two lane bottleneck from 17th to the Bridge. There are two lanes leading up to it (from Macadam) and four lanes leading up to it on the eastside (if you count Tacoma and McGloughlin).
Not my problem any longer: I moved to Vancouver and will access it maybe twice a year.
Posted by Mister Tee | November 29, 2012 2:14 PM