City of Portland running out of credit
Here's a fascinating document from the Sam Rand holdovers in the City of Portland finance bureau (Motto: "Put it on plastic, honey, it's like gettin' it for free"). Willy Week unearthed it this week, highlighting its concern about the lack of funds available for adequate building maintenance. But it also contains an ominous note about the city's borrowing capacity:
City policy establishes debt limits for different types of debt, including self supporting and non-self supporting debt secured by the General Fund. These limits are put in place to avoid the City’s over-commitment of resources to the retirement of indebtedness and are a factor in maintaining Moody’s Aaa bond rating on the City’s General Fund-backed debt. For self-supporting General Fund backed debt the limit is 1% of Real Market Value and for non-self supporting debt the limit is the lower of 1% of Real Market Value or debt service up to 7% of General Fund revenue. Due to reductions in Real Market Value and General Fund revenue as a result of the recession, the City has come closer to reaching those policy limits. The City will need to prioritize debt proposals against these limits until there is sufficient growth in Real Market Value, General Fund revenue and retirement of existing debt.
The financial house of cards is starting to look shaky, even to the reckless and inept bureaucracy.
| Posted at 3:28 PM | Permalink |
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Comments (9)
And that financial irresponsibility is different from the state or federal government, how?
Posted by ltjd | January 11, 2013 5:21 PM
Did someone say it was?
Posted by Jack Bog | January 11, 2013 5:37 PM
And now we know why Sam decided not to go for a second term. He got his cut and paid his favors to his buddies on credit, and now it's up to everyone else to clean up his mess. Is it possible to garnishee a public official's future pay if a city goes bankrupt due to his malfeasance and/or incompetence?
Posted by Texas Triffid Ranch | January 11, 2013 5:40 PM
It's beyond sad that CoP's financial director Enge acknowledges that less than half of needed dollars are being allocated to maintain Portland's buildings, but then goes on to say "we'll need to pass a bond" for the difference. What about budgeting for upkeep. Most people do, why not government?
It's time to get rid of those who think like this. I hope Hales sees the light to fiscal sanity.
Posted by lw | January 11, 2013 7:52 PM
I say we tear down City Hall and the Portland Building, end all the leases...and force City Hall's staff and Bureaus to move into Streetcars.
It isn't like anyone's paying to ride in them, nor the serve most people anyways. So set them up and let the Streetcars serve as a City Hall!
Posted by Erik H. | January 11, 2013 9:37 PM
Sammyboy couldn’t manage his own money. How did anybody expect he could manage the City’s money (or anything else for that matter. All he did in the last four years was max out the City’s credit card to pay for his misaligned pet priorities and projects.
Posted by TR | January 11, 2013 11:18 PM
Sammyboy couldn’t manage his own money. . .
The rest of the council went along with most of this.
Posted by clinamen | January 11, 2013 11:36 PM
The other problem is that because of Measure 50, there is no real incentive for county assessors to get the "Real Market Value" right.
In fact, the incentives are stacked in favor of assessors puffing up the RMV. With higher RMVs, local governments can have (1) bigger debt loads, and (2) more urban renewal areas.
I've had my house assessed a few times over the years, and every time the assessed value is lower than the county's RMV.
Posted by Garage Wine | January 12, 2013 6:57 AM
I think he just heard there's a flu virus spreading and thought he'd return to fight it.
Posted by Newleaf | January 12, 2013 9:44 AM