If you had an income stream that had gone up 40 percent over the last ten years, you might think you were doing well. The city of Portland's property tax revenue has gone up that much. But as A new audit finds the city's debts and liabilities are outpacing that revenue growth.
The city of Portland got 41 percent more property tax money in 2010 than it did in 2001. But the amount available for city services hasn't grown nearly that much. The problem? Debts and liabilities grew 73 percent in that same timeframe.
For instance, audits director, Drummond Kahn says the city has created urban renewal districts, where debt has boosted city priorities like transit and economic development.
"But they grew – that's 88 percent growth in ten years, in the amount of urban renewal debt," Kahn said.
Kahn says the new "fiscal sustainability" audit looked at the total of the city's obligations. It's like a family looking at all of its credit cards together. But it's hard to ignore that some of the cards are running up bigger bills than others.
LaVonne Griffin-Valade: "The fact that urban renewal is the big gorilla in the living room means this is an opportunity for them to re-evaluate," said LaVonne Griffin-Valade, Kahn's boss.
Griffin-Valade, the city's elected auditor. And by "them" she means city commissioners. She says the mounting debts are important – but not catastrophic.
"This is the time to act. The city's financial condition is stable, right now," said Griffin-Valade.
The audit warns that if debt obligations continue to grow, it could put a real squeeze on city finances in the future.
The audit encourages city leaders to look at the cumulative effect of obligations like urban renewal, and police and firefighter pensions. It recommends reducing pension costs – or changing how they're funded. It doesn't have a specific approach for urban renewal.
Griffin-Valade has requested a council work session to discuss the new audit.