Like many Oregon counties, Clackamas County needs to replace or retrofit public buildings. The county’s own assessment found that its courthouse would be likely to slide into the Willamette River in the event of a major earthquake. The county commission is close to finalizing a deal to build a new courthouse using funds from the state, county and a private investment firm. It’s not the first building project in Oregon to use a public-private partnership, but it appears to be the first such deal to build a public building. Clackamas County Commission Chair Tootie Smith tells us more about why a new courthouse is needed right now, and about the unusual funding model.
Note: The following transcript was created by a computer and edited by a volunteer.
Dave Miller: We start today with Clackamas County’s plans for a new courthouse, and a novel way to pay for it. According to the county’s assessment, the current courthouse would likely slide into the Willamette River in the event of a major earthquake. So, like Multnomah County a few years ago, they decided to build a new one, but instead of asking voters to pay for a construction bond, the Clackamas County Commission is going to partner with a private investor. Tootie Smith is the chair of the Clackamas County Commission. She joins us now with more details. Welcome back.
Tootie Smith: Hi.
Miller: Can you give us a sense for what’s wrong with the current courthouse?
Smith: Well, the court house is really old, for one. It was built in 1936 and we’ve totally outgrown it. It has safety concerns with mechanical, electrical, plumbing, they’re functionally obsolete. We spend a lot of money on maintenance and operations every year, but it’s just not enough. There’s also a security challenge; currently, victims, witnesses, and defendants share the same hallways and common areas, and that’s not good. You can’t have the victims coming into court, running into the hallway or the same restroom as the criminals who are being prosecuted and tried for the crime. That just doesn’t work.
Miller: Is that a question of size, that there’s just that many more cases being processed in Clackamas County, than decades ago when it was built?
Smith: Oh absolutely the size. This courthouse was built, like I say, with a population of 50,000 in 1936. Today, we have a population close to 420,000, so we’ve really outgrown it. We have remodeled and remodeled and remodeled, and added in courtrooms over time. We now have eleven judges, but, population wise, we could have fourteen judges.
Miller: So remodels happened in the past, but a major renovation or addition, nevertheless, wasn’t a possibility; it had to be a new building?
Smith: Well, it does, because there’s no space to add on down there, and it sits practically right on the Willamette River. We are three feet off the Willamette River. You can’t see it, because Highway 99 is paved over the top, so it’s built on sand, and the river flows and it just continually erodes the sand. We have one of our judges who walks around with a yardstick; her office sits on the corner, and every week she goes out and measures how much it settles. That’s a bit disconcerting.
Miller: So there is broad agreement that a new courthouse is needed, but the question has been how to pay for it. Last year, the price was estimated to be $189 million. Now it’s $313 million. What went through your mind when you heard that price increase?
Smith: I about had a heart attack, as you can imagine, because we’ve been planning, and we’ve been saving, and we are going to make adjustments in our spending. But as you know, there’s inflation. The Oregon State Legislature has agreed to pay 50% share. We went back to the Legislature and the Justice Department and said, ‘would you help us with the higher price?’ We expect to have final word on that in the next legislative session, ut all indications are, yes. The Justice Department is putting the overage in their budget.
We are also able to add site improvements, like the parking lots, road improvements, that type of infrastructure that’s always needed in new construction. That’s why the price went up, too. We were going to try to pay for that out of the general fund, but we’re able to leverage it with the state and also bond for some of that. So that’s why the price went up, too.
Miller: The price is really striking when you compare it to what Multnomah County paid not that long ago, a couple of years ago, for its new courthouse, because the prices are pretty similar. Multnomah County spent $325 million for a new courthouse, but that one is in downtown Portland, it has 44 courtrooms, which is many more, it’s three times as many as you’re talking about, and it was twice the size, and yet it was the same price. It’s an example of what inflation just in the last couple of years has meant.
Did you consider asking voters to pay for this in the form of a construction bond? That’s a very common way that municipalities pay for big capital projects, including Multnomah County’s new courthouse.
Smith: We have polled Clackamas County voters and consistently they have said no. They are resistant to raising their property taxes to pay for a courthouse. So we are citing the need of a courthouse, as it is a core county service that we really must provide for our citizens. It’s the right time to do it. With the P3 model that we’ve chosen, we’re actually saving anywhere from 10% to 25% over standard construction operations.
Miller: What is a P3 model?
Smith: P3 is the short version for Public Private Partnership. Obviously we’re the public, bringing public dollars, the use is public, and we have engaged the private sector to come in and work within the guidelines of the public entity. What they do is they design, they do the architecture, they do the construction, the build out, and the financing. Since we approved this P3 model this month, the price is set. It won’t go up. In August, they will approve the financing, the financing will be finalized and our interest rates on the bonds going forward will also be set for 30 years.
Miller: Can you explain how it’s going to work after that, in terms of what the county is going to be paying?
Smith: The county will be paying about 50% of the $313 million. Our payments on that are around $15 million a year. Our payments will not start until 2025, when construction is finished and we occupy the building.
Miller: Fifteen million, and that’s what you’re gonna be paying over the course of decades to this private company?
Smith: Yes.
Miller: How does that compare to what servicing a bond would have been? In the end, taxpayers are paying for all of this, whether it’s a new levy or not, but how would that have worked in terms of what you’d be paying?
Smith: Actually, we’re saving money by locking in the interest rate. You have to understand, courthouses have a lot of maintenance, they have a lot of operations, because hundreds of people use them daily. It’s not like other government buildings, where access is restricted and you don’t see a great amount of public going through them. With that in mind, we also in this $15 million payment have included operations and maintenance for 30 years. So, Dave, when the courthouse is paid for in 30 years, we will essentially still have a brand new building, because the HVAC system that will go out, let’s say, in 12 years or 20 years, will be replaced. If there’s a roof leak or if there’s a plumbing situation, that will be replaced along the way, and we will have a very top notch, functional building that will last 50 to 60 to 70 to 80 years.
Miller: Is that fair to say? I mean, ideally, you’ll have a well maintained building, not a brand new one, Right? It’s still going to be 30 years old, or 15 years old. The hope is just that it’ll be in good condition. I think that’s what you’re trying to say.
Smith: It will be in very good condition. You look at the courthouse that we have now, they’re still using it, and yeah, it looks old, but it does have character. So in 30 to 40 to 50 years, this building is a newer design by standards today, but it will maintain its character and operation ability for decades and decades to come.
Miller: Before we go, I want to ask you about elections. I’m assuming that a lot of our listeners remember the debacle that happened in Clackamas County in the primary, where misprinted ballots couldn’t be read by the machines and, despite pointed questions from you and other members of the commission, initially there was very little urgency on the part of the elected county clerk to deal with this issue. What lessons did you personally take from that experience?
Smith: Well, you have to understand, in Clackamas County our elections clerk is an independently elected official. We offered to come in and help weeks before the May 17th election day. It was her decision not to accept our help. I could not force her. It was her decision not to do that. She didn’t see any urgency in it. For me, where there’s been a huge outcry, ‘well, why don’t you remove the clerk?’ Well, we can’t remove the clerk. She’s independently elected. The only thing we can do is help and advise, and if somebody does not want to accept your help or your advice, at the end of the day, there’s not anything that we can do about it.
Miller: So the lesson you took is what? Because what you’ve just described seems like public misunderstandings, or broadly about the way elections function in Clackamas County. So what was your takeaway?
Smith: Well, my takeaway is, I can’t force anybody to do anything they don’t want to do. It’s a personal responsibility of all people who are elected by their constituents to answer and be responsible to their constituents. That’s my lesson I took away. The lesson for me personally, in my public service, is I try to listen to all sides at all times, and go forward, and make the best decision for the greatest good of Clackamas County residents. That’s all I can do, Dave.
Miller: How do you think the November election is going to go? In 20 seconds.
Smith: Oh they’re going to go well. We’ve advised, and Sherry has gone through her systems. By the way, in our August 10th board meeting, she’s gonna come before our commission and give us an after action report. We’re going to ask very pointed questions. We’re going to ask her this question: what did she learn? What improvements has she made? I know one improvement is she hired a new printer.
Miller: Tootie Smith, thank you.
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