Bracing for a potential shortfall in city revenue and future emergency spending, Portland’s City Council is poised to authorize $100 million in revenue bonds to keep the city functioning during the pandemic.
The ordinance, discussed by the City Council on Wednesday and headed toward a vote next week, would allow the city to have cash available should emergency needs arise. Calling the funds “a backstop of last resort,” Mayor Ted Wheeler made it clear he’s not eager to bring on debt for the city but wants to have cash at the ready.
“While I don’t anticipate needing it, I want to make sure the council has all of the tools at its disposal to ensure that we have financial resources we need during this crisis,” Wheeler said.
The money could be used to pay for emergency needs such as materials and staffing for temporary shelters and personal protective equipment for first responders, according to Dylan Rivera, a spokesperson for the city’s Joint Information Center. The city expects they would be repaid through federal disaster aid.
According to a summary of the ordinance submitted to the council, executing but not using a line of credit could cost the city between $250,000 and $500,000 per year in fees.
Commissioner Jo Ann Hardesty said at Wednesday’s council meeting she was worried about a lack of oversight for the funds, should officials choose to tap into them.
“My concern is unless the City Council is leading the effort of determining what the real priorities are, those decisions will not be made in the public eye,” Hardesty said. “I am concerned that the right hand won’t know what the left hand is doing.”
The city’s chief financial officer, Michelle Kirby, emphasized that Portland would not be purchasing or spending on anything that “didn’t already have council authorization.” After an ask from Wheeler, the officials agreed to inform the council whenever the city uses the line of credit.
The council also discussed selling revenue bonds that could provide up to $745 million for the Portland Water Bureau’s projects, namely the filtration project to treat the Bull Run Watershed for the parasite cryptosporidium. The bonds would allow the water bureau to move forward in its pursuit of a federal low-interest loan.
That loan, which would come through the EPA’s Water Infrastructure Finance and Innovation Act program, would lock in low interest rates and offer the city a longer period of time to pay the money back than they would ordinarily have.