Thursday, December 6, 2007

City Council Meeting: City Layoffs, $10.5M Budget Shortfall, $5M More Debt

Report from 12/05/07 Bend City Council Meeting

Biggest news: the City is laying off 10 employees as of March 31 and another 35 jobs will be "affected" by current revenue shortfalls. I discussed the revenue shortfalls in detail in the BendBubble2 comments earlier today. Year-to-date overall revenues are off $10.5 million or 11% through the end of October. Much more detail is at the end of this post.

Juniper Ridge news: Council authorized several things that will cost Bend taxpayers more money.
1) $100,000 for a traffic study in NE Bend, related to the Cooley Road Interchange
2) $5,000,000 in additional debt through municipal bond sales, of which $3,725,000 will be used for the Cooley Rd./18th Street improvements aka Les Schwab's new driveway. Details here.

This is part of the "Short Term Financing Plan for Juniper Ridge":
Costs incurred in the Juniper Ridge Construction and Operating Fund, not including the change order and additional development costs discussed above, total approximately $8.3 million to date since FY2005-06 ($5.8 million in construction and City engineering costs, and $2.5 million in consulting and operating costs since FY2005-06). The $8.3 million will be funded/financed by a bond issuance of $5 million (expected to be issued in December) and the $3 million of Les Schwab property sale proceeds (expected in November or December) and $300,000 of tax increment revenues. The $5 million bond issuance will be secured by the City’s full faith and credit and is expected to be repaid with Juniper Ridge tax increment revenues and property sales.

This additional short-term debt of $1,662,000 will also be secured by the City’s full faith and credit and is expected to be repaid with property sales.

This is one more step in that march to over $12.6 million and counting for the Juniper Ridge project, which has only one (tentative) tenant. As shown in the 11/19/07 "Juniper Ridge Costs And Financings Needed Issue Summary" the costs so far are:
The Juniper Ridge fund has incurred $12.6 million to date as follows (see attached Detail of Juniper Ridge Costs Through FY 07-08):

FY05-06 thru FY07-08

Construction of infrastructure (Cooley impvs, pump station, utilities & Les Schwab SDCs ) $8,291,388
Payment to Juniper Ridge Partners (per MOU sect 11.5) $2,500,000
Legal and consulting $923,463
Personnel and overhead costs $917,033

Total incurred and required $12,631,884

And for those of you who think there is some sort of firewall between Juniper Ridge and the City General Fund, note this:
Funding/Financing of Costs (assuming land sales Do Not occur within 2 years)

If land sale do not occur within 2 years, General Fund discretionary revenues or other revenue sources will be needed to repay the line of credit.

And if Les Schwab doesn't deliver that "Contingency Removal Notice" to the City by 12/31/07, all bets are off. Even if LS does buy all 20 acres, we still need the Cooley Road/Hwy 97 intersection fixed. I can't imagine that happening faster than in 18 months, and more likely 24-36 months. Which puts potential land sales a long way out.

And every single company that is looking to buy at Juniper Ridge is going to use the Les Schwab sweetheart deal as a basic price negotiating tool. I just can't see how this place is going to pay for itself, as it now stands.

But Bend taxpayers will still be on the hook. $12,631,884 spread over 77,780 people is $162 per person. Not counting interest on debt, services, maintenance, etc. To say nothing of the opportunity cost of putting the City into such a financial bind.

One other small thing that might affect me and my ability to continue to dig up docs from the city was buried in the City Fee Amendment Resolution":
"Section 6.9.07 – Change the description of the fee charged for Records Research to “Time Required to Respond to Public Records Request”."
I'll be able to tell pretty quick if there is any change, as I'm putting together a request for an listing of any and all payments to Juniper Ridge Partners and what department they were charged to. Have they been paid anything? Is the $2.5 million buyout in addition to the $60,000 per month agreement? Or did that $60,000 per month never start, because the DDU was never finalized? I still have lots of questions.

October, 2007 City Budget Details, as noted at the start of this post:
P. 31 Revenue Totals By Dept.

The Good
Tourism Fund +30% +$114,000 (they are still coming in throngs)
Stormwater Fund +38% +$215K (that new stormwater fee is working)
Downtown Parking Fund +64% +$216K (mostly "in-lieu of" fees)

The Bad
SDC Revenue -10% -$465K
Building Fund -12% -$235K

The Ugly
Planning Fund -43% -$639K
Affordable Housing Fund -39% -$237K
Trans Construction Fund -25% -$934K
Intra-Gov Services -23% -$3.32 Million

Overall Revs -11% -$10.5 Million

P. 32 Total Expenditures by Dept.
Overall Expenses
Budget $63,406,202
Actual $53,418,300
Cuts-Affordable Housing, cut 90%, Accessibility Construction, cut 71%
Intra-Gov Services, cut 40%, $6.2M

Other Requirements
Budget $8,814,960
Actual $6,651,025
Cuts-Future Construction/Facilities and Future Major Maintenance Reserves

Change in Working Capital
Budget -$14.6M
Actual -9.9M

Net Available Working Capital
Budget $24.1M
Actual $25.7M

So things aren't dire, yet. But we can't keep spending $10 to $15 million a year more than we take in, that's for sure.