Sunday, January 13, 2008

About the revenue shortfall for the city that started in early 2007, and which caught city officials by 'surprise:'

BAD SHOW.

Look, I started this blog in December, 2006, and I was a relative latecomer. It was pretty clear to anyone paying attention that there was going to be a slowdown, if it hadn't already started.

I know that both Paul-doh and I blogged the irony of the city raising their fee structure just as building was slowing.

This is going to sound harsh, but the only explanation to me is that city officials and media were so close to the real estate community, which was desperate to keep the illusion of the ever expanding Bend alive, that they simply refused to see what was happening. They saw the housing bubble bloggers as alarmists, and preferred to believe the "Bend is Different" folk.

This is a case where I can't let them off the hook, because I was actively blogging about these very issues at the same time this was going on, and it took an extremely obtuse mentality to not see the slowdown coming. Hell, they had access to the real numbers, which were clearly showing a slowdown, but they kept guzzling the kool-aid.

I've said it recently; they need to scale back their grandiose plans, and concentrate in building some available industrial land, or even more basic, fill the huge number of potholes we're going to have.

Hint to the city planners: we're about to have a bunch of potholes. Don't let it be a surprise.
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5 comments:

jacie said...

Right on with regard to more
potholes. The shame of it is if
and when the city gets excess money
again it will spend it on more 2030
visionary processes.

January 13, 2008 at 5:02:00 PM PST
Anonymous said...

The city will not get any money (2030) for a generation.

Now to the facts, all the people who currently run city hall have no problem in picking priority's.

Capell is an owner in family of Knife-River, who just got $10M for building the Les Schwab lot @ Juniper-Ridge all off-budget, all paid 100% by city of bend to the richest native oregon company. How is it we can't afford cop cars, ... but we can afford to pay for Les Schwab campus???

The reason of course is the city is running two sets of books, one public, and the other on the side. The side book-set is littered with debt.

Garzini says "run bend like a business", what he means is have a thousand dollars of debt for every dollar in assets, this is how 'corporations' run today. This is how Capell's "Knife River", can keep the Millions/Month of city money coming their way, by city borrowing bonds. These are the people who run the city. Soon ALL of bends tax revenue will go to servicing debt, who cares by that time Capell will have retired, and/or moved on.

Then there are the SDC's, nobody had to pay the actual cost during the people boom, they were deferred, and now that the boom is over, the richest people in Bend, are going to defer the payment for another seven years, all these shells will be bankrupt by the time the city of bend, realizes that the money isn't coming.

Why should we care, these same people asking for an extension in payment are the very people who run city hall.

Bill Friedman & Linda Johnson collect a 50% tax on all condo fees in the city. ( Ridgefield 'Cascade Bookkeeping' collects 50% of HOA fee's as accounting fee. )

Duncan, go back to your comic books.

January 13, 2008 at 7:26:00 PM PST
Anonymous said...

First of all DUNC, these fee's should have been raised a long time ago, the fact that you and HOMER(IHTBYB) both thinks the fees should have been raised, shows clearly to all that you & homer, are just as much a part of the BEND/SDC problem. The SDC should have gone up PRE BULL, but didn't, and thus the cheap SDC created the BULL, and made Bend the #1 over-priced RE in in the country. The fact that you & homer want to keep the rates low, show as always that you & homer are the fucking problem in Bend, your NO different than Friedman, or anything other Bend parasite.

***
Bend was warned about its budget
By Andy High / Bulletin guest columnist
Published: January 13. 2008 5:00AM PST

The warning signs were given to the city that there would be a shortfall.

It is really troubling to watch the city of Bend go through budget cuts right now when it was warned its budget and projected building and planning permit volumes were way too optimistic last year. On June 19, the Central Oregon Builders Association warned the City Council that the projected permit volumes were too high and should be scaled back.

City Manager Andy Anderson refused to listen and decided to proceed as planned. Now that he is gone, the city finds itself in a tough situation that he helped put all of us in. Mr. Anderson also put the community and council in the unfortunate position of laying off good employees.

In mid-2006, COBA started to see the reduction in new home starts and warned jurisdictions that they need to reflect that in upcoming budgets.

Most refused to listen and increased or planned to maintain permit levels of 2005 to 2006 and at the same time increased fees drastically.

In the city of Bend, planning fees have gone up 150 percent in the last two years and building permit fees rose 35 percent. That is in addition to double-digit increases in system development charges and new affordable housing tax.

Why have we seen such a drastic decrease in building new homes in Central Oregon, one reason is the current market. The other is cost of doing business with cities has gone up on average in Bend with increase in SDCs and fees the average 1,500-square-foot home will be $20,000 in fees before you can even move the dirt. With the high land prices and the down turn in the market this has made it virtually impossible to make projects pencil at today’s numbers. When this happens it leaves jurisdictions with less revenue by not adding new property taxes thus taking longer to pay off construction bonds and will leave budgets short.

The city of Bend’s budget committee also questioned the large increases to the budget. The city planned back in May a 19 percent increase in this year’s fiscal budget. The committee questioned that type of increase along with Councilor Chris Telfer. Why did the city refuse to listen to the committee members and councilors?

On Jan. 2 at the council meeting, they discussed the impacts to the urban growth boundary and the delays it will have on it because of the down turn in permit numbers. This as well could have been avoided if the city would have listened and not put long-range planning for the city into a fee supported system. Long range planning benefits all of us, not just the development community. When a city is not growing it is the job of long-range planning to figure out how to grow and generate new revenue for the community. Then, when times are good, it is the job of long-range planning to manage growth through the UGB and development code along with other mechanisms.

Time and time again the city has been warned and refused to listen. It is my hope that the city under new management will begin to listen and take seriously the on the ground experience of those who want to see the city succeed and its residents prosper.

The city should prepare itself for further cuts in non-emergency personnel and spending, and they should not wait long to act as it will be more painful for employees to make changes the longer they wait.

The key to making wise decisions in upcoming budgets will be to listen to businesses and industry officials because they will be able to give us a comprehensive look at what is happening locally.

Andy High is director of Government Affairs for the Central Oregon Builders Association

January 13, 2008 at 7:40:00 PM PST
Anonymous said...

I have zero sympathy for Andy High and the builders, who only 'warned' the city that there was a slowdown when fees were being raised. Gee, thanks.

***


Dunc,

It goes deeper than that. Its not a fucking accident that Bend was #1 CNNFN for RE appreciation 05,06,07 in USA. It was because,...

1.) Marketing PR from city of Bend, millions per year to get them here to buy condo's
2.) DUMBYA zero-down is money had a little, but all things equal this was true everywhere.
3.) Low to zero SDC cost, when the cost of a new house to Bend is-was $60k/home, the builder was paying less than $10k. This subsidy encouraged builders from all over USA to come here because they didn't have to FRONT SDC money.

The result, Bend got over-built, then when the city ( ANDERSON ), knew the city was broke, and raised the SDC a measly 5%, the BUILDERS (COBA) went out of their fucking minds and had him fired.

Today, the biggest developer Hollern,Bauhofer, are trying to extend their SDC deferral another 7 years, shit why didn't the spineless council FORCE the developer to pay back in 2001???????????

Bend is FUCKED.

January 14, 2008 at 8:40:00 AM PST
Bend Economy Man said...

Right on with regard to more
potholes. The shame of it is if
and when the city gets excess money
again it will spend it on more 2030
visionary processes.


Absolutely right.

The "visionary" people who are in city council and top city staff positions aren't pave-the-roads and fix-the-pothole kinds of people.

The type of person who leaves behind his/her friends, family and roots in California to pursue some white-flight fantasy in a small town in Oregon is looking for something more "meaningful" than just a normal job. They want the full pioneer empire-building experience.

January 14, 2008 at 2:11:00 PM PST

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