RoguePundit

With Green Priorities Like These...

For an organization that is claims to be a coalition of over 50 Oregon conservation groups, the Oregon Conservation Network (OCN) sure doesn't make it easy to find out who its members are.  This incomplete list (linked from here) includes groups like 1000 Friends of Oregon, the Bicycle Transportation Alliance, and the League of Women Voters of Oregon.  Hmmm.  

Anyway, the OCN recently amended its legislative wish list for the umpteenth time this session.  There is some disappointing stuff in its top five.  

• Senate Bill 101: Prevents Oregon utilities from entering into new contracts for coal-fired power.

That's a pretty obvious one, though it wouldn't be good for the energy bills of most Oregonians.

• SB 740: Allows Water Resources Department to charge $100 annual fee to holders of water rights to fund administration, field staff and science for managing more than 85,000 water rights in Oregon.

So, property owners with wells--like me--would have to pay $100 a year in exchange for what?  The Water Resources Department needs another $8.5 million to do what it's already doing?  Meanwhile, there's nothing in the bill to stop the legislature from cutting a similar amount from the department's budget and spending the money elsewhere.  And laughably, the bill would declare the collection of this money a public peace, health, and safety emergency.  This bill smells.    

• House Bill 2020: Authorizes issuing $10 million in lottery-backed bonds for a fund to target invasive species as soon as they're spotted.

Combating invasive species is usually a good thing.  But doing it with debt rather than within the state budget is a lousy idea. 

• HB 2220: Charges fees to boaters to fund check stations that would check boats for aquatic invasive species. Establishes civil penalties for knowingly transporting zebra mussels and other invasive species on a boat.

I suppose it's possible that boat check stations could be more effective than the agricultural inspection stations we pass through when entering California.  We do need penalties though for knowingly transporting invasive species in boats...and cars, trains, planes, etc.  The release of bait fish has certainly caused all sorts of problems in Diamond Lake (previous blog here).  One would presume the state would try to prove the "knowingly" part through the permitting process.    

• HB 3369: Authorizes $175 million in loans and $10 million in lottery-funded grants for water development projects that meet conservation requirements.

This is another proposal to expand the state budget via debt.  No matter what the money would be spent on, this is fiscally reckless.  No, no, no.

At least the following is moving forward despite its absence from the list...though the governor may veto it.

By a 26-2 vote, the Senate approved House Bill 2472, which lowers the maximum state payments to large wind projects from $10 million to $3.5 million. Along with some other changes, the bill is expected to save taxpayers about $10 million a year.

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At issue is Oregon's Business Energy Tax Credit, a once minor subsidy program aimed at boosting conservation efforts. Two years ago, at Kulongoski's behest, the Legislature vastly expanded the program, offering millions of dollars to lure wind and solar companies to bring their projects -- and the jobs that come with them -- to Oregon.

The changes allowed a business to recoup up to half the cost of building a new plant that either generates renewable power or makes equipment for renewable power generation. With a maximum credit of $20 million, the subsidies quickly became the most generous in the nation. They have been credited for bringing a number of wind and solar projects to Oregon, including SolarWorld.

As a result, however, state spending on the projects ballooned to more than $60 million over the past two years and was expected to rise to about $150 million in the coming two years.

An investigation by The Oregonian this year showed that millions of dollars in credits were being handed to some risky startup companies, to projects with questionable environmental benefits and to projects that would have been built even without the credits.

If we could just get the leadership in Salem to think long term.  We're bribing companies to come here for a few years rather than investing more money in our university system to build foundations that would attract green businesses here on merit.  Most of the green jobs we've lured here with subsidies don't involve setting down roots...those employers will go wherever their costs are lowest. 

We need to grow more of our own jobs, but our university system isn't up to the task in the sciences and engineering.  There needs to be more research...and the quality of some of what's being done needs to improve.  Our universities are known for producing too many activists and not enough scientists...and of course, the ugly uniforms.

Negotiations Over Tribal Payments in North Bend

The Mill Casino is on what's considered reservation land.  Thus, the Coquille Indian Tribe doesn't have to pay the local property and room taxes.  However, it's been doing so for several years...until recently.

After a 14-year-long agreement with the city of North Bend to pay a room tax similar to other hoteliers in the city, the Coquille Indian Tribe is withholding a three-month payment.

North Bend City Administrator Jan Willis confirmed that the tribe did not pay the tax for January through March. The payment should have come in on April 15. She wouldn't comment further.

Tribal Attorney Brett Kenney said the tribe wants to renegotiate its contract and is withholding the nearly $44,000 payment. In the meantime it is collecting and setting aside the funds.

"Our conversations with the city are not something that I want to be in the public eye," he said. "The tribe always has and always will pay its fair share for municipal services."

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The agreement with the city stated the tribe would pay two "payments in lieu of taxes," or PILOTs for short. One, a property PILOT, pays for basic municipal services including police and fire protection. The second, an occupancy PILOT, is a replacement for the transient room tax paid by hotels and motels.

For whatever reasons, the Tribe decided it was time to play hardball...except with the money that normally goes to advertising the region.            

Last month, Katherine Hoppe, director of the Coos Bay-North Bend Visitor and Convention Bureau, learned her organization would get less than usual for its third quarter.

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She received a brief letter from Kenney on June 11, saying the tribe is committed to continue funding the bureau.

"The Tribe recognizes that the Bureau has helped to advance our local hotel and service industries," Kenney wrote.  

...

"Because it values the VCB and its role in the local economy, the tribe tendered the two-sevenths payment to the city to forward on to the VCB," Kenney said. "They said they didn't want to accept only two-sevenths of the total payment."

It's not that the new hotel tower isn't doing pretty well.

According to a spreadsheet provided by Hoppe, bureau funds from the North Bend tax were up 30 percent and 25.2 percent for the first and second fiscal quarters as compared to last year. The increase is due to The Mill's recent addition of a 92-room hotel tower.

Can't help but wonder if this has something to do with Home Depot pulling out of a deal to locate a store on nearby tribal land in North Bend.  And that was after Rep. DeFazio did some legislative work to help it happen (previous blog here).

A Hasstile Reaction

Remember all those Oregon state senate candidates who talked of being bipartisan?

After a one-day delay, the Oregon Senate voted today for an increase in corporate income taxes that will produce an estimated $261 million to balance the next two-year state budget.

House Bill 3405, which goes to Gov. Ted Kulongoski, passed on an 18-11 vote. All Democrats voted for it; all Republicans against it. One Republican was excused.

That delay was a rare crack in the lock-step voting of Oregon Democrats when it comes to tax increases.    

The one-day logjam was broken when Democratic Sen. Mark Hass of Beaverton agreed to vote for the bill in exchange for another bill, pending in the House Revenue Committee, that would divert money from permanent increases in the corporate tax after 2012 into the state’s general reserve fund.

It's sad that he had to resort to such a tactic to get his fellow Democrats to save more for the inevitable next rainy day...at least if that was really why he voted no.     

Hass's original no vote was met with horror, because the only bipartisanship acceptable to our majority party involves Republicans voting blue.  Unsuprisingly, hyperbole ensued.     

During the floor debate, Sen. Alan Bates, D-Ashland, practically begged Hass to reconsider.

"I implore you," Bates repeated three times, looking directly at his longtime colleague. "The state will go into chaos without these bills."

Groups advocating for higher spending on schools and other state programs were stunned by Wednesday's outcome and said they would intensify their lobbying efforts.

"We're talking thousands of teacher layoffs statewide" if the Legislature is forced to cut the amount of money the taxes would have raised, said Otto Schell, legislative director for the statewide Parent Teachers Association. "It will be a meat-axe to the K-12 budget." 

Meanwhile, nary a peep out of either party on how reckless PERS investing has again cost the state billions--money which could have paid for those services instead of a tax increase. 

And before Hass changed his vote, notice the accidental admission...that too many politicians consider raising taxes easier than living within a budget. 

Gov. Ted Kulongoski said he hopes the Senate will reconsider.

"If this doesn't pass, it makes for very, very difficult decisions ahead," said his spokeswoman Anna Richter Taylor.

At least Kulongoski suggested a wage freeze.  And obviously, HB 2523 was DOA.

Rep. Ron Maurer, a Republican who manages a Rogue River health clinic, featured in his fall campaign a vision for health care reforms that included making elected and appointed state officials and the 46,000 public employees who get health and dental benefits through the Public Employees Benefits Board contribute to their own insurance premiums. Oregon is the only state that does not require either an insurance premium contribution or a deductible. 

In Oregon, public employees get surf & turf while the poor, our children, etc. hope for tablescraps...which are too often dependent upon tax increases.

The OIC Never Learns

Here's yet another high-risk investment by the Oregon Investment Council, which should be taking a low-risk approach to managing the state's pension money.

Eudaimonia Asset Management LCC has been hired by the Oregon Investment Council to manage a $50 million U.S. micro cap growth equity investment portfolio.

Encinitas, Calif.-based Eudaimonia, whose name connotes happiness in classical Greek, called the investment a “major milestone” for the firm.

It manages two micro cap growth strategies marketed to institutional investors, EAM Micro Cap Growth and EAM Ultra Micro Cap Growth.

Micro cap growth?  Will the OIC never learn? 

Would the state need to raise taxes if the OIC hadn't run PERS $17 billion in the hole--again--via high-risk investment strategies?

State and local governments have been paying and will continue to pay unnecessarily high PERS contributions to help cover the OIC's massive losses.  This has needlessly increased personnel costs by several percent.  That money could have been spent on social services, preserved school days, prevented layoffs, on and on.  Instead, it buys us nothing.  

The political silence on this subject remains deafening.

Waving in the Breeze

Considering how green Oregon supposedly is, it amazes me that in some neighborhoods, residents still aren't allowed to hang out their laundry. 

In thousands of Oregon neighborhoods and condo buildings, covenants and other rules ban clotheslines, even from private backyards. Homeowners using clotheslines face threatening letters from their homeowners' associations and potential fines--not to mention simmering tension with neighbors who consider hanging clothes an eyesore or an emblem of poverty.

"People have been drying their clothes for 3,000 years," says developer Eli Spevak, who encourages clotheslines in his inner Northeast Portland condo buildings. "We should be allowed in Oregon to use the sun and the breeze to avoid using a dryer."

Clothes dryers are second only to refrigerators as the top consumers of energy in typical homes.

A bill that may soon become law would prohibit homeowner associations and condo associations from banning clotheslines in areas maintained by individual homeowners. House Bill 3090 cleared the Oregon House and could soon reach the Senate floor.

Just 3,000 years ago? 

Refrigerators and dryers are nowhere near numbers one and two in home energy consumption.  Here are the latest statistics (from 2006) for residential energy consumption in the U.S.  By the way, "wet clean" includes washers, dryers, and dishwashers. 

Space heating                    26.4%
Space cooling                     13.0%
Water heating                    12.5%
Lighting                             11.6%
Electronics                           8.1%
Refrigeration                       7.2%
Wet clean                            6.2%
Cooking                               4.7%
Computers                           1.0%
Other, non-end user, etc.     9.3%

Gosh, is our legislature not going to pass the bill unless advocates exaggerate--or lie--about how much energy dryers use?  Back to the article.

[State Senator Jackie Dingfelder, D-Portland] says the bill has no organized opposition.

The Oregon chapter of the Community Associations Institute, which represents homeowner associations, had opposed the bill. The group pushed lawmakers, however, to include a ban on clotheslines in common areas such as courtyards and to allow associations to place "reasonable restrictions on the size, appearance or location" of a clothesline. The institute now says it is officially neutral on the bill.

Could this mean clotheslines will be popping up soon on balconies across the Pearl District and South Waterfront?  Not likely.  The bill carries forward the restrictions of banning clotheslines in areas such as balconies, maintained by condo associations.

Quiet opposition has cropped up from some senators who say they want to protect views of the coast from beachfront houses. Some also say it would force a change to contracts that were in place when a homeowner moved into a community decades ago.

Dingfelder says she intends to amend the bill to apply only to new subdivisions and condos, to get it through the Senate.

She has to gut the bill to get it passed, despite there supposedly being "no organized opposition?"  Who besides rich NIMBY folks is opposing this?  Shows what Dingfelder and many of her fellow legislators think is more important. 

More Transparency Would be a Good Start

The Oregon Investment Council has twice this decade presided over multi-billion dollar PERS losses, leaving the taxpayers on the hook (previous blog here).  With four of the five OIC members having been appointed by Governor Kulongoski and the fifth being the State Treasurer, none of were there for both financial disasters.  But, it's obvious that our governors routinely appoint (and we vote for) folks who are in over their heads. 

They're huffing and they're puffing. But in the end, it's not clear that the Oregon Investment Council's efforts to extract better terms from the private investment partnerships that manage $9 billion in state pension money will amount to much more than hot air.

Earlier this month, the five-member citizens council that manages the state's $43 billion public employee retirement fund adopted a statement of principles designed to rein in exorbitant fees and demand more transparency from the historically secretive private equity partnerships that invest in leveraged buyouts, distressed bank loans and other investment vehicles.

The Oregon Investment Council's hope is that other state pensions and institutional investors will follow suit, and that the private equity sector, in which firms have historically set take-it-or-leave-it terms, will become more of a buyer's market.

That's a nice, but timid initiative.  If you don't like the terms, don't invest in the firms.   

Private equity firms' high fees and lack of transparency have long been controversial. General partners of firms such as Texas Pacific Group and Kohlberg Kravis Roberts typically charge annual management fees between 1 and 2 percent of the amount of capital committed to a fund, then take 20 percent of the profits they generate.

Hedge funds, which are also high-risk investments, typically charge two and twenty.  By design, pension funds should have little-to-no exposure to high-risk investments.  But in Oregon, the PERS beneficiaries are immunized from the losses...except when it comes to the cancerous impact of higher PERS contributions on state and local budgets.  Thus, the OIC keeps on rolling the dice in search of eight percent returns, which are unrealistic over the long haul.  A number of investment firms have taken advantage of that.  

The resulting fees can be gargantuan -- Oregon alone paid $85 million in fees to alternative equity firms in 2007, including $13 million to KKR in 2007 and another $8 million to Texas Pacific.

The largely unregulated partnerships also offer investors far less transparency in terms of governance and accounting than publicly traded investment vehicles.

While the stock market was booming and cheap debt was fueling the buyout market, investors like Oregon were lined up to invest with the firms, no matter the cost. Now that private equity returns have crashed with the overall markets--Oregon's private equity portfolio is down 25 percent in the past year--the push is on to drive a better deal and make sure that management fees don't become a profit center while the partnerships aren't delivering any returns for investors.

There was a lack of transparency way back in the go-go '90s and earlier this decade when PERS was in a $17 billion in the hole.  Finally fighting for more transparency in its investments is a good thing.  But, you never commit money to such investments unless you're satisfied with the terms.  The OIC still doesn't get that.  This is another aspect of the excessive risk it takes.

The Single Majority in Grants Pass

I'm sure a number of folks in Grants Pass are glad that the double-majority rule is no more.  That's because despite the surprising 2-1 majority that approved the public safety levy yesterday, only 41 percent of the registered voters cast their ballots.  That would have meant failure last year.  The gamble in asking for just a dime less than the levy that failed last November paid off.

If one cranks the numbers, 28.5 percent of registered voters approved the two-year levy while  14.2 percent voted against it.  About 55 percent of city residents are registered voters.  Or as the Daily Courier saw it...

It was a stirring show of confidence in this city and its public safety workers, especially when one considers Josephine County's unemployment rate hovers at around 16 percent.

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Critics of the city administration might also keep in mind that Tuesday's vote has to show some fairly high confidence in the staff who run this city, as well as its firefighters and police. After all, these people are the ones who handle the money and coordinate services. City councilors may well be going against the will of the majority by trying to force out City Manager David Frasher.  Certainly, several on the council misjudged their fellow voters when it came to the Public Safety levy. They reluctantly approved the levy, saying they thought it was doomed, and refused to campaign for its passage, as previous councils have done.

Thank goodness the overwhelming majority of their fellow citizens had the courage and good sense to refuse to let their quality of life slip away.

Only in election math is an overwhelming majority just under one-sixth of city residents.  But, those folks helped prevent some significant cuts, mostly in public safety.

Condemning a Family Name

It shouldn't take a law to change this stupid decision.   

In 2007, the DMV denied an application for custom plate "UDINK4," for Kawika Udink, son of Mike and Shelly Udink, and ordered the return of plates UDINK1, UDINK2 and UDINK3, belonging to Mike, Shelly and another son, Kalei. UDINK1 was approved seven years earlier.

Udink is Dutch, but the state said "U" could be seen as "you," and "dink" is an offensive term for someone from Asia.

Shelly Udink was disappointed to hear of the failure. It isn't fair someone can suddenly decide they're excluded from what the rest of the populace can do because someone may consider their name offensive, she said.

...

House Bill 2454 would have directed the Department of Motor Vehicles to allow people to use their names on their license plates if they met criteria such as matching the name on their driver's license.

Ron Maurer, our local state representative, sponsored the bill.

The license plate bill is among legislation killed by the Legislature's deadline for measures still in their chamber of origin.

...

Maurer, R-Grants Pass, blamed the committee head, Rep. Terry Beyer, D-Eugene.

"It was clear to me that there was enough support to get the Udink bill out of committee, but the chair was unwilling to move it," Maurer said.

The DMV isn't combating intolerance, it's showing intolerance.  Our state's Democratic leadership be ashamed.  The inaction shows that they're not.  

Public Safety Job Safety (Updated)

The political leadership in Grants Pass is suffering cold sweats over the upcoming public safety levy.  A $1.89 per $1,000 levy failed last November by just 170 votes, so the city decided to shoot for $1.79 this time (previous blog here).  That's still an aggressive 20% increase over the expiring four-year levy of $1.49.  

Going for the city is the fact that there's no double-majority requirement in this off-election.  However, unemployment here in JoCo has shot up since the previous election from a seasonally adjusted 10.1% to 15.8%.  More will be added to the unemployment rolls if the levy fails.  Little wonder some proponents are resorting to scare tactics to sell the levy.

As we know, passage of the levy will allow the city's police and fire services to remain the same.  But if it fails, the city has to cut $4 million.  And suddenly it's bait-and-switch time...the levy may not be paying for just public safety.  The city manager is offering another proposal in which if the levy fails, $3.3 million--about 21%--would be cut from the city's $15.6 million public safety budget.  

City Manager David Frasher said the alternate budget, should the levy fail, is based on input from department heads and is a reflection of the staff "trying to be as responsible as we can be with what's there."

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Public Safety would lose 27 full-time and two part-time positions, including eight police officers and seven firefighters.

Public Safety has 102 employees, while the total workforce for the city is 214. Cutting the firefighters would cost Grants Pass $250,000, because the city would have to repay a grant used to hire firefighting personnel.

One Public Safety station would have to be closed, and the new Redwood Station in the Redwood area has been targeted.

...

In addition, the department's firefighter intern and police reserve program would be eliminated.

What about the rest of the money--the bait-and-switch part? 

The recommended budget calls for every city office to be reduced to 32 hours a week, subject to approval by the American Federation of State, County and Municipal Employees and Teamster unions.

That would save the equivalent of 21 full-time positions, but if the unions balk, those positions would remain full-time and employees would be laid off instead.

Also, the reduced Public Safety staff would result in longer response times in many cases, and there would no longer be enough personnel to staff local events such as Boatnik, Back to the '50s and similar activities.

Another recommendation is to eliminate $40,000 in contributions to the Women's Crisis Support Team. The city contributes to WCST, because it assists law enforcement in cases involving sexual assault and domestic violence, rather than having to hire its own specialists to handle them. In addition, Caveman Pool would be closed and other recreation programs eliminated.

No doubt those cuts would be ugly, if indeed they're what the city approves.  But, the budget committee hasn't met on the subject yet.  And more to the point, are we really supposed to believe that defeat of the public safety levy could drive such deep cuts across city government?   Frasher's been here long enough that he ought to know that JoCo voters--even those inside city limits--don't react well to exaggerated distater scenarios regarding the rejection of a tax increase. 

UPDATE:  The Saturday DC had a follow-up article containing some readers' questions answered by city officials.  Unfortunately, the weakest answers came up front.  This was easily the worst.    

Q: Shouldn't recent annexations be providing more property tax revenue, negating the need for a tax rate increase?

A: If we annex properties, we need to provide more staffing to serve those people.

Costs go up, just like they do, and you're providing services to more people. More miles on the cars, more staff time.

Public Safety Director Joe Henner

How did the city let this shallow response slip through the staffing process?  If one follows the "logic," whenever Grants Pass grows in area, all city property owners need to pay higher taxes to cover the additional services.  What a great reason to avoid growing via annexation.  Was this listed as a cost existing residents would incur when they voted on the recent annexations?  No. 

Henner's dashed-off answer begs more questions.  Way to alienate a few more voters...

A Dark Piece of Legislation

On Tuesday, the Oregon House passed HB 2478 by a vote of 57-0 and forwarded it to the Senate.

The proposed new law nobody wants to talk about would make it a second degree sex abuse crime [a Class C felony] to propel "a dangerous substance at another person." That substance being semen or other bodily fluid flung out of sexual desire.

Yep. Apparently such behavior is part of a gang initiation rituals.

The proposed law follows an incident last June when a man threw his semen on a mother in a Portland area Target store. Her little girl saw it first.

The man was convicted of assault, said Rep. Scott Bruun, R-West Linn. But Bruun and others thought the crime should fall into the category of a sexual assault.

Bleah.  The bill also includes blood, urine, and feces.  Note that the law would only apply to victims who don't consent to such actions.