Authorize revenue bonds in an amount sufficient to provide not more than $80 million to finance curb, ramp and street improvement projects
The City of Portland ordains.
Section 1.The Council finds:
- The City is authorized to issue revenue bonds for a public purpose under ORS 287A.150 and related statutes (the “Act”). Revenue bonds issued under the Act may be payable from all or any portion of the “revenue” of the City, as defined in ORS 287A.001(17). ORS 287A.001(17) defines “revenue” to mean all fees, tolls, excise taxes, assessments, property taxes and other taxes, rates, charges, rentals and other income or receipts derived by a public body or to which a public body is entitled. The City is also authorized to issue revenue bonds to refund revenue bonds pursuant to ORS 287A.360 to 287A.375.
- The City may authorize revenue bonds under the Act by nonemergency ordinance. The City may not sell the revenue bonds under the Act until the period for referral of the nonemergency ordinance authorizing the revenue bonds has expired. If a nonemergency ordinance authorizing the revenue bonds is referred, the City may not sell the revenue bonds unless the voters approve the revenue bonds.
- The City has identified a need to finance certain curb, ramp and street improvements and related costs (the “Projects”) and has determined that there is a need for revenue bonds in an amount sufficient to provide not more than $80 million to finance the Projects plus additional amounts sufficient to pay costs related to the bonds, and that the Projects serve a public purpose.
NOW, THEREFORE, the Council directs:
- Revenue Bonds Authorized.The City hereby authorizes the issuance of revenue bonds pursuant to the Act in an amount sufficient to provide not more than $80 million for costs related to the Projects, plus additional amounts sufficient to pay capitalized interest, accrued interest on any interim financing and estimated costs related to the revenue bonds authorized by this Section 1.A.The principal amount of revenue bonds to be sold pursuant to this Section 1.A is estimated not to exceed $81.2 million.
- Refunding Bonds Authorized.If all or any portion of the revenue bonds authorized by Section 1.A are issued to provide interim financing for the Projects, the City may issue revenue bonds to refund those interim financing bonds and pay associated costs pursuant to ORS 287A.360 to 287A.375.The revenue bonds that are authorized by this Section 1.B may be issued in amounts that are sufficient to refund any interim financing that is obtained under Section 1.A, plus additional amounts sufficient to pay the estimated costs related to issuing the refunding bonds authorized by this Section 1.B.
- Security and Use of Bond Proceeds.The revenue bonds authorized by Sections 1.A and 1.B of this Ordinance (the “Bonds”) shall be secured by the full faith and credit and available general funds of the City.Proceeds of the Bonds may be spent only to pay costs related to the Projects and costs related to issuing, paying and refunding the Bonds.
- No Additional Taxes Authorized.No Bonds shall be general obligations of the City and neither the authorization nor the issuance of any Bonds shall authorize the City to levy any additional taxes.
- Procedure.No Bonds may be sold and no purchase agreement for any Bonds may be executed until the period of referral of this nonemergency ordinance has expired and this ordinance takes effect. If this ordinance is referred, the City may not sell the Bonds unless the voters approve this ordinance.
- Delegation.After this ordinance takes effect the City Administrator, Deputy City Administrator of Budget and Finance, City Treasurer, Debt Manager, or the person designated by the City Administrator to act as an Authorized Officer under this ordinance (any of whom is referred to in this ordinance as an “Authorized Officer”) may, on behalf of the City and without further action by the Council:
- Issue the Bonds in one or more series, which may be sold at different times and in combination with other series of revenue bonds authorized by the Council.
- Issue one or more series of the Bonds to provide interim financing for the Projects, enter into lines of credit or similar documents which permit the City to draw Bond proceeds over time, and issue short or long term Bonds to refund the Bonds that provide interim financing for the Projects.
- Issue one or more series of the Bonds to provide long term financing for the Projects.
- Participate in the preparation of, authorize the distribution of, and deem final preliminary and final official statements or other disclosure documents for each series of the Bonds.
- Subject to the limits in this ordinance, establish the final principal amounts, maturity schedules, interest rates, sale prices, redemption terms, payment terms and dates, record dates and other terms for each series of the Bonds, and either publish a notice of sale, receive bids and award the sale of each series to the bidder complying with the notice and offering the most favorable terms to the City, or select one or more underwriters or lenders and negotiate the sale of any series with those underwriters or lenders and execute and delivery bond purchase agreements with those underwriters or lenders in connection with such sales.
- Undertake to provide continuing disclosure for any series of the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission.
- Finalize the terms of, execute, and deliver bond declarations or other documents that describe the terms of each series of the Bonds. The bond declarations or other documents may also contain covenants for the benefit of the owners and any credit enhancement providers.
- Appoint and enter into agreements with service providers for the Bonds.
- Issue any qualifying series of Bonds as “tax-exempt bonds” bearing interest that is excludable from gross income under the Internal Revenue Code of 1986, as amended, (the “Code”) and enter into covenants for the benefit of the owners of those series to maintain the excludability of interest on those series from gross income under the Code.
- Issue any qualifying series of Bonds as “tax credit bonds,” “federal subsidy bonds” or other obligations that are eligible for federal tax credits, federal interest rate subsidies or other federal benefits, and enter into any covenants and take any actions that are required to qualify for those federal benefits.
- Issue any series of Bonds as “taxable bonds” bearing interest that is includable in gross income under the Code.
- Apply for and purchase municipal bond insurance or obtain other forms of credit enhancement for any series of Bonds, enter into agreements with the providers of credit enhancement, and execute and deliver related documents.
- Execute any documents and take any other action in connection with the Bonds that the Authorized Officer finds will be advantageous to the City.
- Fiscal Year 2024-2025 Budget Modification. To allow for the receipt of proceeds of the Bonds for the Projects and payment of Bond costs in accordance with local budget law, the Fiscal Year 2024-2025 budget is hereby amended for the Special Finance and Resource Fund (Fund 211000) and the Transportation Operating Fund (Fund 200000) as follows:
Transportation Operating Fund
Fund – 200
Business Area – TR
Resources: Internal Revenues – Fund Transfers – Revenue: $11,600,000
Transportation Operating Fund
Fund – 200
Business Area – TR
Requirements: Fund Expenditures – Bureau Program Expenses – $11,600,000
Special Finance and Resource Fund
Fund – 211
Business Area – MF
Resources: External Revenues – Bond & Note – $81,200,000
Special Finance and Resource Fund
Fund – 211
Business Area – MF
Requirements: Fund Expenditures – Fund Transfers Expense – $11,600,000
Special Finance and Resource Fund
Fund – 211
Business Area – MF
Requirements: Fund Expenditures – Contingency – $68,400,000
Special Finance and Resource Fund
Fund – 211
Business Area – MF
Requirements: Bureau Expenditures – Debt Service – $1,200,000
Exhibits and Attachments
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of Proposed Legislation and Background Information
The proposed legislation authorizes the issuance of revenue bonds in an amount sufficient to provide not more than $80 million to finance curb, ramp and street improvements and related costs (the “Projects”) plus additional amounts sufficient to pay bond costs (the “Bonds”). The borrowing is being done in conformance with debt limitations established in the City’s Debt Management Policy (FIN 2.12). The Ordinance delegates to Authorized Officers certain tasks for issuance of the Bonds, including, but not limited to, issuing Bonds in one or more series; establishing the final principal amounts, maturity schedules, interest rates, and other terms related to the sale of the Bonds; and finalizing terms and executing Bond documents.
As part of the U.S. District Court monitored Civil Rights Education and Enforcement Center (now known as Disability Law United) Consent Decree settlement (Hines, et al. v. City of Portland, 3:18-cv-00869-HZ) (the “Settlement Agreement”), the City of Portland is required to provide a minimum of 1,500 new or remediated Americans with Disabilities Act (“ADA”) compliant curb ramps per year, starting in calendar year 2018 and extending through calendar year 2030.
A FY 2024-25 Budget Note required the Budget and Finance Service Area, the City Attorney’s Office, and the Public Works Service Area to jointly develop options to fund ADA curb ramp compliance costs through the remainder of the settlement period. Through the first six years of the Settlement, funding sources for meeting this requirement have been split between the City’s General Fund, bond-funded resources from the Build Portland program, and eligible Portland Bureau of Transportation (“PBOT”) funds. However, in subsequent years, the viability of these revenues to fully absorb Settlement Agreement liabilities has shifted due to financial strain on the General Fund from emergent obligations, the discontinuation of the Build Portland program, and revenue declines within PBOT, while at the same time, significant cost escalation has occurred for remediated or newly installed curb ramps. Consequently, PBOT and the General Fund are challenged to identify available projected cash resources to fund the full remaining required capital work required under the Settlement Agreement through calendar year 2030, thereby creating a potential shortfall of resources to fund projects in compliance with the Settlement Agreement.
The issuance of the Bonds will provide financing for a portion of projected curb, ramp and street improvements required for the Settlement Agreement through FY 2026-27. Over the same time period, the balance of annual projected Settlement Agreement costs is expected to be funded within related PBOT capital improvement project budgets and/or other transportation revenues.
To provide the lowest borrowing cost on the Projects, the Bonds will be secured by the City’s full faith and credit (legally available General Fund resources); however, payment of debt service will be equally split between the General Fund and the Transportation Operating Fund.
The portion of debt service expected to be paid by the General Fund will be funded from a portion of the typical annual General Fund appropriation to PBOT.
The portion of the Bonds’ debt service expected to be paid by the Transportation Operating Fund will be derived from existing “General Transportation Revenues” (i.e. “GTR”) which largely consist of State Highway Fund distributions and parking meter revenues.
Financial and Budgetary Impacts
Based on the current plan of finance, the Bonds are expected to be repaid over a 15-year period with level annual debt service estimated at $7.68 million, assuming issuance at the maximum authorized amount. Accordingly, at a 50/50 split, the General Fund and Transportation Operating Fund will each be responsible for up to an estimated $3.84 million of debt service per year until the Bonds are fully repaid. The assumed interest rate on the Bonds is 5.00%, however actual interest rates will not be known until the date the Bonds are sold.
Addressing the Potential Funding Shortfall: Issuance of the Bonds will eliminate the potential funding shortfall for both FY 2025-26 and FY 2026-27 and reimburse PBOT for certain ramp costs incurred in the current FY 2024-25.
As shown under “Cash/Bond Funding Scenario (2025 Bonds)” within Table 1 below, a potential projected funding shortfall remains in FY 2027-28 through FY 2029-30. It is possible that an additional borrowing may be considered at a future date (i.e. in FY 2026-27) to fund all or a portion of the remaining shortfall and/or other costs under the Settlement Agreement, depending on the financial and budgetary conditions of the General Fund and PBOT at that time. Project amounts, cash flows, and bond financing assumptions will be updated at that time to assess whether a future borrowing might be viable and recommended.
Short-Term Budgetary Savings: A second impact of the Bonds is the creation of short-term budgetary savings for both the General Fund and the Transportation Operating Fund (specifically “GTR”).
In opting to issue the Bonds, initial budgetary savings is created because annual bond debt service is lower than the projected “Base Case Funding Scenario (Cash Only)” of completing the Projects as originally planned through FY 2026-27. This short-term savings will be followed by subsequent increases in cash flow requirements beginning in FY 2027-28 (See Table 1 below).
- Estimated annual General Fund budgetary savings is projected to be $6.2 million for FY 2025-26 and $6.5 million for FY 2026-27.
- For the Transportation Operating Fund, projected budgetary savings is $6.6 million for FY 2025-26 and $6.9 million for FY 2026-27.
If a future borrowing is pursued (as described above) annual budgetary savings may continue in FY 2027-28 through FY 2029-30.
Following completion of the Projects in FY 2029-30, the General Fund and PBOT resources will continue to be needed for repayment of the Bonds between FY 2030-31 and FY 2039-40, resulting in estimated total annual cost increases of roughly $7.7 million per year (split 50/50 between PBOT and the General Fund) during those years, as compared to the Base Case Scenario.
Table 1: Summary of Projected Settlement Agreement Funding Costs(1)
- Financial projections do not include a second potential issuance of bonds for the funding of ramp costs between FY 2027-28 and FY 2029-30.
- Net cost increases beginning in FY 2030-31 are projected to continue through FY 2039-40 at the same level of $7.7 million annually (split 50/50 between the GTR and the General Fund).
- Transportation CIP Contribution to Settlement Agreement funding assumes availability of underlying CIP resources in accordance with PBOT-provided projections.
- PBOT financial forecast assumes partial funding of the potential ramp cost shortfall from future transportation revenues.
- Remaining “Potential Ramp Cost Shortfall” may be addressed by a subsequent bond issue.
In conformance with local budget law, a modification of the current Fiscal Year 2024-25 budget is included in the Ordinance that will allow for the issuance of the Bonds and payment of issuance costs during the current fiscal year, if feasible. However, the Bonds may not be issued until FY 2025-26.
Economic and Real Estate Development Impacts
Not applicable.
Community Impacts and Community Involvement
If approved, the package will provide funding to complete a minimum of 1,500 new or remediated ADA compliant curb ramps in each of the next two fiscal years, plus reimbursement for certain related Project expenditures that occurred in FY 2024-25 in compliance with the Settlement Agreement. The ADA curb ramp program will provide residents accessible access to or within their neighborhood, work, medical facility or other destinations.
100% Renewable Goal
Not applicable.
Budgetary Impact Worksheet
| Fund | Fund Center | Commitment Item | Functional Area | Funded Program | Grant | Sponsored Program | Amount |
|---|---|---|---|---|---|---|---|
| 211000 | MFFM000005 | 451200 | LADMDMDB000000GL | N/A | N/A | - | 81,200,000 |
| 211000 | MFFM000005 | 557100 | LADMDMDB000000GL | N/A | N/A | - | 1,200,000 |
| 211000 | MFFM000005 | 650020 | LADMDMDB000000GL | 1SPFI2PBOT | N/A | - | 5,600,000 |
| 211000 | MFFM000005 | 650020 | LADMDMDB000000GL | 1SPFI2PBOT | N/A | - | 6,000,000 |
| 200000 | TRMN000011 | 640020 | TPCIAM00000000GT | 1SPFI2PBOT | N/A | - | 5,600,000 |
| 200000 | TRED000016 | 640020 | TPCIAM00000000GT | 1SPFI2PBOT | N/A | - | 6,000,000 |
| 211000 | MFFM000005 | 571130 | LADMDMDB000000GL | N/A | N/A | - | 68,400,000 |
Financial and Budget Analysis
Analysis provided by City Budget Office
This ordinance authorizes the issuance of up to $80 million in revenue bonds, plus issuance costs, to fund ADA-required curb, ramp, and street improvements through FY 2026–27 in compliance with a federal Settlement Agreement. The bonds will be repaid over 15 years, with annual debt service estimated at $7.68 million, split evenly between the City’s General Fund and the Transportation Operating Fund. This financing approach creates short-term budgetary savings—estimated at over $6 million annually for both the General Fund and Transportation Operating Fund in FY 2025–26 and FY 2026–27 (total savings of $12.8 million per year) —compared to a pay-as-you-go model. Dissavings totalling $7.68 million a year are incurred starting in FY2027-28 through bond repayment concluding FY 2039-40. While a future bond issuance may be needed to fund remaining obligations through 2030, this ordinance eliminates projected funding shortfalls through FY 2026–27. The FY 2024–25 budget is amended to accommodate bond issuance and related costs.
Document History
Document number: 2025-131
President's referral: Finance Committee