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Counties scramble to fund infrastructure projects

Leaders, builders discuss paying for public works projects


The Oregon Investment Council has recently invested hundreds of millions of dollars into public infrastructure projects around the United States — and at least one in Brazil.

But the council has not put any money into local infrastructure projects, even though counties and cities are struggling to finance them. Metro is projecting a shortfall of up to $26 billion to build and maintain needed infrastructure in the region over the next two decades.

State Treasurer Ted Wheeler discussed the investments last week at a regional infrastructure forum, and his report surprised some of the elected officials in attendance. The Washington County Board of Commissioners spent the past few years raising $93 million for road improvements in North Bethany without state help; Beaverton is currently looking for $15 million to increase the walkability between its downtown transit center and the Beaverton City Library; and Portland is searching for millions to maintain its streets and build more sidewalks in the east and southwest neighborhoods.

According to Wheeler, there is actually a great deal of public and private money available for infrastructure financing. For example, in June, the Oregon Investment Council voted to invest up to 2.5 percent of its $80 billion portfolio in funds that support infrastructure projects. Most of the money is being invested domestically, but some of it is going into foreign projects.

That money is just one small source of global infrastructure funding, Wheeler said. But so far, it is all going into huge projects that promise high rates of return. For example, Brazil and China are seeking money for new cities and seaports.

“The Oregon Investment Council doesn’t invest less than $200 million at a time. Most local infrastructure projects are well below that,” Wheeler pointed out.

But Wheeler explained the state might be able to help local governments find such investment capital by marketing several similar projects together. That idea is currently being studied by the West Coast Infrastructure Exchange, a partnership between British Columbia and the states of Oregon, Washington and California. The partnership was launched with Wheeler’s participation to develop new and innovative methods of financing infrastructure projects to improve regional economies and support jobs. It released draft standards for certified projects for public comment on Sept. 10.

The exchange was just one of many ideas discussed for financing infrastructure projects at the forum, which was held on Wednesday, Oct. 2, at the Lake Oswego headquarters of the Home Builders Association of Metropolitan Portland. It was co-sponsored by the association and the Westside Economic Alliance, the Clackamas County Business Alliance and the National Association of Industrial and Office Properties, which represents commercial real estate developers. It was attended by contractors and elected officials from Metro and most Washington County cities.

The forum was held to discuss a common and growing problem in the region: how to pay for the roads, water and sewer systems and other public construction projects needed to support residential and employment development.

The event opened with a presentation by planner John Fregonese, who worked on Metro’s 2040 Growth Concept before becoming a private consultant. Fregonese noted how the concept was concentrating much of the new development along transportation corridors within the urban growth boundary administered by Metro, but said the existing infrastructure still needs to be upgraded to support it.

Fregonese said all governments struggle to raise funds for such projects.

“The perfect way to finance infrastructure projects is an invisible, painless tax that somebody else pays and makes growth pay for itself. Unfortunately, it doesn’t exist,” said Fregonese, who advocated creating a vision of the future that the public supports before seeking new fees or taxes.

Former Washington County Chairman Tom Brian talked about the challenges of financing development outside existing urban centers. He focused on North Bethany, a 700-acre parcel in the northern part of the county that Metro brought into the urban growth boundary for residential development in 2002. Planning started after unsuccessful land-use challenges in 2006 and continued until 2010, when the county commission approved a financing plan for road and street improvements. It tapped multiple sources of funds, including the county’s Major Streets Transportation Improvement Program, supplemental system development charges to be paid on each new home, and a special service district approved by area residents.

Even then, Brian said the $93 million will pay for the basic transportation infrastructure needed to support the 4,400 new housing units planned for the property and a few off-site improvements.

Nevertheless, he said the approach could be used as a model for future large developments in the county, including South Hillsboro, South Cooper Mountain in Beaverton, and Riverview Terrace in Tigard.

“Hopefully, we’ll end up with well-planned, marketable communities,” Brian said.




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