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Plan proposes new funding pipeline for future growth

• Group says region must find a way to pay for roads, services, schools to handle more people
by: CHRISTOPHER ONSTOTT, Work continues on the concrete piers that will support the coming transit bridge over the Willamette River, the largest new infrastructure project in the region these days.

Can private financing help build the public infrastructure the Portland region needs to meet its growing needs?

A group of 26 business and community leaders believes the answer is yes.

The Leadership Council of the Community Investment Initiative, a public-private partnership, was formed in cooperation with Metro two years ago to develop new and innovative ways the region can accommodate people expected to move here by 2035.

"The Community Investment Initiative volunteers realize that the problems with the region's infrastructure affect everyone one way or another," says council Co-Chairwoman Karen Williams, a Portland attorney with years of public-private partnership experience who works for Carroll Community Investments. "It's a big issue all of us face, and it can't be solved by cities and counties, Metro or the state acting alone. We can only find ways to solve it by working together."

Williams is scheduled to appear before the Metro Council on Thursday with four other members of the group to present its Strategic Plan. Among other things, the plan calls for the establishment of a yet-to-be-fully defined regional entity to help identify, prioritize and fund regional infrastructure projects during the next 20 or so years.

One example is Partnership British Columbia, a private company owned by the Province of British Columbia that plans and oversees the construction of large infrastructure projects there. Partnership BC, as it is more commonly called, works with both the private and public sectors on the projects.

Perhaps the best example of such a project is TriMet's MAX Red Line to the Portland International Airport. The $125 million extension was financed largely by the Bechtel Corp. in exchange for development rights to Cascade Station, a 120-acre parcel owned by the Port of Portland near Interstate 205.

Construction on the extension started in spring 1999, and the line opened on Sept. 10, 2001. Today, the 5.5-mile extension provides service to the airport from the entire regional MAX system.

The group believes that additional private funds for public infrastructure projects are available. For example, the California Public Employment Retirement System is reportedly willing to invest $3.8 billion in such projects -- $800 million in California and $3 billion in the rest of the country. Tapping such sources can help build needed regional projects without increasing taxes, according to the group.

Three other members of the group also will appear before the Metro Council. They are: Co-Chairman Burton Weast, executive director of the Clackamas County Business Alliance; Randy Miller, president of Produce Row Management Co.; Joe Rodriguez, retired Hillsboro school superintendent; and Carl Talton, president, chief executive officer and executive chairman of the Portland Family of Funds.

Schools in the mix

The strategic plan is as notable for what it does not recommend as for what it does. The plan does not call for a new regional tax or fee to close the projected infrastructure funding gap. Nor does it call for changes in Oregon's property tax limitation system. Instead, it essentially calls for a more thorough assessment of the region's needs and collaborative efforts between the public and private sectors to meet them.

Another idea supported by the group is a new funding source for the maintenance and construction of city streets and state highways. The group believes the existing gas tax is outdated because motor vehicles are becoming more fuel efficient -- including electric cars, which use the roads but don't generate any gas tax revenue. So the group has endorsed efforts by the Oregon Department of Motor Vehicles to design a voluntary regional alternative Vehicle Miles Travel pilot program that could ultimately replace the gas tax with a fee based on actual mileage.

Perhaps the most radical idea supported by the group is to expand the definition of infrastructure to include public schools. The group originally formed after Metro issued a report predicting a $27 billion to $41 billion funding gap for such traditional infrastructure projects as roads, parks, water systems and sewer facilities. Shortly after it first began meeting, however, the group agreed that a properly educated workforce also was part of the public infrastructure.

Funds drying up

The Community Investment Initiative was created after Metro released its Regional Infrastructure Report in July 2008. At the time, Metro was predicting that an one million people would move to the greater Portland-Vancouver region by 2035, with the majority settling in the Oregon counties south of the Columbia River.

The report also looked at the money expected to be available for infrastructure projects. It noted that local governments were facing financial restrictions because of Oregon's property tax limitation system. The report also noted that the buying power of the state gas tax was falling because motor vehicles were become more fuel-efficient. And it accurately predicted that federal funds for infrastructure project were drying up.

The report was something of a reach for Metro. The regional government must authorize all major transportation projects in the urbanized parts of Clackamas, Multnomah and Washington counties. Voters have also authorized it to buy natural areas, some of which been opened to the public. Metro does not have any direct authority on other infrastructure projects, such as water systems and sewer facilities, however. But it has approved a 2040 Concept Plan that calls for new development to be concentrated along major transportation corridors and in urban centers, which need a wide range of infrastructure projects to succeed.

After the report was released, a group of regional business and community leaders began talking among themselves about the need to find new ways to fund such projects. They soon convinced Metro to provide staff support to help prepare a formal set of recommendations, beginning with the strategic plan.

Metro is not expected to take action after the plan is presented. It has already pledged another year of support to the group, however.