OK, what’s “new,” exactly?

File photo: The Albany City Council at a work session.

File photo: The Albany City Council at a work session.

So what exactly is "new debt"? It can be hard to agree on that point even though the words themselves are not especially tricky.

Albany voters approved an initiative amending the city charter on new debt. Basically, although there are some wrinkles, it says the city must get approval at an election for any new debt. I wrote a commentary saying that if this had been in effect last month, the city would have been barred from refinancing its water bonds and saving a truckoad of money. No, the sponsors of the initiative responded, that was refinancing an old debt, so the restriction does not apply.

I'm not convinced, because the refinancing bonds are obligations to new and different buyers of new bonds, obligations that replaced the old obligations to other buyers. So to me they are clearly "new," even though from the standpoint of the debtor -- Albany -- they represent the same old debt with better terms.

As for what other types of obligations the measure might affect, nobody really knows. Tom Cordier, the sponsor of the debt initiative, offered to meet with council members to work out a workable arrangement. Trouble is that once the words are in the charter, they can't be limited by any ordinance or agreement the council might adopt. Clarification likely can come only with court decisions over time. If the city sells, for a street project, bonds for a local improvement district, in which property owners ultimately pay off the debt, and if an opponent of the project sues alleging this violates the ban on new debt without an election, a judge will have to say the LID either violates the charter or it does not. (hh)

From Ryan Murphy, via Facebook: Either way the voters sent the message that Albany does not have an unlimited credit card. I think that was the purpose of putting this on the ballot. I am sure the courts will say "new debt" is not operational debt, like police and fire. While I have nothing against beautification projects, the ones that the city cannot afford and such would most likely fall under "new debt."

From Mark Workhoven, via Facebook: I agree with Hasso. It's a vaguely-worded measure that could actually end up costing Albany money, especially since the city could have to take a public vote every time something gets refinanced. Elections are expensive. I understand the need to not let debt run out of control, but most of Albany's debt came from their new water plant, not from the CARA beautification projects.

Albany debt measure: Now what?

Albany City Hall: Refinancing before election saved $5.6 million over 20 years.

Albany City Hall: Refinancing before election saved $5.6 million over 20 years.

Voters in Albany almost cost themselves an extra $5.6 million, but the city administration deftly saved them from that expensive mistake.

The mistake was to approve a debt limitation in the city charter, which ostensibly requires voter approval of any new debt even if property taxes are not pledged to repay it. If the city had waited for the election on the amendment, it could not have refinanced $30 million remaining on a $40 million water bond issue. But it did refinance that debt, and the new bonds were sold on Feb. 28. The finance director, Stewart Taylor, says this will save $5.6 million in interest over the next 20 years and lower annual bond payments by $300,000, which should help slow the rise in water rates.

None of this would have been possible without another special election under the charter amendment, and perhaps not even with an election if indeed, as the city attorney believes, the amendment requires approval by more than 50 percent of all city voters, a percentage never reached.

The council had previously thought of asking a court to determine whether the amendment -- if it passed -- was properly adopted under the state constitution, which says any measure requiring a supermajority must pass by the same supermajority, which this one didn't. But going to court to thwart the voters would surely anger the 4,825 voters who backed the measure. The council, which must officially "canvass" the election results and has 30 days to do so, may have a better way to proceed. It could declare the measure to have passed and add it to the charter while expressing doubts about its validity, and then let events take their course.

Suppose the city later had a chance to refinance its $60-plus million debt to the state for the sewage treatment plant by selling revenue bonds, saving further millions in interest. But if the new charter amendment prohibits that, voters might conclude that passing the amendment was not exactly a smart move.(hh)

From Gordon L. Shadle: You parrot the city attorney's campaign position that Measure 22-117 would not allow the city to save money by replacing higher cost bonds with cheaper bonds (refunding). This interpretation of the measure's language is absurd.
One of the rules when interpreting a legal document is to use the ordinary meaning of words. The measure requires voter approval of "new" debt. A common sense application of the word "new" means debt that didn't exist before. It is debt that is appearing for the first time. Refunding bonds are not "new" debt. Refunding bonds are a replacement of an existing debt under more favorable terms. It's like refinancing a mortgage. It's not a "new" debt appearing for the first time to the homeowner. It's a "replacement" debt.
The election is over. The city doesn't have to campaign anymore using an absurd interpretation of the measure to win votes. It is now time for the city to use common sense instead of campaign sense.
From Tom Cordier: Your conclusion is wrong. The city's new found desire to save money and reduce debt has been driven by the petition process and measures.
We are on record stating the measures would not have restricted re-issuing existing debt instruments to save money. What the city did was exactly what we wanted to happen -- reduce the cost of government and NEW debt must be approved by the voters.
The measure does NOT/never has required a super majority going forward. The debt measure passed by a simple majority and by state law will only require a simple majority to approve new additional debt proposals by the city council.
It is now clear that the council was attempting to influence the vote by their earlier public disclosure resolution to litigate if the measure passes. That attempt was seen as dirty politics by many voters and it back-fired.


Oregon prepares for drones

You could call this place Drone Central in Benton County.

You could call this place Drone Central in Benton County.

With all this talk about drones, the Oregon legislature may set some ground rules. And it's about time. Judging by what you read about the increasing popularity of using unmanned aircraft, those things are going to be buzzing overhead any time now.

The state Senate Judiciary Committee has a bill that deals with the issue. It's Senate Bill 71-4, and the committee plans to consider it on March 20 at the Capitol in Salem. First, the bill would make it a felony to use a drone for invasion of privacy or to intercept communications, hunt a game animal, commit a trespass, or stalk someone. It would become a class A felony, the worst kind, to use a drone to harm another aircraft in the air.

Further, public bodies would be barred from operating drones without first registering them with the state. Law enforcement would be barred from surveillance of private places by drone without a warrant. It could use a drone to track a fugitive or  stop a crime in progress, though. But drones would be barred from use for speed control. And if a drone flew lower than 400 feet over your private property, you could sue for damages unless the thing was taking off or about to land. All these seem like reasonable provisions.

I noticed that the definition of drone -- unmanned flying machine -- would seem to include radio-controlled model planes as well. But as far as I know, those hobbyists at Adair and their little aircraft don't do the things the legislation would outlaw, so they'll be all right. (hh)

Albany election: Off to court

The Albany debt initiative will likely be decided here, in court.

The Albany debt initiative will likely be decided here, in court.

Now it's the lawyers' turn in Albany's latest romp into the wilds of direct democracy. Voters approved two initiatives written by North Albany resident Tom Cordier. One says the city council will need voter approval of any future urban renewal districts. No question about that one. But the other says the city cannot incur "new debt" above the amount of Feb. 28, 2012, without approval of a majority of electors in an election.

The city attorney believes this measure demands approval of debt by more than half the registered voters and therefore, under the constitution, needed approval of more than half of Albany voters to be enacted. That means it needed 13,792 yes votes, but it got only 4,825. Anticipating this development, the council weeks ago authorized a lawsuit asking a circuit court judge to determine whether the debt measure was constitutionally enacted or whether it fell short.

If it was enacted, then there are more questions for lawyers and the courts. For instance, what is "new debt"? And can this measure limit city debt retroactively, more than a year after being enacted? If so, what about the refinancing of water bonds that recently took place, saving city ratepayers $5.6 million in interest over the next 20 years and lowering annual payments by $300,000? Can that savings go ahead, or does Albany have to have yet another election on that?

The voters have spoken, but because of the clumsy phrasing they've approved, the last word is yet to be heard and it will likely come from the courts. (hh)

Albany’s plunge in traffic tickets

Less ticket-writing means the public makes fewer trips to the cashier's window.

Less ticket-writing means the public makes fewer trips to the cashier's window.

When you drive around Albany, does it seem to you that there's been a marked change in driving behavior since, say, 2008? No? Not to me either, even though the population, and therefore traffic, has grown a little. I'm wondering about this because there's been a steep decline in the number of traffic tickets written by the Albany police.

The judge of the municipal court, Robert T. Scott, called attention to this in his annual report to the city council on Monday. The court handled 2,044 tickets in 2012, the lowest number in the last 15 years. The most, 6,410, were written in 2008. From then until last year, the number of tickets plunged 68 percent. The drop in tickets is one of the reasons the city court's revenue dropped $151,325 in 2012, causing the court to cost the city more to run than it was bringing in for the first time in many years. The judge's report implies that the number of tickets dropped because the police were understaffed and didn't have time to write as many as before. He says that as the economy improves, the police likely will be beefed up, allowing more time to write tickets. And this in turn, he expects, will allow the court again to produce a revenue surplus instead of going in the hole. But if the streets are just as safe most of the time with fewer tickets being written, it sounds as though the main point of many traffic tickets is not to make the streets safer but to make money for the city. I'm afraid that this is what the public has suspected all along. (hh)

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