City audit questions management of Portland Streetcar

City audit questions management of Portland Streetcar »Play Video

In the city's first ever audit of the Portland Streetcar, the city auditor suggests that management is off the tracks. 

The report points to questionable contracts, nepotism, as well as a lack of accountability and public transparency.  And despite the fact that the project began nearly 20 years ago, it lacks a strategic plan and even a clear mission statement.

There's also concerns about money.

The report says, "We found... PBOT (Portland Bureau of Transportation) spending an increased proportion of its discretionary transportation dollars for the Portland Streetcar."

It goes on to say that "we remain concerned about how projects like Portland Streetcar displace other transportation services," referring to street maintenance.

"If we had no streetcar, we'd have a little bit more money to spend on streets," says City Commissioner Steve Novick, who oversees PBOT. "But it wouldn't be nearly enough to address our needs."

According to PBOT, the city used $4 million for the streetcar in fiscal year 2013-14.  That represents 5 percent of its PBOT discretionary budget.

The streetcar is supposed to be a public-private partnership between the city and Portland Streetcar Incorporated (PSI).

But the report says: "The city does not fully report Portland Streetcar operations and maintenance costs, and it has authorized PSI to possess public dollars that are not managed in compliance with Oregon law."

"The auditor says that there's money held in a bank account by Portland Streetcar Incorporated that should be held in a bank account by the city," Novick said.  "The lawyers for PSI argue that that's wrong. That's just a matter of where the money sits, one of those things auditors worry about, but it's not like any money is missing or stolen."

Ultimately, the auditor said that the city has taken on more risk that was initiately intended and until Streetcar management can get back on track, the city  should put the brakes on any future expansion.

This report is just part one of the audit.  A second report, due out at the end of the year, will focus on management systems.