The Jaws Of Death? An Inside Look Behind The Numbers Of The Clackamas County Budget: An interview with Clackamas County Commissioner Paul Savas

In 2017 thru 2019 I continued beating the drum, yet again my concerns were dismissed. – Paul Savas

BW: The Commission just passed the 2022-2023 budget with a 4-1 vote. You were the only dissenting vote. Why?

PS: The 2022-2023 budget we just passed is not structurally sound, nor did it incorporate a five-year forecast of pending capital projects and other liabilities in the five year time-frame. Last year’s administrator’s budget message and subsequent 2021-2022 budget discussions included a commitment towards a structurally sound 2022-2023 budget that incorporated the capital projects anticipated in the 2021-2022 budget and forecasts.

BW: What are the capital projects that are in discussion?

PS: Those projects included for example two libraries and the courthouse. There is also discussion of a new livestock building at the fairgrounds. The courthouse is the most significant as this was affirmed and advanced on May 5, 2021, just 2 weeks before 2021-2022 budget documents were distributed.

BW: You, at times, have mentioned the “jaws of death” regarding budgetary issues. What does that mean?

PS: In prior years dating back to 2016 increasing costs were out-pacing revenues. When costs are trending upward and outracing revenues, I refer to the graphical intersection where the costs exceed revenues as the “jaws of death”. Whether it is a household budget, a business, or a government this trend (jaws of death) is a red flag. Some would simply describe it as “going underwater” or “in the red”. By 2017 my calculations again indicated that we not seeing the real picture and the forecasts were off.

BW: How was the “jaws of death” message received by the Commission over time?

PS: In 2016 and several years forward I flagged this, but it was dismissed. The chair at the time referenced the forecast as telling a different story, yet that was precisely my point of disagreement. The forecast was not realistic. In 2017 thru 2019 I continued beating the drum, yet again my concerns were dismissed. After some staff retirements our finance department discovered we indeed were “in the red” and indeed the forecasts were off significantly. The initial estimate was that the revenue/expenditure delta was actually about 13 million in the red. The interim finance director took action and brought this to the attention of the administrator and soon after to the county commissioners. The lesson that I hoped we would adopt is paying attention to the five-year horizon.

BW: You refer to a “5-year horizon.” What does that do to create a structurally and sustainable sound budget?

PS: It includes forecasting for future annual operating expenditures, revenues, capital expenditures and inflation. Then of course, budgeting accordingly. Instead, we are backfilling our budget with one-time revenues and savings that otherwise would be applied to the future capital liabilities. The county, in my opinion must identify the reductions necessary to achieve the goals of the board.

BW: At some point there will be a vote on whether to approve the building of a new courthouse. What are your thoughts on that at this time?

PS: If the goals of the Commission include a courthouse at todays inflated construction cost environment, the Commissioners must act with urgency and establish where the cuts will be targeted.
Otherwise, property tax revenue, which is the primary source of general fund revenue will be under tremendous strain to meet the annual payment obligations for the courthouse.

We know crime is increasing, however our jail bed capacity is not increasing nor is it meeting current needs.  – Paul Savas

BW: How does a high cost of financially funding a new courthouse affect other future Commission goals, using a new jail as an example?

PS: If the annual payments for the new courthouse exceed 5 million dollars a year, it is quite possible the Board of Commissioner’s goal of identifying funding for a new jail by 2025 will not be realized. Unfortunately, it is not uncommon to release people from the county jail early due to jail capacity challenges. We know crime is increasing; however our jail bed capacity is not increasing nor is it meeting current needs.

BW: Is there anything you would like to say as we conclude?

PS: These thoughts are my own, a lot of which is memory. It is a summary, not a detailed historical summary. My hope is that this is constructive, and I want to make sure sharing my thoughts is not in any way intended or results in criticism of or towards my colleagues.

BW: Thank you, Commissioner Savas. We appreciate your time and helping us to understand the challenges of a budget process.