The streetcar is owned by the city but is partnered with TriMet and Portland Streetcar Incorporated.
The audit said there is no mission statement or strategic plan for the project, and the the auditor suggested those items be put into place.
Increasing the financial transparency of the streetcar is suggested.
KOIN 6 News will have more information later in the day.
Portland Streetcar 'convoluted, confusing' | KOIN.com
The Portland Auditor's Office is urging the City Council to postpone future expansion of the Portland Streetcar system until questions about its financing and organizational structure can be resolved.
In its first audit of the system, the auditor's office found the mix of public agencies and private organizations involved its operation confusing and potentially risky to the city's finances. Although Portland owns the tracks, streetcar and other equipment, the system is operated by a non-profit organization called Portland Streetcar Inc., and the streetcars are driven by TriMet employees.
The audit, "Portland Streetcar: City bears financial burden and operational risk while relying on outside partners," was released Thursday, April 17, and includes four recommendations to the Portland Bureau of Transportation to resolve some the questions.
"After years of system growth, the city needs to focus on aligning its mission, strategic direction and partnership structure to ensure the success of Portland Streetcar operations. With that in mind, we also recommend the City Council defer future Portland Streetcar system expansion decisions until PBOT has implimented our recommendations," according to the audit.
The recommendations include:
• Conducting a strategic planning effort.
• Better protecting the public interest.
• Improving transparency for Portland Streetcar financial reporting.
• Mitigating risks related to conflicts of interest and/or related-party partnerships.
In his response letter, Transportation Commissioner Steve Novick says he agrees with the audit's recommendations.
The audit can be read at www.portlandonline.com/auditor/index.cfm?c=64479&a=487580.
Audit questions Portland Streetcar organization
Portland Streetcar Audit Says City Violated State Law
A new city audit of Portland Streetcar says City Hall is breaking state law in how it allows the streetcar's private operator to control public money.
City Auditor LaVonne Griffin-Valade also says the city has never made a strategic plan to fit the streetcar into its larger transportation spending, since creating the streetcar system in 1995.
"The City’s decisions have resulted in a structure that is not readily transparent to the public," writes Griffin-Valade, "does not reflect an actual level of City control to match its contractual responsibilities, and raises concerns about related-party relationships and perceived conflicts of interest."
Griffin-Valade's new audit slams the Portland Bureau of Transportation for allowing private operator Portland Streetcar, Inc. to manage two funds of city money—revenue collected from fares, sponsorships and parking revenue.
The audit says that money was spent by Portland Streetcar, Inc. in violation of Oregon law—and that while the city has made gestures toward compliance, it still hasn't finalized agreements allowing the streetcar operator to use the money legally.
The report also criticizes the city because it "does not fully report Portland Streetcar operations and maintenance costs."
More than a year ago, Griffin-Valade slammed the City Council and the Portland Bureau of Transportation for spending on capital projects without having the money to pay for road maintenance.
Now, 15 months later, the City Council is hunting for new taxes and fees to fund transportation projects.
But Griffin-Valade's latest audit, released today, says PBOT still hasn't followed through on the auditor's recommendation that it decide which transportation projects are the most important.
"In our 2013 audit on transportation funding, we agreed with the City Budget Office’s recommendation that PBOT develop a transportation strategy to prioritize and reconcile potentially competing transportation priorities," Griffin-Valade writes. "PBOT has yet to create a written strategic plan."
The admonition arrives at a particularly damaging moment.
Mayor Charlie Hales and City Commissioner Steve Novick are trying to rally support for a $12-a-month "street maintenance fee" that would deliver as much as $52 million a year to the cash-strapped transportation bureau.
The audit suggests that City Council not approve any further streetcar expansion until it develops "consistent goals" and a strategy to link the streetcar to its larger mission.
Portland Streetcar Audit Says City Violated State Law
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Direct link to the audit: https://www.portlandoregon.gov/auditor/article/487580
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