Three months shy of his two-year anniversary, Hillsboros Michael Brown talks about debt, police

Michael Brown has served as Hillsboro’s city manager, one of the most important positions in Hillsboro’s city government, for 21 months. As city manager, Brown oversees day-to-day operations and helps plan for the future of the city. He also works to execute the goals and objectives of the Hillsboro City Council.

Although he is relatively new to Hillsboro itself, Brown is no stranger to the state of Oregon, as his family moved to Oregon when he was HILLSBORO TRIBUNE PHOTO: CHASE ALLGOOD - Hillsboro City Manager Michael Brown has lived in Oregon most of his life.

“We lived in the coastal range mountains near Blodgett, between Corvallis and Newport,” Brown explained. “We moved to Eugene when I was 14.”

Brown went on to earn a degree in business administration from the University of Oregon, double-majoring in finance and management. After a brief stint working for Corvallis city government, Brown entered the Master of Public Administration program at the University of Kansas. He graduated in 1995, and about two years later, in May 1997, he accepted a position with Douglas County, Nev. He served in various administrative roles in Douglas County for 14 years, and eventually worked his way up to become county manager.

On Aug. 15, 2011, Brown started serving as Hillsboro’s city manager.

The Hillsboro Tribune interviewed Brown last week to get his views on the city’s finances; the ongoing search for a new police chief; and other key issues. The interview has been edited for brevity and clarity.

Hillsboro Tribune: From your position as city manager, what do you see as Hillsboro’s key assets? Conversely, what do you see as the biggest challenges facing the city?

Brown: Hillsboro residents can be proud of the city’s excellent, stable and progressive political leadership. The quality of our local leaders is matched only by the city’s dedicated and talented staff. The city of Hillsboro is in excellent financial condition. Our fiscally conservative approach, along with stable revenues, has led to strong reserves and low debt. The strength of the city can be seen in the great public and private partnerships we have established. Those partnerships are the result of an exceptional degree of collaboration and have paid great dividends for the city.

Our challenges as a city largely stem from our continued prosperity. To keep pace with our expanding economy, we need to address the shortage of housing options in Hillsboro, as well as our short and long-term transportation needs and costs. At the same time, we are working to maintain our hometown livability and connectivity as we grow.

Hillsboro Tribune: Some citizens have raised concerns that city officials are using “creative financing” and circumventing the public by not asking directly for bond money through taxation for major projects such as the library reconstruction, the new Hillsboro ballpark and enhancements to City Hall. Is the city adding to its debt with these projects? If so, does the city have a realistic plan to pay off these debts?

Brown: Far from “creative,” the city’s past and current borrowing adheres to very traditional debt financing practices in accordance with state laws and best practices for local government debt financing. We recently refinanced some of our debt (City Hall and water infrastructure) to take advantage of exceptionally low interest rates, which saved taxpayers a lot of money. We also recently issued new debt to fund our new, multi-purpose ballpark and main library expansion, as well as the remodeling of the Shute Park Library, at exceptionally low interest rates.

We underwent a bond rating review by Moody’s prior to issuing our new debt. Our debt rating is excellent due to the city’s strong financial condition and positive economic forecast. Repayment of debt (debt service) is and will remain the highest priority expenditure for the city, and we will always have sufficient funding to repay our debt obligations.

You mention that some think we circumvented the public by not asking directly for bond money through taxation. The City Council is elected by the public to represent the public. The council has the authority to approve the issuance of debt when the city can fund debt repayment without raising taxes. In other words, rather than raise taxes to finance these facilities, the City Council was able to utilize existing resources.

Hillsboro Tribune: In round numbers, how much indebtedness does the city currently carry (we’ve heard it’s in the $50 million to $60 million range), and for what projects? How is it beneficial to Hillsboro citizens for the city to owe that amount of money? And, to use the national vernacular, what number in your mind would be the city’s “debt ceiling” — the amount beyond which you wouldn’t be willing to go?

Brown: Total outstanding debt is currently $63.7 million. The projects financed include: the completed Civic Center; the Cherry Lane and Jones Farm fire stations; the construction of the Hillsboro ballpark; a new water reservoir and existing reservoir repairs; and the expansion of the main library and renovation of the Shute Park Library.

The amount of debt the city maintains is a very important financial consideration, and we thoroughly analyze our ability to repay new debt prior to issuance. Debt financing is beneficial for certain projects and makes sense particularly when interest rates are low. By borrowing at a very low cost for projects desired and approved by the City Council for our community, the city can save money in the long run by avoiding inflation in the years to come.

The city has an adopted debt policy that sets forth requirements on what we must do prior to issuing debt, including seeking financial alternatives to debt, full disclosure, estimation of operating impacts and compliance with all federal and state laws and regulations. Further, there are state laws that put limits on the amount of general obligation debt and short term debt that a local government can issue.

Hillsboro Tribune: The Hillsboro Police Department has had a rough stretch lately, and morale has reportedly been low in the ranks. Do you have any insights into why this has been the case, and do you believe the situation is getting better or worse? How close are you to hiring a new police chief? Given the stakes, are you feeling a lot of pressure to get this decision right?

Brown: My interactions with police staff led me to the same conclusion: that we need to improve morale in our police department. We are working to establish a clear vision for the department and improve working relationships. We believe this will help our employees continue their outstanding work to protect the safety of the public. But here is something I want to stress. It is very important for our citizens and businesses to understand that despite the morale concerns, our police department employees continue to deliver excellent services to our community. This is because of the quality, talent and dedication of our police department employees. The Hillsboro Police Department is second to none and I am very proud of our employees’ commitment to the public. We plan to start the recruitment of a new police chief in about two months. Our aim is to resolve some of the most pressing issues in that time to aid in the success of our new chief.

Yes, I feel a lot of pressure to make a good decision, but I have the privilege of holding a position where the pressure to make good decisions is always present. I am fortunate to have the support and assistance from a lot of people who care a great deal about who becomes our next chief. My hope is to have several high quality applicants to choose from.

Hillsboro Tribune: What do you like to do when you are not working on your duties for the city of Hillsboro?

Brown: I enjoy being with my wonderful family and friends. Traveling, eating, listening to live music, hiking, walks on the beach and motorcycle riding are a few of our favorite activities.

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