Updated: This story was updated to include a statement from Mayor Ted Wheeler.

Portland should dedicate more resources to infrastructure improvements like road and sewer repairs, according to a report released by City Auditor Mary Hull Caballero Wednesday.

Some of the city's assets--in particular its roads--are losing value faster than the city can repair them, the report found.

"While the city is making significant investments in water, sewer and stormwater assets, most transportation infrastructure is in fair to poor condition," the report said.

The condition of Portland's roads continues to decline.

Every other year, the auditor's office produces a report on the city's financial condition over five years.

This year's report found that Portland's financial health is "stable." Revenues have increased, debt is down, the city's annual budget is balanced and its credit ratings are strong, the audit found.

Since 2014, revenues increased 13 percent to $1.9 billion in 2016, the report said.

While the Rose City's immediate financial health looks promising, the rapid deterioration of roads is becoming costlier each year, the audit said.

As road conditions deteriorate, the cost of the repairing the streets dramatically increases.

Roads in poor condition cost the city around $500,000 per mile to replace, while roads in fair condition cost about $150,000 per mile, City Budget Office Director Andrew Scott told the Portland City Council at a budget work session in March.

Each year, the city faces a $281 million gap when it comes to infrastructure improvements, according to the March presentation. Transportation improvements require the most investment to repair--$285.3 million.

"Although Portland's financial condition is currently stable, there are long-term challenges the city must address," Hull Caballero wrote in the report.

Mayor Ted Wheeler has a plan to tackle infrastructure needs, spokesman Michael Cox said. The mayor plans to start spending $50 million within his term to help improve roads without raising taxes, City Budget Office Director Andrew Scott said. The city will borrow the money against expected future revenues, a step in a longer term proposal dubbed Build Portland.

"Portland has had well-documented, long-standing challenges adequately funding our infrastructure needs," Wheeler said in a statement. "We're going to change that. Build Portland is critical to the economy, safety and livability of Portland."

--Jessica Floum

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