Portland is among the seven major U.S. cities with the most staggering loads of debt per capita, according to a report issued Wednesday by a Chicago-based government finance think tank, Truth in Accounting.

The Rose City received an 'F' grade for its $4.4 billion worth of debt, most of it for capital projects and unfunded employee pensions. Authors of Wednesday's report divided cities' debt by the count of taxpayers and found Portland's would each have to pay $21,400 to retire the city's debt.

By that metric, Portland ranked 70th among 75 cities.

Portland Debt Manager Eric Johansen told The Oregonian/OregonLive in an email that the report failed to consider Portland's unique voter-approved pay-as-you go tax levy that covers its Portland Fire and Disability Fund. An independent analysis of the levy in June 2016 found that it fully covers future benefits under "a wide range of most likely scenarios."

"As a result, the Truth in Accounting 'report' is highly misleading and does not fairly present the city's financial position," Johansen said.

Portland ranked above Dallas, San Francisco, Philadelphia, Chicago and New York City and one notch below Oakland. Each of the seven cities received F grades from the firm.

The top grades went to Irvine, Calif; Stockton, Calif.; Lincoln, Neb.; Charlotte, and Aurora, Colo. The study called them "sunshine cities" for spending within their means.

Stockton's low debt level has a novel cause: The city filed for Chapter 9 bankruptcy protection in 2013. The Northern California city faced a "staggering debt burden," the study says. But because creditors agreed to debt relief, "Stockton now has more than enough assets to pay its bills."

Truth in Accounting advocates for local and state governments to disclose more than what generally accepted accounting principles require and to estimate more conservatively how much they will earn on their pension investments.

The think tank's study analyzed 75 cities' comprehensive annual financial reports from 2016 for its Financial State of the Cities report and determined that 64 of them did not have enough money to pay all of their bills.

Almost all of the cities, the report argues, have financial problems "driven by runaway entitlement obligations in the form of pension benefits." It asserts that city officials have hidden "significant amounts of that retirement debt from its balance sheets."

"This means that to balance the budget, elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers," the report says.

Portland frequently gets questions about a mismatch between its assets and liabilities and city finance officials are able to explain it to anyone interested in understanding it, city debt manager Johansen said. The think tank never reached out to the city, he said.

Johansen said rating agencies regularly review Portland's financial policies. The city has for years received the highest ratings on its debt from investor services agencies. Moody's Investors Services gave the city the highest Aaa rating on $471 million of outstanding limited tax bonds. Its unlimited tax general obligation bonds and lien water revenue bonds already had the Aaa rating.

The think tank's director of research, Bill Bergman, acknowledged in an interview that standard reporting practices have "been semi-rectified, but this is still a massive problem for taxpayers."

"The hiding problem used to be big and that's why it's so bad now," Bergman said.

"Portland is one of many municipalities that have chosen to follow the rules when they could've provided supplemental information and should've," he said.

--Jessica Floum

503-221-8306

@cityhallwatch

@jfloum