On Friday, Mayor Vera Katz will deliver her State of the City address. While she wouldn't make a copy of her speech available before press time, it's a safe assumption she'll focus a lot of attention on the budget shortfall. This year, in the middle of the worst recession in two decades, there will be no bold-sounding proposals like those of last year, when she announced the River Renaissance, a push to reconnect Portland's psyche to the Willamette River.

It's also a good bet that the three-term mayor will give Portland good grades. She'll say Portland is moving forward in spite of the state's 8-percent unemployment level. She'll probably stress how crucial expansion of Oregon Health & Science University is to the city and how Portland could, one day, become the Molecular Forest. Katz may even embrace a change in Portland's form of government, the Good Government Initiative.

But she will almost certainly not tell the City Club audience about something more immediate and pressing: City Hall is under fire.

The winter's discontent cannot be measured strictly by the number of complaints flowing into her office, even though her staff was recently bombarded with emails demanding the Office of Neighborhood Involvement not be eliminated during upcoming budget cuts. It can't be tallied by the number of negative news accounts in the national press following Katz's decision in November not to cooperate with the Department of Justice in having local cops interview foreigners.

It can't even be gauged by the groans that came from all corners last summer when it was revealed that computer software problems at city Commissioner Erik Sten's Water Bureau would leave the city with an $8 million piece of junk.

It can only really be measured by the number of ways, both large and small, in which conservatives and liberals, businessmen and trade unionists are all tag-teaming the city that works. For them, it's become a city which needs to be thrown out of the ring.

Even Sam Adams, Katz's chief-of-staff and a reflexive booster of city government, admits Portland is facing a high level of criticism and outright dissension.

"There is always an ebb and flow," says Adams, "and we're definitely at high tide."

It's not hard to find people angry at City Hall. All it takes is a few phone calls.

Call Carl Davis, general counsel for Columbia Sportswear, which sells $770 million a year worth of sporting goods. He'll bitch in a perfectly professional manner about how the city left the company with little choice but to move its headquarters and 431 employees out of Portland and into Washington County last November.

In October 2000, in search of larger digs, the company angled to move from St. Johns to a vacant piece of property along the east side of the Willamette River between OMSI and KPTV Channel 12's studios.

Davis was taken aback by the reception a group of city planning employees gave the company.

"They laid out a bunch of reasons why the property wouldn't work for us," says Davis, adding that the property was clearly zoned for an office building and a parking lot.

The city insisted that the company file a new application for zoning. What's more, the city's Office of Transportation wasn't warm to the parking lot. The reason: Surface parking lots are not allowed near MAX stations. Of course, there's no MAX stop in sight, but a station was once planned next to Columbia's proposed parking lot. The fact that metro-area residents had shot down that particular light-rail line in a November 1998 election didn't seem to matter to city planners.

"They told us [this was] non-waivable and non-negotiable," says Davis. "They said they still considered it a viable project."

After the meeting, Davis says he reached into his briefcase. He had an advertisement for a vacant building in Washington County. The next day, he and Tim Boyle, the company's president, looked over the property. A year later, they moved their company out of Portland.

"That was a hit to the bow" of the local economy, says Greg Goodman, a local businessman and president of City Center Parking. "You can win all those 'Most Livable City' awards, but people have to be able to work in them."

It's not just businessmen who are angry with Portland.

Call John Wish, a member of the Public Utilities Review Board, and you'll get an earful. A former Lewis & Clark economics professor, he considers the Water Bureau fiasco an example of bureaucracy at its worst.

Two years after a new computer billing system was brought on-line, the Water Bureau and the Bureau of Environmental Services still cannot bill accounts properly. That's forced the city to write off $5.9 million in delinquent BES accounts over the last two years, an amount that's five times more than a typical year's bad debts.

Even worse, the resulting cash-flow shortage has forced BES to delay by more than a year issuing bonds to fund new construction projects.

Check with Jim McEchron, president of Laborers' Local 483, which represents some 600 city workers, and he'll tell you the city engages in "benign corruption." His evidence? The city's deal with Portland Family Entertainment to run PGE Park. Engineered behind closed doors in 1999, it was a $38 million "sweetheart deal" for PFE, as the union leader puts it, and one he claims was especially sweet for managing partner Mark Gardiner, the city's former finance director.

"It's not Chicago," says McEchron, "but people get real benefits from their connections."

Last summer, PFE almost went into financial meltdown, and, for a time, it appeared that Portland might be liable for the limited partnership's interest payments as a result. (Gardiner and his partner Marshall Glickman were forced out last fall.)

Call Mike Sublett, a local economist who in 1996 ran for the state Legislature as a liberal Democrat and was endorsed by the Oregon League of Conservation Voters.

He's angry because he thinks the city has taken environmentalism too far. His beef is with the Bureau of Planning's Healthy Portland Streams project, an attempt to protect steelhead trout and Chinook salmon.

Sublett and others who've reviewed the draft proposal think the Healthy Streams project has gotten out of control. The homeowners who are mad about this are hardly the black-helicopter crowd. They are doctors and lawyers, many of whom count themselves as Portland liberals. They argue that the city has gone too far in protecting fish. During the past three months, public meetings over the proposal have broken down into shouting matches.

Sublett, for example, says that under its proposed restrictions, he and his wife won't be able to plant non-native vegetation on their Southwest Portland property because they live near a culvert.

"This is abominable," says Sublett.

Steve Abel, a local lawyer who recently completed eight years on the Portland Planning Commission, agrees. "Right now, the balance between protecting fish and letting property owners use their land is out of whack," he says

The complaints have not gone unnoticed at City Hall. Katz told WW last week that, while she wants to charge ahead with Healthy Streams, she's inclined to hold off given the city's grim financial picture. That's because she says the city can't afford to handle what she is sure will be legal claims over "takings."

Even some people who sit on a key commission are uncharacteristically exasperated by the city.

Last week, Ernie Bonner, a former city planning director who is currently a member of the Portland Planning Commission, unloaded on Planning Director Gil Kelley and Katz, Kelley's boss.

He's frustrated because, on Feb. 11, Katz and Kelley held a press conference announcing their support for an aerial connection between OHSU's Marquam Hill campus and its proposed expansion site in the North Macadam district.

Bonner was ticked that Kelley had expressed his opinion so strongly before public hearings on the Marquam Hill plan scheduled for April--hearings intended to help the planning-commission members make up their minds.

"If it's pretty much decided, what are we doing?" asks Bonner.

Amanda Fritz, another planning commissioner, is just as rankled. "The public hasn't even had a chance to weigh in," she says.

Katz and Kelley insist they are only voicing their opinions, not carving decisions in stone. They say the public hearings will be more than window dressing.

That doesn't satisfy Marcy McInelly, another planning-commission member.

"I'm embarrassed for the city," she says. "It's horrible."

One person stands to benefit from the kind of free-floating anger that's going around the city.

Robert Ball is a real-estate developer and reserve police captain. A thin, dark-haired man who's often brimming with a salesman's enthusiasm, he almost ran for mayor in 2000. Now, he's teaming up with downtown business interests to change Portland government.

Since 1913, Portland has had the commission form of government. That means the city's five council members, each of whom is elected citywide, run city departments such as fire, water and police in addition to setting city policies. Portland is the last major city in the United States to have such a form of government.

The idea behind the commission form is that, since power isn't concentrated in the mayor's office, there's less chance of outright corruption. Under the system, the mayor's primary power is to assign departments to council members.

The system's downside, Ball and others say, is that the commission form of government essentially creates five mayors, each with his own fiefdom. And this, he claims, slows down the engine of government.

Last year, Ball recruited Steve Janik, a well-connected lawyer and the developer of the ill-fated Capes, the environmentally challenged development on the Oregon coast. Janik drew up initiative language with the saccharine title "The Good Government Initiative." The measure would replace the commission form of government with a strong mayor running all city departments. City Council members, elected on a district basis, would be relegated to rule-making and passing budgets for the city. The mayor would be able to veto any council action.

Ball and his allies insist their motive is to create a more responsive government.

"The business community has zero input" on city government, says Pete Mark, a prominent owner of downtown real estate who contributed $5,000 to Ball's campaign. He says that his own business has been "slowed down" every time it has come in contact with city bureaus such as the Office of Planning and Development Review.

Another supporter is Sho Dozono, president of Azumano Travel.

"Let's say the mayor floats an idea," Dozono says. "It's only good [if she gets] two more votes. I think we ought to elect a mayor and hold them accountable, as opposed to having [a mayor] say, 'There are five of us, and I couldn't get three votes.' I think the mayor's hands are tied."

Joining Mark and Dozono are businessmen such as Howard S. Wright, Ken Novack and Gordon Sondland. Each gave $5,000 of the campaign's $196,000 as of Jan. 31. The Portland Firefighters Association kicked in $7,500.

Among those opposing the initiative are former mayors Bud Clark and Neil Goldschmidt and local developer John Russell.

The environment around the Good Government Initiative is rich with irony.

While the initiative has gathered enough signatures to be placed on the May ballot, the language of the initiative includes a fatal flaw: a dating error that, should the measure pass, would have the effect of eliminating City Council for an entire year.

That's why last week found Ball before City Council asking it to refer a corrected version of his initiative to the ballot. In essence, he asked city commissioners to participate in their own demise.

At press time, it seemed highly unlikely that a majority of commissioners would vote to refer the corrected measure when asked to do so during a Feb. 20 council meeting.

"We'd be the first city council in America to recall itself," says city Commissioner Charlie Hales, who's leading the charge against the initiative.

It's also curious that the support for the Good Government Initiative is being fueled by much of the anger currently directed at the city planning bureau. This agency is overseen by the mayor; it's hard to see how passage of the Good Government Initiative, which would give the mayor more power, would address those complaints.

Besides, Katz acknowledges that Kelley is doing exactly what she hired him to do: make unpopular proposals and force issues into sharper focus.

The mayor, of course, remains the most prominent unofficial supporter of the initiative. She has not yet publicly announced her position, but she has repeatedly stated that she's warm to the initiative and cold to the commission form of government.

She admits that the anger directed at City Hall has increased in recent months.

"We felt a change in mood in emails and letters" in December, she says. The mayor attributes it to the faltering local economy and people's sudden awareness that government is still spending money.

"When the economy was doing fine, we didn't have all this finger-pointing," she says.

Katz says, however, that City Hall's unpopularity has nothing to do with her dislike of the commission form of government. She thinks it's inefficient. Skeptics say that Katz--who, amazingly, won't rule out running for a fourth term in 2004--simply wants more power.

Finally, it's odd that the push for changing Portland's government is coming not from outraged outsiders who feel they don't have access to City Hall, but rather from entrenched insiders like developers and the firefighters union, groups which have easy access to the levers of power.

What do those in the line of fire make of the striking assault on City Hall?

"I try not to take it too personally," says city Commissioner Dan Saltzman. "But I think [the measure's existence] says a lot of people have frustration with this form of government."

Saltzman's fellow commissioner Sten agrees that the city is under fire.

"Most of the issues that people are fired up about are absolutely fair," he says.

One observer, political consultant Mark Wiener, thinks much of the hostility toward City Hall has an easy explanation.

With only one shift in its members (Saltzman replaced Gretchen Kafoury in 1999), the same City Council has been in office fox six years.

"It just doesn't have that new-car smell," says Wiener.

Former Mayor Goldschmidt says that this may be the smartest City Council in the city's history, but that there's such "a narrow bandwidth in philosophy" among its members that some interest groups, like the business community, feel frozen out.

While the groups hoping to capitalize on the anger currently directed at City Hall may ultimately fail with the Good Government Initiative, they aren't going away.

"This group will not stop" its efforts to change city government," says Pete Mark, the downtown real-estate mogul. "I guarantee it."

Mayor Vera Katz delivers her State of the City address at 12:15 pm Friday, Feb. 22, before a City Club of Portland luncheon at the Multnomah Athletic Club, 1849 SW Salmon St., 228-7231. Seating without lunch is $5 for non- members of City Club.

Someone's raising a ruckus: Led by activist Rachael Stein, a group of broom-wielding performance artists- cum- protesters will clean the sidewalk in front of the club before Katz's speech. They are protesting Katz making her speech before a club that charges admission instead of making her address accessible for no charge.

Katz's address will be broadcast live on Portland Cable Access channels 30 and 11, then on KOPB-FM 91.5 at 1 pm Tuesday, Feb. 26.

The error in the Good Government Initiative would effectively disband City Council for 2004. Under the city charter, city government would cease to function.

Portland Firefighters Association President Tom Chamberlain says the union, which supports the initiative, merely wants to push district elections of city council members. Some attuned skeptics, however, say that former PFA president and state Rep. Randy Leonard (D-Portland) would be an odds-on favorite for a council slot under the new system.

Other large contributors include developer J.P. Hammer and television producer Paul Stojanovich. Each gave $5,000 of the campaign's $196,000 as of Jan. 31.

Robert Ball contributed $77,000 of his own money.

The public comment period on the Healthy Streams proposal closes March 1.

The Portland Planning Commission will hold public hearings on the Marquam Hill and North Macadam plans on April 2 and May 7, respectively.