Illustration by Ryan Alexander-Tanner

LAVONNE GRIFFIN-VALADE, Portland's independently elected auditor, has been very good to Mayor Charlie Hales this year.

Twice this winter, just before bureaus released their budget wish lists, her shop produced stinging audits on the high cost of neglected street maintenance—dovetailing neatly with a political message Hales had been selling since the primary campaign.

Then on Tuesday, March 26, her office dropped a third perfectly timed report. It's all about the muddy division of labor (and tax revenue) between the city and county governments—a subject that has, increasingly, sizzled as a flash point for Portland officials puzzling over how to solve this year's $25 million deficit.

The upshot is simple: Most of what we think we know about the two agencies' essential arrangement—Multnomah County runs social services and rural affairs, while Portland handles bricks, pipes, and roads—is a myth.

And that myth masks a Byzantine tangle of redundant programs and payouts that make it impossible to decipher who's spending our money, and on what.

The documents that purportedly define this deal—cited as holy books by officials looking to justify whatever policy need is convenient—never clearly say, with few exceptions, what should qualify as each government's "core" functions.

Worse, the youngest of those bedrock documents is 29 years old, crafted before the rise in lobster-like urban renewal districts. Before the fadeout of federal funding for county services. Before Portland cops started filling in as de facto counselors. Before governments like Metro were created. Before Portland felt compelled by poverty to create a housing bureau. Before property tax limits put a tight squeeze on local budgets.

The list goes on and on. And some of those perfectly pleasant programs the city has taken on in the intervening years, the report warns, might be too expensive to keep around.

At a budget hearing this month, where Police Chief Mike Reese was discussing a request to keep paying 20 county employees to process fingerprints, not a single person in the room had an exact inkling of why, when, and how that deal was struck. It's not an inconsequential question. Passing those techs back to the county would buy a lot of cops.

"It was very telling that no one knew the history of that," Griffin-Valade told me.

This is hardly a new issue. And it comes with a history of old wounds and backbiting. But it took on new urgency after voters approved a library district that, because of tax laws, will cost the city up to $10 million a year in lost revenue. Griffin-Valade confirms she bumped up the report for the express purpose of helping guide budget talks.

Former Mayor Sam Adams tried and failed, as the Mercury first reported, to devise a new grand compromise. Hales has picked up that baton, taking pains to talk up his bonhomie with County Chairman Jeff Cogen.

But if the mayor should need to pick up a club, too? This audit gives him one.