BACK IN MAY, Commissioner Sam Adams called a last-minute press conference to break some bad news: Thanks to the rising cost of oil (then at a record $120 a barrel), people were buying less gas, and paying less gas tax, which meant the Portland Department of Transportation (PDOT) was strapped for cash to the tune of $2.7 million.

Making things worse, as Adams noted in a May 18 post to his blog, "The skyrocketing cost of oil has put existing estimates for transportation projects out of whack." Adams ordered PDOT to do a 30-day review of the "40 projects in the pipeline for delivery in the next two years," to find out how much more expensive they'd be now. (He also ditched the controversial Sauvie Island Bridge re-use project that day, citing uncertain costs.)

Fast forward more than 60 days: During this time, oil has jumped as high as $145 a barrel (as we went to press, it was down to about $128), and PDOT has finished their review of projects. It's a double hit of more bad news, according to PDOT Director Sue Keil.

"Grossly we're off another million dollars since we were talking in that press conference," she says. The city is getting even less in gas tax revenues from the state, because people are buying even less fuel. "It's sticker shock on the price of gas, and more fuel-efficient cars," she says. The gas tax is "not a very good funding mechanism anymore."

The city council plugged the last gap on June 4, but it's unclear how the city will make up this million—or what it will do to fill what is likely to be an ongoing gap, as people change their driving habits.

On the PDOT project front, Keil says the review found that material costs jumped.

"We have completed our review of projects, and because of the oil-relatedness of asphalt and other increases in material costs, we found there's a 17 percent increase in the cost of materials," Keil says.

Six transportation projects "we know for certain are out of whack," says Adams.

Adams says he's "looking at both the revenue side and the cut side at this point," and doesn't expect to have a solution for several weeks.