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Legal threat hits non-critical spending

Group says bureaus' money doesn't always go toward services
by: CHRISTOPHER ONSTOTT A cyclist rides the path through River View Cemetery adjacent to 146 acres of undeveloped land partly purchased by the Portland Bureau of Environmental Service, a transaction that may soon end up in court.

In the contentious debate about city water, sewer and stormwater spending, Commissioner Randy Leonard has taken most of the heat.

Leonard, who is charge of the city's Water Bureau, has been criticized for spending millions of ratepayer dollars on projects that do not seem directly related to the bureau's core mission of providing clean water to homes and businesses.

Leonard has repeatedly defended the projects, even though much of the spending was questioned in a March audit by the city outlining the 'inconsistent' spending of utility funds on projects 'not always linked to services.'

But, as revealed by a potential lawsuit threatened by the city, alleged misspending by the Water Bureau could pale when compared to mispending by the Bureau of Environmental Services, which operates the city's sewer system and manages stormwater runoff.

The suit is being prepared by a new advocacy group called Water Accountability, Trust and Reform Inc. Lawyers representing the group cited the Water Bureau projects included in the city audit and a number of others in an Oct. 31 letter to the City Council demanding that the money be repaid to taxpayers.

The letter also cited a number of BES projects that dwarf those being defended by Leonard, including greenspace land acquisitions for stormwater management, such as the May purchase of 146 acres from the River View Cemetery Association in Southwest Portland.

BES contributed $6 million to that single purchase, which WATR believes was not justified. That alone is more than all of the projects Leonard has been defending. They total less than $4 million.

'Leonard has been criticized and deservedly so, but BES may actually be spending more money on non-critical mission projects than the Water Bureau,' says WATR spokesman Kent Craford, who also represents a group of large Portland water consumers.

City Commissioner Dan Saltzman oversees BES. Saltzman said he could not comment about specific projects mentioned in the threatened lawsuit because of the pending legal action.

Saltzman said the March audit raised serious questions about Water Bureau and BES spending that the council should address. After the audit was released, he proposed transferring several BES projects totaling $220,200 to the general fund, an idea that no one else on the council supported. Saltzman has also developed a proposal for an Independent Utility Commission to set future water and sewer rates. That plan is on hold while the Charter Review Commission decides whether to place its own proposal on a November 2012 ballot.

'All of this should be looked at,' Saltzman says.

Made up concerns

Public criticism is growing after years of increasing water, sewer and stormwater bills. Craford says WATR is still researching how much the Water Bureau and BES are spending on projects the group does not consider essential to the agencies' core missions. In addition to the approximately $4 million in questionable Water Bureau spending, the audit cited a few questionable BES projects, including $270,000 for tree inspections, invasive species control and enforcement of dog rules in natural areas, more than $2.5 million in parks and planning programs, and an unspecified amount for the Office of Healthy Rivers created in 2009 by the council.

The letter from the WATR lawyers lists a number of projects not included in the audit, however. One is the purchase of Centennial Mills by the Portland Development Commission. BES contributed $900,000 to the acquisition of the property. The money was intended to pay for work on the former Tanner Creek, which flows from underground pipes into the Willamette River at the site. The redevelopment project has since stalled.

Another is the purchase of undeveloped lands. The council has authorized BES to buy property to preserve or enhance lands that naturally clean stormwater before it reaches creeks, rivers and sloughs. The largest purchase happened two months after the audit was released, when the city helped buy the property south of the River View Cemetery. The purchase price was $11.25 million, with $6 million coming from BES, $2.5 million from Portland Parks and Recreation, $2 million from Metro open space bond funds and $750,000 from an Oregon State Parks and Recreation Department grant.

Before the council approved the purchase, cemetery officials indicated that a number of developers were interested in the property near Lewis and Clark College. Craford believes the land could be developed in a way that is sensitive to the environment. It is zoned as open space, meaning the council would have to rezone it for development and impose environmental restrictions on future projects there.

'Basically, the city made up stormwater concerns to use BES money to buy a park,' Craford says.

Another area of concern for WATR is ratepayer funds that are used to replace and move water and sewer lines in conjunction with Portland Streetcar and TriMet light-rail projects. Although such work makes the lines last longer and easier to maintain after the tracks are laid, Craford argues that other lines around the city may be in need of more attention. City records show the Water Bureau and BES have each spent around $12 million on such work in recent years.

'The bureaus need to set their priorities, not the streetcar and TriMet,' says Craford.

The letter gave the city until Oct. 16 to respond. That deadline passed without any contact from the city. Craford says lawyers are proceeding to finalize their lawsuit, which could be filed by the end of the year. Craford declined to identify the source of WATR's funding, saying donors prefer to remain anonymous.