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  • 21 Oct 2014

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City shifts gears on water, sewer spending

Lawsuit-related item on Wednesday agenda


In an unexpected move, the City Council will consider using general fund dollars to repay the Water Bureau for a small fraction of its expenses being challenged in a ratepayer lawsuit on Wednesday.

Those behind the suit say no one from the city contacted them before filing the resolution to reimburse the bureau for approximately $1.6 million spent to refurbish a headquarters building for the Portland Rose Festival and to enforce the city’s renewable fuel standards.

The resolution would also spend nearly $1.9 million from the general fund on future Portland Harbor Superfund cleanup costs — an expense that has been totally paid by the Bureau of Environmental Services so far.

The suit is also questioning whether BES, which operates the sewer system, should pay 100 percent of the city’s share of cleaning up the Superfund sites.

“I think it’s very bizarre,” says Kent Craford, co-founder of Citizens for Water Accountability, Trust and Reform (WATR), which helped bring the suit. “These are just a few of the expenditures we’re challenging, and the suit will go forward.”

The suit charges the two bureaus have spent an undetermined amount of ratepayer money on projects that are not related to their primary missions over the years.

"The council has been using water and sewer funds as free money, spending them on anything they wished, contrary to the City Charter," says Craford.

The resolution notes the lawsuit, but argues that the charter gives the council to spend the water and sewer funds as it sees fit.

“[T]he Council disagrees with and rejects the narrow legal interpretation of the City Charter advanced by plaintiffs in that case and expressly finds that the Charter does not limit the Council’s authority to spend water funds to only those circumstances in which the primary purpose of the expenditure is to promote the objectives of the water service and in which the expenditures are reasonably calculated to promote those objectives,” the resolution reads in part.

“It’s OK with me if they want to disagree with us and reimburse the water and sewer bureaus for every project,” says Craford.

Early on in the suit, the city identified recent costs for each challenged program and project that totaled about $127 million. The largest items on the list included approximately $45 million preparing for the Superfund cleanup, and more than $16 million to purchase land for stormwater management.

The city also identified around $1.5 million in water funds spent on the Rose Festival headquarters, $547,000 contributed to the now-defunct Voter Owned Elections public campaign financing program, and around $236,000 in water funds spent on the so-called Portland Loo public toilet project.

Ratepayer attorneys have decided to approach the programs and projects in phases. They are currently preparing summary judgment motions for a handful of them. For the water bureau, they the Rose Festival headquarters and the Portland Loo public toilets. For the sewer bureau, they include the land purchases. For both bureaus, they include the Voter Owned Elections program and the relocation of water and sewer lines for mass transit projects.

Even though the resolution calls for around $1.9 million in general fund dollars to be spent on the Superfund cleanup, the ratepayer attorneys are not yet preparing a summary judgment motion challenging billing all of those costs to the sewer bureau.

The resolution would make the payments by borrowing around $3.5 million in general fund dollars for three city agencies not related to the water or sewer bureaus. They are Fleet City Operating, Facilities Services Operating, and Technology Services.

The general fund transfers would begin at $135,811 in the next fiscal year and increase slightly each year until jumping to $540,025 in the 2018-19 fiscal year. The payments would total $584,543 in the 2022-23 fiscal year, the last year they would be made.

The resolution would also reverse a land swap between the water bureau and Portland Parks & recreation that facilitated the work on the Rose Festival headquarters.

The resolution can be read at portlandonline.com/auditor/index.cfm?c=50265&a=419431