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City Club report against water district, for more oversight

A study committee of the Portland City Club is recommending a "no" vote on the proposed Portland Public Water District measure on the May 20 Primary Election ballot.

But the committee is also calling for changes in the way the city's water and sewer systems are managed, including the creation of a Portland Water and Sewer Authority that would remain part of City government, but would provide independent management and oversight of the Portland Water Bureau (PWB) and the Bureau of Environmental Services (BES), which manages the city’s sewers and stormwater management programs.

“While changes are needed in oversight and management of these bureaus, this ballot measure is not the solution,” the committee said about Measure 26-156 in its report. “More modest steps can improve the process of setting (bureau) budgets and rates and enhance the effectiveness and efficiencies of the bureaus.”

The measure would amend the City Charter to create an independently-elected commission to manage the water and sewer bureaus. Their assets would still belong to the city.

The committee gave numerous reasons for voting against the measure. Among other things, the committee found the measure is poorly structured, likely to face legal challenges, and unlikely to save money.

“Your committee sees nothing in the measure that will guarantee (lower rates.) Rates will continue to be subject to upward pressure, regardless of the utilities’ governance,” the report says.

Report says new governance needed

At the same time, the committee also found problems with the current management of the bureau that have contributed to public resistance to increasing water and sewer rates. It termed spending ratepayer money on such controversial projects as the Water House and new Rose Festival “unacceptable.”

“The City’s budget-setting process bears much of the blame for the diversion of funds," the report said. "Often, short-term political expedience substitutes for long-term planning, and the temptation to tap ratepayer dollars for projects unrelated to utility services can be too much to resist.”

In response, committee is recommending the creation of a water and sewer authority that would would remain part of city government, but would provide independent management and oversight of the two bureaus. A single commissioner selected by the mayor would appoint members of the authority, who should have experience in utility finance, engineering and fields relevant to utility management.

According to the recommendation, the authority would propose budgets for the bureaus to the council and set utility rates. It would also appoint an administrator for each utility who would oversee and manage the bureaus. While the council would continue to set policy for the utilities and approve their overall budgets, it would not engage in any administrative functions related to the utilities.

The goal of establishing the authority is to “promote independent, accountable, sustainable and effective management and oversight,” the report says. “The Authority will better insulate the utilities from political and special interest pressure and help ensure accountability for long-term planning and efficient management.”

The report found that Portland water and sewer rates have been increasing faster than inflation, but the committee could not reach any firm conclusions about whether they were out of line with other municipalities.

"PWB’s rates have increased steadily over the past 10 years," the report says. "PWB’s typical residential monthly bill was $15.91 in 2003-2004, compared to $27.61 in 2013-2014. This represents an increase of approximately 73 percent in 10 years. As a comparison, the consumer price increase for that period was approximately 24.7 percent.

"BES’s residential rates have increased approximately 79 percent since 2003-2004. BES’s average monthly bill in 2003-2004 was $35.05 compared to $62.74 in 2013-2014. Projected future rates show similar increases."

Town Hall set, campaigns underway

A public town hall of the report will be held from 5:30 p.m. to 7 p.m. on Wednesday, March 12, at the Green Dragon, 928 SE 9th Ave., Portland. The full City Club will vote on the report before the annual State of City Speech by mayor Charlie Hales at noon on Friday, March 12, at the Governor Hotel, 614 S.W. 11th Ave., Portland.

The measure was put on the ballot by a petition drive primarily supported by large water users upset by increasing water and sewer rates. Portlanders for Water Reform reports raising over $172,000. major contributions include $50,000 from the Portland Bottling Company, $25,000 from American Property Manangement, $5,000 from Hilton Worldwide, and $5,000 from the Siltronic Corporation.

A new campaign committee to support the measure, the Portlanders for Water Reform Committee, was just formed and has not yet reported any contributions.

The measure is opposed by the Stop the Bull Run Takeover PAC. It reports raising just over $23,000 so far. Major contributions include $10,000 from AFSCME Local 189, $10,000 from the Audubon Society of Portland, $2,000 from Depave. and $200 from Urban Greenspaces Institute.

Committee interviewed 31 witnesses

The draft research report and recommendations are titled “Rising Rates and Customer Concerns: Assessing Governance of Portland's Water and Sewer Utilities.” It will become the official position of the City Club of Portland if a majority of its members vote to approve it by March 19. 

The committee interviewed 31 witnesses, including supporters and critics of the City’s water and sewer bureaus. The committee also studied the governance, of water, sewer and wastewater utilities in other municipalities.

The committee was chaired by Christopher Liddle, Manager, Regulatory Affairs for Portland General Electric. Lori Irish Bauman, attorney with Ater Wynne LLP, wrote the report. Brodi Ayers, Leonard Bergstein, David Cook, Michael Dougherty, Pete Farrelly, Don Francis, Michael Greenfield, Catherine Howells, Jim Jackson, Charlie Makinney, Peg Malloy, Chris Stadler, Ted Wall and Larry Wolf were also committee members. Elizabeth Friedenwald, Mark Knudsen, Pat McCormick, Patty Farrell and Greg Wallinger advised the committee.

To read the report, visit pdxcityclub.org/2014/Report/Portland-Water-Sewer-Rates