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Oak Lodge districts to merge in 2016?

The word “exciting” doesn’t usually come up when people think about the next Oak Lodge Sanitary District meeting, but the word has been spreading among community members in reference to Tuesday’s agenda with a merger proposal and possible new board members.

Terry John Gibson, president of the OLSD Board of Directors, is looking forward to voting for a deeper look into consolidation with the Oak Lodge Water District so the two boards can consider more accurately “where and when we’d get a return on investment.” The new merged board could have seven board members, or they could decide five is enough.

Tom Foeller, who has been planning his retirement for awhile, will step down from the OLSD Board July 8 at 5 p.m. Remaining board members will be picking between two possible replacements: Eleanore Hunter, former chairwoman of the Oak Grove Community Council, or Susan Keil, former director of transportation and pollution prevention for the city of Portland.

A joint work session between the two boards last month considered a consultant’s prediction of more than $500,000 annual savings, but in practice, no one believes all of those savings would be realized right after voters approved the merger in 2016.

OLWD Board Chairman Myron Martwick worked 13 years for PGE during the Enron debacle, so he is wary of over-enthusiasm for a merger. In merged organizations, even if two clerks are doing the same function, he argued, a person who is doing the combined work won’t be as effective.

“Over time work piles up and become a major problem, so you may have to hire people back,” he said. “Then you really haven’t saved anything — just caused chaos.”

Martwick also expects both district boards will vote this month to proceed with exploring the merger possibility, but he predicts more devils will emerge in these details.

“To base the welfare of your organization on guesstimates really isn’t sound thinking,” Martwick said. “One of our biggest concerns is being able to maintain customer-service levels after we eliminate administrative positions.”

OLWD staff aren’t unionized, while OLSD employees belong to a union, so it’s unclear what employment-law issues would come up if the organizations merged. If a “utility authority” is created, as advocated by some OLWD and OLSD board members, Gladstone and Milwaukie could object to a threat to city expansion in a similar way to how Oregon City objected to an agreement between Clackamas River Water and Sunrise Water.

But Gibson argued that since districts already by statute remain whole when cities annex, the authority would make sure there’s always an independent group taking care of Oak Grove’s infrastructure. This was the intention of local activists when they refused to join Clackamas County agencies about a decade ago, and late OLSD President William Wild fought for these protections in Salem.

Martwick said a 10-year forecast of each agency based on rate increases of 4 percent isn’t necessarily going to happen. “This year for instance, we don’t have a rate increase, so the numbers that were used for this study weren’t current,” he said.

With or without a merger, cost to customers would continue to trend up long-term. That’s just how things go with inflation and with rising costs in general, board members say.

OLWD hired its own consultant who is going to look at the final report from Donovan and make his own conclusions.

“This isn’t going to be easy or swift process,” Martwick said.

“It’s going to take a long time to get this thing completed,” agreed fellow OLWD Board Member David Gray, who added that there could be lots of additional benefits to a merger.

“This report was just on financial feasibility, and the savings for the average customer was not big, maybe 50 or 100 dollars in the first few years,” Gray said. “ But it would also simplify things for customers, and they’d get one bill that would show the water, sewer and surface water management costs.”

July 8 at 6 p.m., OLSD Board will discuss the merger at its administration office, 14611 S.E. River Road. At the same time on the following Tuesday (July 15), the OLWD is scheduled to discuss the issues at its offices two blocks away, 14496 S.E. River Road.