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City gets ready to battle EPA on Superfund costs

PORTLAND TRIBUNE FILE PHOTO - The McCormick and Baxter site on the Willamette River was cleaned up as part of an early action project in the Portland Harbor Superfund process. Most of the Superfund site has yet to be cleaned.
Despite the city’s lead role in financing the Portland Harbor Superfund project to date, Portland officials do not believe the city is liable for much — if any — of the ultimate cleanup costs.

Although the City Council is not expected to take a stand on the U.S. Environmental Protection Agency’s proposed cleanup plan until near the Sept. 6 end of the public comment period, several officials have recently said the city has not contributed significantly to the contamination in the harbor that must be cleaned up — suggesting the city is preparing to fight the EPA if it attempts to stick it with much of the bill.

That conclusion is included in a memorandum recently filed by the City Attorney’s Office as part of an ongoing civil lawsuit alleging the council has illegally spent city utility ratepayer funds on projects unrelated to the water and sewer bureaus — including $50.6 million spent by the Bureau of Environmental Services on preliminary Superfund cleanup work. The memorandum is in support of a legal motion to remove that spending from the long-running lawsuit.

In the June 16 memorandum, city attorneys argue the spending was legal because the EPA suspects the sewer system operated by the Bureau of Environmental Services contributed to the contamination of the harbor. But, the attorneys write, research funded by the spending revealed little of the contamination came from the sewers, which they refer to as “the conveyance system.”

“It is the city’s position that its conveyance system has not significantly contributed to the Superfund site contamination,” the attorneys write.

In addition, the attorneys claim that any contamination attributed to the sewer system actually was caused by other parties.

“Further, insofar as the system has conveyed contamination, the contamination came from the operations of others and was discharged into the city system in violation of City Code,” the attorneys write, suggesting the city could go after them if the EPA holds Portland responsible for any of the cleanup costs.

“Over the years, the city has helped fund investigative work to identify what contaminants are in the river, and where those contaminants are concentrated,” says Sonia Schmanski, chief of staff to Commissioner Nick Fish, who is in charge of BES. “That scientific investigation shows that city stormwater was not a major contributor,” she says.

“The investigation has also helped identify the actual sources of contamination — including those (entities) upland from the river who discharged into the city’s system — which will help the city’s efforts to ensure that after the final plan is approved by the EPA, those polluters will pay their fair share for the cleanup,” Schmanski says.

BES Director Mike Jordan was a panelist at last week’s Columbia Corridor Association breakfast meeting on EPA’s Superfund cleanup plan. Jordan prefaced his remarks by saying he was advised by city attorneys to note the city’s lack of responsibility for cleanup costs.

“The city has no liability — we have none. We’re not willing to admit that we have any,” Jordan said.

Barbara Smith, a spokeswoman for the Lower Willamette Group, said after the breakfast meeting that the EPA has collected cleanup funds from other sewer authorities at Superfund sites around the country. The Lower Willamette Group, a consortium of public and private sector entities that are potentially responsible to pay for pollution cleanup, has paid for early studies and other work for the Superfund project. The city is an active member.

According to the June 16 memorandum, other city agencies, so far, have spent $11.2 million on the Superfund process. They include the Portland Development Commission, Portland Fire & Rescue, the Portland Bureau of Transportation and the Portland Water Bureau.

The Remedial Investigation report that the city helped finance found those bureaus did not significantly contribute to the contamination in the Superfund site, either, the memorandum says.

The city transportation and water bureaus already contributed $720,000 to the early cleanup of a site at what is dubbed River Mile 11.

Attorney John DiLorenzo is representing utility ratepayers in the suit, trying to earn them refunds from what they view as improper spending by the Portland Water Bureau and Bureau of Environmental Services. DiLorenzo says he will oppose the motion to remove the BES Superfund spending from the litigation.

“The city should have spent the money from the general fund, and then sought reimbursement from ratepayers if they thought there was some liability,” DiLorenzo says. “Instead, they used BES as the go-to fund.”

Multnomah County Circuit Judge Stephen Bushong ruled earlier in the case that ratepayer spending must be “reasonably related” to the primary mission of the utility bureaus. Although he has ruled in favor of the city in the largest test cases so far, Bushong has nevertheless found that $4.7 million in ratepayer funds were misspent.

The suit is scheduled to go to trial in December. DiLorenzo is hoping to increase the final misspending total by seeking interest on the illegally spent funds that could have otherwise been invested.