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Oregon City 'error' leads anti-urban-renewal petitioners to sue

Fights over Oregon City’s use of tax-increment financing for blighted areas just got a lot uglier.

Oregon City officials say that they made a mistake in approving an anti-urban-renewal petition; rather than cease collecting signatures, the petitioners have sued to keep their right to put a measure on the November ballot that, if approved, would limit the city’s urban-renewal agency’s functions to paying off its current debt and dissolving itself.

In a lawsuit filed on Jan. 19 in Clackamas County Court, the petitioners say that the city violated the due-process clause in the 14th Amendment of the U.S. Constitution in rescinding the certification of the ballot title.

Co-chief petitioner John Williams expressed feelings of both bewilderment and anger upon receiving a notice about an “error” that the city said would force his nearly yearlong effort to a halt. The 87-year-old former mayor said that his group had already collected thousands of signatures in hopes of effectively killing the city’s controversial urban-renewal program.

“We went through the city process,” Williams said. “We got our petition all approved and started circulating them. When we were 75 percent completed collecting the signatures, the intrigue began.”

Both co-chief petitioners received a Dec. 23 certified letter from the city attorney stating “the city’s concern about the effectiveness of the measure.”

Based on a recent case in Linn County, “it seems unlikely that an amendment to a city charter would limit the statutory powers of an urban renewal agency,” wrote Oregon City attorney Bill Kabeiseman in the letter. “The city has not made a decision as to whether it will take any further action regarding this measure, but others might.”

Williams initially thought that the letter was a not-so-veiled warning about someone potentially suing the petitioners, but he refused to let the signature-gathering effort be bullied into giving up.

“I interpreted that as a threat, that they wanted this measure stopped but they weren’t going to tell us that,” he said.

On Jan. 12, the petitioners received a second certified letter from the city recorder rescinding the certification of the petition “after consultation with the city attorney.” Saying the petition doesn’t comply with the requirements of the Oregon Constitution, City Recorder Kattie Riggs concluded that the petition was no longer certified for circulation. Riggs added that a “judicial review” would be the only way to reverse the city’s decision that the measure would be ineffective in changing the city charter to staunch urban renewal.

“Did the city recorder really make a mistake, and if she made a mistake, is that our problem?” Williams asked.

That’s exactly the question that a Clackamas County judge is being asked to decide in a complaint for declarative judgement filed on Wednesday. If the judge decides that the petitioners would have to rewrite their petition, the petitioners are demanding that the city pay back the money spent on gathering signatures.

Williams said that the petitioners have spent about $5,600 on paid signature gatherers, which doesn’t include printing costs and some smaller items. Even if the city isn’t forced to pay back that petitioning cost, he believes that city officials are wasting a lot of money on attorney’s fees to halt a democratic process.

“They’re trying to stop something that they don’t like,” Williams said.

However, Oregon City’s attorney made it clear that the city merely doesn’t want voters to weigh in on a measure that would be effective in doing what it says it’s going to do. Urban renewal “is not an agent of the city and it is unlikely that a change to the Oregon City Charter would affect the statutorily created powers of the agency” that’s governed by state rather than city laws, Kabeiseman wrote to petitioners.

Williams doesn’t buy that argument and instead suspects more foul play, since Oregon City Mayor Dan Holladay has already had to pay a $100 fine for violating state election law through submitting an argument, printed in the city’s official newsletter, discouraging citizens from signing the petition. Oregon City voters already would get their say if the city proposes major projects following the 2012 success of Measure 3-407 to require votes before the city can sell urban-renewal bonds.

“City commissioners know if this goes to a vote, the vote will go the way it did last time, and they’ll lose access to their slush fund, and they’re panicking,” Williams said. “For the moment, we’re continuing to collect signatures, because if we stopped and waited for the county court to make a decision, it would probably delay us a couple of months.”

Clackamas County’s judge will certainly have a grey area to consider in ruling on the petitioners’ lawsuit against Oregon City. Urban renewal is a creature of the state, but Oregon City decided to participate in the state’s program.

“The state didn’t send down a dictum to Oregon City saying that you have to do urban renewal,” Williams said. “We’re attacking the city and not the urban renewal agency, just like with we did with the bonds, when voters told the city that they wanted the city to ask voters about future urban-renewal bonds.”

Oregon City’s attorney will argue that, by state law, urban-renewal agencies are separate entities from the city.

“In other words, the city did not create the city’s urban renewal agency, the state did,” Kabeiseman wrote.

Kabeiseman and Williams are both relying on the Linn County case ruling against a proposal to limit the maximum indebtedness of Albany’s urban-renewal program. Williams said that he spoke with the chief petitioner of an anti-urban-renewal measure in Albany whose petition was denied and decided that there’s a good chance that the Oregon City measure doesn’t fall in the same category. While the Albany petitioner wanted to further limit a maximum already set by the Oregon Legislature, William’s petition targets the functions of Oregon City’s urban renewal program that are allowed by city charter.

“We need to know whether we start again with this petition whether it’s legislative or administrative,” Williams said. “Oregon City is nervous, because they’re also not sure which is which, and the determination could go against them.”