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Right-of-way fee not a 'hidden' tax

Editor’s note: In this Citizen’s View, Oregon City Mayor Doug Neeley references an article that appeared in a monthly newsletter published by Clackamas County that can be accessed at http://tinyurl.com/m5hookq.

On June 11, 2014, the Clackamas County Board of Commissioners filed a lawsuit against Oregon City challenging the city’s right-of-way usage fee. The county claims that this fee is a tax and that the Tri-City Service District is exempt. The county also vindictively raised sewer rates for the residents of Oregon City at a higher rate than West Linn and Gladstone, which are also served by the district.

Neeley

Oregon City avoided issuing press releases, opting to leave the matter to the courts. However, since the county released misleading statements about the case in an article entitled “Oregon City fee raises sewer rates” on the front page of its August edition of Clackamas County Citizen News, I must respond.

The county claims the fees are “rare” and a “hidden tax” and implies the Oregon City imposed a higher fee on the district than on others.

Oregon City has been charging right-of-way fees for decades, as have most Oregon cities. In 2013, recognizing that many other utilities using the city’s rights of way did not compensate us for right of way use, Oregon City adopted a new ordinance based on a statewide model from the League of Oregon Cities.

The City identified 23 entities that previously were not paying for their use of the rights of way. With the exception of the Tri-City Service District, all have complied with the ordinance without taking legal action.

The County’s position is that a public is entitled to use city rights of way free of charge. Public bodies enjoy an exemption from property taxation, but that does not permit them free use of the city’s property. The property tax exemption is not a free pass; public entities are expected to pay their own operating costs.

The City is expected to be a good steward of public resources, including charging fees and rent for use of public assets, which is what the city has done. The right-of-way fee is not “hidden;” it was adopted through a public process that included at least three public meetings. This is no less transparent than other Tri-City Service District costs, such as payments it makes to the county for various county services. The district does not get these services for free simply because they are provided by the county. Similarly, the city expects the district to compensate the city for use of the public rights of way managed by the city.

Finally, the city did not single out the district for this fee. All utilities pay the greater of a percentage their gross revenue from operations in the city or a minimum fee based on the linear feet of facilities in the rights of way. The city expects the district to comply with this fee in the same manner as the city and all other public and private utilities. Instead, the county has chosen to spend taxpayer dollars to sue the city to avoid compliance with the law.

Doug Neeley is the mayor of Oregon City.



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