A cool $52 million in Superfund bucks collected via our sewer bills

by: TRIBUNE PHOTO: STEVE LAW - Travis Williams of the Willamette Rivekeeper (center) leads a recent educational tour of the Superfund site in Portland Harbor for people on canoes and kayaks. Portland sewer customers have shelled out money via their utility bills for 13 years to cover city spending for federal Superfund work on the Willamette — though the sewers had little to do with the toxic sediment contaminating the river.

The city’s Superfund expenditures — topping $52 million — were one of the big-ticket items cited by critics who sued the city in 2011 and accused city commissioners of using water and sewer rates as a “slush fund” for unrelated projects.

Now city officials are promising that sewer ratepayers will be reimbursed once the Superfund cleanup moves forward, and say that was their intention all along.

“There’s never been any understanding that it’s all going to be on the back of city ratepayers,” says Dean Marriott, director of the Bureau of Environmental Services, the city’s sewer and storm drainage utility.

The bureau had the most expertise on matters related to the river, so the City Council asked BES to spearhead the city’s Superfund efforts, Marriott says. “But we’ve not generated any of the contamination of concern that’s in the harbor.”

That’s welcome news to Kent Craford, a key force behind the 2011 lawsuit and a related May ballot initiative that would wrest the city sewer and water bureaus from City Council control.

“From a money standpoint, this is terrific news for sewer ratepayers,” Craford says. It might result in tens of millions of dollars credited back to sewer customers in future years.

However, Craford wonders why he never heard about this before, during several years spent closely monitoring the city water and sewer utilities, including a spell on the citizens budget committee for BES. Craford also has received many documents from the city about the questionable sewer and water expenditures, procured by his attorney John DiLorenzo.

“It is nowhere to be found, any inference that anybody’s going to pick up the tab for Superfund other than sewer ratepayers,” Craford says. “Faced with a $127 million lawsuit and a likely verdict, they’ve changed their tune.”

Discussed several times

Craford says the city’s promise to make ratepayers whole down the road raises more questions about how the city has operated its utilities and used customers’ money. He wonders if it’s legal, and says ratepayers must be repaid with interest for fronting the city’s Superfund costs all these years.

Marriott, one of the city’s longest-serving and most-respected bureau chiefs, denies that the city has changed its position. The Superfund process is long and complicated, and it was always assumed that once the federal Environmental Protection Agency ruled on which city agencies bear responsibility for fouling the river, and the cleanup costs were clear, then the City Council would bill the proper agencies and shift money around, Marriott says.

“I don’t know that it was ever presented to council for a vote on it, but it’s been something that’s been talked about and understood from the very beginning,” Marriott says. “This subject was discussed on more than one occasion.”

Upon request, Marriott provided two City Council resolutions that bear on BES’s role in the Superfund effort. The first was adopted in February 2001, two months after the EPA made the polluted Portland Harbor on the Willamette River a Superfund site. That resolution designates BES as the lead agency for the city’s work on the Superfund project. However, the resolution makes no mention of how the bureau’s efforts should be funded.

Marriott says it was assumed that the bureau would get the money from ratepayers. In each year since, he says, the bureau’s Superfund expenditures were listed as a line item approved by city commissioners.

The second resolution was adopted in December 2012, during a flurry of activity as then-Mayor Sam Adams was winding up his term. According to that resolution: “The council anticipates that if the city is ultimately held liable to pay costs and damages under Superfund, that the council will then assess how best to assign those costs to its various agencies, bureaus, or funds, taking into account the bases of liability and the council’s authority under the charter.”

Craford points out that the resolution was passed more than a year after the lawsuit was filed questioning the Superfund expenditure as a BES ratepayer obligation.

Internal discussions

A former city finance official, who wishes to remain anonymous, recalls Marriott insisting early on that ratepayers be reimbursed eventually. “It was always a sense that it would not just be BES” ultimately paying for the Superfund, he says. “Dean Marriott was very clear about it.”

In internal city discussions, the former finance official says, there were three bureaus discussed that might bear responsibility for Superfund cleanup: BES, because it runs the storm drainage and sewer systems that pumped some contaminants into the river; the Portland Bureau of Transportation, because it oversees city streets that also carried contaminants into the river; and the Fire Bureau, which conducted firefighter training exercises along the river that may have resulted in some discharges of toxic materials into the Willamette. But the city didn’t want to “show its hand” about its cleanup responsibilities, the source says, for fear other polluters would try to take advantage and get out of paying their share.

Craford says the way the city handled this issue validates his contention that city councilors used money from sewer and water ratepayers as a “cookie jar.”

“The sewer ratepayers are footing the bill because the city can make them,” he says.

A retired city budget analyst, Katie Bretsch, concurs. “Jane and Joe Ratepayer didn’t create this problem, and I think that if they were asked, they’d say the polluters, or their successors, or their for-profit industries generally, should pay,” Bretsch says. “I think they’d say their bills are high enough already. The decision to make Jane and Joe pay is purely political.”

City may get Superfund money back

Why is Portland so heavily involved in funding the Superfund project while arguing the city did little to cause the contamination in the first place?

Portland is a key player in the Lower Willamette Group, made up of parties identified as potentially responsible for the Superfund cleanup who are willing to step up and play a leadership role. The group also includes the Port of Portland, Northwest Natural and several industrial companies active on the river.

It’s typical for local governments to play leadership roles in such Superfund groups, says Barbara Smith, spokeswoman for the Lower Willamette Group.

“They feel this needs to go well; it needs to be done with the best interests of the community,” she says.

Being proactive can pay off, Smith says. The Lower Willamette Group, under EPA’s oversight, hired the consultants who are testing the river sediment and helping draft potential cleanup scenarios. The EPA will use those reports to ultimately decide which parties must pay for the cleanup and how much.

Conversely, potentially responsible polluters who haven’t stepped up may wind up paying more in the long run, she says. "There are many hammers in the law that require potentially responsible parties to participate, and if you don’t, it can be worse.”

Portland is contributing 25 percent of the Lower Willamette Group’s budget, which so far totals nearly $100 million, says Dean Marriott, director of the Portland Bureau of Environmental Services. The city also is spending money on its own behalf for related Superfund cleanup efforts.

Ultimately, the city expects it will get reimbursed if it contributes more than its share of the costs. That means ultimately city sewer customers could get credited for shouldering the city’s contributions to the Superfund project. But it’s not yet clear when that will occur and how much it might be, Marriott says.

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