Multnomah 26-156 - Portland Charter Amendment to create water and sewer district with elected board
Question: Shall Portland create district not subject to city council control, with elected board, transfer city water, sewer services to it?Financial Impact: Proponents suggest potential savings to ratepayers with restrictions on non-mission-critical expenditures. Opponents suggest added expenses with duplication of roles and risk of higher borrowing costs for the City.Probable Results of a Yes Vote: The City Charter would be amended to transfer all aspects of managing, operating and financing of Portland’s water, sewer and storm water systems from Portland City Council to that of a new separate District with its own elected board.Probable Results of a No Vote: Management, operation and financing of Portland’s water, sewer and storm water systems would remain under the direction and oversight of Portland City Council.Background: Portland’s City Charter assigns responsibility of providing water and sewer services to the Portland City Council. The City of Portland agencies provide area residents and businesses with 100 million gallons of drinking water per day, and manage storm water and sanitary sewers. These are large, complex operations: Portland Water Bureau (PWB) serves over 566,000 people directly, as well as 20 metropolitan area water utilities outside of Portland. It has a current annual budget of $256 million and $7 billion in assets. The Bureau of Environmental Services (BES) manages 2330 miles of sewer pipe, has a $426 million budget and $12 billion in assets. Water and sewer services play critical roles in maintaining public health and environmental protection and in facilitating economic development.Portland’s drinking water comes from the Bull Run watershed in the Mt Hood National Forest and from wells in aquifers along the Columbia River. Portland Water Bureau and the US Forest Service jointly own and manage the Bull Run watershed.After a deadly outbreak from parasite contamination of drinking water in 1993, Congress amended the Safe Drinking Water Act. To protect drinking water, uncovered reservoirs for finished drinking water are no longer permitted unless ultraviolet or other treatment is provided. Because of the exceptional purity of Bull Run water, Portland was able to receive the nation’s only variance for treatment, saving the cost of building and operating a treatment plant. Despite determined legal challenges through federal courts and legislative and lobbying efforts by Portland’s Mayors and City Commissioners and Oregon’s US Senators and House Members, no variance has been given for covering reservoirs or for extending the timetable for covering them, although EPA is conducting a review of the amendment to the Safe Drinking Water Act. Construction has begun for the first covered reservoir at Powell Butte. One Washington Park reservoir is to be covered. Aging water systems challenge Portland and nearly every US city. Much of this infrastructure was built a century ago and is nearing or past replacement age. Updating the infrastructure nationwide is estimated to cost $1 trillion over the next 25 years, with household water bills as much as tripling to cover these essential repairs.¹ Portland is in the process of upgrading the local water and sewer infrastructure. The recently completed Big Pipe project increased storm water and sewage capacity, avoiding frequent raw sewage overflows into the Willamette River.Portland residents are paying higher water and sewer bills. In the past 10 years average water bills rose 73 percent, and sewer and wastewater bills have risen 79 percent. Primary drivers of these increases in Portland are much the same as in cities nationwide. Compliance with Clean Water and other laws and infrastructure upgrades both increase costs. Enhanced conservation practices require rates per unit of water to rise to cover fixed delivery costs. These increases have come at a time when the City Auditor and news media have revealed the use of ratepayer funds for a number of non-mission-critical projects including the Water House, Rose Festival Headquarters and Portland Loos. These projects have damaged public confidence in City Council governance of water/sewer services and how rates and budgets are set.The Portland Water Bureau and the Bureau of Environmental Services function as city bureaus. Portland City Council, through its budgeting process, determines operating expenses, capital expenses and debt service. It also sets budgets and rates. The City Commissioner-in-charge is specifically responsible for administrative oversight of assigned bureaus. Both Bureaus are self-sustaining; the cost of services must be met by the ratepayers. Oregon law requires community involvement in municipal budgeting; PWB and BES take input from two citizen review committees, the Portland Utility Review Board and a Budget Advisory Committee for each Bureau. Committees comment at the budgeting and at the rate setting process, but last minute changes by the Mayor and the Commissioner-in-Charge can be made with less review and transparency. Under the current Commissioner-in-charge, PWB and BES are coordinating their budget processes and expanding their use of best practices. The City Council has approved a 5-year contract with the Citizens Utility Board, a donation-funded organization, to advocate for residential ratepayers and advise on project priorities and capital spending. Summary This measure would amend the Portland City Charter to create a Portland Public Water District outside the supervision of the City Council and the City Auditor.The measure changes the City Charter to transfer to the District the powers of the City Council relating to operating and financing the City’s water, sewer and wastewater systems. The District would have the power to prepare and adopt a budget, set water rates and sewer rates. Control of the property used for these systems would be transferred to the District. The District would have the right to sell surplus water to customers outside the City. The District would be able to enter into contracts relating to sewage disposal and treatment. The measure requires the City to issue bonds at the direction of the District.This District would be administered by a governing board of seven directors elected for three-year terms by zone, each zone corresponding with zones for the board of Portland Public Schools. Each member must reside in the zone from which they are elected. Directors would serve without salary. As the measure is written, it is uncertain whether ratepayers outside the Portland Public School District boundary would be allowed to vote for directors or run for director positions.The measure specifies several groups of people who may not run for the District board: currently serving elected officials; current employees or officers of the City of Portland or the Portland Public Water District; individuals who in the last six years were employed in positions related to water/sewer services by the City, its bureaus or PWD either directly or through contractual relationships; and individuals serving in the last three years as members of the Portland Utility Review Board or either of the Budget Advisory Committees of the PWB or BES.The measure states that the District may not regionalize or privatize water or sewer service. The District may not commingle drinking water with sources other than the Bull Run water and the Columbia Shore Well Field. It may not adopt regulations that are less protective of the Bull Run watershed than those in place as of July 1, 2013. ¹ American Water Works Association, “Buried No Longer, Confronting America's Infrastructure Challenge”, 2012 http://www.awwa.org/portals/0/files/legreg/documents/buriednolonger.pdf , accessed 03-28-2014.
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