City's dispute with North Clackamas Parks & Recreation District likely to continue in court

Happy Valley officials are hoping the latest court decision will expedite their control of city parks, but Clackamas County officials say the case is far from over.

Lori Chavez-DeRemerCircuit Judge Katherine E. Weber ruled this month that the city is entitled to the $13.5 million that its taxpayers put toward four park facilities that the North Clackamas Parks & Recreation District didn't build. All of these funds came from Happy Valley, and none are from Milwaukie or the unincorporated areas of the district.

In 2005, the city and county promised voters they would work toward building a public park, community center, all-weather turf fields and completing the Mt. Scott Trail.

Happy Valley voters approved joining the district, but Judge Weber found that none of the projects were completed by the time the City Council voted to withdraw from the district last year.

"With the recent ruling from the Circuit Court, we're excited the city is one step closer to becoming the parks and recreation provider for Happy Valley," said Mayor Lori Chavez-DeRemer. "We look forward to working with the county and the court to return funds we transferred to the district so that we can begin to fulfill our promises."

However, county officials indicated that it could be awhile before Happy Valley sees the money or gains the right to manage parks within the city. Clackamas County recently filed another lawsuit against the city that could prevent the city from becoming the parks provider.

Tim Heider, a spokesman for the county, said the judge's determination that NCPRD breached its contract with the city does not represent a final ruling, nor does it impact other important questions still being litigated.

"This is a very complex matter, and it's important to remember that outstanding issues remain to be decided, including the question of whether Happy Valley breached its contract with NCPRD to maintain parks and facilities within the city limits and the question over the manner in which the city chose to withdraw from the district," Heider said.

In response to a motion filed by the city, Weber ruled on Oct. 12 that the agreement unambiguously required NCPRD to build facilities using the fees Happy Valley transferred to the district. The city calculated that of the $17.5 million of funds generated in Happy Valley and transferred to NCPRD, approximately $13.5 million was designated for exclusive use on the four projects.

Assistant City Manager Ben Bryant said the court's ruling didn't specify the amount of damages, just that Happy Valley's motion was granted.

"In keeping with our motion that was granted, we again specified the $13.5M. Unfortunately, the county has objected again," Bryant said.

Happy Valley officials acknowledge that there are a number of remaining issues between the city and county. City officials, nevertheless, are hopeful that the county will come to the table to settle all unresolved aspects of the parks and recreation dispute.

A speedy resolution, Happy Valley officials say, would allow the city to best serve its residents, while providing financial certainty to the rest of the district.

County officials say they understand the city's desire to operate independent parks and recreation services, but NCPRD remains committed to representing the interests of all residents of the parks district.

Weber has yet to rule on the division of park assests following the city's withdrawal from the district. In an Oct. 22 court filing, the county objected to paying the $13.5 million until the other issues of the case are settled. County officials also said that a partial completion of Mt. Scott Trail should be calculated in the final distribution of funds.

"The district would only have to pay that [$13.5 million] after the entry of a judgment. Even then it may be stayed pending appeal," Heider said. "It also may not be reduced to a judgment until after trial is complete."

City officials said the breach of contract made up the bulk of their lawsuit, however, so Bryant called the ruling "very significant."

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