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City officials still working on legally exiting North Clackamas Parks & Recreation District

On Aug. 16 a Clackamas County Circuit Court jury awarded the return of more than $18 million to the city of Happy Valley resulting from a breach of contract by the North Clackamas Parks & Recreation District (NCPRD).

Tom EllisWhen Happy Valley residents voted in favor of joining NCPRD in 2006, city and county officials signed a contract requiring Happy Valley development fees to be transferred from the city to the district for use on park projects in Happy Valley. At least nine out of the 12 circuit court jurors found that those projects were not delivered and awarded the return of all those funds: $18,078,238.

Jury members called for a return of funds transferred from the city to NCPRD; none of that money was from Milwaukie or the unincorporated areas of NCPRD.

Happy Valley officials have committed to using the $18 million, when and if the funds are returned by the county, exclusively for the park projects that were promised to the voters when the city joined NCPRD. Those projects include a community park, community center, all-weather turf fields and completion of the Mount Scott Trail.

"City Council and I are looking forward to delivering the projects Happy Valley residents have been promised for years," Happy Valley Mayor Tom Ellis said.

"While I was disappointed we were not able to resolve this dispute before going to trial," Ellis said, with the jury's decision, he is hopeful that NCPRD will come to the table to settle all unresolved aspects of the dispute.

"With the trial behind us now, I'm hopeful the city and county can get back to working together," Ellis said. "We owe that to our shared residents."

Although NCPRD is a separate tax district, it is overseen by county commissioners. Tim Heider, a spokesman for the county, said NCPRD is considering whether to appeal the jury's ruling to a higher court. He said the county was involved in active negotiations with Happy Valley, up until the day of the trial, toward a potential settlement that would have established a pathway for the city to exit NCPRD legally.

"We are disappointed with the jury's decision and consider the verdict amount to be unjustified and unreasonable," Heider said. "While we respect the city's desire to provide their own parks services independently, this must be done according to state law and in a manner that is fair to all district residents. Until then, NCPRD will continue to provide top-quality services, programs and facilities to all district residents, including those who live in Happy Valley."

Jury members found that the county's performance under the contract was not "wholly excused by the city's attempt to withdraw from the district." There are a number of issues remaining between the city and NCPRD, including the city's attempted withdrawal from the district.

Heider pointed out that Circuit Judge Henry C. Breithaupt ruled in December 2018 that Happy Valley relied on the wrong law through a withdrawal vote by the City Council in 2017. Under the state law that the judge said would be the controlling statute, local voters or property owners would have to formally file a boundary change petition to be considered by the Board of County Commissioners.

"Happy Valley can petition to exit the district any time under the appropriate statute," Heider said. "The city has chosen not to exit via Oregon Revised Statutes 198."

Happy Valley officials say they recognize that parks are shared by everyone in the community, including those outside the city. They said that any future investments in parks will remain open to all members of the public who wish to visit them.

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