Clackamas County puts brakes on Oak Lodge Water authority
Clackamas County Chair Tootie Smith put the brakes on Oak Lodge Water Services' request that the county board initiate Oak Lodge's formation of a new "authority" to keep in perpetuity its boundaries for providing sewer and drinking-water services for the unincorporated area between Milwaukie and Gladstone.
In seeking a type of special district allowed under Oregon law, Oak Lodge's authority would freeze OLWS's boundaries so that customers may continue to receive water services at rates that are based solely on their cost, rather than being siphoned off into other functions of a city.
During an Oct. 12 discussion of the potential authority, Smith said that OLWS has failed to fix stormwater issues for houses and streets that regularly flood during rainstorms every year. She said that she would like better "assurances" in writing from OLWS on stormwater problems before the county sets a date for a public hearing on granting an authority.
"Until that issue is addressed, I'm not going to schedule a hearing," Smith said.
OLWS Vice-President Ginny Van Loo said that the authority will be a needed step to protecting public assets from impending takeovers by a neighboring city or a new city. A Metro-funded study evaluating governance options for the Oak Lodge area recently concluded that it is "financially feasible" to pursue annexing into the city of Milwaukie or incorporating a new city.
"Those ratepayers have paid for their sewer and water treatment facilities, all of it, and to have someone come in from the side and form a city or whatever and take it away, it's not what we'd like to see," Van Loo said.
Smith said there's "no rush" to create an authority as she doesn't predict anyone will be able to form a city in Oak Lodge in the next couple of years. County officials canceled upcoming hearings until Oak Lodge can mail its ratepayers more information about why the authority is needed and conduct an informational meeting.
"We're going to give the public every opportunity possible to weigh in on this," Smith said.
In announcing the result of the recent Metro-funded study, Oak Lodge Governance Project members said that city annexation would give residents better representation among elected officials. Water and sanitary sewer would remain a function of OLWS, according to the ECONorthwest study's assumptions.
Property taxpayers in Oak Lodge currently pay an average about $6,319 annually in property taxes, but those charges are expected to go up to $7,314 annually by annexing into Milwaukie, or to $6,558 annually under the incorporation option.
Clackamas County wouldn't necessarily be the final stop for Oak Lodge's attempt to become an authority, as history shows that state and regional governmental agencies can step into the issue.
Oregon's Land Use Board of Appeals denied Clackamas River Water's attempt to become an authority in 2005 after the county had approved the move. Metro officials backed Oregon City in its dispute against Clackamas River Water, saying OC and West Linn's South Fork Water Board should have ultimate jurisdictional control over water service in the areas that are OC's potential urban-growth-boundary expansion areas.
In contrast to CRW's failed effort to become an authority in 2005, this year Oak Lodge has obtained permission from its neighboring cities.
Gladstone Administrator Jacque Betz recommended approval of the resolution in favor of Oak Lodge's authority at the city's Sept. 14 meeting. Milwaukie City Council had already approved a similar resolution at its meeting earlier last month.
"The benefit is that it will allow them to adopt a long-term finance plan with their master plan to be able to access federal, state grant monies and to also provide certainty in their jurisdictional boundaries, even if there are future annexations," Betz said.
Milwaukie and Gladstone had to express their approval of the authority's formation via city-council resolutions since Oak Lodge currently provides water services for a small proportion of citizens in both cities.
An alternate method for creating an authority would be to redraw the district boundaries so they are not within the adjacent cities' limits, but that would increase complexity by creating the need to amend the existing intergovernmental agreements.
Oak Lodge District Engineer Jason Rice said becoming an authority will benefit residents under any governance option.
"An authority will protect customers' investments and aid in long-term planning," Rice said. "Continuity is essential to ensure consistent planning to help address climate change and environmental protection."
Clackamas County recently approved new land-use regulations in Oak Lodge that will substantially increase the density of housing developments allowed along McLoughlin Boulevard's commercial corridor. At the latest authority hearing, county officials expressed concern about OLWS's ability to serve the area's potentially burgeoning population.
Oak Lodge Board President Paul Gornick said the district's elected officials believe changing to an authority would improve the district's ability to plan for future capital improvements, protect the integrity of the district's investments, and limit the risk of losing a portion of the customer base through annexation or incorporation.
"If the district were to lose customers and assets due to withdrawal, the district's existing bonded debt and the cost of needed improvements would be spread over fewer customers, resulting in rate increases to the remaining customers," Gornick said.
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