Judge will say who pays city's Superfund bill
Cleanup costs are potentially the most expensive part of the long running utility ratepayer case that wrapped up last week. A ruling is expected by mid-January.
The question of who will pay the city's share of the Portland Harbor Superfund cleanup cost is now in the hands of Multnomah County Circuit Court Judge Stephen Bushong.
That issue is potentially the most expensive part of the long running utility ratepayer lawsuit against the city of Portland that Bushong has been hearing. Portland has already paid over $50 million in Bureau of Environmental Services ratepayer funds to prepare its defense against the U.S. Environmental Protection Agency naming it as a responsible party in the cleanup. The EPA has released a cleanup plan estimated at $746 million, although some harbor-related businesses believe the final cost will be $1.5 billion or more.
The suit was filed in December 2011 by lawyers representing BES and Portland Water Bureau ratepayers who charge the City Council spent hundreds of millions of their payments on projects not authorized by the City Charter. Bushong has already ruled such spending must be "reasonably related" to the missions of the bureaus. He has found the council spent up to $19 million illegally by that standard, although he ruled that a far larger amount of challenged spending was legal.
Closing arguments on the Superfund spending were presented last Tuesday. Bushong has promised a ruling on it and the remaining unresolved challenges by mid-January. They include approximately $10 million in ratepayer funds spent on such things as system development charge waivers to encourage affordable housing projects and grants to nonprofit environmental organizations and enviornmental-related events.
The trial on the Superfund spending included testimony by Mayor Charlie Hales and Commissioner Dan Saltzman, who was in charge of BES during much of the time it worked on the cleanup process, although it is now assigned to Commissioner Nick Fish.
Ratepayer attorney John DiLorenzo argued that the entire city is responsible for any Superfund liability, not just BES ratepayers. Deputy City Attorney Karen Moynahan argued the city would only be liable because of the sewer system that empties into the harbor currently operated by BES. Any other bureau held liable would reimburse BES for spending beyond an additional $11 million in general fund dollars already spent on the process.
One focus of DiLorenzo's questioning concerned approximately $25 million in BES funds spent on the Lower Willamette Group, a coalition of harbor-related business interests that produced a report on contaminents in the harbor. Although the city was only one member, it agreed to pay 25 percent of the group's costs. Moynahan said that was intended to give the city a bigger voice at the table. BES also paid the CH2M consulting firm up to $1 million a year to review the Lower Willamette Group's work.
Bushong repeatedly questioned Moynahan about the lack of clear authorization by the council for the BES spending on the cleanup process in the initial resolution that designated it the lead agency. Subsequent ordinances and BES budget approved by the council authoritzed specific cleanup-related expenses. The only ordinance that mentioned reimbursements from other agencies was passed after the ratepayer lawsuit was filed, however.
Hales and Saltzman testified the council understood BES ratepayers would be paying for the cleanup process because they finance almost all of BES's services. They said the council members were briefed on the progress on a one-on-one basis and not in public to prevent disclosing the city's legal strategy in case the EPA cleanup plan ends up in court. The spending was authorized during the regular budget process, they said, and the reimbursements were always intended to occur.
DiLorenzo said the secrecy prevented ratepayers from knowing how their money was being spent. In fact, few details of the spending would have been revealed except for the lawsuit filed more than five years ago. The spending figures were released only as a result of record requests approved by Bushong.
Although the EPA hopes to release a cleanup plan by the end of the year, some fear the entire process could be derailed if Donald Trump is sworn in as president and appoints a new EPA administrator before it comes out.
City attorneys have already said they will appeal the final ruling, arguing the charter gives the council broader authority to spend ratepayer funds that Bushong's interpretation.