Note: The voters of Portland rejected this measure overwhelmingly in the May 2014 primary election.

The "Water District" Measure is a Corporate Takeover
of Portland’s Water and Sewer Systems

Note: This op-ed appeared in the Portland Tribune on May 1, 2014. What follows is slightly annotated version.

For 27 years, I have helped create new publicly-controlled utilities in Oregon, including the Oregon Trail Electric Cooperative, now the largest electric cooperative in Oregon (annual revenue $48 million).

Measure 26-156 is not a typical "public district" creation measure.  Instead, it grafts onto the existing City of Portland water and sewer systems a 7-person Board of directors that can set rates, borrow money to be repaid by Portland taxpayers, sell property, and decide how to use the existing $19 billion of assets in those systems and who pays the $682 million of annual costs.

The new 7-person Board would be elected half the time in low-turnout odd-year elections, as each term would be 3 years.  There would be no limits on campaign spending by any persons or entities.  I would expect the big corporate water/sewer users to get together in private, select their candidates, and overwhelm the voters with political ads.  After all, they have provided over 99% of the funds for this campaign, including the paid signature gathering.  See http://tinyurl.com/waterdistbackers and http://tinyurl.com/wdbackers2.

Siltronic Corp. is both by far the largest user of Portland water and the largest contributor to the campaign (30% of the total).

The resulting corporate-dominated Board would likely:

    (1)    gut expenditures necessary for environmental protection, and

    (2)    increase rates for residential customers in order to decrease rates for the largest customers.

Now, Portland's overall progressive voters ensure that the Portland City Council, which controls the system, has a generally pro-environment, pro-consumer outlook.  Serious candidates for the City Council have public track records.  Candidates for the Board may have no records of public involvement.

The Board could also refuse to have the City sewer system pay Portland's share of the expected $170 million to $1.7 billion cost of the EPA-mandated Superfund cleanup of the toxic Portland Harbor.  See http://www.oregonlive.com/environment/index.ssf/2012/03/portland_harbor_... That cost would then have to be borne by Portland taxpayers, not by water users.  Or the Board could decide to have the City sewer system pay the Superfund cleanup liabilities of the big water users, such as Siltronic.

Unlike the rest of Portland government, the new Board would not be subject to audits by the independently-elected Portland City Auditor.  Instead, the Board would choose its own auditors.  Remember how well that system worked for Enron investors.

What supporters call "conflict of interest rules" are actually the opposite.  There is no limit on corporate money for Board campaigns, but the measure bans nearly anyone with Portland water or sewer system experience from running, including (1) volunteers who have served on the unpaid advisory committees that evaluate Portland's water and sewer operations and (2) anyone who has worked for the City of Portland or on the water or sewer systems during the past 6 years.  The only disclosure requirements specifically exempt the financial interests of water/sewer users.

The Board would itself draw its own 7 electoral districts.

Board members would be unpaid.  Portland City Charter § 2-204 bans any elected officer from "pursu[ing] any other business or vocation."  So each Board member would need to be wealthy or receive support from some source other than a job.  No one with any job could serve as a Board member.  This ban could be changed only with another Portland-wide ballot measure vote.

Supporters claim that the City is spending huge amounts of water/sewer funds on projects not related to providing water or sewer services.  In 2011 they filed a lawsuit against the City claiming $127 million of such spending.  But nearly all of it was for acquisition of forested land and other watershed protection measures.  After 3 years of litigation, no court has agreed with their claims, except for the $547,000 assessed on the water and sewer systems for 6 years of public funding of elections (an assessment made upon all City bureaus) and $618,000 spent for building and maintaining public lavatories (even though they reduce pollution by capturing into sewers the human waste that would otherwise end up on the streets and then in the rivers).

Many misleading rate comparisons have been offered.  Looking at west coast cities, Portland's residential water and sewer rates are lower than those in Seattle, San Francisco, Oakland, Fresno and San Diego; about the same as Sacramento; and higher than in Los Angeles and San Jose.  See http://bv.com/docs/management-consulting-brochures/50-largest-cities-bro... The Portland City Club concluded:

"There is no evidence that the creation of a new district separate from the city government would reverse the trend toward higher rates.  If anything, a new district may increase the costs to ratepayers by decoupling PWB and BES from the administrative services they share with other city bureaus."

Rates in all cities are increasing rapidly, due to federal pollution control requirements and the need to replace aging pipes.  Since 2000 the average residential bill for water in America's 50 largest cities has increased by 90%; for sewers has increased by 94% -- almost exactly the same increases in Portland during that period.  See http://bv.com/docs/management-consulting-brochures/50-largest-cities-bro....

For a list of over 50 respected organizations that oppose this measure, including the Oregon Progressive Party, see http://tinyurl.com/stoptakeover.

NOTE:  A version of this article, with complete citations of authority, is at http://progparty.org/watermeasure.

Dan Meek
public interest attorney
503-293-9021    voice
dan@meek.net