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District unnecessarily raises sewer rates

On June 11, the Clackamas County Board of Commissioners, as the governing body of Tri-City Service District, filed a lawsuit against Oregon City challenging the city’s Right of Way Usage Fee. The county claims that this fee for use of the rights of way — a fee paid by all entities that use the city rights of way to provide utility services — is a tax on the district’s property, and that the District as a public entity is exempt from such taxes. The same body also raised sewer rates for the residents of Oregon City, West Linn and Gladstone, but raised Oregon City residents’ rates more than the other members of the district.

Since the county sued the city, Oregon City has avoided issuing press releases or other statements about the case, opting to leave the matter to the court rather than the media to resolve. However, the county has released several misleading statements about the case that I feel compelled to address. For example, in this month’s edition of its Citizen News publication, the county ran an article entitled “Oregon City fee raises sewer rates” in which it claims that right-of-way fees are “rare,” describes the fee as a “hidden tax” and implies the city chose to impose a higher fee on the district than that paid by other entities. Providing misinformation about the city’s fee does not promote the “transparency and accountability” the county references in its article.

Oregon City has been charging fees for use of its rights of way for decades, as have most, if not all, cities in Oregon. In fact, Oregon City’s ordinances on this topic go all the way back to 1865. For those who are not aware, rights-of-way are spaces on, above and under the streets, alleys and sidewalks. The city’s fees have long applied to electric, gas, cable and telecommunications providers as well as the city’s own water and sewer services. In 2013, recognizing that many other utilities used the city’s rights of way but did not compensate the city for such use, Oregon City adopted a new ordinance based on a state-wide model from the League of Oregon Cities. Among other things, the city’s ordinance established fees to be paid by all utility service providers that own facilities in, or use, the city’s rights of way. The purpose of the right of way usage fee is to ensure that all utilities using the city’s rights of way compensate the city for that use. Since adopting the ordinance, the city has identified 24 entities that are now paying for their use of the city’s rights of way, including several public entities, thanks to the new ordinance. With the exception of the county’s Tri-City District, all of these entities have complied with the ordinance without taking legal action against the city.

The county’s position in its lawsuit is, in essence, that as a public entity the district is entitled to use city rights of way free of charge. While public bodies do enjoy an exemption from property taxation under state law, that does not permit public bodies free use of other government property. Public bodies must still feed parking meters, pay application fees, pay for city-provided utilities and otherwise comply with many of the same fees as everyone else. Similarly, Oregon City cannot demand free office space in county buildings or use other county real estate for city purposes without payment. The property-tax exemption does not amount to a free pass for government, which is expected to pay its own operating costs despite the tax exemption. So, too, is the government expected to be a good steward of public resources, which includes charging fees and rent for use of public assets, which is what the city has done with the rights of way.

The city’s fee is far from the “hidden tax” characterized by the county. It was adopted through a public process (in which the county participated) that included at least three public meetings. This is no less transparent — and perhaps more transparent — than other Tri-City District costs, such as payments the district makes to the county for various county services. The district does not get these services for free simply because they are provided by the county. Similarly, the city expects the district to compensate the city for use of the public rights of way managed by the city. Otherwise, city taxpayers have to subsidize the district’s use of city streets, which comes much closer to a “hidden tax” on city taxpayers than the city’s fee assessed on the district and other utilities.

Finally, the city has not singled out the district for this fee nor does the district pay a higher fee than other utilities. All utilities subject to the fee pay the greater of a percentage their gross revenue from operations in the city or a minimum fee based on the linear feet of facilities in the rights of way. The city simply expects the district to comply with this fee in the same manner as the city and all other public and private utilities. It is disappointing, to say the least, that the county has chosen to spend taxpayer dollars to sue the city to avoid compliance with the law.

The citizens of both the city and the county have the right to expect their government to protect the public’s fiscal interests, respect validly adopted laws and to work together for the greater good. The city’s adoption of its right-of-way ordinance does all of those things; we will see if the county’s lawsuit does so as well.

Doug Neeley is mayor of Oregon City.



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