Featured Stories

Other Pamplin Media Group sites

Local Weather

Cloudy

48°F

Portland

Cloudy

Humidity: 93%

Wind: 5 mph

  • 16 Apr 2014

    Showers 58°F 50°F

  • 17 Apr 2014

    Rain 54°F 42°F


Our Opinion: Voters need details on city utility fee

The Portland City Council has a nearly $20 million addiction — which may not be a bad thing.

This addiction stems from a fee most Portlanders pay on their water and sewer bills, a tax that has received little attention during the years it has been in place. As reported on PortlandTribune.com, the fee is starting to generate more revenue for the city, which may be poor timing for city commissioners as they face an initiative attempt to wrest control of the city water and sewer bureaus away from them.

The fee on water and sewer bills was 7.5 percent back in 2004, while the city was charging a 5 percent utility license fee for customers of other entities such as Portland General Electric and Northwest Natural Gas. Back then, critics rightfully asked why the city would assess a larger fee on its own utility than it would on private providers.

In response, city Commissioner Dan Saltzman created an ordinance that slowly equalized utility license fees to 5 percent. To make this ordinance workable, water and sewer utility fees were capped at the 2004 levels, thereby limiting the hit to the city’s general fund. As a result, sewer utility and license fees have stayed at $12.8 million per year for the past nine years and water fees have remained at $4.2 million per year for the same period of time.

Now, however, the frozen fees have finally equaled 5 percent of sewer and water rates. This means the 5 percent tax will start to generate more money — $2.5 million more in the 2013-14 fiscal year alone — for the general fund.

That’s where the valuable portion of this addiction comes into play. The money helps pay for police and fire protection, parks and a variety of important services. But here’s the rub: These services have nothing to do with water and sewer utilities — while the city, for other reasons, has come under withering criticism in the past few years for diverting ratepayers’ dollars to unrelated projects.

Because of the controversies surrounding the Water Bureau, Kent Craford and other critics have advocated creating a separate water and sewer district with an elected board of directors. Craford views the fee that the city tacks onto everyone’s water and sewer bill as just one more example of how Portland abuses ratepayers.

We’re not at all sure, however, that creation of a separate district will benefit ratepayers, taxpayers or the community in general. The millions of dollars the city receives from its own utility fee complicates the question even further.

If voters approve formation of a water district, will the city still be able to assess the fee? It’s possible, but the water district board would have the authority to reduce or end the utility license fee, potentially stripping the city of its nearly $20 million revenue source.

The fact is that the city cannot get by anymore without the money generated by the 5 percent fee. The alternative would be reductions to police, fire and park budgets. The possibility of such budget reductions could become an explosive issue in the water district campaign, since police and fire supporters will be wary of an initiative that has the potential to cut off city funding.

In the meantime, Portland city commissioners must do a better job of explaining to the public why this utility fee is needed and how it is spent. City commissioners cannot simply sign off on a $2.5 million revenue increase with no discussion — as they almost did last week before the Tribune raised the fee as a public issue.

The city must document what the fees mean for police, fire and parks. It must be prepared to say what services would be reduced if the fees went away. Such specifics will help the public determine whether this additional tax on their already expensive water and sewer bills is truly justified.

The information also will be quite useful as voters try to make sense of the water district proposal. The $19.6 million in fees could bolster the argument for retaining a full-service city. Or, if commissioners stumble in their communication, those fees could become a symbol of what’s wrong with the city’s management of its Water Bureau.