Portland's questionable utility spending prompts formal legal threat ...

If the Portland City Council doesn't immediately correct questionable utility spending on tangential projects, a heavy-hitting local attorney and a newly formed ratepayer group promise to sue as soon as Nov. 16.

The formal threat, delivered to the city Monday, is the latest in the years-long saga over water, sewer and stormwater expenses.

Prominent lawyer and lobbyist John DiLorenzo intends to ask a Multnomah County judge to declare unlawful the spending of ratepayer funds on projects that have shaky ties to the core missions of treating sewage, preventing rain runoff or providing fresh drinking water.

DiLorenzo and the Citizens for Water Accountability, Trust and Reform also want an independent auditor to identify all improper spending and will seek a judicial order forcing the city to repay potentially millions of dollars in improper projects.

The group's targets: the Rose Festival Foundation's headquarters, the so-called "Water House" in East Portland and Dodge Park improvements.

"Something had to be done," said Kent Craford, president of the group formed specifically to sue the city over its spending. "These expenditures are unlawful. They're wrong. And they have to stop now."

The group threatens to sue as soon as Nov. 16 "unless the City Council takes immediate action to provide redress for these unauthorized expenditures and rectify its future policies."

Portland Mayor Sam Adams and City Attorney Linda Meng declined to comment Monday, citing pending litigation.

City Commissioner Randy Leonard -- whose efforts within the Water Bureau have generated the most scorn -- said he is confident ratepayer dollars have been spent properly and will explain his stance to "anyone willing to listen to the facts."

"I have a fundamental disagreement that any of these projects impacts rates," he said. "We used our resources more efficiently."

Investigations during the past year by The Oregonian and a report by City Auditor LaVonne Griffin-Valade have highlighted several precarious projects.

They include: $1.5 million in ratepayer money spent on the Rose Festival's waterfront headquarters; $700,000 for a newly built home demonstrating water conservation; and $1.6 million for renovations at a park in Clackamas County that features pipes carrying Portland's drinking supply.

Spending by the Bureau of Environmental Services also has received scrutiny, including $6 million spent to purchase 146 acres of West Hills forest land to prevent development and additional storm runoff. Adams has championed bike boulevards and green streets, and he proposed -- then scrapped under criticism -- a plan to use water and sewer money for college scholarships.

"After all that time, the City Council is absolutely impervious to the criticisms," said DiLorenzo, a partner at Davis Wright Tremaine who also briefly considering running for governor last year.

Monday's legal threat marks the uniting of several of the city's most strident critics on utility spending.

DiLorenzo has been threatening a lawsuit since June 2010. Craford is a lobbyist and director of the Portland Water Users Coalition, which represents a dozen large businesses who have opposed rate hikes tied to federal requirements.

Both declined to identify who will pay their campaign's legal bills, although they acknowledge overlapping interests and say donors so far prefer have preferred to remain behind the scenes and avoid the political spotlight.

Joining Craford as directors of the new group are Floy Jones, in a role separate from her founding responsibilities at Friends of the Reservoirs, and retired businessman Richard Leonetti. Former state Sen. Rick Metzger is overseeing fundraising.

Group members say they don't know if the city will respond to the ultimatum, but are prepared to sue "shortly after" the deadline.

Can they win?

DiLorenzo said it could come down to the city charter's restrictions on utility spending versus more generous provisions authorized under state law.

"Obviously we're in uncharted waters," DiLorenzo said. "We believe we certainly have common sense and public support on our side."

-- Brad Schmidt

Source: http://www.oregonlive.com/portland/index.ssf/2011/10/portlands_questionable_utility.html

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