A thought occurred to me as I considered Professor Bogdanski's posts on the Mayor apparently wanting to use sewer and water money to buy land from the Oregonian (here) and on the other raids on the sewer and water charges for purposes without a clear connection to providing sewer and water service. The basic issue is whether the City should use -- in fact, whether it's legally allowed to use -- revenue from sewer and water charges to fund other projects such as bioswales and bicycle lanes.
A reasonable person could conclude that the City has raised storm sewer, sanitary sewer, and water charges above the actual cost to provide the service, in possible violation of the Oregon constitution. Yet the City's the monopoly supplier of water to its residents. But must it be?
While rummaging through the Oregon constitution, I came across Section 12 of Article XI, which reads as follows:
Section 12. People’s utility districts. Peoples’ [sic] Utility Districts may be created of territory, contiguous or otherwise, within one or more counties, and may consist of an incorporated municipality, or municipalities, with or without unincorporated territory, for the purpose of supplying water for domestic and municipal purposes; for the development of water power and/or electric energy; and for the distribution, disposal and sale of water, water power and electric energy. Such districts shall be managed by boards of directors, consisting of five members, who shall be residents of such districts. Such districts shall have power:
(a) To call and hold elections within their respective districts.
(b) To levy taxes upon the taxable property of such districts.
(c) To issue, sell and assume evidences of indebtedness.
(d) To enter into contracts.
(e) To exercise the power of eminent domain.
(f) To acquire and hold real and other property necessary or incident to the business of such districts.
(g) To acquire, develop, and/or otherwise provide for a supply of water, water power and electric energy.
Such districts may sell, distribute and/or otherwise dispose of water, water power and electric energy within or without the territory of such districts.
The legislative assembly shall and the people may provide any legislation, that may be necessary, in addition to existing laws, to carry out the provisions of this section.
Suppose a group of irritated ratepayers petitioned to form a public utility district for the purpose of providing water in the City of Portland. The PUD would be governed by an elected board of directors, as provided by the constitution. It could acquire the water system from the City and provide water to its members. It would have to acquire its own billing system (something it could likely do much more cheaply than the City did). Being a new entity, it could choose whether or not to participate in PERS. Because it would be limited to providing water service, it could not divert water revenues for other pet projects. Forget about the electric company: if the City Council is going to tap into the sewer and water revenues to bail out the Oregonian's owners, let's think about a people's utility district for our water service.
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