Oregon Public Broadcasting

Portland's City Club has joined the debate over whether to transfer power from the city's water and sewer bureaus to an independent board.

The City Club is advising Portland residents to vote against an initiative on the May ballot that would create a Portland Public Water District.

According to a new report from the civic group, rate increases have primarily been driven by the cost of replacing old pipes and aging infrastructure, the need to comply with federal regulations like the Clean Water Act, and conservation and declining water use.

The report says there has been some spending on projects that are not mission critical for the Portland Water Bureau and the Bureau of Environmental Services (BES). But the report found that kind of spending doesn't account for the reason water rates, by City Club's calculation, have risen 73 percent and sewer rates have risen 79 percent in 10 years.

It noted that these same factors have driven rate increases in cities across the country.

Chris Liddle, a project manager at PGE, was the report's lead researcher.

"Primary drivers for the increases have been large capitol investments, specifically the big pipe projects," Liddle said.

In 2011, Portland finished a $1.4 billion upgrade to the sewer system to stop a combination of stormwater and untreated sewage from regularly flowing into the Willamette River when heavy rains inundate the city's pipes. Liddle also noted that conservation and reduced water use poses a problem for utilities, which charge based on water use: it reduces the amount of money they bring in, often leading to rate increases.

Kent Craford, co-chief petitioner for the water district ballot measure, said the City Club report ignored the impact of wasteful spending on rates. "When it comes to wasteful spending, the City Club has its head in the sand," he said, citing a new $45 million new headquarters the Water Bureau is building.

Craford also argued that the report downplays just how high Portland's rates are. "It really doesn't give Portland citizens very accurate information about where we stand nationally," he said.

The City Club report looked into how Portland's water rates compared to a handful of other cities in the region like Vancouver and Tigard, and said that Portland's sewer rates are comparable to those in other large West Coast cities.

Craford says compared to other large cities across the nation, Portland's rates are among the highest.

A report from Black and Veatch Management Consulting, that City Club cited, shows on average, a household in Portland pays between $20 and $50 a month more than the national average for combined water and sewer service.

The ballot measure Craford supports proposes changing governance of the city's water and sewer system. It would give control of the water and sewer system to an elected board.

Liddle said he shared many of Craford's concerns about oversight of the Water Bureau and BES, but thinks the solution needs a different approach. "I think we both agree that there need to be changes, but we don't think the ballot measure accomplishes what it needs to."

The City Club has also proposed creating a new governance agency to oversee spending at the Water Board and BES. The proposed new agency, which it calls the Portland Water and Sewer Agency, would be made up of experts in utility finance and engineering selected by the mayor.

However, the report found that regular investments will be needed to keep Portland water and sewer pipes from failing. And it cautioned that creating an independent board is unlikely to lower rates in the future.

"While the proponents appear to believe that a new governing entity independent of the city will be able to lower rates, your committee sees nothing in the measure that will guarantee that. Rates will continue to be subject to upward pressure regardless of the utilities governance structure," the report states.

This story originally appeared on Oregon Public Broadcasting.

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