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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1 2 3 4 IN THE CIRCUIT COURT FOR THE STATE OF OREGON 5 FOR THE COUNTY OF MULTNOMAH 6 LLOYD ANDERSON, PAIGE CRAFORD, and MILLARD CHRISTNER, 7 Case No. 1112-15957 Plaintiffs, 8 PLAINTIFFS’ MEMORANDUM IN v. SUPPORT OF MOTIONS FOR 9 PARTIAL SUMMARY JUDGMENT No. CITY OF PORTLAND, an Oregon Municipal 5 and 6 (PARK FOUNTAINS AND 10 Corporation, CONTRIBUTIONS TO CITY OF NEW ORLEANS) 11 Defendant. 12 13 INTRODUCTION 14 The parties previously filed cross-motions for partial summary judgment on four selected 15 categories of expenditures by the City of Portland (“City”) from the dedicated water and sewer 16 funds. The Court issued an Opinion on Cross-Motions for Partial Summary Judgment dated 17 March 10, 2014 (the “Opinion”) as to those particular expenditures, deciding that expenditures 18 relating to utility relocation and the Riverview Cemetery acquisition did not violate the Portland 19 City Charter (the “Charter”), but that significant portions of expenditures from the water and 20 sewer funds for campaign financing and public restrooms were not authorized under the Charter. 21 In so doing, the Court provided meaningful guidance to the parties as to the standard that the 22 Court will apply to the remaining challenged expenditures at issue in this lawsuit. This motion 23 seeks to apply the Court’s prior ruling to two additional categories of water fund expenditures 24 that, plaintiffs believe, constitute equally or more clear violations of the Charter provisions than 25 26 Page 1 - PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTIONS FOR PARTIAL SUMMARY JUDGMENT No. 5 and 6 (PARK FOUNTAINS AND CONTRIBUTIONS TO CITY OF NEW ORLEANS) DWT 26769999v2 0094650-000002 DAVIS WRIGHT TREMAINE LLP 1300 S.W. Fifth Avenue Suite 2400 Portland, Oregon 97201 (503) 241-2300 1 those previously found by the Court.1 2 Specifically, this motion asks the Court to find that the following expenditures from the 3 water fund were not authorized under the relevant Charter provisions2: 4 5) Expenditures relating to decorative (and other City park) fountains,3 including the 5 costs of maintaining, operating, repairing, and improving such fountains; and 6 6) Contributions to the City of New Orleans to provide assistance after Hurricane 7 Katrina. 8 As before, plaintiffs wish to make clear that the basis for their claims is not that the City 9 lacks the authority to spend its general funds on the matters subject to challenges herein, or that 10 the foregoing expenditures are not worthwhile or appropriate uses of the City’s general fund 11 monies. Rather, plaintiffs simply contend that the protected water fund created by the City 12 Charter and funded by the water fees paid by plaintiffs and other ratepayers can only be used by 13 the City for purposes that are reasonably related to “water services” provided by the City, and 14 that these expenditures do not meet such standards required by the Charter. Plaintiffs certainly 15 sympathized with the citizens of New Orleans in the aftermath of Hurricane Katrina and do not 16 oppose private and governmental efforts to assist those affected thereby; however, the City 17 reached into the wrong “separate municipal operation” fund to provide aid to those affected by 18 19 1 Plaintiffs note that they previously advocated for a more rigorous standard than that adopted in the Court’s prior Opinion, and plaintiffs expressly reserve the right to advocate for a higher 20 standard on appeal. While reserving all such arguments, this motion asks the Court to find that, 21 even under the standard articulated in its March 2014 Opinion, the water fund expenditures challenged herein are not authorized under the relevant Charter provisions. 22 2 Plaintiffs intend to file sequential motions for partial summary judgment relating to categories 23 of expenditures as sufficient information becomes available from the City. The court ruled on plaintiffs’ motions 1 through 4 in its March 2014 order. 24 3 As discussed herein, the types of fountains at issue in this motion are not drinking fountains 25 but, rather, are non-drinking park fountains that are either “decorative” (for aesthetic purposes 26 only) or “interactive” (designed for people to play in and around the fountain). Page 2 - PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTIONS FOR PARTIAL SUMMARY JUDGMENT No. 5 and 6 (PARK FOUNTAINS AND CONTRIBUTIONS TO CITY OF NEW ORLEANS) DWT 26769999v2 0094650-000002 DAVIS WRIGHT TREMAINE LLP 1300 S.W. Fifth Avenue Suite 2400 Portland, Oregon 97201 (503) 241-2300 1 Hurricane Katrina. Plaintiffs ask the Court to require reimbursement to the dedicated water fund 2 from the source of funds that the City should have used for this (or any other) humanitarian 3 program (the City general fund). 4 Plaintiffs also note that, at least with respect to the City expenditures for fountains, it 5 appears that the City’s legal position in this case might not reflect the views of its political 6 decision-makers. In April 2013, Mayor Charlie Hales publicly questioned the use of water funds 7 for such purpose: 8 The mayor has been critical of past water and sewer spending and said he is making sure water and sewer rates are actually going to 9 pay for water and sewer projects. That’s why his plan calls for a transfer of funding for such services as street sweeping and 10 decorative fountains back to the general fund. 11 Chris Woodward, “Portland mayor: Water, sewer bills will go up after all,” KOIN.com, 12 http://koin.com/2013/04/30/proposed-water-sewer-rate-hike/ (April 30, 2013). See Exhibit 1 to 13 Declaration of John DiLorenzo in Support of Motions for Summary Judgment No. 5 and 6 (Park 14 Fountains and Contributions to City of New Orleans) (“DiLorenzo Decl.”). Shortly thereafter, 15 the City transferred all the financial and other responsibility for the park fountains from the 16 Water Bureau to the Portland Parks and Recreation (the “Parks Bureau”). See, e.g., 17 https://www.portlandoregon.gov/water/article/454859. (Exhibit 2 to DiLorenzo Decl.) Thus, the 18 City’s own actions appear to acknowledge that the City’s water ratepayers should not bear the 19 financial obligation of operating, maintaining, repairing and improving these park fountains. 20 While the recent decision by the City to discontinue the use of water fund monies for park 21 fountains is a positive development, the City still has failed to account for its prior misuse of the 22 dedicated water fund. Plaintiffs therefore seek the Court’s involvement to declare that the City 23 was not authorized to use water funds for its park fountains, and to require an accounting by the 24 City of all such amounts improperly appropriated from the water fund for park fountains. 25 26 Page 3 - PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTIONS FOR PARTIAL SUMMARY JUDGMENT No. 5 and 6 (PARK FOUNTAINS AND CONTRIBUTIONS TO CITY OF NEW ORLEANS) DWT 26769999v2 0094650-000002 DAVIS WRIGHT TREMAINE LLP 1300 S.W. Fifth Avenue Suite 2400 Portland, Oregon 97201 (503) 241-2300 FACTUAL AND LEGAL BACKGROUND 1 A. City Charter Provisions and Standard Adopted by Court Thereunder 2 1. Water fund 3 Under Charter § 11-101, the City is authorized to: 4 “construct, reconstruct, purchase or otherwise acquire, keep, 5 maintain, approve, alter and change water works and all plants and facilities found appropriate by the Council for furnishing water to 6 the City, its property, its inhabitants, and the places and people along or in the vicinity of the pipes, conduits or aqueducts 7 constructed or used for that purpose.” 8 As part of this authority, the City is authorized to acquire property, employ 9 personnel, obtain materials and supplies, and make all other necessary 10 expenditures to supply water to the City and its inhabitants. Charter § 11-101 and 11-102. 11 Charter § 11-105 mandates that “[f]or each fiscal year the Council shall fix 12 water rates which will provide an estimated income to equal expenses and debt 13 service relating to water bonds.” The Portland City Code likewise provides that 14 the “Council approves and sets water rates for each fiscal year that will provide an 15 estimated income to equal expenses and debt service relating to water bonds.” 16 PCC 21.16.010. Charter § 11-104 mandates that all monies received from water 17 ratepayers shall be held in a dedicated fund and used only for specified purposes: 18 19 Money from the sale of water and charges related to water works or service shall be placed in the Water Fund. After deducting 20 sinking fund requirements, operating expenses of the water works and plant and the Water Bureau, which may include depreciation 21 on plant and property, and maintenance expense found necessary or appropriate, the Council may transfer any excess in the Water 22 Fund to the Water Construction Fund. 23 The Council may make transfers between funds in the Water Bureau, but the funds and accounts of the Water Bureau relating to 24 water plant and works shall be separate from other accounts and funds of the City and treated as a separate municipal operation. 25 The Council may impose charges it finds equitable upon the 26 operation of the water system for municipal services of other departments, bureaus and officers, and may impose fees of the Page 4 - PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTIONS FOR PARTIAL SUMMARY JUDGMENT No. 5 and 6 (PARK FOUNTAINS AND CONTRIBUTIONS TO CITY OF NEW ORLEANS) DWT 26769999v2 0094650-000002 DAVIS WRIGHT TREMAINE LLP 1300 S.W. Fifth Avenue Suite 2400 Portland, Oregon 97201 (503) 241-2300 same character as for public utilities.
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