Portland misspent water bureau cash on Powell Butte park, judge says

The city of Portland wrongfully spent millions of dollars from its water bureau to build trails and other amenities at Powell Butte Nature Park, a judge ruled late Friday.

It was the latest decision on attorney John DiLorenzo's six-year crusade against what he claims were "improper" city expenditures of city water and sewer revenue on a parks, tours and other unnecessary amenities. Customers fed up with years of significant water and sewer rate hikes sued the city.

"I"m very pleased," DiLorenzo said. "They built a new park and they used about $9 million of water bureau funds improperly to do it."

City officials disputed the $9 million figure, claiming the judge has yet to determine the exact amount.

Karen Moynahan, senior deputy city attorney, said the judge found some portion of the $9 million went to authorized expenditures for the city water system, some to the park. "But he did not delineate which was which," Moynahan said.

Friday's ruling was a mixed bag for the city. Multnomah County Circuit Court Judge Stephen Bushong ruled that about $1.6 million in water and sewer money the city spent on Bull Run cabins and bus tours was OK.

DiLorenzo forced this review after suing the city in 2011, arguing the City Council had violated the city charter when they used money from dedicated water and sewer funds on a host of tangentially related programs.

Last March, Bushong issued another split decision, ruling the city went well outside its authority when it spent nearly $1.2 million in water and sewer money to operate outdoor public restrooms and pay for candidates' political campaigns.

But the City Council dodged a huge financial bullet when Bushong determined that spending $10.4 million on two other projects was permissible. The judge said buying parkland and relocating water pipes were "reasonably related" to providing water and sewer services.

Bushong will review other city expenditures in December, when the case is expected to go to trial.

City officials are considering whether to appeal Bushong's ruling on the grounds he's overstepped his authority in reviewing individual city expenditures.

"We respectfully disagree with the standard of review the judge is applying here," said Tracy Reeve, city attorney.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com

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