The Tri-City Service District filed a lawsuit in Clackamas County Circuit Court June 11 seeking to invalidate a franchise fee being charged by Oregon City for TCSD infrastructure located within a city-owned right-of-way. The lawsuit seeks to reduce or eliminate the impact of the fee on ratepayers in the district.
Last November the Oregon City Commission voted to impose a fee on public utilities operating within a city right-of-way. As a result, TCSD, which manages the Tri-City Water Pollution Control Plant in Oregon City, is required to pay the city nearly $250,000 to conduct its operations on behalf of three member cities: Gladstone, West Linn, and Oregon City.
The Clackamas County Board of County Commissioners serve as the governing board of the Tri-City Service District. The county believes Oregon City’s fee is excessive and represents an unreasonable burden for customers in the district. City leaders in Gladstone and West Linn have joined the county in opposition to Oregon City's fee. The county also believes Oregon City’s fee is legally questionable and is pursuing legal action to eliminate or reduce the impact of the fee on district customers.
Oregon City had the option of charging a fee based on linear-feet within the city’s right of ways, resulting in about $15,000. Instead the city is charging the district approximately $240,000 using a formula that is based on the district’s gross revenues. The formula essentially guarantees that these fees will increase in future years.
The only way for the district to pay the Oregon City fee is to pass it on to district customers.
Historically, customers in Gladstone, West Linn, and Oregon City have paid the same rate per connection for district services. However, during the 2014-15 budget process, the TCSD budget committee recommended assessing a differential rate only to Oregon City ratepayers to pay for franchise fee.
These types of fees are rare, as they increase the cost of basic services, such as water and sewer. These essential services support critical infrastructure in our region, protecting public health and the environment while promoting economic development. Some states have banned the imposition of similar fees for this reason.