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Friends of the Reservoirs


News

October 27, 2004

Friends Wins Revenue Bond Case

Nearly a year ago (November 5, 2003) the Friends of the Reservoirs challenged the City in court for issuing Revenue Bonds without proper public notification. At the heart of the case was the claim by the Friends that the City of Portland's notification of the sale of bonds was not sufficiently specific for citizens to determine what the bonds were to be used for. The City provided only a vague description stating that the bonds were for "public purposes."

The Friends argued that this prevented us from challenging the sale of the bonds through a referendum as we are allowed to do under state law. As we built our case, we discovered that the City had increasingly been using this ambiguous terminology for many in their public postings of bond sales. Only later, when the period for public challenge had passed, would the City provide more specificity for those who would be buying the bonds.

The case had implications for the sale of bonds statewide but especially for the City of Portland. If we won, the City would be on notice that its practice of ambiguous notification must stop. Other cities in the state, would also be on notice that similar practices would not pass judicial muster.

Today we learned that WE WON the case against the city. Congratulations to Susan Stoner, a member of the Friends and lawyer who argued this case pro-bono. This is an important victory, even at this late date.

The relevant parts of the ruling follow:

FINDS

  1. Notice was insufficient to inform public on how money was to be spent.
  2. Emergency designation of ordinance denied plaintiffs and other citizens their statutory referendum rights.

ORDER

  1. City auditor has to accept the referendum petition.
  2. From this date forward, defendants are enjoined from issuing any further reveune bonds under the authority of Portland City Ordinance #177129.

As you can see above, it also calls into question the City's use of emergency designation. Emergency designation of ordinances allows the City to bypass some of the usual public oversight. The misuse of emergency designation is an issue that has been addressed by several of the candidates for office who have said that the City should develop a set of criteria for determining which issues should receive emergency designation. The Friends have pointed out that this has been abused in the past, not only on this issue but others as well. The court decision supports our concern.

This victory provides important protection for all citizens who wish to challenge Revenue Bond spending on public projects that are unwarranted and unpopular. It is a victory for citizen activism and transparency in government. It should serve as a bulwark against any further subterfuges on the Reservoir issue. If future use of Revenue Bond money is proposed for Reservoir destruction, this case requires the City to give a specific description so that citizens can bring the issue to the public. A referendum is a direct and effective way to determine public sentiment.

Thanks Susan Stoner who effectively argued this case. Thanks to the 11 petitioners who made the extra effort to put forward their grievances. Thanks to the Friends and all of the supporters who showed up at the Courthouse last November. This is a real, honest-to-goodness victory!

For further information see the October 29 Portland Tribune "Judge Slaps Council in Bond Sales Ruling".