191660

The City of Portland ordains:

Section 1.  The Council finds:

1. Peninsula Drainage District #1 (“PEN 1”) provides flood risk reduction and drainage services for lands within its jurisdiction by operating and maintaining levees and drainage works as authorized under ORS Chapter 547.
2. The City of Portland (“City”) owns 77% of the land in PEN 1.
3. PEN 1’s primary source of revenue is through property assessments and PEN 1 is unable to assess enough revenue to support the basic operations of the district or meet its financial obligations to the City under the intergovernmental agreement described in paragraph 7 below.
4. The City has a strong interest in ensuring PEN 1 remains solvent and is consolidated into the new Urban Flood Safety and Water Quality District (“UFSWQD”), which will have a sustainable governance and funding structure.
5. The Council authorized the transfer of up to $410,000 in funds to PEN 1 for FY 2023-24 to be used for covering the ongoing operating deficit and helping maintain the financial sustainability of PEN 1 (Ordinance No. 191394, adopted Aug. 2, 2023, and the intergovernmental agreement authorized thereunder (“the IGA”)).
6. The Council had previously authorized payments for the same purposes for Fiscal Year 2022-23 via Ordinance No. 191241, adopted April 19, 2023.
7. As further detailed in the recitals of Exhibit A, PEN 1 has not been able to meet its financial obligations to the City under a 2014 cost-sharing intergovernmental agreement authorized by Ordinance No. 186599 (adopted May 28, 2014) (“the Cost-Sharing IGA”). The Cost-Sharing IGA provided funding for engineering evaluations of the conditions of infrastructure in PEN 1 and Peninsula Drainage No. 2, and all PEN 1 financial obligations under that agreement are now past due.
8. PEN 1’s total outstanding financial obligation to the City under the Cost-Sharing IGA is $77,771.79.
9. As further explained in the recitals of Exhibit A, continuing to carry this debt would present challenges for PEN 1’s desired consolidation into the UFSWQD.
10. For this reason, PEN 1 recently requested an additional $77,771.79 in operating support for FY 23-24 beyond what the Council authorized under Ordinance No. 191394 for that fiscal year. PEN 1 wishes to use these requested funds to fully repay its obligations to the City under the Cost-Sharing IGA prior to an UFSWQD board vote on consolidation of PEN 1 and other legacy districts into the UFSWQD, scheduled for June 2024.
11. General Fund special appropriations were used to make the funding transfers in FY23-24 that were previously authorized under Ordinance No. 191394. Specifically, in June of 2023, and subsequently in October of 2023, the Council allocated funding for several identified projects in support of Levee Ready Columbia and the new UFSWQD (Ordinance No. 191334, adopted June 21, 2023, and Ordinance No. 191482, adopted October 11, 2023). PEN1 operating support, including local sponsorship for Army Corps of Engineers partnership, was one of the approved identified uses for those funds.
12. There are available funds in the City’s Special Projects Debt Service Fund that the City’s Debt Management Division has identified as being available and appropriate for the purpose described in paragraph 10 above in FY23-24.
13. The City now desires to use those funds to transfer up to an additional $77,772 to PEN 1, to be used as described in the IGA to fully pay down PEN 1’s financial obligations to the City under the Cost-Sharing IGA by the end of FY23-24.
14. To accomplish this transfer for this purpose, the City now desires to amend and re-state in its entirety the IGA in substantial conformance with Exhibit A.
15. The amended and re-stated IGA will authorize City payments in support of covering the ongoing operating deficit of PEN 1 and helping maintain the financial solvency of PEN 1 in an amount not to exceed $487,772, rather than the original amount of $410,000, for Fiscal Year 2023-24.

NOW, THEREFORE, the Council directs:

1. The City’s Chief Administrative Officer to execute an amended and re-stated intergovernmental agreement with PEN 1 in substantial conformance with Exhibit A, provided it has been approved as to form by the City Attorney’s Office.
2. The City’s Chief Administrative Officer or their designee is authorized to execute amendments to the scope of services or the terms and conditions of the amended and re-stated intergovernmental agreement, provided the changes will not increase the City’s financial risk.

Section 2.  The Council declares that an emergency exists because delay in providing financial support to PEN 1 would  interrupt PEN 1’s ability to maintain operations and achieve consolidation into the UFSWQD, which will have a sustainable funding structure; therefore, this Ordinance shall be in full force and effect from and after its passage by the Council.