Greasing Small Business

Marilyn DeVault has watched several businesses in her neighborhood close down in recent years. Her bakery, the award-winning Piece of Cake in Sellwood, remains popular and busy.

But she fears that new city fees that will more than double her sewer bill could make her business the next one to close.

City records show Piece of Cake's sewer charges will go from $1,892 a year to as much as $4,380.

“We’re a little tiny bakery,” DeVault says. “They’re going to put a lot of people out of business.” 

DeVault's bakery and thousands of other small food businesses are being asked to start covering the cost of treating grease, food and other contaminants in the city's wastewater.

Officials at the city Bureau of Environmental Services acknowledge the new sewer fees will mean small businesses will take a big hit.

"I don't have access to any of the businesses' books, but it's possible that the charges could be tough on folks," says John Holtrop, a program manager for the bureau. 

Holtrop says the new rates will shift between $3 million and $6 million in charges from large industrial users to about 3,000 food-related businesses, including coffee shops, delis, bakeries, brew pubs, doughnut shops, restaurants, caterers and hotels.

About 20 years ago, the city started charging large industrial sites for handling contaminated wastewater. 

In recent years, the companies—about 72 currently—lobbied to shift some of those costs onto other businesses.

The new fee has been labeled as the "Cut Through the FOG" program—FOG being an acronym for fats, oils and grease.

Dean Marriott, director of the Bureau of Environmental Services, says fats, oil and grease clogging sewer pipes cost the city millions a year, and businesses that cause the problem haven't been paying their fair share. "Their activities have been subsidized by everyone else," he says.

Marriott says the program is intended to create an incentive for companies in the food industry to put less waste down the drain. Businesses that do more to reduce wastes will see a smaller fee. 

"We're trying to send a signal to change people's behavior," he says.

The new rates show that—in many cases—businesses that reduce their wastes will still see steep increases. The shift in cost burden will lower residential rates by about 2 percent.

But the city estimates big industrial users will see a cut of about 22 percent. They include Costco, Portland French Bakery, Alpenrose Dairy, Kraft Foods, Lloyd Center and Widmer Brothers Brewing. Portland International Airport is also on the list of beneficiaries.

"I understand completely that it might put [smaller companies] out of business," says Chuck Little of Portland French Bakery. "That's why the city didn't implement this sooner. They knew what kind of firestorm it was going to bring up.” 

The City Council approved the change with little public attention last fall. A number of businesses contacted by WW said they hadn't heard about the program or didn't know exactly how it would affect them.

Marriott says his bureau has spent a year informing businesses of what was coming and sent each at least two notices. No business will see a rate increase, he says, until a city inspector visits and determines the proper rate.

DeVault understands what the city is trying to do, but she thinks the impact on companies like hers is severe.

“I think it’s crazy to do this to small businesses,” she says. “I think it’s a mean thing to do to Portland.” 

WWeek 2015