Water is Portland's secret problem. 

Not the Bull Run Reservoir water that runs out of your tap nor the contentious May ballot measure that will determine who controls it.

No, the next big whack to taxpayers will, in fact, come in the fight against floodwaters, the kind that have inundated the city every few decades and will do so again.

Portland along the Columbia River was once swamps and wetlands that drained behind a web of levees—28 miles of dikes and berms that act as a bulwark against flooding but often go unnoticed even when underfoot. Northeast Marine Drive, for example, runs on top of one.

The levees protect some of the city's most valuable real estate—Portland International Airport, the Expo Center, and Portland International Raceway, to name a few key parcels—but are maintained by four tiny, obscure public agencies that can barely afford their basic upkeep.

And the feds now want more than basic maintenance. After 2005's Hurricane Katrina, the Federal Emergency Management Agency is pushing to upgrade levees in the nation's 1,000-plus levee districts. FEMA wants all levees to be able to withstand what it calls a "1 percent flood" event—a deluge so severe there's only a 1 percent chance of it happening in any given year.

The agency wants action by 2017. The cost to Portland: an estimated $100 million, money that local drainage districts charged with maintaining the levees do not have, and money the city of Portland may have to raise from ratepayers, probably through higher water and sewer rates.

Right now, everyone involved is tiptoeing around the potentially explosive issue of who will have to pay. In October, Gov. John Kitzhaber convened a group that includes Mayor Charlie Hales and Multnomah County Chairwoman Marissa Madrigal to find a financial solution.

The Multnomah County Drainage District is the largest of the four levee districts; the others are Peninsula Drainage Districts Nos. 1 and 2 (both in the city of Portland) and the Sandy Drainage Improvement Company.

The districts have independent boards and assess property owners based on the amount of land they own. Budgets at the districts range from $3 million at Multnomah to $200,000 for Peninsula No. 1—nowhere near enough to take on the new federal requirements.

City officials promised business owners in the affected areas—including the Columbia Corridor, the business district east of the airport and home to 43,000 jobs—they'd help pay for the work. That hasn't happened yet.

Executive director Corky Collier of the Columbia Corridor Association sent Hales a letter March 21 to prod the city into taking action. 

"The discussions we've had with the city have been about equity, and I think they've been receptive," says Tim Warren, a real-estate developer and chairman of the Multnomah district. "It's not that they are not stepping up, it's a question of [Hales'] administration getting educated about the issue."

Hales policy director Jackie Dingfelder says City Hall is committed to fixing the levees. She says it's likely that the state of Oregon will provide a low-interest loan to complete current investigation of their conditions.

As for long-term costs, Dingfelder says, the decision of who pays will come after initial studies are complete. "We won't know what we need to fix until the engineering work is done,” she says. 

The Columbia rarely inundates Portland as it once did; the river's federal dams play a big flood-control role, and so have the levees—except when they've failed. They did so catastrophically in 1948, when Columbia River flooding wiped out the city of Vanport, killing 15 people. And the threat of major flooding has not gone away. 

The January 1996 flood put so much stress on the system that people feared city-owned Portland International Raceway would be flooded before crews performed an emergency fix to one levee.

“We almost lost the dike in 1996 at PIR,” says Mark Wigginton, manager at the raceway and chairman of the Peninsula No. 1 board.  “That dike was sloughing and moving every day.”

A failure to comply with new federal standards meant that the Corps of Engineers last year pulled certification of two of the drainage districts—Peninsula Nos. 1 and 2. Without certification, landowners in the districts can't get subsidized flood insurance. Without insurance, they can't get bank financing. 

"You might as well turn out the lights," Warren says.

In other cities, such as Sacramento and Coeur D'Alene, requirements have included stripping levees of intrusions ranging from trees to buildings to major reconstruction. 

Reed Wagner, executive director of the Multnomah district, says the feds have not given him hard deadlines for levee recertification—saying only that the two delinquent districts must immediately work toward meeting federal standards. They need $1.5 million just to finish investigating the levees' condition—money the districts simply do not have.

"We as districts don't have a lot of authority," Wagner says. "Nor do we have the financial ability to carry out recertification.”