Independent Board Says Water Bureau Properly Handled Its Rainy-Day Fund

City Commissioner Nick Fish pledges annual review of funds.

Last fall, WW reported how the Portland Water Bureau sat on a reserve fund that grew to $32 million over the past five years, even though Water Bureau sales to customers were in decline. In response, City Commissioner Nick Fish called for an outside review of the "rate stabilization fund," which the Bureau of Environmental Services also keeps.  

Now that independent ratepayer advocate, the Citizens' Utility Board, has issued a report saying the Water Bureau did nothing wrong.

"WW's article seems to suggest that the rate stabilization funds for PWB and BES are somehow used as slush funds," CUB director Janice Thompson writes. "We do not find that to be the case."

Thompson says the bureau did the right thing by saving money to smooth the cost of capital projects, like underground reservoirs. She says the industry standard of using rate stabilization dollars to offset declining water sales only applies to cities with seasonal water shortages.

Fish says he'll stick with the CUB's recommendation.

"We made a commitment to seek independent review of the water bureau's use of its rate stabilization fund," he tells WW. "We kept our promise by asking the Citizens' Utility Board to take a look and report back to me. In their report, they conclude that the bureau's use of those funds was 'targeted, strategic and planned.'"

Thompson's one suggestion for changes? Bureau managers should report to a new independent regulator—the People's Utility Board—its savings and spending of reserves, "which, though valid, should be more transparent."

Fish says he'll do that, too.

"While I'm pleased we got a clean bill of health," he says, "I also think the recommendation we conduct annual briefings is a good one, and we intend to implement it. We're going to institutionalize annual review of these funds."

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