A bill to circumvent the carefully crafted statutory process for a city to withdraw from a special district received a public hearing in the House Committee on Agriculture and Land Use on March 28. The bill, HB 3099 would authorize cities that were annexed into a special district by a special city election to withdraw by a city election. This bill was brought to the legislature by City of Happy Valley in order to address a local dispute between the City and the North Clackamas Park & Recreation District.
Allowing a city to withdraw from the district in such a way proposed in HB 3099 will result in many complications for districts, cities, counties, and the state. Under this bill, if a city were to withdraw from a district, the bill would set the stage for more stranded assets. Cities would not be required to assume ownership of assets within city limits, and a special district would have no ability to levy the taxes to maintain the asset, further exacerbating this issue. Because there is no clear division of district assets, cumbersome and expensive litigation would likely ensue.
Special districts are planned in such a way they can bring efficiencies and cost savings to the district they serve. This bill would deteriorate carefully-planned economies of scale. Special districts would also be disincentivized from making significant capital investments because this bill would allow for those investments upon a withdrawal.
Association of Oregon Counties (AOC) Interim Executive Director, Mike Eliason testified on a panel in opposition to the measure. In his testimony, Eliason noted this is a unique local issue that should be addressed between the parties involved as there is a process in place.
Commissioners Jim Bernard and Paul Savas (Clackamas County) also testified in opposition to the bill. The Commissioners discussed the clear process that is currently in effect, the way the county is engaging with the city to resolve the issue, and the detrimental impact the bill could have on all districts statewide.
More information on this issue can be found here.
Contributed by: Megan Chuinard | Public Affairs Associate