Staring down another legal fight, Portland officials last month quietly returned nearly $1 million of utility ratepayer money used in 2000 to help buy a Pearl District redevelopment site along the Willamette River.

The reimbursement came six weeks after attorney John DiLorenzo called attention to the spending by unearthing an old memo questioning the rationale of spending utility money -- absent stormwater improvements -- to buy the Centennial Mills property.

DiLorenzo said it's another victory in his five-year-old lawsuit against the city over questionable utility spending.

"I asked that they give the money back, and they gave it back," he said Tuesday. "So, yeah."

At issue was the city's decision to use $950,000 in money from the Bureau of Environmental Services to buy the Centennial Mills property. DiLorenzo identified the project in his 2011 lawsuit against the city. But it wasn't until December that he asked city officials to voluntarily repay the money to avoid an adverse ruling from a Multnomah County judge.

DiLorenzo found ammunition to bolster his case. In 2000, Commissioner Dan Saltzman wrote a memo to then-Mayor Vera Katz saying the $950,000 contribution was made so the Bureau of Environmental Services could build an innovate stormwater facility on the site.

"Absent such a facility, there is no rationale to justify allocating ratepayer money for this property acquisition," Saltzman wrote in the Dec. 2000 memo.

Terry Thatcher, the city attorney handling the utility lawsuit, said Tuesday that city officials reviewed the status of the project and decided to repay the money.

Thatcher stressed that there was nothing wrong with the initial contribution. But because no redevelopment project has moved forward in the ensuing years, he said, it's not clear if a stormwater facility will ever be built there and officials decided it was time to cut bait.

On Jan. 21, the Bureau of Environmental Services invoiced the city's urban renewal agency, the Portland Development Commission, for the money. On Feb. 2, the Portland Development Commission cut a $950,000 check to the sewer bureau.

Beyond that, the city has no documentation explaining the transfer.

This isn't the first time that city officials have changed course because of legal pressure. In 2012, the City Council tapped nearly $1.6 million from the general fund to reimburse the Water Bureau for money already spent fixing up a building for the Portland Rose Festival Foundation.

The reimbursement eliminated the need for a judge to weigh in on that project.

But in 2014, a Multnomah County judge hearing DiLorenzo's case ruled that Portland utility spending must be "reasonably related" to providing water, sewer or stormwater services. So far, the judge has ruled that $4.5 million worth of projects crossed the line.

Despite the Centennial Mills repayment, the dispute isn't over.

DiLorenzo wanted the city to pay interest, which, after 15 years, could double the amount repaid. Thatcher said officials don't think it's appropriate to pay interest because the money wasn't a loan.

DiLorenzo said he'll ask a judge to decide.

-- Brad Schmidt

503-294-7628

@cityhallwatch