Two self-proclaimed watchdogs of Portland’s government have filed suit against Commissioner Nick Fish, who oversees the sewer utility, saying a planned $12 million payment from the bureau made as part of an agreement with the federal government is unlawful.

In May, city leaders agreed to make the payment to a trust fund – along with an identical one from the state of Oregon – to speed up remediation of the polluted Portland Harbor Superfund site. The federally-designated site encompasses 10 miles of the Willamette River in Portland, where the government and private industry dumped pollutants for decades.

Part of the superfund system, which is overseen by the Environmental Protection Agency, involves assessing polluters’ liabilities and proportionally dividing the cleanup costs among them. The state, local governments and private firms have been haggling for years over how much each should pay. Cleanup is expected to cost more than $1 billion, with the city’s share unknown.

In addition to speeding up the process, Portland entered into the $12 million agreement with to earn a credit against its future superfund liabilities. The City Council authorized $6 million from sewer utility revenues to cover a portion of the expense. The rest, to be covered by other city bureaus, has not been appropriated.

But central to the lawsuit, brought by retired parole officer Floy Jones and air-taxi owner Kent Craford, are restrictions on how money paid by Portland’s water and sewer ratepayers may be used. Unlike property taxes, which may be spent at the discretion of city commissioners, ratepayer funds may be spent only on the provision of water and sewer services.

Craford and Jones said Monday they take no issue with efforts to remedy pollution in the Willamette River. But they said Portland’s leaders were fleecing ratepayers by turning the sewer system into a “slush fund” and directing proceeds to out-of-bounds projects such as the EPA trust fund.

Fish, the city commissioner, said in a news release Monday that the lawsuit was “unfounded.” He said the trust fund was “a responsible approach for Portland ratepayers and taxpayers” and touted the city’s ability to keep sewer rate increases below the rate of inflation. Fish is named as a defendant in his official capacity.

Jones and Craford are two leaders of Citizens for Water Accountability and Reform, a nonprofit which, with prominent attorney John DiLorenzo, filed suit against the city in 2011 over ratepayer funds used for projects tangential to the water and sewer systems, including payments to clean up the superfund site.

They settled with the city in 2017 for a $10 million reimbursement to ratepayers, a third of which went to DiLorenzo’s firm.

A Multnomah County judge ruled at the time that superfund payments from the sewer bureau were allowable expenses. The judge also decided that once the liability of city bureaus for Portland Harbor became clear, the remediation expenses should be apportioned among them. That has not yet happened.

In their current lawsuit, also lead by DiLorenzo, Jones and Craford ask a judge to halt the $12 million trust fund payment and appoint , an auditor to monitor the city’s superfund spending and reimbursements to the sewer fund as necessary.

-- Gordon R. Friedman

GFriedman@Oregonian.com