City of Happy Valley's proposed withdrawal from NCPRD

On Dec. 3, 2019, the Clackamas County Board of Commissioners, acting as the Board of Directors for the North Clackamas Parks and Recreation District (NCPRD), and the Happy Valley City Council approved a settlement agreement that resolves a two-year legal dispute over parks and recreation services.

Read the full press release.

Overview

In June 2017, the Happy Valley City Council took action to withdraw from NCPRD and to provide their own parks and recreation services to Happy Valley residents. However, the City did not follow appropriate state law in withdrawing from the District.

On Dec. 13, the Circuit Court ruled that the City of Happy Valley improperly withdrew from the District. Read the court ruling.

On Aug. 16, 2019, a jury awarded the City of Happy Valley roughly $18 million in its claims that NCPRD had breached its original 2005 contract with the city for failing to complete certain projects. NCPRD will review its legal options to determine its next steps, including a possible appeal of the judge’s original ruling. Read the county’s official statement.

During the legal proceedings, the District has continued to maintain facilities and programming in Happy Valley without receiving a permanent tax rate from Happy Valley residents.

NCPRD will continue to make any necessary adjustments to our operations and budgets to provide the best service and value possible to our residents.

What is NCPRD?

The North Clackamas Parks & Recreation District (NCPRD) is a service district of Clackamas County. It provides exceptional parks and recreation programs, facilities and services to more than 122,000 residents in a 36-square-mile area, including the cities of Milwaukie and Happy Valley, and a large area of northern unincorporated Clackamas County including Oak Grove, Jennings Lodge and more.

The NCPRD offers residents the use of more than 39 parks, 25 natural areas, 15 miles of trails, the Hood View Sports Complex, the North Clackamas Aquatic Park, the Milwaukie Center and Mount Talbert Nature Park.

Citizens voted to create the NCPRD in 1990, and Happy Valley voted to join the District in 2006. According to the measure approved in 2006 by Happy Valley voters, “City Finances alone cannot adequately fund parks and recreation.”

The NCPRD has its own permanent taxing authority, with 54 cents of every $1,000 of assessed value dedicated to providing parks and recreation services in the community.

Next Steps

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In the breach of contract case, a jury awarded over $18 million in damages and the court added pre-judgement interest of over $3 million, putting the district at risk of paying 21.3 million to date. In addition, the interest continues accruing at 9 percent per year. 

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While some of the money would be paid using fees assessed on new development within the City of Happy Valley (known as System Development Charges, or SDCs), the remaining money would have to come from the District’s capital and operating budgets. 

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The District will no longer receive property tax revenue generated from properties in current Happy Valley boundaries. If not for this agreement, as the City continues to grow and annexes more properties, the District’s tax base would erode over time. However, the settlement agreement locks in the current district boundaries outside of Happy Valley, preventing this from occurring. 

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The City and the County have approved a settlement agreement. This agreement commits the parties to jointly developing and proposing legislation that provides the City with an alternate means of withdrawing from the District.  If the State Legislature passes this proposed legislation, the terms of the Settlement Agreement between the City and the County would be implemented, and both parties would drop all pending litigation.
If the City and the County cannot agree on proposed legislation, or if the Legislature does not pass proposed legislation, the Settlement Agreement would not take effect.  

Since the successful passage of legislation is required to implement the Settlement Agreement, the City and the County are working closely with key legislators to develop and support mutually-agreeable legislation.

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Presuming legislation is enacted that withdraws the City from the District, the Settlement Agreement contemplates:

  • •    Instead of paying $21 million (plus additional accumulated interest), NCPRD will pay the City $14.3 million.  
    • The entire sum is directly attributable to system development charges that were collected within the city. A total of $9.3 million is remaining cash that by ordinance can only be spent within NCPRD Zone 3 boundaries which is comprised of Happy Valley and the Urban Growth Management Area. 
    • The remaining $5 million will be paid from Hood View Park sale proceeds. The full amount of this $5 million from sale proceeds is attributable to funding that originated in Happy Valley, including a $2 million contribution by the City for development of Hood View Park.
  • •    NCPRD will transfer ownership, liability and maintenance of the following existing parks within Happy Valley to the City:
    • Southern Lites
    • Village Green 
    • Ashley Meadows
    • NCPRD-owned Mt. Talbert parcels within Happy Valley* 
    • Mt. Scott Creek Trail
    • Hidden Falls Nature Park
  • The County and the City will jointly support legislation in the 2020 Legislative Session which provides Happy Valley an alternative legal path to withdraw from the District.  
  • Once the City withdraws, the resulting boundaries of the District will remain intact even if the City annexes parts of District territory in the future.  This will prevent the District from losing potential multiple millions of dollars of tax revenue over time as the City grows and annexes more property.

*The majority of the Mt.Talbert Nature Park is in the ownership of Metro, and will remain as such. Most of this Metro property is within the City of Happy Valley, and thus will no longer be in NCPRD boundaries if the city withdraws. NCPRD and Metro have a joint management partnership for this site.    If Happy Valley withdraws from the district, NCPRD will work closely with Metro to ensure that the public’s access to Mt. Talbert Nature Park will be unaffected.  

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Due to the legal challenges and uncertainties over the past two and a half years, many of NCPRD’s planning, budgeting and service activities have been in limbo or delayed altogether.  If the required legislation passes, this settlement agreement provides the District with certainty regarding its boundaries and finances, and will allow the District to move forward with implementing programs, services and projects that have been on hold.  NCPRD will be able to focus on important projects such as Milwaukie Bay Park, the future of the Concord, Wichita and Clackamas Elementary School sites, and planning for additional parks and facilities in underserved areas of the District.  Additionally, this settlement allows our District Advisory Board to move forward in its regular work helping NCPRD meet the needs of the residents.

In addition, NCPRD will no longer be responsible for managing and maintaining the 6 properties being transferred to Happy Valley, which will provide ongoing cost savings to the District.
Finally, this settlement agreement will end costly litigation and save taxpayer dollars. 

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The District and the City sought a legal solution to the city’s desire to withdraw from the District for over two years. Happy Valley has grown rapidly since joining NCPRD, and City leadership desires to provide its own parks and recreation services.  

If the parties continue to litigate, there will be significant financial risk to the District and the services provided to the District residents.  The Board of Commissioners, in their role as the governing body of the District, stands committed to looking out for the best interest of all District residents, and therefore is supportive of this settlement resolution to avoid potential further financial hardship on the District and its residents.  

Additionally, this resolution allows both parties the ability to clearly move forward in providing residents with parks and recreation services rather than be tied up in courts for the next two or more years.   
 

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In spring 2020, NCPRD will conduct community listening sessions about the future of the parks district.  Additionally, interested residents may attend and participate in the monthly District Advisory Board meetings. Opportunities for public feedback are provided at every meeting on matters pertaining to NCPRD.  

Meeting information is available online.

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Timeline

Dec. 3, 2019 City of Happy Valley and Clackamas County/NCPRD reached settlement agreement on parks, contingent on legislation.
Aug. 16, 2019 On Aug. 16, 2019, a jury awarded the City of Happy Valley roughly $18 million in its claims that NCPRD had breached its contract with the city for failing to complete certain projects. NCPRD will review its legal options to determine its next steps, including a possible appeal of the judge’s original ruling.
Jan. 22, 2019 A judge ruled that financial damages, if any arising from an earlier ruling that NCPRD breached the contract with the city to build parks, will be decided at trial.
Dec. 2018/
Jan. 2019

NCPRD held four public meetings in December 2018 and January 2019 for people who live in the District (Happy Valley, Milwaukie and unincorporated areas of North Clackamas County) and wanted to learn how this could affect them. View the latest presentation.

Read NCPRD’s letter to residents about the meetings.

Dec. 13, 2018 The Court determined that the City of Happy Valley had not followed Oregon law when it attempted to withdraw from NCPRD. The City was not allowed to act unilaterally to withdraw, but instead must follow the process in ORS 198 in which a petition is presented to the Board of County Commissioners to start the process.
Dec. 12, 2018 A hearing is held in Circuit Court in Happy Valley’s lawsuit on the form of Order on Summary Judgment. The court takes the question under advisement to decide if, after the Court’s earlier ruling that NCPRD was in breach of the agreement, Happy Valley is entitled to damages at this time or if damages must be determined at trial in August 2019.
Dec. 5, 2018 A hearing on NCPRD’s Motion for Summary Judgment is held in the declaratory judgment action in Circuit Court on the question of whether Happy Valley’s attempt to withdraw from NCPRD was proper, or illegal and void.
Nov. 28, 2018 The Circuit Court denied a request by Happy Valley to dismiss a declaratory judgment filed by the NCPRD, Clackamas County, and the Clackamas County Assessor to decide the question of whether the City’s attempt to withdraw from NCPRD was legal.
Oct. 29, 2018 The Circuit Court denied a request by Happy Valley to dismiss a declaratory judgment filed by the NCPRD, Clackamas County, and the Clackamas County Assessor to decide the question of whether the City’s attempt to withdraw from NCPRD was legal.
Oct. 12, 2018 The Circuit Court denies Happy Valley's motion to consolidate the declaratory judgment action with the lawsuit seeking a share of the District's assets filed earlier by Happy Valley. This decision allowed for an earlier hearing on a Motion for Summary Judgment.
Sept. 19, 2018 The Oregon Tax Court rules that the Oregon Department of Revenue (DOR) exceeded its authority in rescinding approval of a boundary change sought by the City of Happy Valley during its attempt to withdraw from NCPRD. The decision invalidates the June DOR decision that rescinded the boundary approval and reinstates the DOR’s March approval of the boundary change.
June 19, 2018 Oregon Department of Revenue (DOR) rescinds approval of Happy Valley's boundary change. DOR determined that the City did not follow appropriate state law in withdrawing from NCPRD.
May 15, 2018 City of Happy Valley voters approve establishing a five-year local option levy for parks and recreation services with the same assessed tax rate as NCPRD.
Nov. 2017 NCPRD files a countersuit against Happy Valley.
Oct. 2017 Happy Valley files a lawsuit against NCPRD seeking a share of the District’s assets and substantial cash.
June 2017 The Happy Valley City Council votes to withdraw from NCPRD effective Dec. 31, 2017.

News

Dec. 4, 2019 City of Happy Valley and Clackamas County/NCPRD reach settlement agreement on parks, contingent on legislation
Aug. 16, 2019 Statement on HV/NCPRD Litigation
Dec. 13, 2018 Court rules Happy Valley improperly withdrew from Parks District
Sept. 19, 2018 Oregon Tax Court rules Department of Revenue without authority to rescind Happy Valley boundary change; No longer part of NCPRD
July 3, 2018 Clackamas County Commissioners decline Happy Valley requests for NCPRD boundary change submission, tax delay
June 21, 2018 Oregon Department of Revenue invalidates Happy Valley boundary change; City remains part of NCPRD
April 10, 2018 NCPRD status change for Happy Valley residents
Oct. 9, 2017 Clackamas County on Happy Valley lawsuit: City has ‘misguided perception’ that it is owed more than authorized by state law in withdrawal from NCPRD
June 7, 2017 North Clackamas Parks and Recreation District to transition services within Happy Valley city limits

Contact Information

Questions or comments, feel free to contact NCPRD at 503-742-4348 or info@ncprd.com, or visit their website.