City of Happy Valley's proposed withdrawal from NCPRD

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. 

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. 

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. 

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.

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.  

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. 

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.   
 

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.