Dear Bruce and Members of the MTNA Board,

Commissioner Leonard asked me to respond on his behalf to your recent letter to members of the Council.

As you may be aware, the Friends of the Reservoirs last week circulated a letter indicating, for the first time in writing, that the strategy they wish to have the City pursue regarding LT2 is simply to refuse to comply.

Their letter urges Portlanders to tell the City Council, "...none of these projects should be approved unless and until we do not achieve legislative relief..." and asked that they remind Council that, "...it would take 75-100 years of non-compliance penalty fees before reaching the eventual total cost of these projects, assuming the EPA decided to actually do so. Maximum assessment for violating an administrative order is $37,500 per day or about $13.5 million per year. "

Refusing to comply with federal law, and incurring fines of $37,000 per day for non-compliance, no matter how much the City Council disagrees with the law, is simply not a viable option or approach.

As I am sure you know the City Council has supported the Water Bureau's efforts to modify, challenge and change the proposed and final version of LT2.

In January 2005, the Portland City Council committed to pursue alternative forms of compliance for the LT2 rule. Soon after, the city met with EPA officials to encourage the agency to alter the final rule so that it would include alternate approaches that would allow Portland to avoid building additional treatment.

When first assigned the Water Bureau, Commissioner Leonard contacted community stakeholders in July 2005 and learned of their desire that the city fight the proposed LT2 rule. Commissioner Leonard pledged to do everything in his power to maintain Mt. Tabor's open reservoirs in accordance with the Mt. Tabor Independent Review Panel recommendation to City Council that the city develop a risk mitigation plan to come into compliance with the proposed LT2 rule.

In January 2006, the final rule was published. It removed risk mitigation as an option for compliance with the open reservoir requirements that Portland had been planning to pursue. The city filed a legal challenge to the rule in the Washington D.C. District Court of Appeals in early 2006. Community stakeholders were intimately involved in the challenge and participated in the selection of the nationally recognized law firm selected to pursue the city's legal challenge. Stakeholders met with bureau staff and participated in regular meetings and every aspect of the challenge, including compiling documents to support the city's case and reviewing and commenting on the legal briefs filed by the City's outside attorneys.

In early 2007, the Water Bureau worked closely with the Office of Government Relations and representatives from Oregon Wild and Friends of the Reservoirs to pass state legislation that would ensure that the city has the same opportunities to seek alternative compliance with the LT2 rule at the state level that are currently available at the federal level. Legislation was crafted by bureau and stakeholder representatives and introduced by Representative Jackie Dingfelder. It passed with broad support.

In November 2007, the Washington D.C. District Court of Appeals issued a decision rejecting the city's challenge and upholding the rule.

Following the court loss, Commissioner Leonard met with stakeholders Floy Jones, Regna Merritt, Scott Fernandez and Frank Gearhart and expressed his belief that the city would now need to comply with the LT2 rule as written, including building a treatment plant for the Bull Run source and ending the use of the open, in-town reservoirs. The stakeholders urged Commissioner Leonard to pursue a variance to the rule and seek federal legislative intervention by our congressional delegation. Commissioner Leonard instructed the Water Bureau to pursue the variance option and pledged to convene meetings with Portland's congressional delegation and the stakeholders to explore any possible legislative options. This was done with the understanding that the Water Bureau would also begin planning for conventional compliance with LT2, as written, so the city would not find itself in violation of federal drinking water law should its efforts at obtaining a variance fail.

In December 2007, Commissioner Leonard convened a meeting including representatives from Senator Wyden, Congressman Blumenauer and Congressman Wu's offices, the City Government Relations Office, the Water Bureau, Floy Jones, Jeff Boly, Cascade Gellar Anderson, Scott Fernandez and others. Congressional staffers indicated at this meeting that such legislation would be a "heavy lift" but that they would work with the city on strategies as opportunities arose within Congress. They indicated that the city should go through the variance process in advance of seeking legislative solutions because it would be better to exhaust all administrative options before seeking a legislative "end around".

In early 2008, the Water Bureau worked directly with County Health Officer Gary Oxman, Multnomah County Epidemiologist Amy Sullivan, Floy Jones, Scott Fernandez, Jeff Boly, and Cascade Gellar Anderson on developing a proposal to the EPA for how the city would approach gathering evidence to support a variance. The EPA rejected the city's proposed approach for obtaining a variance and indicated what specific water quality monitoring would be required in order to qualify for a variance to the treatment requirement of the LT2 rule. The Water Bureau has been working directly with the EPA since then to work out details of the water testing procedures. $450,000 has been budgeted to conduct a year's worth of testing to make Portland's case for a variance.

At this time, the EPA also indicated that it would not consider a variance application for the open reservoir requirements of the rule. Water Bureau staff confirmed the EPA's assertion that a variance on the open reservoir provision of the rule was not possible with both the City Attorney's Office as well as the attorneys from Foley Hoag who litigated the city's 2007 legal challenge.

In August 2008, the Water Bureau briefed Senator Wyden's staff on the city's efforts to date in securing a variance to the treatment requirement, EPA's communication regarding the lack of a variance option for open reservoirs and the city's continued interest in a legislative fix for its open reservoirs

In November 2008, Commissioner Leonard met with stakeholders Floy Jones, Regna Merritt, Scott Fernandez and others to come to a common strategy regarding notification to the new Obama Administration of the city's interest in seeking legislative alternatives to LT2. Commissioner Leonard's office, the Water Bureau and other stakeholders collaborated on a letter to the Obama transition team, indicating the city's strong interest in seeking alternatives to the rule. The city has yet to hear back from the administration regarding this latest request.

This month, Commissioner Leonard sent a letter to each member of Portland's congressional delegation to ask for its help in introducing and passing federal legislation to allow the city to continue to use its five open, finished drinking water reservoirs for drinking water storage and to allow the city to continue to use Bull Run source water without an additional treatment facility.

In response to the court ruling, Commissioner Leonard directed the Water Bureau to pursue the following compliance strategies:

1. Attempt to obtain a variance to the treatment portion of the rule from the EPA. A variance could conceivably allow the bureau to avoid the expense associated with building new treatment if the city can demonstrate to the EPA that due to the nature of the Bull Run source, additional treatment is unnecessary.

Thank you for writing and participating in the deliberative process. I encourage the MTNA and interested Portlanders to continue working with Commissioner Leonard, the Portland Water Bureau and our Congressional representatives to change the rule that Congress directed EPA to create.

David Shaff, Administrator

Portland Water Bureau