Multnomah County OKs $4 million loan to Dunthorpe Riverdale for Elk Rock pump station rebuild

Multnomah County commissioners voted to authorize a $4,000,000 interfund loan from the county’s risk fund to the Dunthorpe Riverdale Service District to help pay for replacement of the Elk Rock pump station shared with the City of Portland.

The loan, approved by roll call vote, accompanies a separate budget modification that increases the county risk fund appropriation and establishes the first-year loan payment in the county budget.

The Dunthorpe Riverdale Service District is replacing the 54-year-old Elk Rock pump station because it no longer meets needed service levels and lacks sufficient on-site storage capacity. Chet Hagen, program manager in the Department of Community Services, said the total estimated project cost is $11,200,000 and that Multnomah County’s district share is $8,800,000. "We need more storage capacity to prevent raw sewage overflows," Hagen said, adding the district expects construction to finish in fiscal year 2027 or possibly slip into fiscal year 2028.

The county chief financial officer explained the loan mechanism and legal authority. The county described interfund loans as authorized under Oregon statute (as cited to the board during the meeting) for either short-term cash-flow needs or for capital financing whose term may not exceed 10 years when used for design, acquisition, construction or improvement of real property. The county said it would set the loan’s interest rate at the then-current rate paid by the state Local Government Investment Pool; the presenters used an illustrative rate of 4.6 percent, and estimated that, if repaid over 10 years at that rate, the district would pay "a little bit over a million dollars" in interest over the term. The county also said it will set up an annual principal-and-interest schedule and budget the payment obligation in future county budgets.

Board members asked about repayment capacity and alternatives. Commissioners were told the district currently funds operations through a property-tax assessment (cited in the meeting as $240 per month per connection) and that, based on current fees and revenue, the district can meet the loan payments under the proposed debt structure. The county noted a private-market loan for the district would likely carry a higher interest rate (the county estimated above 5.5 percent) and would include debt issuance costs, making the interfund loan comparatively less costly for district ratepayers.

A public commenter who identified themself as Lightning urged the board to make the loan interest-free, questioned using the risk fund, and asked whether environmental studies had been completed for the pump station site because of its proximity to waterways. Chet Hagen replied that the City of Portland followed the appropriate land-use processes for unincorporated Multnomah County, that the project was designed to reduce discharges to the Willamette River, and that the pump station is above the 100-year floodplain.

On the board floor, commissioners generally expressed support. Commissioner Moyer said the interfund loan would be a more cost-effective option for district ratepayers than private borrowing. Commissioner Brent Edwards called the project an important infrastructure improvement with little county exposure. The board approved the resolution authorizing the loan and then approved budget modification DCM-126, which increases the risk fund appropriation by $4,000,000, reduces the risk fund contingency by $3,500,000, and establishes loan proceeds and the first-year payment estimate (about $509,000) in the county budget.

Next steps: with both the resolution and the budget modification adopted, the county will execute the interfund loan, establish the formal debt schedule and begin the accounting transactions needed to transfer funds. Construction of the Elk Rock pump station is already under way, and county staff said work may conclude in fiscal year 2027 or possibly fiscal year 2028.

Votes at a glance: The board adopted R-1, the resolution authorizing the interfund loan, and approved R-2 (DCM-126), the budget modification needed to carry out the loan and initial payment; both measures passed on roll-call votes recorded during the meeting.