Resolution may be near in water dispute between Dallesport Water District, Columbia Gorge Regional Airport owners

The FAA’s explanation of this assurance reads, “Airport revenue must be used for the operational and capital costs of the airport, the local airport system, or other facilities owned or operated by the airport owner or operator and directly and substantially related to the air transportation of passengers or property.” An FAA regulation issued in 1999 says that paying in excess of the value of goods and services the airport receives is “unlawful revenue diversion.”

In other words, any asset the airport has can’t be given away; any agreement that involves transfer of property must result in the airport receiving an equal or higher value of something in exchange.

The FAA originally offered concerns that the deal would involve the airport not getting enough value for giving up the water right, but declined to make a definitive ruling on the subject. Despite repeated inquiries from the city and county, the agency sat on the request for years, but now, it's moving beyond the regional office to the headquarters in Washington, D.C.

Commissioner Dan Christopher stayed away from the morning session due to illness, and both Chair Lori Zoller and Commissioner Jake Anderson said they’d just received word of the letter that morning, so they weren't prepared to discuss any of the details until they’d met with Prosecuting Attorney David Quesnell. Zoller did have this short comment on the letter:

“That’s incredible positive movement,” she said, “and I’m thankful for it.”

The Dalles City Manager Matthew Klebes echoed the optimism. “This is something we’ve been diligently waiting for quite some time,” he said. “We’ll be working with our partners in Klickitat County to evaluate their response and determine next steps.”

The text of the letter was released in response to a public records request.

One part of it refers to information provided to the FAA by a law firm hired by Klickitat County and the City of The Dalles as owners of the airport. The letter abbreviates the 2011 original water share agreement as WSA.

“On June 7, 2023, Kaplan Kirsch and Rockwell provided our office a letter with additional information and analysis regarding the transfers. We have determined that through the review of this letter and the WSA, the FAA is generally agreeable to the terms and conditions of the transfer of water right and other infrastructure. We have also determined that the Columbia Gorge Regional Airport Water Valuation Analysis, prepared by Aspect Consulting, represents a knowledgeable and credible assessment and a reasonable fair market valuation for the water right. We have also determined that the in-kind contributions described in the WSA provide a satisfactory monetary value to account for the assets transferred to the district.”

The next paragraph begins with a “however” and laid out a few conditions in bullet points:

“• The WSA describes that the district will receive title to water rights, water mains, well, easements and covenants of airport property. However, the WSA is a 99-year agreement, and therefore it is unclear what portion of the agreement is subject to the 99 years, considering there is a transfer of ownership of airport property and water rights. The city and county and water district need to clarify the term of the WSA and what occurs at the conclusion or termination of the agreement.

“• When evaluating the valuation of the water right and the transfer of infrastructure, our office determined that the improvements made to support the on-airport business park with fire flow protection could be used to offset the airport revenue provided to the water district in the WSA.

“• The water reservoir and pumping facility was constructed with the city and county contributing 50% of the costs of construction ($596,641.49). The city and county need to verify that this contribution was not airport revenue which will allow the costs of the reservoir and pumping facility to offset a portion of the assets transferred to the water district. We consider this value essential to offset the value of assets transferred to the district.

“• It is understood that the WSA requires the district to remit all system development connection for new water connections on airport property to the district system through 2036, up to $500,000, as reimbursement for the costs of developing the well and water right. To date, the district has remitted approximately $33,000 in system development connection. For the FAA to accept the terms of this transfer agreement and consider this transfer complete we are requiring that remaining $467,000 be paid to the airport fund. This is consistent with the practice required of property disposals, cost allocation, documentation requirements, and general accounting practices as described in the FAA Revenue Use Policy.”

How to interpret this all awaits some study on the part of all the parties.

“I am pleased to say we finally have the long awaited response from the FAA in regards to the water well issues between the Dallesport water District and the Columbia Gorge Regional Airport,” Zoller said in a follow up email. “It is important to remember the airport is an asset of The City of the Dalles and Klickitat County.

“I have done a preliminary read of the document but have not had a conversation with our legal council to ensure my interpretations are right at this time,” she continued. “But I am very encouraged as it appears that the FAA held to line items in the contract that we all understood to be true ... I am sure the details will be ironed out and we will finally be on our way to a future, long awaited partnership with the Dalles Port Water District.”

Members of the Dallesport Water District did not feel comfortable commenting before exploring all the implications.

In other business at the commission meeting, Human Resources Director Robb Van Cleave had a very short jail update.

“If we get through this week like I anticipate, “ he said, “we will make a formal offer to the jail administrator next week, and then it’d just be working out a start date. We still have one significant event to get through this week, but I’m hopeful.”

He did say that they’re also working on the contract for body cams. It’s currently with the sheriff’s department, and the county wants to make sure jail workers will still have them as a safety issue after they’re transferred from the sheriff’s department to the new Department of Corrections.

In the afternoon session, commissioners held two hearings. One on the bulk storage of batteries, and a second on the moratorium on Battery Energy Storage Systems, known as BESS. After lengthy public input and deliberations, the bulk storage issue was held over for two weeks to Nov. 12. The BESS moratorium, which was extended for a further six months, passed in an unusual two to one vote, in that Zoller and Christoper voted yes together, and Anderson voted no.

Christoper summed it up this way: “For the general public, that was all confusing. The first hearing was held over until [Nov.] 12 for future discussion, and the moratorium passed, the extension passed, and it’s going to the planning commission.”