LAUNCH TIME The city might spend $600,000 making this dock REAL nice. Jason DeSomer

WHEN SUMMER HITS in Portland, aspiring mariners set a course for Swan Island.

The North Portland industrial enclave, an island in name only these days, hosts one of the few public boat launches within city limits. That launch and an accompanying dock quickly fill to capacity when the weather turns balmy.

So the city wants to spruce the thing up. As part of a freshly approved deal [PDF] between the Portland Bureau of Environmental Services and Portland Parks and Recreation (PP&R), the parks bureau is going to take ownership of the run-down launch, pouring an estimated $600,000 into making repairs and bolstering security.

It's a project the cash-strapped parks bureau might balk at in other instances. But in this case, it plans to pay for the fixes from a special pot of cash. It told Portland City Council the money would come from "system development charge" (SDC) funds—fees the bureau collects from new development citywide, designed to help ensure it can expand the parks system in a fast-growing city.

The only problem? It's not clear the dock project qualifies for use of that money.

"This is plainly not a permitted use of [PP&R] SDC funds," says Paul Conable, an attorney with Portland law firm Tonkon Torp who recently represented developers in a lawsuit over SDCs. "The law couldn't be clearer."

For the last year or so, developers have been railing against a planned change in the way parks charges SDCs, slated to take effect next month. In some cases, the tweak will more than triple the charges for new developments—generating up to $552 million for the bureau in the next two decades.

PP&R says it's merely recouping necessary costs, but developers accuse it of a cash grab. They say the city will be collecting the money arbitrarily, without actually knowing how it will be spent. There are accusations that the bureau could use the money as a "slush fund" to pay for projects that don't qualify.

And while the outcome of a recent court challenge to the SDC hike largely found the city's methods sound, it did not take a stance on the individual projects the parks bureau hopes to pay for with that money.

"If improper expenditures are included within the formula that sets the fees," Multnomah County Circuit Judge Cheryl Albrecht wrote in her ruling [PDF], "then the authorized amount could be artificially high."

A list of projects Portland wants to pay for with SDC money suggests 100 percent of the cost of fixing up the Swan Island dock is eligible. But that claim raised concerns among people the Mercury asked about the expenditure.

"The city wants to treat these SDCs as if they were general-fund tax revenues that can be spent at the city's discretion," says Conable. "That's simply not permitted under the SDC laws."

According to state law, the types of SDCs that parks uses "may be spent only on capacity-increasing capital improvements," meaning fixes that make the parks system fit to handle more users. It's not at all clear from city documents that that's in the works for the Swan Island launch.

An ordinance passed by Portland City Council on June 15 says the ramp is already "filled to capacity during summer months and fishing seasons." But that ordinance doesn't list any ways the parks bureau plans to increase that capacity with its $600,000—only that fixes will include "significant repairs to the dock and boat ramp for safety reasons, installation of a gate for security, and other improvements needed to make the site safe and useable."

"I would be concerned about the use of park SDC funds to pay for what appears to be a straight-up deferred maintenance/capital replacement project," says DJ Heffernan, a Portland-based consultant who's helped cities like Forest Grove and Bend establish SDCs. "If the project involves replacing old boards on a dock with new boards on a dock, I fail to see how that is not a maintenance project."

After the Mercury inquired about this, Parks Commissioner Amanda Fritz said during a June 8 city council hearing that the Swan Island deal would increase capacity. But asked about it a week later, Fritz couldn't say how.

"We're still looking at feasibility studies for how to do that," she said. "It may be some of it is eligible [for SDCs] or none of it is."

The Portland Parks Bureau itself offers a more confusing take. Sarah Huggins, SDC program manager at PP&R, says that the dock repairs are just part of parks taking on a new piece of property, and eligible for SDC use as part of "stabilization."

But Trang Lam, a deputy director at the bureau, says further study is needed. "Once we purchase the property, we scope out what's eligible for SDCs," she says.

That might be news to some city council members who voted on the project with an understanding it would be paid for from a certain pot of money.

Whatever the parks bureau ends up doing to the dock, Portlanders have reason to demand it be done with care: Misusing SDCs can lead to trouble down the road. As an example, Heffernan holds up Molalla, Oregon, which he says used SDCs inappropriately for years. The city had to pay that money back from other pots of cash, which Heffernan says caused "significant financial hardship."

"The risk to the city in using SDC funds inappropriately is significant," he says. "PP&R should be very careful in this arena."

This article has been updated to reflect that it was Molalla that had to pay back SDC money. Not Mt. Angel.