Cheadle Lake has become the new focal point in an ongoing dispute between Albany and Lebanon over how to pay for operations and maintenance of the Albany-Santiam Canal.

Albany has asked Lebanon to remove equipment that pumps water from the canal into the former mill pond at the south end of town. Lebanon has countered that it has no intention of doing so and that any attempt by Albany to remove the pump will be subject to prosecution.

Officials for both cities say the exchange is related to the attempt to come to a new intergovernmental agreement on the costs of operating and maintaining the canal. Negotiations are currently at a standstill.

Albany officials say the newest wrinkle was prompted by an inspection last year by an engineer with the Federal Energy Regulatory Commission. FERC crews came out again last month to do a new inspection, although the city has not yet received the results.

City Manager Wes Hare of Albany sent a letter to City Manager Gary Marks of Lebanon on June 1 saying it's necessary to remove the pump because pumping may cause the lake's water levels to rise higher than the canal.

It's not clear that this has happened, nor that it would cause problems if it did, Hare said; However, he said FERC is worried that it might, because the berm that separates the lake and the canal then effectively becomes a dam, which could trigger costly federal requirements such as a safety study.

"They (FERC) have expressed concern and expect Albany ratepayers to resolve the issue. That’s the issue that causes us particular concern. We're not even sure we agree it’s a safety problem, but we have to prove to FERC that it’s not, at our expense," Hare said.

Chris Bailey, Albany's interim director of public works operations, said FERC agreed to wait on the concerns it expressed in 2014 until the two cities worked out their intergovernmental agreement. However, talks have since derailed.

Marks said Albany must work with FERC as owner of the canal, but that Lebanon is not involved. The first he said he heard of any Cheadle Lake concerns was the letter from Hare, which he called "completely out of line."

"We are concerned about the integrity of the berm and have taken our own actions to make sure it’s all that it needs to be," he said. 

John "Tre" Kennedy, attorney for the city of Lebanon, wrote a letter June 4 to Jim Delapoer, attorney for the city of Albany, saying Albany has no reason to now object to a pumping station it has been aware of and authorized since October 2010. 

He said Lebanon is willing to discuss issues related to the classification of the berm.

However, he wrote, Albany has no authority to remove any property from the pumping station, and trespassers will be subject to prosecution. Further, he said, any previous authority Albany might have had to gain access to the canal has been revoked and locks have been changed. Lebanon now is requiring 48 hours' written notice before any access is granted, and any violation will be treated as trespassing.

Albany purchased the canal in 1985. Lebanon is drawing water from it until it establishes its own intake from the Santiam River.

The initial agreement between the two cities called for Lebanon to pay for one-third the costs because six of the canal's 18 miles run through Lebanon. However, both cities have been abiding by an unofficial agreement made in 2007 that charges Lebanon $77,000 per year.

Albany city officials say it isn't fair for Albany residents to pay all of the remaining operations and maintenance costs, which total more than $800,000.

Marks has said Lebanon doesn't agree with Albany's cost assessments and is wary of any negotiations that have the threat of legal force. Kennedy echoed that sentiment in his June 4 letter.

"Perhaps Mr. Hare believes he can use such strong arm tactics to bully Lebanon into complying with Albany's unreasonable demands for payment of millions of dollars that Lebanon does not owe and has no intention of paying," Kennedy wrote. "However, threatening to essentially drain Cheadle Lake, wasting thousands of dollars in state grant funds, hundreds of volunteer hours, and recreational opportunities for Linn County's disabled anglers, appears petty and vindictive to say the least."

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