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After nearly eight months of failed negotiations, the Oswego Lake Country Club is suing the city of Lake Oswego over a long-standing miscalculation of city fees.

Since identifying in April 2010 that the city for the past six years had overcharged the private country club for street maintenance, the club has worked to recoup its money. But the parties were not able to reach a settlement on the nearly $130,000 the golf course has overpaid since 2004.

The city collects a street maintenance fee – much like a transportation utility fee -monthly to help pay for improvement projects for its 181 miles of streets. Depending on a property’s use, and past data that indicates how much that use relies on the local transportation system, the fee is determined so that property owners can share the cost burden of street maintenance.

Presently, the fee is $5 per month for a single-family home and from $3 to $26 for most commercial businesses. The Oswego Lake Country Club, which should have been charged $296.50 per month, was being charged $2,490. Over the six years since the fee was implemented, the club has paid approximately $146,000 in street maintenance fees; however, it owed only about $18,000, according to Paul Hart, president of the club.

“This isn’t a new issue, as we have argued that these fees were too high on two separate occasions over the years,” Hart said. “Our manager challenged it back in 2004, and our controller challenged it again a few years later.

“Both times our concerns were dismissed.”

Last year the city approved a fee increase, and the club found it could barely pay the fee and operate under its budget. Club treasurer Mike Temple, familiar with similar fees, started working with the city to understand how the fee amount is determined.

“What we found out was the city was accidentally leaving out the final step of the six-part equation to come up with the fee for a golf course,” Hart said. “By doing so we were paying about eight times as much as we should have.”

The city agreed that it had miscalculated the fee, and the two parties started to work out a solution. But after eight months of failed negotiations, and the statute of limitations nearly ready to run out, the country club decided to take legal action on Friday.

According to a release issued by the city of Lake Oswego, “The city has put an extensive effort over the last year to understand the historical calculation used on golf courses for the street maintenance fee. Through review, the situation became clear and all (parties) were working together through productive discussion to resolve the concerns.

“The city was quite optimistic based on the discussions that resolution could be achieved and is disappointed that the Oswego Lake Country Club chose to file suit rather than continuing to work to reach resolution.”

But the country club had no other option, Hart said. The club had asked the city to do two things: begin to charge the right amount and pay back a reasonable amount of the overpaid fees. And because the city had failed to oblige either request, the club had to pursue legal action, he said.

The city said it would start charging the right amount, but Hart said the club is still being billed $4,980 every other month. And as part of a proposed settlement, the city had agreed to pay back a large portion of the overcharged fees, but only in future fee payments. But the city would need nearly 30 years to pay back 75 percent of the amount owed, Hart said.

“These fees are a marvelous way for the city to get more money from taxpayers,” he added. “Eighty-five percent of our members are Lake Oswego citizens, and that includes the mayor and a city councilor.

“This is an extra tax burden on our taxpayers.”

The time frame for the legal process isn’t known yet. The country club filed a suit with Clackamas County on Friday, asking for the full $127,542.04 in overpaid charges plus interest from the date of each overpayment. In a second claim filed by the club, it is asking the county to intercede and require the city to charge the correct fee amount.

And while golf courses are in their own property class for the fee, the country club is urging other Lake Oswego property owners to review their fee amounts.

“The school district pays the most for these fees and it would be really upsetting to know taxpayers have been paying too much for these fees there too,” Hart said.