A source inside Portland City Hall reports that the city is preparing to reject the $1.6 million reimbursement that it has received from the federal government for the assistance that city water crews provided in New Orleans following the disastrous flooding there two years ago.

The city, which has differed with the Bush administration on a number of issues, including the Iraq war and the "war on terror," is apparently preparing an announcement to be made tomorrow afternoon. Earlier today, the city had announced the reimbursement with no mention of a problem, but a red flag was reportedly raised later in the morning by the city's Office of Sustainable Development as the payment from the Federal Emergency Management Agency was being processed. As a result, sources say, City Council members plan to "stand on principle" and send the money back.

"Our regulations require that all checks contain a minimum percentage of post-consumer fibers, and that inks be soy-based," said one assistant vice administrator in the city's management bureau, who requested anonymity. "In this case, unfortunately that's not the case. The check stock was kind of shiny, and the ink was straight out of the bargain bin at the Dollar Store -- probably made out of lead in China."

The official also noted that routine testing revealed traces of Styrofoam on the envelope in which the check was mailed.