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HomeMy WebLinkAboutApproved Minutes - 2023-11-07 CITY COUNCIL REGULAR MEETING rrA Ifir MINUTES V ! November 7, 2023 aREGO� 1. CALL TO ORDER, CITY COUNCIL Mayor Buck called the regular City Council meeting to order at 5:34 p.m. on Tuesday, November 7, 2023. The meeting was held both virtually via video conferencing and in- person in the Council Chamber at City Hall, 380 A Avenue. 2. ROLL CALL Present: Mayor Buck, Councilors Corrigan, Wendland (via video conferencing), Mboup, Verdick, Rapf, Afghan Staff Present: Martha Bennett, City Manager; Ellen Osoinach, City Attorney; Kari Linder, City Recorder; Bonnie Hirshberger, Citizen Information Specialist; Paul Espe, Associate Planner; Erik Olson, Long Range Planning Manager; Melissa Kelly, Library Director Others Present: Matt Hastie, Project Manager with MIG (via video conferencing); Kate Rogers, Senior Planner with MIG (via video conferencing) 3. PLEDGE OF ALLEGIANCE Mayor Buck led the Council in the Pledge of Allegiance. 4. PRESENTATION 4.1 2023 Photo Contest Winners. Mayor Buck commended the more than 500 entrants in the City's annual photo contest and thanked Bonnie Hirshberger, Citizen Information Specialist, for organizing the contest and doing the behind-the-scenes work. First through third place winners in the eight categories were invited forward to receive their awards from Mayor Buck and Councilor Verdick and asked to share a few words about their winning entry. Winners present were: Martin Stabler, Ina Clark, Karen Brown, Mindy McCaslin, Patricia Goodman, Laura Hanson, Matthew Berger, John Hoch, Kip Nordstrom, Kim Beveridge, Tim Wyatt, Jen Ciupryk, Adrianne Brockman, Tim Wood, Skye Neal. Winners recognized but not present were Alexandra Jennings, Christina Tongue, Jeffrey Dewitt, Jamie Thompson, Lily Evers, and Frank Ha. City Council Regular Meeting Minutes Page 1 of 10 November 7, 2023 5. PUBLIC COMMENT • Jay Haladay, VP Strategic Planning, Lake Oswego Chamber of Commerce, read into the record a previously submitted letter from the Chamber's Executive Committee to the City Council affirming the Chamber's support for completing the North Anchor project as soon as possible. • Carole Ockert, former member, Middle Housing Committee, read into the record her written testimony advising Council include the Middle Housing Committee's recommendations on Housing Production Strategies in its discussion this evening. 6. CONSENT AGENDA 6.1 Approval of Meeting Minutes. September 19, 2023, Draft Regular Meeting Minutes END CONSENT AGENDA Councilor Mboup moved to adopt the consent agenda. Councilor Verdick seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Corrigan, Wendland, Mboup, Verdick, Rapf, and Afghan voting `aye', (7-0). 7. ITEMS REMOVED FROM CONSENT AGENDA No items were removed from the Consent Agenda. 8. PUBLIC HEARING 8.1 Ordinance 2936, An Ordinance Annexing to the City of Lake Oswego One Parcel, Consisting of 0.42 acres at 6117 Washington Court; Declaring City of Lake Oswego Zoning Pursuant to LOC 50.01.004.5(a-c); and Removing the Territory from Certain Districts (AN 23-0006). City Attorney Osoinach reviewed the hearing procedures and asked if any Councilor wished to declare any financial conflicts of interest. None were heard. Paul Espe, Associate Planner, presented the Council Report via PowerPoint and reviewed the subject property's location, jurisdiction, zoning, and sanitary sewer/water facilities. The site was within the urban services boundary, and public services could be provided in a timely, orderly, and efficient manner. Staff recommended approval of the annexation. Mayor Buck opened the public hearing, confirmed there was no public testimony, and closed the public hearing. Councilor Corrigan moved to enact Ordinance 2936. Councilor Rapf seconded the motion. City Council Regular Meeting Minutes Page 2 of 10 November 7, 2023 A voice vote was held, and the motion passed, with Mayor Buck and Councilors Corrigan, Wendland, Mboup, Verdick, Rapf, and Afghan voting `aye', (7-0). 9. STUDY SESSIONS 9.1 Housing Production Strategy (PP 22-0005). Erik Olson, Long Range Planning Manager, and Matt Hastie from consultant MIG, presented via PowerPoint the Council Report on the Housing Production Strategy (HPS), reviewing new data gathered for a Contextualized Housing Needs assessment which bridged the Housing Needs Analysis (HNA)with the HPS, and summarizing strategies the City currently employed to promote production of housing. Councilor Rapf asked if the numbers displayed in the lower portion of Slide 15 reflected a statewide trend towards lower homeownership rates. Mr. Hastie confirmed the numbers did reflect a statewide trend and noted that often, no data was available for the local community because local communities reflected a smaller sample size and a higher margin of error. Councilor Rapf verified Staff's strategy for accessory dwelling units was to dissuade short term rentals. Olson said that was right, and the City essentially regulated ADUs to avoid incentivizing short term rental uses. Mayor Buck noted there were additional items the City was doing to incentivize housing through the Comprehensive Plan and zoning for Middle Housing in a variety of areas. Mr. Olson said City should take credit for those actions and added there was a list of strategies the City was employing in the Contextualized Housing Needs Assessment that was more a more robust. It was relevant to point out the City was allowing Middle Housing broadly within Lake Oswego. Councilor Afghan expressed concern about the strategies Staff was asking Council to provide feedback on and noted some strategies made sense for some situations, but not for others. Mr. Olson replied the project was in its early phases and Staff was seeking the Council's feedback about broad strategies. There would be more room to shape strategies going forward in a way that promoted the housing Lake Oswego needed. Councilor Afghan expressed reluctance to embrace regulatory incentives because what was fair was fair for everybody. He could be open to exceptions that could be made in cases that did not impact other people. Mr. Olson said he understood, adding the City was trying to determine how appropriate this tool was to meet that need while still thinking very broadly about these tools. City Manager Martha Bennett reiterated the Council was not making any decisions this evening, but rather providing some high-level guidance to the HPS task force under broad categories. Under each of the broad categories were literally dozens of options. She would not want any Councilor to make a sweeping statement in opposition to any strategy because under each broad category were dozens of options, and the City's Code had incredible regulatory complexity so the tools may not be regulatory relief as much as regulatory simplification. Not every tool would work in every circumstance, but many tools could be multi-faceted, many-use tools. Tonight, the Council was tasked with giving high-level guidance about which of the policy areas they were most interested in, and nothing was agreed or committed to. Mr. Olson said this was the first study session and Staff was trying to get a general sense of what the Council's interests were. While it was important to think about ways to use the strategies to shape specific types of housing the City wanted to produce going forward, that would be a separate discussion. City Council Regular Meeting Minutes Page 3 of 10 November 7, 2023 Councilor Afghan again expressed concerns about strategies working in some cases but not in others. Mayor Buck emphasized the broad framework of the discussion this evening, and noted the DLCD would look at the strategies with appropriateness and adequacy in mind. The strategies would be reviewed at the agency level and the agency would ask if what the City was doing was appropriate given the need that was identified and where the gaps were between what that need was, what the market provided, and whether what the City was doing was adequate to address the gaps. Councilor Mboup said the City could not prohibit large, expensive single-family homes and wanted quality housing. At the same time, Lake Oswego needed affordability and the strategy to attain affordability was in density. Kate Rogers, MIG, continued the presentation with a review of feedback received during initial stakeholder interviews and results of discussions with developers. Councilor Afghan asked how many developers were surveyed. Ms. Rogers clarified it was not a survey; the data presented was collected from a limited set of stakeholder interviews. The team had spoken with 7 or 8 different people and 4 or 5 different market rate developers that were building single family housing, as well as a couple of nonprofit developers. It was not a survey of all the developers in the city, however Staff had indicated to MIG that the concerns brought up in stakeholder interviews were consistent with what Staff heard from the development community. Councilors discussed slow permitting times and Councilor Mboup suggested a strategy include more Staff in City Hall. Mr. Olson appreciated Councilor Mboup's perspective and said Staff had tried to reach out to developers with middle housing, multifamily, or affordable housing experience to cover as many bases as possible within the scope and confines of the project and had interviewed developers with different expertise to weigh in on things. While Staff was not necessary proposing to address all the items listed, it was important to listen to developers and take in the context of their comments. Councilor Rapf commented there was often talk about housing barriers in Lake Oswego, but it was important to note the great things the City did to allow housing and the City had been and should continue to be an aspirational housing destination. Mayor Buck asked Mr. Olson if the system development charge (SDC) waiver for ADUs had resulted in increased production of ADUs. Mr. Olson replied more ADUs had been produced but the City did not allow ADUs previously. The waiver was adopted shortly after the City adopted ADU regulations. Mr. Olson continued the presentation with a review of the housing productions assembled by the DLCD. Staff proposed a shortened list of high-impact strategies expected to make a significant impact on housing production in Lake Oswego for discussion with Council, including strategies that would require Council Action due to their creation of a new tax bond or revenue source to promote housing development, which were pretty big moves in terms decision making. Councilors would be asked to indicate their level of interest in each strategy on a scale of 1 to 5 using the Poll Everywhere tool. The responses would then be used to guide the task force's discussion of where to focus its energies and dig in deeper. The list was not meant to be exhaustive, but a starting point to guide future HPS task force discussion. Staff reminded the Council that including a strategy in the City's HPS would require the City to commit to implementing the strategy on a particular timeline. City Council Regular Meeting Minutes Page 4 of 10 November 7, 2023 City Manager Bennett understood Councilor Afghan's opinion that any one of these in context may be appropriate, but the reality was the City could not possibly do everything. The poll was more of a rank ordering of interest in the strategies. Each one may be correct in some contexts, but there was no way the City could do them all so some sense of priority needed to be created so the HPS task force could make sure it spent time and energy on items the Council was most interested in. Mr. Olson said the strategies included in the poll were those Staff assumed would have a high impact. Ms. Bennett added some would have a range of impacts depending on how far the City took the strategy. For example, the number of units produced by a general obligation (GO) bond was dependent on the size of the bond put to voters. While the strategies were all high-impact, Staff did not know how much of the gap could be closed because of the ranges within each strategy. Mr. Olson commented that the strategies before Council were those with the opportunity to make the most impact and had different scales depending on what guidance the Council provided. Mayor Buck confirmed the City could then further refine strategies as the Council received input, and noted the Council wanted to adopted strategies that would work. Mr. Olson said the City should adopt strategies it felt comfortable with. Some strategies might be a good idea for the City to pursue on its own timeline, not through a commitment to the HPS. The question for Council was what strategies the City focus on for the HPS work. Councilor Wendland expressed concern about financial strategies and general obligation bonds when the City did not have money to tackle its current priorities. Ms. Bennett replied the City had money that was being spent on existing programming and services. If the City Council wished to examine whether to redirect funds from existing programming into new programming, then Councilors should rank that option high. If they believed the City's current financial expenditures were aligned correctly, then they should rank the strategy lower. She agreed with Councilor Wendland that the City had hundreds of millions of dollars in unfunded capital projects and these strategies would have to compete with those other needs. Councilor Wendland expressed concern about committing the City to a strategy. He noted the Metro Tax was going to collect more than a billion dollars over what was anticipated for the 10-year cycle and asked if the City could count on those funds in its calculus. Ms. Bennett advised those funds flowed through the counties. Councilor Wendland reiterated concerns with making a commitment to strategies and noted the feedback from the building community included in the presentation was the same feedback the City had received for 15 years. The number one issue seemed to be the scarcity of land and he was not sure how the Council could vote on a number of the strategies when there was no land to build on. Mayor Buck commented that the sense that land is rare may make the acquisition of land a high priority. Ms. Bennett emphasized a number of strategies included the idea that Council was ranking their interest in the strategies, not committing to any one strategy. Mayor Buck noted some of the strategies on the list were not new to Council and many had already been used by the City—providing a tax incentive was something the City did currently and was talking about for the North Anchor Project. Mr. Olson replied the City could map a vertical housing development zone that would apply to more than just one property and then it would not be site specific. Councilor Corrigan asked if staff could provide an estimate of how much of the City's need could be handled by the low barrier methods not being discussed this evening. Mr. Olson replied the City should focus on the high impact strategies, because the low barrier strategies were considered to be a relatively low impact; the numbers would be extremely marginal. City Council Regular Meeting Minutes Page 5 of 10 November 7, 2023 Councilor Corrigan expressed discomfort with committing to strategies and asked if the state had made clear what consequences the City could face. Ms. Bennett replied the Governor had advanced a bill to create a Housing Accountability Office tasked with evaluating local government's progress towards implementation of their housing production strategies. There was no indication of what the consequences would be because that legislation had not been written. She did not want Council to pick a set of strategies it did not feel comfortable implementing because that would not be good from a policy standpoint, adding Council was not just going through the motions, but truly trying to create a strategy that would produce 1900 houses over a 20-year time period to create the type of community Council desired. Mr. Olson commented that while the City was being forced to do this by the state and there could be consequences, this was also an opportunity because the City had similar housing production goals as the state and could use the HPS work to structure and focus the goal a way that the City felt comfortable with. Ms. Rogers described the following specific strategies with additional comments from Mr. Olson. Additional comments, responses to Councilor questions, and Council's results from the Poll Everywhere tool were as noted: 1. Zoning bonuses for affordable housing. Ms. Rogers confirmed the strategy would be incorporated in certain areas of the city, not across the whole city. Mr. Olson added the City would want to incorporate the strategy in appropriate areas and it would have the ability to shape and refine the program to create a potential incentive system. Councilor Wendland noted that he was less interested in that change—and would be a D. Mr. Olson recorded his answer on the polling tool. Result: Medium to high support. 2. Code audit and amendment strategy. This strategy would work towards advancing Council's goal to streamline and simplify the Development Code by looking at potential barriers to the types of housing, as well as procedural requirements and the impact of things like neighborhood overlays or design districts on housing production. Mr. Olson stated there were ideas about what could be done through a Code audit to promote housing development. If Council supported this strategy, it was by no means committing to support ever single zoning change discussed, just a general audit and then conversations from there. He verified the discussion could extend to overlays which had been previously discussed in the context of economic development. This strategy would focus on housing production, which was related to housing development. Result: Medium to very high support. 3. Minimum density requirements for to-be-annexed land. This strategy was relevant given the land within the urban services boundary not yet annexed. The strategy could be shaped and targeted based on parts of the city to ensure it worked well with the City's priorities. Staff clarified the strategy would not compel annexed property to redevelop or rezone. The strategy would implement a minimum density requirement mandating a certain number of units be constructed on annexed properties when the property owner chooses to redevelop. It would not rezone the property. Almost all zoning was about maximum and did not prescribe a very restrictive minimum. The strategy would be a specific component of a zoning district. Ms. Bennett suggested there could be push back from neighboring properties when nearby lots annexed into the city were now required to have higher density than the surrounding lots when redeveloping altering the character of City Council Regular Meeting Minutes Page 6 of 10 November 7, 2023 the neighborhoods. Mr. Olson reiterated the strategy did not compel redevelopment at the time of annexation; the minimum density requirement would be considered when zoning applied to the property. The actual process for implementing the strategy was still being determined by staff. Typically, properties annexing into the city did so for the purposes of redevelopment. Result: Medium to very low support. 4. General rezoning strategy. Rezoning areas designated for commercial or mixed-use to higher-density housing would address the scarcity of land, but the strategy would have to balance the need for employment lands with the city's housing needs. Mr. Olson explained the specific areas that would be rezoned to higher densities were unknown. The strategy would essentially reallocate and refocus density within the existing city limits. Mr. Olson agreed that similar to the project on Kruse Way, the strategy could employ the reuse or conversion of existing commercial structures, but also the redevelopment of commercial property into residential. However, the City's existing mixed-use or commercial zones in that area of the city may not be conducive to residential development. Result: High to very high support. 5. Infrastructure planning to support housing development. This strategy combined stakeholder feedback on infrastructure barriers and associated costs in housing production with the City's capital improvement plans to prioritize areas lacking suitable infrastructure for housing. Mayor Buck noted there had been statewide discussions on infrastructure funding, but those funds may never materialize, and the city had existing housing stock without adequate infrastructure. Councilor Rapf added when one project was prioritized, it meant another was deprioritized. Result: Low to very low support; one Councilor in support. 6. System development charges (SDCs). This strategy would create a scaled SDC fee schedule based on dwelling size, and discounts on Parks SDCs for developments near existing parks have been discussed. Councilors and Staff discussed the necessity of parks and transportation SDCs for those City departments. Mr. Hastie noted the ongoing Parks System Plan update and potential adjustments in SDC methodology for parks based on home size, which was a consideration adopted by other cities statewide. Councilors deliberated on the impact of SDCs relative to housing project costs and the potential for financial incentives through fee modifications. Councilor Wendland cautioned against potential consequences of tax structures on housing affordability, noting increased taxes seemed to be why some people had moved out of nearby jurisdictions. Mr. Olson said the strategy could be revenue neutral, but that was not guaranteed. Result: High to very high support; two Councilors in low support. 7. Construction Excise Tax (CET). A CET program could be tailored on housing types the City wished to encourage. Affordable housing was already exempt from the CET, and multifamily or smaller homes could be exempted as well. Alternatively, the CET could apply to only non-residential construction. The CET could raise development costs by up to 1 percent, but the Middle Housing Code Advisory Committee had endorsed its use as a way to encourage development of middle house. Staff clarified funds raised through the CET would be dispersed through tools like land banking or loans. Councilors raised concerns about the tax's alignment with housing promotion efforts. Some Councilors questioned the intuitive nature of taxing housing development. Result: Low support. City Council Regular Meeting Minutes Page 7 of 10 November 7, 2023 8. General Obligation Bond funds. This strategy would create a stable revenue source through increased property taxes but hinged on voter approval. GO Bonds, which were distinct from the Metro Housing Bond, could be used for capital improvements like land acquisition and infrastructure, not on operational aspects like maintenance or supportive services. Councilors raised concerns about potential bond fatigue among voters due to ongoing requests for other City projects and the request for renewal of the Metro Housing Bond. Result: Mixed, low support in general; one Councilor in very high support. 9. Tax abatements and exemptions authorized by state statute. These tax abatements and exemptions could apply to things like affordable rental housing, multi-unit housing, and vertical mixed-use housing. Affordable housing developers had indicated that abatement programs could be crucial in making a project pencil out and lowering operating costs. Tax abatements and exemptions could be a strong tool to encourage needed types of housing in targeted areas of the city, or certain housing features Lake Oswego wanted to promote. Result: High to very high support; one Councilor with low and one Councilor with medium support. Mr. Olson said the votes would be documented for the public record and used to provide specific guidance for the HPS task force going forward. Next steps included a Planning Commission work session scheduled for November 13th. The task force would work to refine alternatives based on Council's direction, task force input, and stakeholder interviews and then present a refined list of strategies to Council for discussion in mid-January of 2024. He confirmed the task force had completed a similar polling exercise online and staff would synthesize that feedback with the Council's polling results. Mayor Buck commented that Lake Oswego had grown in different areas over many generations into a community that had a variety of housing types and distinct neighborhoods. The HPS was the next phase. He understood the angst around the state mandating the action by the City, but Lake Oswego always wanted a variety of housing and had always been a community of mixed incomes—a place where people want to live but had become unreachable for many over the years due to escalating prices. Lake Oswego would always be a community where people strived to live because of the community itself, its parks, its surrounds, and the beauty, but the ability to live here should not be wholly dependent on people's income. The HPS work would take nothing from the community, but it would add to the community. Council took a ten-minute recess. 9.2 Library's 2024-2026 Strategic Plan. Melissa Kelly, Library Director, announced the selection of "Honor" by Thirty Umrigar as the 2024 Lake Oswego Reads novel. She presented the Library Strategic Plan via PowerPoint, emphasizing the plan's background, visioning process, community outreach, priorities, and outlining next steps. The Library sought to assess Council support for three key items: a facility needs assessment work plan; development of service models to determine expansion scopes and community willingness to invest; and support for strategic business plans regarding future capital development or partnerships. City Council Regular Meeting Minutes Page 8 of 10 November 7, 2023 Mayor Buck thanked Ms. Kelly for the presentation and said he supported all three items. It was clear the library was important to the community, but despite the fondness for its existing site, the current site was too constrained to accommodate the kind of facility needed to ensure it reflected the community's values of education, literacy, accessibility, cultural diversity, and creative thinking. As the Library moved ahead with the Strategic Plan, it was important that City Council provide clear direction on the future of the facility itself. It seemed clear at this point that the City's library would be a new location that would be able to accommodate all that the community envisioned for future generations. Council discussion focused on the importance of the library to the City of Lake Oswego, and the library's need for a bigger space. Councilors expressed support for the questions posed by Ms. Kelly. Mayor Buck noted the last time Council had spoken about the topic in depth, it was clear the path forward would involve strategic partnerships and thinking creatively. The way the project would be put together would engender the support needed to move it forward. In looking at the facility's needs, Berry Dunn had done a good job and were a reputable firm, but one with a particular box in mind, and Lake Oswego needed to determine if that box made sense for the city. He agreed there should not be more than one library facility and noted Ms. Bennett had legitimate concerns about how to operationalize one larger facility, let alone additional facilities. The City needed to be realistic and set goal that would help focus the project as one unified vision that was right- sized for Lake Oswego and would meet its needs while remaining financially stable for years to come. 10. INFORMATION FROM COUNCIL Mayor Buck stated that at last night's Water Partnership meeting, Councilor Corrigan and Lake Oswego's counterparts at the City of Tigard directed the partnership to pursue an agreement for rental generators to provide backup power at the intake and water treatment plant. Lake Oswego discovered the cost of on-site, permanent generators was astronomical, but access to rented generators could provide power with a very high level of certainty, and additional certainty could be gained through rental agreements. 11. REPORTS OF OFFICERS City Manager Bennett reminded that an Executive Session would be held the following Monday regarding pending litigation. The session would be held in the main fire station, not City Hall. The County Board had scheduled a study session with the City Council in late November regarding a letter from the Library District Advisory Committee (LDAC), the body that provided levy funding for most library operations in all of Clackamas County. Lake Oswego had operational concerns about how LDAC operated and the types of issues the committee addressed. The agreement among all the jurisdictions in the county gave LDAC oversight over whether the City was meeting operational targets set in the original tax levy that funded the libraries, but LDAC frequently veered into other policy questions that were inside the jurisdictions of the city that operated the libraries. Ms. Bennett and Library Director Kelly planned on drafting a letter to clarify that the City wanted LDAC to be effective at overseeing whether the City met its operational targets, but did not need them to judge decisions in the purview of the City Council. The letter would be circulated among Councilors for approval and feedback, and Ms. Bennett and the Mayor could sign the letter with Council's approval. If Councilors did not approve, a discussion could be scheduled at a future City Council meeting. City Council Regular Meeting Minutes Page 9 of 10 November 7, 2023 Mayor Buck announced Lake Oswego would hold its Veterans Day celebration on Friday at the Veterans Memorial in Foothills Park, and a concert would be held Thursday night at Our Savior's Lutheran Church. LO for Love did a great job putting on its second annual Diwali celebration at Lake Ridge High School. The well-attended event had many community partners. This past weekend, Lake Oswego celebrated the 20-year anniversary of Lake View Village. The City appreciated Gramor Developers; there were not many developers local to the community and it was great to have their partnership over the decades. 12. ADJOURNMENT, CITY COUNCIL Mayor Buck adjourned the City Council meeting at 9:00 p.m. Respectfully submitted, Vctjt65 Kari Linder, City Recorder Approv-d by the City Council on December 19, 2023. 1 _ Joseph . Buck, Mayor • City Council Regular Meeting Minutes Page 10 of 10 November 7, 2023