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Home My WebLink AboutAgenda Packet - 2010-07-27 SpecialLAKE oswEco AGENDA CITY OF LAKE OSWEGO Centennial 1910-2010 CITY COUNCIL SPECIAL MEETING 380 AAvenue PO Box 369 b1ba Tuesday, July 27, 2010 Lake Oswego, OR 97034 6:30 p.m. 503-675-3984 Council Chambers, 380 AAvenue www.ci.oswego.or.us Contact: Robyn Christie, City Recorder Also published on the internet at: Email: rchristie@ci.oswego.or.us www.ci.oswego.or.us Phone: 503-675-3984 The meeting location is accessible to persons with disabilities. To request accommodations, please contact Public Affairs at 503-635-0236, 48 hours before the meeting. Pape # 1. CALL TO ORDER 2. ROLL CALL 3. STUDY SESSION 3.1 Distinguished Service Award for Councilor Kristin Johnson 3.2 Comprehensive Plan Update (10 minutes) 3.3 Resolution 10-51A, a resolution of the Lake Oswego City Council directing staff to implement revisions to the City's Natural Resource Protection Program (15 minutes) 3.4 Code Audit Report (45 minutes) 3.5 Series 2010 Wastewater Revenue Bond - LOIS (30 minutes) 3.6 Direction on Code amendment related to accessory structures and water dependent uses to occur within the Oswego Lake setbacks (Ord. 2556/LU 08-0052A) (30 minutes) 4. ADJOURNMENT CABLE VIEWERS: This meeting will be televised live on Channel 28. Also available on live streaming video at mms://www.ci.oswego.or.us/live. Jack Hoffman, Mayor ■ Roger Hennagin, Councilor ■ Kristin Johnson, Councilor Donna Jordan, Councilor ■ Sally Moncrieff, Councilor ■ Mary Olson, Councilor ■ Bill Tierney, Councilor LAKE OSWEGO Centennial 1910-2010 COUNCIL REPORT TO: Jack Hoffman, Mayor Members of the City Council Alex D. McIntyre, City Manager FROM: David Powell, City Attorney Iil 01 P �.3 CITY OF LAKE OSWEGO 380 A Avenue PO Box 369 Lake Oswego, OR 97034 503-675-3984 www.ci.oswego.or.us SUBJECT: Resolution 10-51A — Directing Staff to Implement Revisions to the City's Natural Resource Protection Program DATE: July 22, 2010 ACTION Adopt Resolution 10-51A directing staff to implement revisions to the City's Natural Resource Protection Program. INTRODUCTION/BACKGROUND At the July 20, 2010 City Council meeting, the Council approved a number of amendments to draft Resolution 10-51A, and requested that staff present the amended Resolution to the Council for adoption on July 17, 2010. DISCUSSION Attached Resolution 10-51A incorporates the amendments approved by the City Council on July 20th. With the exception of a few edits for grammatical consistency, staff has utilized the verbiage used in the oral motions. Also attached is a redline version of the Resolution showing the changes made to the originally - presented draft. 9 7I Iffem It is recommended that the City Council adopt Resolution 10-51A ATTACHMENTS 1. Resolution 10-51A 2. Redline draft showing the changes made to the originally -presented version of the Resolution RESOLUTION 10-51A A RESOLUTION OF THE LAKE OSWEGO CITY COUNCIL DIRECTING STAFF TO IMPLEMENT REVISIONS TO THE CITY'S NATURAL RESOURCE PROTECTION PROGRAM WHEREAS, in the 1990's, in an effort to protect significant natural resources as called for by the City's Comprehensive Plan and Statewide Land Use Planning Goals 5 and 6, the City indentified and mapped significant resource areas, and in 1997 adopted regulations known as Sensitive Lands regulations; and WHEREAS the City anticipated that, with certain modifications, the Sensitive Lands regulations would qualify for compliance with Metro's Title 3 and 13; and WHEREAS the Sensitive Lands regulations have not been significantly amended or modified since adoption; and WHEREAS concerns and questions raised by the community led the City to conduct a thorough review of the program by supporting the Planning Department in convening a technical task force (the Second Look Task Force) to evaluate the Sensitive Lands program and recommend program improvements; and WHEREAS, from September 2009 to May 2010, after 17 meetings, one Public Open House and Comment Session, and including field trips, case studies, presentations and extensive document review, the Second Look Task Force compiled recommendations for program improvement, which were presented to the Planning Director and reviewed and evaluated by the City Council; and WHEREAS, following three public comment sessions in review of Task Force and staff recommendations held in June and July 2010, the City Council is prepared to direct program revisions with a goal of offering greater flexibility for property owners, while maintaining environmental protection and compliance with Metro and State standards; BE IT RESOLVED by the City Council of the City of Lake Oswego as follows: The City Council directs staff to prepare the following program revisions (as outlined more thoroughly in the Staff Report dated July 15, 2010 and in the Second Look Task Force Reoort dated Mav 28, 2010): Section A: Implement the regulatory changes identified in Staff Report Section A, which recommends immediate amendments to: 1. Modify the Development Code to permit de minimis impacts with s eci is attention to allowing more uses in buffers, such as fences, gardens lighting, pervious surfaces, etc Resolution 10-51A Page 1 of 3 iris 2. Clarify the terms "ditch," "resource buffer," and "construction setback" 3. Exempt invasive trees from tree removal permit requirements 4. Amend the City fee schedule to eliminate the resource delineation fee Section B: Implement the regulatory changes identified in Staff Report Section B within the next year, including the following steps: 1. Develop and initiate a free map correction process 2. Consider removing small, isolated tree groves from the overlay zone on private property, not including private dedicated open space 3. Improve the readability of the Sensitive Lands code 4. Develop a two -track review system 5. Develop standards for mitigation measures 6. Direct staff to return to Council with habitat friendly development codes Section C: Return with a supplemental budget request for the enhanced communication and community outreach activities identified in Staff Report Section C as follows: 1. Expand Landscaping for Conservation outreach and education programs 2. Develop a handbook on best practices for restoration; provide some on -the - ground support and grant opportunities 3. Develop new informational materials for property owners 4. Strengthen the City's connection to watershed councils and seek their assistance in these outreach efforts. Section D: Schedule study sessions on the new resource protection and environmental initiatives identified in Staff Report Section D as follows: 1. -Direct staff to report to the City Council by February 1, 2011 on advantages, disadvantages, funding mechanisms and an implementation plan to organize and operate internal resources to support watershed based environmental management, including linking the surface water resource program and sensitive lands eff-er-ts. 2. Direct staff to prepare by November 1, 2010 a current fiscal year and a longer term multi-year plan to improve maintenance of City property by removing invasive species and restoring those lands with appropriate species. The City Council recognizes that the degraded condition of our public lands occurred over many years and that it will take many years of dedicated sustained effort to correct the situation. n.n nr-1 Cnncitiin 1 ivnc/r 3. Create a program for ongoing outreach on environmental and resource topics 4. Develop an on-line data service program similar to Portland Maps Resolution 10-51A Page 2 of 3 Section E: Implement regulatory changes identified by the City Council as follows: 1. Consider increasing RP buffers, on City -owned land only, consistent with the Metro Model Code 2. Review_ significant tree and riparian resources on City -owned lands and add designations where appropriate 3. Direct staff to return to the City Council with recommendations for an appeal process and options, with an emphasis on fairness and equity, including o discussion and timeline for 1B properties, by the end of the year Section €F: This resolution shall be effective immediately upon its adoption by the City Council. Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on the day of , 2010. AYES: NOES: EXCUSED: ABSTAIN: Jack D. Hoffman, Mayor ATTEST: Robyn Christie, City Recorder APPROVED AS TO FORM: David D. Powell, City Attorney Resolution 10-51A Page 3 of 3 RESOLUTION 10-51A A RESOLUTION OF THE LAKE OSWEGO CITY COUNCIL DIRECTING STAFF TO IMPLEMENT REVISIONS TO THE CITY'S NATURAL RESOURCE PROTECTION PROGRAM WHEREAS, in the 1990's, in an effort to protect significant natural resources as called for by the City's Comprehensive Plan and Statewide Land Use Planning Goals 5 and 6, the City indentified and mapped significant resource areas, and in 1997 adopted regulations known as Sensitive Lands regulations; and WHEREAS the City anticipated that, with certain modifications, the Sensitive Lands regulations would qualify for compliance with Metro's Title 3 and 13; and WHEREAS the Sensitive Lands regulations have not been significantly amended or modified since adoption; and WHEREAS concerns and questions raised by the community led the City to conduct a thorough review of the program by supporting the Planning Department in convening a technical task force (the Second Look Task Force) to evaluate the Sensitive Lands program and recommend program improvements; and WHEREAS, from September 2009 to May 2010, after 17 meetings, one Public Open House and Comment Session, and including field trips, case studies, presentations and extensive document review, the Second Look Task Force compiled recommendations for program improvement, which were presented to the Planning Director and reviewed and evaluated by the City Council; and WHEREAS, following three public comment sessions in review of Task Force and staff recommendations held in June and July 2010, the City Council is prepared to direct program revisions with a goal of offering greater flexibility for property owners, while maintaining environmental protection and compliance with Metro and State standards; BE IT RESOLVED by the City Council of the City of Lake Oswego as follows: The City Council directs staff to prepare the following program revisions (as outlined more thoroughly in the Staff Report dated July 15, 2010 and in the Second Look Task Force Report dated May 28, 2010): Section A: Implement the regulatory changes identified in Staff Report Section A, which recommends immediate amendments to: 1. Modify the Development Code to permit de minimis impacts, with specific attention to allowing more uses in buffers, such as fences, gardens, lighting, pervious surfaces, etc. Resolution 10-51A Page 1 of 3 2. Clarify the terms "ditch," "resource buffer," and "construction setback" 3. Exempt invasive trees from tree removal permit requirements 4. Amend the City fee schedule to eliminate the resource delineation fee Section B: Implement the regulatory changes identified in Staff Report Section B within the next year, including the following steps: 1. Develop and initiate a free map correction process 2. Consider removing small, isolated tree groves from the overlay zone on private property, not including private dedicated open space 3. Improve the readability of the Sensitive Lands code 4. Develop a two -track review system 5. Develop standards for mitigation measures 6. Direct staff to return to Council with habitat friendly development codes Section C: Return with a supplemental budget request for the enhanced communication and community outreach activities identified in Staff Report Section C as follows: 1. Expand Landscaping for Conservation outreach and education programs 2. Develop a handbook on best practices for restoration; provide some on -the - ground support and grant opportunities 3. Develop new informational materials for property owners 4. Strengthen the City's connection to watershed councils and seek their assistance in these outreach efforts. Section D: Schedule study sessions on the new resource protection and environmental initiatives identified in Staff Report Section D as follows: 1. Direct staff to report to the City Council by February 1, 2011 on advantages, disadvantages, funding mechanisms and an implementation plan to organize and operate internal resources to support watershed based environmental management, including linking the surface water resource program and sensitive lands. 2. Direct staff to prepare by November 11 2010 a current fiscal year and a longer term multi-year plan to improve maintenance of City property by removing invasive species and restoring those lands with appropriate species. The City Council recognizes that the degraded condition of our public lands occurred over many years and that it will take many years of dedicated sustained effort to correct the situation. 3. Create a program for ongoing outreach on environmental and resource topics 4. Develop an on-line data service program similar to Portland Maps Section E: Implement regulatory changes identified by the City Council as follows: 1. Consider increasing RP buffers, on City -owned land only, consistent with the Metro Model Code 2. Review significant tree and riparian resources on City -owned lands and add designations where appropriate Resolution 10-51A Page 2 of 3 3. Direct staff to return to the City Council with recommendations for an appeal process and options, with an emphasis on fairness and equity, including a discussion and timeline for 18 properties, by the end of the year Section F: This resolution shall be effective immediately upon its adoption by the City Council. Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on the day of , 2010. AYES: NOES: EXCUSED: ABSTAIN: Jack D. Hoffman, Mayor ATTEST: Robyn Christie, City Recorder APPROVED ASSTO F David D. Powell, City Attorney/ Resolution 10-51A Page 3 of 3 LAKE OSWEGO Centennial 1910-2010 COUNCIL REPORT TO: Jack Hoffman, Mayor Members of the City Council Alex D. McIntyre, City Manager FROM: Jessica Numanoglu, Associate Planner Planning & Building Services Department SUBJECT: Community Development Code Audit Report (PP 09-0007) DATE: July 22, 2010 ACTION CITY OF LAKE OSWEGO 380 AAvenue PO Box 369 Lake Oswego, OR 97034 503-675-3984 www.ci.oswego.or.us No action is required. The Council will receive a presentation of the Community Development Code Audit report. INTRODUCTIONIBACKGROUND The City's Community Development Code (CDC) and related codes are complex in terms of their content and organization, making it difficult for the user to navigate and understand. Last year, the City Council directed staff to undertake an audit of the CDC and related codes in order to identify problems with the organization, readability, and ease of use, and to define an approach for creating a more user-friendly code. Clarion Associates, LLC, was selected as the project consultant in February 2010. In addition to conducting a full review of the CDC and related codes, the consultant gathered input from a variety of stakeholders in March 2010, including members of City boards and commissions, the development community, staff, and the public. The code audit was completed in late May 2010. A draft of the audit report was presented in a joint Planning Commission and Development Review Commission meeting on June 14, 2010. Commission members supported the findings and recommendations of the audit and asked questions related to implementation of the audit recommendations. DISCUSSION The final report includes the findings of the audit and a suggested annotated outline for a restructured development code to respond to weaknesses identified in the audit. The report illustrates how the current CDC and related codes could be reformatted, reorganized and integrated with more graphics, charts and tables to be more understandable to the reader. The Page 2 report also identifies substantive issues that would require more involved policy discussion and public input. To begin the discussion on implementing the audit recommendations, Council should consider the following issues. Scope of Work To implement the recommendations of the audit, the consultant recommends a 2 -phase approach. Phase 1 to reorganize the CDC, and Phase 2 to address substantive changes. This approach helps assure that debates over substantive issues will not derail the code reorganization effort and breaks the process down into more manageable steps. Alternatively, the Council may choose to only tackle the reorganization of the code and not to address substantive issues at this time. The 2 -phase approach has the advantage of comprehensively addressing organizational as well as content issues (e.g. conflicting regulations, complex language, sustainability, etc.), but will take longer to complete than focusing only on the code reorganization. Staffing Needs Another issue to consider is whether the work will be done internally by city staff or by a consultant. Both options can work, but result in different trade-offs. Doing the work internally would involve dedicating at least one full time staff person for the duration of the project — this is not a project that can be completed in someone's spare time. The advantage of this option is that it is less expensive for the city; however, the disadvantages are that (1) it will involve a shift and/or reduction in current services in order to free up a full-time staff person, (2) it would take longer to complete (depending on the scope of work, it could take 1-2+ years), and (3) the project would involve a substantial amount of effort to improve the current graphics in the code and to create new graphics. Since the organization does not have staff with necessary graphic design skills to perform these tasks, outside assistance by a graphic consultant would be required. Alternatively, a consultant team could be retained to perform the work, which would have the advantages of preserving current service levels and completing the process in a timelier manner (9 months to 2.5 years, depending on the scope of work). But of course, the trade-off of using a consultant is the expense. If the scope of work was limited to reorganization of the code, the cost could be up to $100,000. To address both code reorganization and substantive issues, the cost could rise to $225,000. Technology The Council will need to consider the technology the City uses to maintain and display its Codes. The consultant outlined current technology available for presenting the code online, but an even more pressing issue is that the software that the City uses to maintain the entire City Code (Codemaster) is archaic and is no longer meeting our needs. The software was purchased in 1992 for $10,100. Codemaster no longer exists (support and service for the Codemaster program ceased to be available seven years ago), and the software does not support the use of imbedded graphics (all graphics must be in appendices). Additionally, the software was designed for a code up to 500 pages long and the CDC alone is 380 pages long, so it is already beyond its designed capacity. Due to these limitations, the recommendations of the audit cannot be implemented without the replacement of this outdated software. However, even if the audit recommendations do not move forward, this software is well beyond the end of its useful life and will need to be replaced in the near future. Page 3 Sensitive Land In recent discussions about potential amendments to the City's Sensitive Lands regulations, Council inquired how the code audit recommendations might fit in with the Sensitive Lands revisions currently under consideration. While the scope of the code audit was much broader than the detailed review the Council is undertaking of the Sensitive Lands program, there are recommendations of the audit that would help address some of the program revisions under consideration. Specifically, the code audit recommendations could address the revisions proposed to improve the readability of the Sensitive Lands program, incorporate regulations and incentives for sustainable development (i.e. a more "habitat -friendly development code"), and to improve the dissemination of property -specific information with technology similar to Portland Maps. RECOMMENDATION The purpose of this study session is to present the findings and recommendations of the Code Audit report to Council, answer questions Council may have regarding the report, and initiate a discussion about next steps. Following the presentation, staff recommends the Council engage in a discussion on the issues outlined, above, and provide direction to staff on what additional information Council needs before deciding whether and/or how to move forward with the audit recommendations. EXHIBITS Copies of the full Development Code Audit Report were distributed to Council members on June 23, 2010. The report is also available on the City's website at the following link http://www.ci.oswego.or.us/plan/Planning Protects/PP09- 0007 Code Audit/CDC Audit Report FINAL 07-2010.pdf. Reviewed by: Department Director Alex D. McIntyre City Manager DEFECTS IN ORIGINAL DOCUMENT Community Development Code Audit Lake Oswego, Oregon July 2010 RW* 311/ C L A R I O N 1 - 311/ C L A R I O N Table of Contents 1. Introduction...................................................................................................................1 2. Public and Stakeholder Input.....................................................................................2 2.1 Lack of Clarity......................................................................................................................................................................... 3 2.2 Complex Development Standards................................................................................................................................. 3 2.3 Confusing Development Review Procedures........................................................................................................... 4 S. System of Zoning & Use Regulation........................................................................4 3.1 Current Zoning System and Structure......................................................................................................................... 4 3.2 Performance Zoning............................................................................................................................................................ 5 3.3 Form -Based Zoning.............................................................................................................................................................. 7 3.4 Recommendation on Zoning System............................................................................................................................ 9 4. Technology..................................................................................................................11 4.1 Portable Document Format (PDF) Technology.....................................................................................................13 4.2 Database-driven/Server-dependent Technology.................................................................................................14 4.3 Web Browser-based/Self-contained Technologies.............................................................................................14 4.4 Key Features to Consider................................................................................................................................................15 4.5 Future Enhancements.......................................................................................................................................................16 4.6 Recommendations on CDC Technology....................................................................................................................18 5. Detailed Findings....................................................................................................... 19 5.1 Readability / Clarity / Graphics...................................................................................................................................19 5.2 Layout and Style..................................................................................................................................................................21 5.3 Development Standards..................................................................................................................................................25 5.4 Land Use Decision Process.............................................................................................................................................28 5.5 Exceptions, Adjustments, and Interpretations......................................................................................................37 6. Content and Policy Issues........................................................................................ 41 6.1 Sustainability and the CDC............................................................................................................................................41 6.3 Simplifying the District Structure................................................................................................................................43 Lake Oswego. Oregon. CDC Audit Jul-, 2010 7. Annotated Outline..................................................................................................... 43 Article 1. General Provisions....................................................................................................................45 Lake Grove Village Center Overlay District.............................................................................................................49 1.1 Title and Purpose................................................................................................................................................................45 Greenway Management Overlay District.................................................................................................................49 1.2 Authority .................................................................................................................................................................................45 Stream Corridor/Wetland Overlay District............................................................................................................49 1.3 Applicability ..........................................................................................................................................................................45 Tree Grove Overlay District...........................................................................................................................................50 1.4 Zoning Designations, Boundaries, and Maps........................................................................................ 3.8 1.5 Authority to Interpret CDC and Zoning Map..........................................................................................................46 1.6 Non -conforming Lots, Structures, Uses, and Signs........................................................................ Article 2. Base Zoning Districts...............................................................................................................46 Planned Development Overlay.....................................................................................................................................50 2.1 Residential Districts..........................................................................................................................................................46 Article 4. 2.2 Commercial/Mixed Use Zones......................................................................................................................................47 2.3 Special Purpose Zones......................................................................................................................................................48 Introduction to the Permitted Use Table.................................................................................................................51 Article3. Overlay Districts........................................................................................................................ b8 3.1 Evergreen R-7.5 Overlay District.................................................................................................................................48 3.2 Downtown Redevelopment District...........................................................................................................................48 3.3 West Lake Grove Design District.................................................................................................................................49 3.4 Lake Grove Village Center Overlay District.............................................................................................................49 3.5 Greenway Management Overlay District.................................................................................................................49 3.6 Stream Corridor/Wetland Overlay District............................................................................................................49 3.7 Tree Grove Overlay District...........................................................................................................................................50 3.8 Flood Management Area Overlay District................................................................................................................50 3.9 Planned Development Overlay.....................................................................................................................................50 Article 4. Use Regulations and Conditions.............:..............................................................................50 4.1 Introduction to the Permitted Use Table.................................................................................................................51 4.2 Permitted Use Table..........................................................................................................................................................51 4.3 Use -Specific Standards.....................................................................................................................................................51 Article 5. Dimensional Standards............................................................ 2 5.1 Dimensional Table..............................................................................................................................................................52 5.2 Exceptions Table.................................................................................................................................................................53 Article 6. Sustainable Development Standards.....................................................................................54 6.1 Geologic Hazards and........................................................................................................................................................55 6.2 Circulation and Connectivity .........................................................................................................................................55 6.3 Landscaping and Site Design.........................................................................................................................................55 6.4 Park and Open Space Contributions...........................................................................................................................55 6.5 Solar Access...........................................................................................................................................................................55 6.6 Building Design....................................................................................................................................................................56 Lake Oswego, Oregon, CDC Audit July 2010 6.7 Parking....................................................................................................................................................................................56 6.8 Historic Preservation........................................................................................................................................................56 6.9 Utilities....................................................................................................................................................................................57 6.10 Maintenance and Operation........................................................................................................................................57 Article 7. Review and Approval Procedures..........................................................................................57 7.1 Summary Procedures Table...........................................................................................................................................58 7.2 List of Decision-Makers....................................................................................................................................................59 7.3 Common Procedures.........................................................................................................................................................59 7.4 Specific Review and Approval Procedures..............................................................................................................60 Article S. Variance and Adjustments..................................................................:..............................•.....62 8.1 Type 1: Administrative Adjustments.........................................................................................................................63 8.2 Type 2: Residential Infill Development (RID).......................................................................................................63 8.3 Type 3: Hardship Variances..........................................................................................................................................63 Article 9. Enforcement and Penalties......................................................................................................64 9.1 Violations................................................................................................................................................................................64 9.2 Enforcement..........................................................................................................................................................................64 9.3 Penalties..................................................................................................................................................................................64 Article 10. Definitions and Rules of Measurement.............................................................................64 10.1 Rules of Construction.....................................................................................................................................................64 10.2 Rules of Measurement..............................................................................................................................................•....65 10.3 Definitions...........................................................................................................................................................................65 S. Conclusion................................................................................................................... 65 8.1 Next Steps...............................................................................................................................................................................65 8.3 Avoiding „Complexity Creep„........................................................................................................................................68 AppendixMaterials.............................................................................................................. 70 Lake Osmego,. Oregon. CDC Audit Juh 2010 Introduction 1. Introduction The City of Lake Oswego has retained Clarion Associates to perform this audit of the city's Community Development code (the "CDC", which is Chapter 50 of the municipal code). Although the CDC is the primary focus of this Audit, we also reviewed several other chapters of the municipal code that are used along with the CDC in regulating development and redevelopment in the city. Those related chapters included: Chapter 38: Utilities Chapter 42: Streets and Sidewalks Chapter 45.15 Fences Chapter 47: Signs Chapter 55: Trees Chapter 57: Solar Access Chapter 58: Historic Preservation These chapters are sometimes collectively referred to as the "CDC and related regulations." This Audit reviewed these regulations from the perspectives of o Readability/Clarity/Graphics; o System of Zoning and Use Regulation; o Development Standards; o Land Use Decision Process; o Exceptions, Adjustments, and Interpretations; o Technology; and o Content and Policy Issues Clarion Associates was also asked to suggest an Annotated Outline for a restructured CDC that would respond to the weaknesses identified in the Audit and could serve as a "roadmap" for future CDC reform efforts by the city. The primary focus of this Audit is to show how the existing material in the CDC and related regulations could be reorganized and integrated to be more understandable to the public and to support more consistent and predictable land use decisions by the city. Our secondary focus was to identify strengths, weaknesses, and possible changes to the substantive development regulations themselves. Our assignment did not include suggesting changes to Lake Oswego's zoning maps. This document presents the findings of the Audit. Lake Oswego, Oregon, CDC Audit July 2010 Page 1 DEFECTS IN ORIGINAL DOCUMENT Public and Stalieholder Input o Section 2 summarizes public and stakeholder input received in the course of the Audit; o Section 3 includes a discussion of alternative systems of zoning and use regulations that should serve as the foundation for later sections of the Audit; o Section 4 includes a discussion of technology and web -based approaches to presenting CDC content; o Section 5 contains our detailed findings and recommendations on each of the topics listed on the preceding page; o Section 6 identifies two key issues where we suggest that additional content/policy discussions are necessary; and o Finally, Section 7 presents Clarion Associates' suggested reorganization of the CDC and related regulations. The purpose of this Audit is not to criticize the current Lake Oswego Code or those who have drafted the current CDC regulations, but to offer suggestions as to how the CDC can be improved. All cities adopt land use regulations through public processes that tend to ensure that their content reflects the desires of their elected officials and citizens. In Lake Oswego's case, this has resulted in a very attractive community with an enviable quality of life. However, the cumulative effect of piecemeal amendments over time often results in a complex and frustrating land use system. While Lake Oswego's current CDC reflects many of its citizen's values and goals, we believe that it could do so in a simpler and more user-friendly way. Instead of looking backward at how the current CDC came to be, this Audit looks forward to a different and more integrated way of achieving the city's planning goals and preserving what makes Lake Oswego a great place to live and do business: 2. Public and Stakeholder Input At the inception of this project in February 2010, Clarion Associates prepared an on-line survey to gather comments from citizens, development professionals, neighborhood advocates, and city staff about their experiences and opinions of the CDC and related regulations. The survey was not designed to produce a statistically valid opinion sample, but as an opportunity for public comment and to help Clarion Associates identify issues for further discussion. The on-line survey consisted of 32 multiple choice questions with the option to provide written responses to further explain those answers. The questions focused on ways to improve the user-friendliness and format of the CDC, the effectiveness and clarity of the development standards, the efficiency of the review procedures, and whether Lake Oswego, Oregon, CDC Audit July 2010 page 2 Public and Stakeholder Input the CDC and other ordinances generally implement the city's Comprehensive Plan. Forty- nine individuals completed the survey. Of that total, 8% were development professionals, 49% were interested citizens, 20% were on a city board, city council, or planning staff, 16% were staff from other city departments, and 6% checked "none of the above". A summary of the most significant survey comments is provided in Appendix A, and the full results of the on-line survey are available from the Lake Oswego Planning Department. In addition, on March 15 and 16, we conducted stakeholder meetings with representatives from the development community, the Sustainability Advisory Board, the Planning Commission, City Council, and city staff. A public meeting was also held on the evening of March 15 to introduce the Audit process and solicit comments. Not surprisingly, this input produced some comments that were critical of the current CDC, as well as some that defended both the system and the way it has been administered. We did not assume that the comments received were "representative" of general citizen or builder opinion, but we did take them seriously. Our recommendations in the remainder of this Audit have been informed by the input from these sources, but are ultimately based on Clarion Associates' own reading analysis of the CDC and our experience in other communities throughout the U.S. The key concerns that emerged through this public and stakeholder input process can be grouped into three general areas: lack of clarity, complex development standards, and confusing development review procedures. This section summarizes comments in each of those areas. Clarion Associates' detailed response to these public and stakeholder perceptions appears in Section 5 Detailed Findings. 2.1 Lack of Clarity There is a perception that the CDC and related regulations are difficult to understand, in part because they are not written clearly and related regulations are often scattered in different sections and ordinances. This complexity results in even seasoned professionals needing to regularly consult with planning staff for interpretations of CDC provisions. City staff acknowledged that they are sometimes frustrated by the amount of time they spend explaining the CDC to others and that this time could be better spent on matters of more value to the public if the CDC were simplified. Several interviewees commented that lack of clarity leads to reliance on staff to interpret the CDC and that interpretations are not always consistent. While there is no such thing as a development code that does not require interpretation — all codes require interpretation on a daily basis — the level of comment on this topic is higher than we have experienced in most other cities. 2.2 Complex Development Standards There is a perception that the development standards in Lake Oswego's CDC and related regulations are complex, which makes them difficult to understand. Topics that drew specific comments as being particularly complex included the tree ordinance, the RID regulations, and the variety of overlay districts (and their relationship to underlying zoning). In addition; there is a perception that numerous Lake Oswego. Oregon, CDC Audit July 2010 Page 3 System of Zoning & Use Regulation exceptions to standards make it difficult to predict how the development standards will work. Since this input was received, City Council has completed its review of the RID program and decided that it should be continued with only minor changes. We agree that some of Lake Oswego's development regulations are more complex than those used in other cities. Our discussion of which ones might be simplified is found in Section 5 of this Audit. 2.3 Confusing Development Review Procedures Finally, there is a perception that the city's development review procedures are confusing. Specific concerns included how procedures in different sections of the CDC and the related regulations are coordinated with each other, and the difficulty of knowing what combination of procedures will apply before deciding to file an application. Concerns about review procedures were often linked to problems with the development standards — i.e., because the development standards are complex the review process gets bogged down in trying to reconcile different standards through staff interpretations, and that sometimes leads to inconsistent results and erodes public confidence in the integrity of the process. The number and variety of variances and exceptions was also mentioned as a source of confusion over procedures. 3. System of Zoning & Use Regulation 3.1 Current Zoning System and Structure Lake Oswego's current system of zoning and land use regulation is a much -modified form of traditional Euclidean use -based zoning — with elements of performance zoning grafted on. That is, it defines zoning districts based primarily on the uses permitted (or conditionally permitted) within them. This is still the mainstream approach to zoning and the one practiced by the vast majority of American cities, but it has numerous problems that have led to the emergence of alternative approaches over the 95 years of zoning history. Most seriously, use -based Euclidean zoning is based on the assumption that most of the impacts that we need to control are caused by the types of use permitted on the property, and that controlling, separating, or spacing those uses can address most of those impacts. It turns out, however, that some of the impacts that concern citizens are not related to permitted uses but to the form and scale of the buildings allowed on different sites. The structure of the Lake Oswego CDC has its roots in the district -by -district format that characterized pre-war zoning ordinances — but that structure has been modified so many times that those roots are only dimly visible. Early codes began with the assumption that everything about a zoning district (or a group of similar zoning districts) could be collected in one chapter, and the CDC was simply the collection of those chapters "bookended" by an introductory chapter at the front and Lake Oswego, Oregon, CDC Audit July 2010 Page 4 System of Zoning & Use Regulation a procedures chapter at the back. As . regulations for signs, parking, and environmental controls were added in the post-war era, they usually varied by use or location or type of structure — not by district — and they did not fit into the district -by -district structure, so they were added on as separate chapters at the end. In addition, a place had to be found for "one-off' ordinances addressing only a narrow topic or problem (like cellular telephone towers), and those usually found their way into an "additional regulations" or "general regulations" chapter that became a collection of everything that did not fit anywhere else. Because of the shortcomings of the traditional Euclidean zoning approach and structure, alternative approaches have emerged — most notably performance zoning and form -based zoning. Both of those alternatives are discussed below. 3.2 Performance Zoning Performance zoning is based on the premise that zoning should focus on the impacts that we are trying to prevent (like overcrowding, noise, or tree removal) or encourage (like compatibility or solar access) instead of the uses that we think create those impacts. Instead of assuming that certain types of land uses create bad impacts, we should just prohibit those impacts and let builders and users figure out how to make their use "perform" in the way that zoning requires. Performance zoning was first used in industrial areas, and in theory it makes a lot of sense for some types of commercial and industrial land uses. As an example, early Euclidean zoning addressed "heavy" industry primarily through separation. While a "light" industrial use might be required to locate 50 feet from the property lines, a "heavy" factory might be required to be set back 200 feet so that the noise and heat from the operations could dissipate before they reached other properties. But this was inefficient if the "heavy" industry used a technology that did not produce noise or heat. Instead of using setbacks, performance zoning quantifies how much noise and heat are tolerable at the property lines and then prohibits anything more. Builders can use whatever setback allows their operation to meet those standards. A second example of performance zoning is the introduction of FAR (floor area ratio) zoning in the 1970s. FAR zoning is based on the premise that it doesn't matter whether a building is wide and short or narrow and tall as long as the same amount of floor area is enclosed. Once again, however, this tool emerged from planner's attempts to regulate commercial and industrial development, where one of the key impacts is traffic generation. From that perspective, FAR zoning makes sense, because traffic generation can be predicted from the square footage of a particular land use, at least in places where most people drive to work and shop. But FAR zoning ignores how buildings fit into their context, because that is not the element of "performance" it was designed to address. In short, performance zoning was designed to improve flexibility, and it does. Lake Oswego, Oregon, CDC Audit July 2010 Page 5 System of Zoning & Use Regulation Most large cities did not replace Euclidean zoning with performance zoning, for two reasons. First, it turns out to be complicated to write and administer performance standards. Writing the standards themselves took time. If we are concerned about how your house may shadow a neighbor's property, then what level of shadowing is tolerable, and how do we measure it? How do we take into account how trees in the area may grow and cast shadows of their own that cannot be "blamed" on your house? More importantly, however, many performance standards turn out to be hard to administer. Instead of simply measuring a setback, staff have to measure several different building size and shape parameters to see if it meets the desired shadowing performance. Noise impacts are similar — instead of measuring a setback someone on the city staff needs to be trained to use a noise meter in ways that can stand up to a court challenge. As a practical matter, it proved difficult to create an efficient and sustainable system to enforce broad -ranging technical performance standards. The second problem was that lots of zoning regulations are not really designed to avoid measurable negative impacts — they are designed to make development more predictable. Some neighbors — particularly residential neighbors — do not just want to know that your house will have no adverse impacts on their property. They want to know that the size, shape, and style of your house will be compatible with theirs and others in the neighborhood. Many neighbors want the area to look and feel pretty much like it does now, at least for a while. This is a key point — while performance zoning does increase flexibility, it often decreases predictability. It often leads to creative — and unexpected — designs, and that sometimes leads to opposition from neighborhoods that do not appreciate the use of a performance standard to do something unexpected. While Lake Oswego's current system is predominantly Euclidean, some performance elements have been grafted on over the years. The solar regulations in Chapter 57 are performance based. They require that building designs meet a desired performance target that requires complicated technical analysis and experience to administer. The "fit" between this performance based chapter and the Euclidean foundation of the CDC is awkward. A second example is Lake Oswego's use of FAR zoning in residential areas, which is relatively unusual. In single family residential areas, the key impact of new development or redevelopment is not traffic generation (the size of a house creates only minor changes in the number of trips it generates), but predictability is generally very important. We understand that the city adopted residential FAR zones to limit house size and to address visual compatibility, and that a recent review concluded that it was an effective tool. Nevertheless, Lake Oswego's attempt to add flexibility -based FAR controls to standard predictability -based building envelope controls in residential areas is a minority approach and a source of complexity in the current CDC. Lake Oswego, Oregon, CDC Audit July ?010 Page 6 DEFECTS IN ORIGINAL DOCUMENT System of Zoning & Use Regulation 3.3 Form -Based Zoning A second departure from Euclidean zoning has emerged only in the last twenty years. Proponents of form -based zoning try to re -balance the elements of Euclidean zoning to focus more on the form and scale of buildings and less on the uses permitted in those buildings The trouble, they say, is that the Euclidean assumption that impacts are primarily related to land use was never right in the first place, and heights and setback controls are far too crude to address the true impacts of building size and shape. All that does is define imaginary boxes within which each building has to fit. But many of the great places we all like to visit don't fit into site-specific boxes at all. Some have continuous frontage along the streets with no spaces between buildings; some have occasional buildings much taller than the rest. Many allow public and religious buildings and monuments to violate the boxes, and having a big town hall or cathedral at the end of a boulevard makes it visually exciting. That can't easily be done with standardized boxes unless you hand pick the box for each site. But the problem is not just with generalized, uniform patterns of boxes — it is that the buildings inside the boxes can be beautiful or ugly, and that makes more difference to the neighborhood than the specific use inside the building. Form -based zoning tends to be more prescriptive about what buildings should look like — sometimes regulating height relative to the width of the street, degree of detail on the fagade, placement of parking, placement of public buildings within a block, and in some cases even the architectural style of the buildings. In general, the controls are intended to create a more pedestrian -oriented (as opposed to auto -oriented) layout and scale and to focus on "place -making" rather than a uniform set of rights for each lot. Figure 1: Form Based Transect Zones RURAL 111 1 I 1 i I I TRANSECT 1 1 1 1 1 1 1 1 LRBAN NATURAL TRANSEC- ZONES N TRANSECT J15T1 RiCTS URBA_ Most form -based zoning is derived from six "transects" (see Figure 1), which are idealized models of good design that start with the most dense neighborhoods and taper off to the least dense at the edge of a typical city. Form -based zoning advocates say that most built-up areas fit into one defined transect or another, and if you choose the one that is right for the density and function of the area, its regulations will produce a better development than standard Euclidean controls. Of Lake Oswego, Oregon, CDC Audit Jul- ?010 Page 7 System of Zoning & Use Regulation course, one size never fits all, and the idealized version of each transect needs to be "calibrated" to reflect how that type of area has developed in each city, so the forms and standards in each CDC will differ (just as they do in Euclidean CDCs). What is common to all form -based zoning CDCs is that they require compliance with many more building shape and size parameters than Euclidean zoning. While a planner reviewing plans for a house under a Figure 2: Example of Form -Based Parameters traditional zoning ordinance might only have to verify that it meets five or six parameters (setbacks, heights, 0, Apartment lot coverage, etc.), the same planner reviewing plans in a form -based zone might have to check 16 to 20 I parameters in order to ensure that this building really "fits in", because the shape of the building is ° p o controlled more closely. Some of Up �� Lake Oswego's CDC regulations try �- U0 to reach a similar result — for example, the side and front wall planes discussed earlier. Another similarity is that form -based; regulations are highly graphic using far more pictures and far less text to convey the types of drys.` buildings that are permitted (see ` Figure 2). The most ambitious version of the form -based idea is the SmartCode®, which establishes a set of standards lnre•S,arY rve NwY r°m Yir for each transect from which calibration can begin. The SmartCode purports to cover an entire city — everything from rural areas to be preserved to center cities frill of tall buildings. Because it is so ambitious, it is not surprising that few cities have decided to replace their current zoning ordinances with the SmartCode. Most cities adopt form -based regulations either (1) as an option to be used at the request of the property owner, or (2) as a mandatory code for denser, mixed use areas in the city, but not for the whole city. Unlike performance zoning, which was created to make Euclidean zoning more flexible, form -based zoning aims at a different failing — the fact that earlier tools were not producing the types of neighborhoods that people wanted. Since the goal of form -based zoning was not simplicity, it is not surprising that the result is not simple. Or rather, it is a mixed bag. It makes regulation of uses easier and regulation of building design more complex. This is important for Lake Oswego, because most of the zoning issues here relate to building design rather than permitted uses. Lake Oswego, Oregon, CDC Audit July 2010 Page 8 System of Zoning & Use Regulation As with most new ideas, the strengths of form -based zoning are also its weaknesses. Its advantages in communicating intended forms of development also make form - based zoning a relatively static tool. Unlike performance zoning, which can adjust to new trends in development, architecture, or technology, form -based zoning is more of a snapshot of what we like today. It represents today's idea of what fits in, usually with a sprinkling of what we think is pretty. Form -based advocates believe this not a significant weakness because ideas of what fits in change slowly over time. A second weakness is that form -based zoning is not particularly sensitive to topography or environmental concerns. The idealized transects acknowledge terrain and environment as constraints, but don't really address what happens when slopes, soils, or environmental constraints provide significant barriers to where streets can be engineered and buildings built. This is also important for Lake Oswego, because terrain and platting patterns are significant factors in development in this city. Although mostly Euclidean, Lake Oswego's CDC appears to strive for some form - based outcomes. Regulations addressing front wall planes, side wall planes, garage appearance, and solar access go far beyond the traditional Euclidean box approach, but do so without the use of standard building templates or graphic models of building types common to form -based codes. This attempt to regulate form using modified Euclidean tools is another significant source of complexity in Lake Oswego's land use system. 8.4 Recommendation on Zoning System Lake Oswego's zoning approach should be targeted towards the types of development that are common in the city, should reflect the geography of the city, should fix specific problems with the current system, and should be designed to discourage "complexity creep" (the tendency of development codes to get more complex over time). While Lake Oswego includes a variety of non-residential development areas, such as the Kruse Way and Boones Ferry corridors, the downtown, and foothills area, it is residential development that appears to generate the most consistent controversy and neighborhood involvement. Ensuring compatibility between new and existing residential development, and to a lesser degree between non-residential and residential development, are fundamental concerns. The recent lengthy RID evaluation process is testament to this fact. The terrain and historical platting of Lake Oswego make development difficult in a number of ways, and argue against template -type zoning solutions. The land is simply too hilly, and the platted lot lines create too many variations in lot sizes and shapes, for tools designed for flat land to work well. We believe that this is a major source of dissatisfaction with Lake Oswego's current system — the use of any zoning formula on difficult terrain and irregular lots produces unpredictable outcomes. Lake Oswego, Oregon, GDC Audit July 2010 Page 9 System of Zoning & Use Regulation Most of the complaints we heard about the current CDC involved the complexity of the system, the amount of interpretation needed to make decisions, attempts to maximize residential square footage on individual lots, and the unpredictability of zoning outcomes. While downtown was presented as an opportunity for improvement and Lake Grove Village Center as an example of over -complexity, most of the criticism was aimed at residential development. Neither performance zoning nor form -based zoning provide a good foundation for addressing these concerns. As mentioned above, performance zoning might allow more flexibility in addressing unique lot and terrain challenges, but would probably increase administrative expense, require increased staff interpretation, and produce less predictable outcomes. For those reasons, even flatland cities that have moved towards a performance zoning system (like Fort Collins, Colorado) have backed away from them over time. Predictability turns out to be pretty important in primarily residential areas. Form -based zoning is also not a good foundation for a new Lake Oswego development code for three reasons. First, the best examples of form -based zoning, and the places where cities use form tools most often, are walkable mixed use or downtown areas with a definable form and character (i.e. Transects 4, 5, and 6). Many form -based zoning advocates would admit that the "form" of lower density residential areas (i.e. Transects 2 and 3) are harder to define, and far fewer cities have tried to use form -based tools in that context. Denver, Colorado, is one exception, but its pending form -based zoning code contains over 100 zone districts, and almost half of those are for Transect 2 and 3 neighborhoods. It turns out to be very hard to articulate the right form for single family homes on individual lots — forms that reflect the existing character but allow breathing room for other compatible forms in the future. Second, form -based zoning's assumption that acceptable template buildings can be pre -approved for each zone doesn't work well in areas of irregular terrain and lot boundaries. Many of the conflicts over residential zoning in Lake Oswego come from owners' or builders' attempts to maximize either square footage or views on lots that are significantly higher, lower, or differently shaped than those around them. Some of the complexity in the current CDC comes from reactive efforts to correct the unpredictable outcomes of that process caused by variations in terrain and platting. In short, Lake Oswego's attempts to more closely control the form and size of buildings on irregular lots on rolling or steep hillsides has led to (1) more predictability at the expense of growing complexity, and (2) reactions intended to insert more flexibility at the expense of predictability (like the RID program). We believe that an attempt to create a set of form -based templates for large areas of the city would continue this trend and result in an ever -more -complex code. Finally, form -based zoning is not particularly attuned to environmental concerns. One of the most consistent criticisms of form -based approaches is that they focus on building forms and their relationships to streets without adequate consideration for Lake Oswego, Oregon, CDC Audit July 2010 Page 10 Technology the soils, vegetation, natural features, and environmental constraints. This is a significant shortcoming given Lake Oswego's (and Oregon's) focus on environmental controls. For these reasons, we do not believe that Lake Oswego should start over and replace the existing CDC and land use regulations with either a performance zoning or a form -based zoning system. Instead, the city should refine its existing CDC to address the issues of (1) user -unfriendliness to citizens, builders, and investors, (2) perceived over -complexity, (3) perceived reliance on potentially subjective interpretations, and (4) perceived unpredictability of zoning outcomes. This recommendation is strongly grounded in the fact that most of the frustration with the current code involves single-family residential structures and uses. In the commercial and mixed use areas in and near downtown, where both terrain and platting patterns are more regular, form -based controls could be integrated as a discrete zone or chapter in a revised CDC. 4. Technology As in many other fields, the use of technology in zoning and planning is changing rapidly. Many cities are experimenting with different approaches and software applications, and there is no dominant approach or technology currently in use throughout the U.S. In discussing the technology of zoning and development codes, it is important to distinguish between two different potential uses of technology: o Dissemination of Information. Technology can be used to disseminate information regarding the CDC, the zoning map (and other maps), and property - or system -specific information contained in the city's GIS system, and to link those pieces of information together. For instance, technology can play a pivotal role in making public outreach documents (such as the many explanatory handouts on popular or common code topics developed by the Lake Oswego Planning Department), easily accessible to citizens, and to reduce the need to contact staff for clarification of basic concepts. Indeed graphically rich question - or topic -specific handouts have proven to be very effective tools for improving citizen satisfaction with land use regulatory systems. o E -governance and Decision Making. Technology can also be used to provide e -governance — to accept applications .and payments, to route applications through various city offices for review and comment/signoff, to issue permits, to send out required notices for public hearings, to notify community organizations about pending zoning and development in their area, to calendar required public hearings, and to send out zoning violation notices. We understand that Lake Oswego's Building Division is currently implementing a version of state- sponsored Accela software system to improve the user-friendliness of permit Lake Oswego, Oregon, GDC Audit July, 2010 Page 11 Technology logging and tracking. That system offers planning modules that the city may also decide to implement. This chapter will focus primarily on the use of technology for dissemination of information, because that is generally the most important concern in a development code revision process — i.e., how to make the CDC more understandable to and usable by the public. While e -governance is obviously important (and is rapidly spreading through U.S. local governments), it uses different types of software, most of which are relatively independent of the technology used to disseminate information. In other words, the city can often evaluate e -governance and decision making software regardless of the technology used to make the development code accessible to the public. Focusing on dissemination of information is particularly important because Lake Oswego's CodeMaster software is outdated and the supplier is apparently no longer in operation. While we have not previously worked with a city using CodeMaster software, our review of the on-line version suggests that the architecture of the system is dated and may be too simple to use for a complex document like a modern development code. Key shortcomings appear to include the following: o Limited ability to integrate graphics. The separation of CDC text from graphics in the Appendix is already a shortcoming of the current code, and that separation may be driven by the inability of CodeMaster to integrate the two. o Treating each article of the CDC as a separate document. Clicking on a CDC article in the table of contents opens that article, but there is no way to scroll to the previous or next article — you need to return to the table of contents and then open the second article. This is a serious weakness, since related content has been split up so that several nearby articles often need to be considered to understand the answer to common code questions o Absence of headers and footers. While in a given article of the CDC, the program does not offer headers or footers that identify what section of the article you are in. Knowing whether the text you are reading is in the primary text addressing that topic — rather than an incidental reference in another section of the code — is very important to avoid misunderstandings about which regulations apply in a particular context. o Very limited searchability. There seems to be no way to search for a specific term in a specific article, in Chapter 50 as a whole, or in the municipal code as a whole. This is a serious problem, since only those familiar with the CDC may know where to start looking for answers to their questions and some topics may be addressed in multiple articles of the code. o Absence of hyperlinks. Few key terms are hyperlinked to either their definitions or to other sections of the CDC that relate to that term. In many sections of the CDC Lake Oswego. Oregon, CDC Audit July 2010 Page 12 Technology the only hyperlinks appear at the bottom of the article, and those links take you to the previous drafts of the same section of the code. While that is useful to the city attorney and to private attorneys involved in potential disputes over the applicability of specific code provisions to their property, they are fairly unimportant to most readers who would find hyperlinks between related sections of the CDC much more useful. For all of those reasons CodeMaster-type technology has been bypassed by several other approaches. Most cities and many counties now have their zoning and development regulations available on the internet in one of three online formats: (1) Portable Document Format (PDFs), (2) Database driven/server dependent formats, or (8) Web browser- based/self contained formats. 4.1 Portable Document Format (PDF) Technology Portable Document Format (PDF) technology simply takes a picture of each printed page of a development code. It is by far the easiest to accomplish and the most used technology. PDF reader technology is available to the public free of charge from Adobe Corporation. The resulting pictures are linked together in a document that is searchable by term — for instance, a viewer could search for every instance of the word "garage" and the program would find them in sequence. As with a printed page, however, the information format is limited by the size and shape of a printed page. Text, drawings, or tables that span more than one page require the reader to turn to successive pages, whereas other internet technologies would allow the reader to scroll up or down or side to side on a single web image unlimited by page size. Hyperlinks (for example, a link from a defined term to the definition of that term) can be inserted, but it is time-consuming to do — especially in documents with as many defined terms as development codes — so that is rarely done. If hyperlinks are used, the text `jumps" to the desired location (like a definition), but after reading the definition the reader must manually find his or her way back to the term where the jump began. PDF format CDCs can generally be downloaded, stored, and searched on individual computers, although they are often available only as separate chapters (not the full CDC in one chapter) in order to keep the file size manageable. Although cities can create PDF versions of their CDCs on their own, some firms combine CDC reorganization and graphic services to provide better organization and presentation of content before making the PDF product. An example of a PDF based consulting service is C1earZoning in Lathrup Village, Michigan, and an example of their work can be viewed at httl2://www.bloomfieldtwl2.org/ Services/ PlanningBuildingOrdinance/PlanningDivision /Adopted BloomfieldZoning Ordinance.pdf. Clarion Associates has also recently developed a more dynamic and interactive form of PDF regulation that shows promise in giving PDF codes more of the functionality common to the two alternative code technologies discussed below. Lake Oswego, Oregon, CDC Audit July 2010 Page 13 Technoloo- 4.2 Database-driven/Server-dependent Technology As an alternative to PDF technology, some companies offer database -driven technologies that are dependent on software installed on a server. Examples include Municipal Code Corporation in Tallahassee and American Legal Publishing in Cincinnati (probably the two biggest) as well as regional firms like General Code Corporation based in Rochester, Sterling Codifiers in Coeur d'Alene, and Municipal Research and Service Center in Seattle. An example of a "Municode" product can be viewed at http://library.muniCDC.com/inclex.aspx?clientfd=10257&stateld= 6&stateName=Colorado and an example of a Sterling product at http:// www.Sterlingcodifiers .com/CDCbook/index.php?book id=401. Many cities contract with firms like these to update and manage their municipal, building, and zoning codes and to make them available to the public. Generally, the public may view and search these codes online for free, but must download proprietary software (sometimes for free, sometimes for a fee) if they want to store a copy of the code and search it in the same way on their own computer. Searchability is generally more powerful than on PDF codes and sometimes includes Boolean search options to find entire phrases, or to exclude similar terms, and more ability to limit the search to particular portions of a CDC. However, user-friendly data dissemination is generally not the primary focus of database -driven codifiers. Their primary business is updating and managing codes and their clients are cities, not citizens. Generally database -driven CDCs can only be updated by the codifier itself — the city cannot enter its own amendments. One significant shortcoming of some codifiers is that the database programs they use to manage codes do not allow drawings, tables, illustrations, or flowcharts to be located close to the text they refer to. Sometimes the text contains a reference and hyperlink to a graphic that is located at the end of the chapter or CDC. Although the state of the art among codifiers is improving — and some do now offer inline graphics and tables — the quality of many of the embedded graphics is often lower than one would find in the printed versions of the CDCs. 4.3 Web Browser-based/Self-contained Technologies The third option for information is web browser -based technologies (see Figure 3) in which development codes are compiled using off-the-shelf software (generally HTML compilers). These types of codes are often prepared by firms interested in converting paper codes to a user-friendly, highly searchable format. While some offer code maintenance and management services, others do not. Interfaces tend to be more . colorful and engaging, searchability more powerful, and links to Figure 3: Example of Web -Browser Code Interface Lake Oswego, Oregon, CDC Audit Jules 2010 Pa`*e 14 Technology external documents or web sites can be inserted (for example, a link to a reference or best practices guide). Because web browser -based codes focus on user-friendliness rather than ease of maintenance as a legal document, they often include annotations — popup windows, drawings, flash animations, video clips, or slideshows that explain the intent of a regulation but have no binding legal effect. Examples of web -browser based codes include the Visual Interactive Code Group (VICGroup) in Pennsylvania and ZoningPlus in Illinois. An example of a VICGroup code can be viewed at http://twl2.marshall.pa.us/Marshall VIC/default.htm, and an example of a ZoningPlus code at llttp://,",ww.mkedcd.org/czo. 4.4 Key Features to Consider' In addition to simply placing their development codes on the web in a searchable format, many cities are beginning to offer enhancements designed to improve user- friendliness and to link zoning information to other types of information maintained by the city. Examples of information that is linked to or incorporated into the electronic version of the development code include: o Links to post -adoption rule-making and interpretations of the CDC; o Non-binding explanatory materials distinguished from legal text by the use of different fonts, colors, icons, or popup windows; o Links from a zoning district label on a GIS -based zoning map to the section of the CDC describing that zone (which may in turn have links to other parts of the CDC that apply); o Links to a menu of application forms that the reader may want to download — for example, variance application forms; o Links from a GIS -based zoning map to any Board of Adjustment decisions concerning the property and/or any pending zoning applications or enforcement actions involving the property; o Links to photos of recent projects completed under specific rules, and sometimes commentary about how they comply with the rules; o Links between the zoning CDC names for particular land uses and the North American Industrial Classification System or APA Land Based Classification System name for that use; and o Links to state or federal regulations — for example, the Americans with Disabilities Act or state group home statutes implementing the federal Fair Housing Act Amendments. 1 Some of the information in this section is derived from a study titled "Washington DC Zoning Regulations Reengineering Study" prepared by White and Smith, LCC, which is a public document. Lake Oswego, Oregon, CDC Audit Jule 2010 Pa_e 15 Technoloo- 4.5 Future Enhancements2 In spite of the rapid rise in the use of internet technology to disseminate information, the state of the art in providing useful, integrated information on planning and zoning topics is still rather low. Most users do not want to read the zoning ordinance. They want to find the answer to a specific question about their property, their neighbor's property, or a piece of property they may want to buy. Or they want to know what the city's policy is on a particular topic and whether its rules help implement that policy. Reading an online community development code is often a very inefficient way to answer those types of questions, no matter how searchable it is. For example if a property owner wants to know if they can build a fence in a particular location, she can use the internet to search the online zoning ordinance for the word "fence" and the software will list each time that word appears in the ordinance. It will probably find the word in most individual zone district chapters (111, R2, etc.), in the landscaping regulations, in the design regulations, and in a section on fence permits. Reading those references together, the property owner may be able to figure out what kind of a fence she can build and what kind of a permit she needs. But if she visited the zoning office, experienced planning staff would not answer the question that way. They would say: "In the R zones, you can build a fence up to fbur feet tall inyour front yard. It cannot be solid — it has to be chain link or something YOU can see through. You can build one up to six feet tall in the side and rear yards and they can be solid. If your lot is on the creek or river, you cannot put a fence in the floodplain. If you have a corner lot you cannot block drivers' views within 30 feet of the corner. You cannot build fences out of trash materials, and you cannot hang a commercial sign on your fence. You need a fence permit, and we can issue one if you show us a drawing of where on the property the fence will go, what type of fence it is, and how tall it will be". Staff can answer the question "what kind of fence can I build, and where can I build it" based on your specific address, while the internet does not do that well (so far). In part, this is because technology that is being used to disseminate information about planning is different and disconnected from that used for information on zoning, and both are disconnected from property -specific information in the GIS system. The future of web -based zoning systems is in (1) making these linkages between different information systems and (2) developing and refining address - based query capacity to answer questions rather than just disseminate information. Many cities have address -based query systems for their GIS systems (i.e. you can type in an address and get information about that site), but the information retrieved Z Some of the information in this section is taken from Elliott, Better Webbing, Zoning Practice (American Planning Association, October 2008). Lake Oswego, Oregon, CDC Audit July 2010 Page 16 DEFECTS IN ORIGINAL DOCUMENT A Technology concerns utilities, school districts, fire and police districts (in other words, tax and public services data) and perhaps the zone district in which the property is located. In some systems the GIS icon for "zoning" simply takes you to a different web site where the zoning ordinance is posted and the reader must then enter or search for the zone district label found on the GIS map. More sophisticated systems actually link the reader to the specific zone district associated with their property but do not help explain how its provisions apply to their address. Philadelphia has implemented an address -based zoning query system that provides a little more information, and a screen from that MapsPlus system is shown in Figure 4 below. Entering a property address highlights the parcel on a zoning map, and a popup window informs the reader of the base district (in this case R10A) and two off-street parking control districts that apply to the property. However, it does not give the viewer any information about what those districts allow or prohibit on the property. While it is technically possible to link the base and overlay district designators to additional windows that would summarize use and dimension information, that has not yet been done. But many users need more than that, they need information about how the base and overlay districts work together to allow or prohibit activities, buildings, additions, accessory buildings, fences, garages, decks, or patios. There is no reason why web -based zoning technology and GIS technology cannot be linked to provide address -specific answers to those questions, but to our knowledge no city has yet developed that capability to a point where it can answer most user questions about the applicability of the development code to their property. Figure 4: Example of Address -based Zoning Query System (90 PhLa.Gav 1 mayors omr 1 cwe r—a I Bus— ; Re den I L—we I Rhdly311 Lake Oswego, Oregon, CDC Audit July 2010 Page 17 Technology A detailed study of emerging use of technology in planning and zoning applications was authored by Clarion Associates Senior Consultant Don Elliott and published by the American Planning Association in 2008, and is attached as an appendix to this report. 4.6 Recommendations on CDC Technology One of the most fundamental complaints about the current Lake Oswego CDC and related ordinances is that they are not user-friendly. Seventy-two percent of survey respondents said they had trouble finding information in the CDC, and 83% had heard from others that they had trouble using the CDC. With that in mind, the city should focus on technologies that emphasize user-friendliness. As noted above, the terrain, old platting patterns, and requirements of Oregon's state land use laws create a fairly complex system in which zoning rules cannot be applied simplistically — different lot, slope, and environmental combinations produce different zoning outcomes even on nearby lots. That points to a technology that can be tailored by Lake Oswego to address locally unique zoning challenges. In order to design a system that meets both these goals, we recommend that Lake Oswego pursue a web browser based information dissemination technology, rather than a PDF or database -driven approach. Even after simplification, Lake Oswego's zoning system will probably be too complex for a front -to -back PDF -type web CDC to work well, and PDF systems do not link easily to GIS and mapping programs. While database -driven codifiers are improving their quality each year, their products are still not as user-friendly as web browser -based products, and their internal architecture may not adapt well to the types of zoning tools Lake Oswego needs to respond to unusual terrain, platting, and state environmental controls. National codifiers use a fairly generic architecture and then tailor it to local needs, but Lake Oswego's needs may be far enough from the norm that the fit may be awkward. Within a web browser -based information dissemination system, we strongly suggest that Lake Oswego pursue an address -based linkage between its GIS maps (especially the zoning layer) and the web version of the development code. The city should aim at a system that allows citizens to enter an address and link to a wide range of zoning information, including base and overlay districts applicable to the property, dimensional standards applicable to the property, and environmental restrictions applicable to the property (such as the current RC and RP designations). Wherever possible, dimensional and graphic rules should be illustrated on three-dimensional line drawings rather than text. In addition, basic parking, home occupation, and landscaping/ tree regulations applicable to the property (and tailored to the type of structure and use shown in GIS databases) should be presented, with links to the frill parking, home occupation, and landscaping/ tree chapters of the CDC for more information. Lake Oswego, Oregon, CDC Audit July 2010 Page 18 Detailed Findings While we are not aware of any city that has developed a system with these capabilities, there are several examples of cities headed in that direction. We would encourage Lake Oswego to look at the technology used by Denver (at www.denvergov.org/DenverMaps/report.asp?rpt=zone&cat=cprop), Seattle (at http://webs.seattle.gov/dpd/maps/dpdgis.aspx) and Vancouver, British Columbia (at http://vanmal2pub.vancouver.ca/web/vanmap/vanmal2pe.htm) as examples of how much information can be disseminated through the use of linked zoning and GIS technology. 5. Detailed Findings The section provides Clarion's specific findings regarding the primary study topics outlined in the scope of work and request for proposals and listed on page 1 of this Audit. 5.1 Readability / Clarity / Graphics Clarion's first impression of the CDC was that it is unnecessarily long, complex, and inconsistently organized, especially for a community of Lake Oswego's modest size. This impression was confirmed by the feedback we received from staff, public officials, and the public during the initial kick-off meeting in March. There is considerable acknowledgement that significant changes need to be made to the content, organization, and language of the current CDC to transform it into a more transparent, understandable, and effective regulatory document. o Stilted, Archaic Language Like many older codes, the Lake Oswego CDC often uses language and sentence structures that are unnecessarily stilted and hard for the modern reader to comprehend. For example, the definition of "house side shield" defines this is as a shield on a light fixture that "significantly attenuates the unit of illumination in the back photometric hemisphere at all angles greater than 30 degree relative to nadir." This is very difficult for most people to understand. All such language should be identified and replaced with simple words and sentence structures. o Scattered Overlays The current overlay districts are interspersed through the CDC in no apparent order, other than perhaps when they were adopted. Given the high number and inconsistent structure of the current overlays we recommend that they at least be grouped into a single section that explains how all of these overlays relate to the base districts and other development standards. By consolidating the overlays in one section, readers will not have to search the entire CDC to make sure they have found all the layers of regulations that affect their property. o Too Much in the Appendix Lake Oswego. Oregon. CDC Audit JUIN 2010 Page 19 Detailed Findings The appendix for Chapter 50 is nearly as long as the chapter itself. This is very unusual and forces reader to constantly flip pages back and forth past scores (if not hundreds) of pages to understand the full scope of each regulation. The public is also sometimes confused about the legal status of appendices (i.e., are appendix materials really part of the CDC and legally binding?). This confusion would be avoided if the appendices are stripped of their developments standards and reserved for guidelines or examples that do not have binding legal effect. As an alternative, those portions of the Appendix that are binding should be clearly labeled. o Lack of Flowcharts Many readers have difficulty grasping the basic steps in a development review procedure when it is explained in long narrative text. Often the same information can be converted into a graphic flowchart that shows the order of major review steps in a way that the average reader can quickly understand. While Lake Oswego has flowcharts in its handouts, we recommend that they be added to the CDC itself. While flowcharts can sometimes replace narrative text, most modern codes use both — simply because many citizens understand the graphic better than the text. Even though flowcharts can add some length to a code, many cities conclude that the substantial increase in reader comprehension makes the added length worthwhile. o Vague and Missing Definitions A CDC cannot be implemented fairly and efficiently if the definitions of key terms are not clear. Unclear definitions create doubt and are invitations to interpretation and manipulation. Definitions need to be added for currently undefined terms and development standards embedded in definitions need to be removed. Figure 5: Sample process flowchart Preappliwtion conference (Rsquiredl o Neighborhood meeting Applicati Staff review & � DSD Director's recommendation Public Notice Examiner's public hearing Examiner's decision C: Examiner's recommendation Public Notice Mayor & Council consideration (public meeting or hearing) Mayor & Council Decision to approve Compliance with conditions i CITY ZONING MAP CHANGE REZONING Lake Oswego, Oregon, CDC Audit July 2010 Page 20 Detailed Findings An example of a development standard embedded in a definition is "residential care housing" where some standards for accessory uses are included in the definition — these limitations should be located in the use section of the CDC, not in the definitions. o No Users Guide Even if major improvements in clarity and organization of the CDC are made, we recommend the city consider creating a User's Guide that summarizes in plain language how to use the CDC. User's Guides differ in detail and length depending on the jurisdiction's wishes, but they generally explain the major goals and overall organization of the CDC, how to find information in the CDC, how major development standards and procedures work, and provide lists of submittal requirements and application fees, as well as other information that will help the public understand and use the CDC. User's Guide's tend to be highly graphic to make the concepts more accessible. Because the User's Guide is an administrative manual and not part of the CDC, it can be changed by staff without the formal hearing and notice requirements needed for CDC amendments. 5.2 Layout and Style Because user-friendliness is so important to public acceptance of a CDC, this Audit reviewed possible new layouts and styles for the CDC. As an interim product of this Audit, Clarion Associates provided the city with excerpts from a variety of modern development codes and an explanatory memo to help city staff evaluate what kinds of formats, layouts, or styles it may want to use in future revision of the CDC. The following sample materials were provided for the city's review: o Table of contents: Duluth, MN; Buckeye, AZ; Denver, CO; and Miami, FL. o Text format: Duluth, MN; Buckeye, AZ. o Text and graphic format: Irving, TX, Franklin, TN. o Graphic format only: Duluth, MN o Permitted use table: Buckeye, AZ. This section summarizes staffs response to the sample formats we provided, as well as Clarion's recommendations for reformatting the CDC. In evaluating the table of contents examples, we recommended the city focus on the general organization of the chapters (Are there too many or few? Is the material organized into logical groups? Do chapters unnecessarily overlap?) and the subheadings (Are there too many or few? Do headings provide adequate description of material?) In evaluating the text and graphic formats of the sample codes, we recommended that the city focus on the content and detail in the headers and footers, heading design, Lake Oswego, Oregon, CDC Audit July 2010 Page'1 Detailecl Findings numbering scheme, text indentation, use of graphics, and general reaclability of the examples. Staff Preferences Below is a summary of city staff comments on the CDC format examples: o Table of Contents Staff preferred the Buckeye, Arizona, table of contents because of its logical and simple organization, as well as its inclusion of subsections that give the reader relatively detailed information. A portion of the Buckeye table of contents is shown in Appendix B. Staff raised the question of whether the city's somewhat lengthy numbering system should be carried forward. A major consideration is that the CDC and other land use chapters are part of the city's general municipal code so that any new numbering scheme would have to apply and work for the entire civil CDC as well. We recommend that Lake Oswego continue to use a system of numbering consistent with that in the rest of the municipal code. o Text Format Even sections of the CDC that contain only text (because no relevant graphics or pictures can convey the level of detail desired) need to be as readable as possible. Staff also preferred the Buckeye, Arizona code text layout. Although the font size would need to be increased, staff thought the text indentations, heading styles, and headers and footers made the text easy for the reader to follow. A sample of this text format is attached in Appendix C. o Text and Graphic Format Sections of the CDC that contain both text and graphics also need to be easy to read and understand. Staff thought that both the Irving, Texas, and Franklin, Tennessee, formats could work well as models for integrating text and graphics on the same page, but they noted that the Franklin format may better handle the many exceptions and other formatting complexities in the city's existing CDC. A sample is attached in Appendix D. o Graphic Format Portions of the CDC that can be conveyed in graphics (because text would not add anything to the communicative power of the image) also need to be styled for maximum effectiveness in conveying information. Staff noted that Duluth, Minnesota's zoning district layout might work well for the city's design districts but cautioned that textual standards would still be necessary given the complexity of many of the current design standards. A sample is attached in Appendix E. Lake Oswego, Oregon, CDC Audit July 2010 Page 22 Detailed Findings o Permitted Use Table Staff was enthusiastic about the comprehensive permitted use table from Buckeye, Arizona, and it's potential for significantly simplifying the CDC and reducing the need to flip between different sections of the code to get a full understanding of what uses are possible on a given piece of property. The city's current Section 50-11 for commercial zones has a disaggregated version of a use table, but breaking up the table into small sections of rows is not convenient to read and provides no opportunity to compare or distinguish the permitted uses in the commercial zones to those allowed in residential, industrial, and all other zones. A portion of the Buckeye, Arizona, use table is attached in Appendix F. Recommendations on CDC Format Clarion Associates found the Lake Oswego CDC format to be very outdated and lacking many key elements of modern CDC text and graphic layout. The CDC is very "text heavy," with the exceptions of the graphic design regulations in the Appendix and the use of tables in some sections. In many cases the CDC tries to use words to describe what a picture could do much more effectively or where a picture would improve understanding of Figure 6: Sample sight triangle graphic the requirement. For instance, pictures can greatly aid readers in understanding the definition of a term, such as a cornice, flag lot, or grade. Figure 6 shows a graphic of a required sight triangle that can be described r: only awkwardly in words. The recommendations below reflect best practices used around the country for formatting and organizing CDCs, and direction set out by staff. respond to the preferred o Headers and Footers Use descriptive headers and footers that quickly provide the reader with the page's chapter, article, and section title and number, as well as the page number and name of the document. Information in header should be linked to the text on the page and automatically updated whenever the CDC is amended. After the table of contents, headers and footers are the primary guide for readers to locate CDC provisions. Properly designed headers and footers can usually direct readers to within a page or two of the material they are seeking. Lake Oswego's Chapter 50 header states only "Community Development Code." The headers for the other development ordinances state only "City of Lake Oswego." While this is accurate information, it provides little value and misses an important Lake Oswego, Oregon, CDC Audit July- 2010 Page 23 Detailed )' indiii�s opportunity to provide the reader with powerful orienting information about the content of the CDC. See Appendix C for a good example of a descriptive header. o Descriptive Headings Use descriptive headings — highlighted in boldface or otherwise formatted to be clearly distinguished from supporting text — for every major section and subsection. After headers and footers, clear descriptive headings are the next most important tool readers use to locate specific information. Without section and subsection headings, readers are forced to scan or read long sections of text to find what they are looking for. Even then, the lack of headings can cause readers to doubt whether they have really found the right answer because the same issue could be addressed in another untitled section of the CDC. See Appendix C for a good example of descriptive headings. o Text Indentation Clearly and consistently indent each level of text to show its relationship to more general and more detailed information. Proper indentation of text serves two primary purposes. First, it creates white space on the page that results in a more user-friendly and less intimidating appearance. Second, it makes it significantly easier for readers to see the hierarchical relationship between information and to correctly cite CDC sections. A balance must be struck, however, because too much indentation and white space can significantly increase the length of a CDC, create an unwieldy document, and unnecessarily waste paper. A quick scan down the left margin of a page should immediately tell the reader what level of information is immediately to the right. See Appendix C for a good example of proper text indentation. o Text and Graphic Format Text and graphics should be located next to each other or in close proximity so that the reader can quickly and accurately find the visual depictions referred to in the text. In addition, the content of text and graphics must be consistent, with clear rules of interpretation if content conflicts. Currently, Chapter 50 is without any graphics other than those located in the separate Appendix. The Appendix creates a lot of confusion and page flipping that could be easily avoided by integrating some of its material into the body of Chapter 50. Doing so, however, would make Chapter 50 over 500 pages long, which is very long for a city the size of Lake Oswego. The city should thus consider whether some of the graphic content in the Appendix (particularly illustrative materials that is not intended to be binding on development review) can be replaced, deleted, or moved to an administrative -type manual in order to reduce the size of the CDC. See Appendix D for a good example of text and graphic coordination. Lake Oswego, Oregon, CDC Audit July 2010 Page 24 Detailed Findings o Permitted Use Table (and Other Tables) Create a permitted use table that summarizes all permitted and conditional uses allowed in each zoning district, with references to any use -specific standards. The main formatting advantage of a comprehensive use table is that is can replace many pages (over loo pages in some cases) of repetitive text, including long lists of permitted, conditional, and temporary uses. Substantively, a permitted use table provides one place where the reader can quickly determine what uses are allowed in every district and compare allowed uses across all districts. Finally, the process of creating a use table is a good test of a CDC because if it is difficult to convert existing districts and uses into a logical use table, that is a good indicator that the current provisions may be overly complex or inconsistent and should be simplified. Many other substantive provisions of a CDC can also be summarized in tables, such as dimensional standards, permitted encroachments into height limits and setbacks, off-street parking requirements, and sign regulations. See Appendix F and page 52 for two good examples of a use table. 5.3 Development Standards Many of the problems with the current CDC are directly or indirectly related to the complexity of the development standards. This section focuses on changes to targeted development standards that can be approved by the city without raising significant policy issues. Development standards related to sustainability are addressed as part of this section and not as a separate topic. o Overly Detailed and Nuanced Standards Perhaps the most fundamental change we recommend to the development standards is to reduce the amount of fine-grained nuances within and between standards. As one staff member pointed out, some regulations are written to address issues that occur 1% of the time rather than situations that occur the other 99% of the time. Highly individualized and nuanced regulations tend to create the need for even more nuanced regulations in order to address the unintended consequences of the original standards. An example of an overly nuanced CDC section is the two-page list of applicability requirements for the Lake Grove Village Center Overlay (LGVC) — a list that is so complicated that most readers would be lost before they get to read the developments standards. In particular, we recommend the city focus on simplifying its standards for setbacks, height, garage design, landscaping, and tree protection. Some of these issues are addressed in more detail below. o Too Many Complex Overlays In addition to consolidating its overlay districts into one section, Lake Oswego should reduce the number and complexity of its overlays. Lake Oswego, Oregon, CDC Audit Jul- 2010 Page 25 Detailed Findings Distinguishing between the purpose and application of the overlays and the other types of zoning districts is difficult. For example, the city has base districts (R-5), design districts (Downtown Design District); overlay districts that primarily address building design (Evergreen Neighborhood); overlay district that primary address natural resources (Sensitive Lands Overlay); and even an overlay -type district that implements a neighborhood plan but that has its own base district (DD Zone). The result is a confusing mix of zoning districts that often overlap in purpose and whose relationship to each other is unclear. o Effective but Complex Tree Ordinance Trees are a volatile topic in Lake Oswego. On the one hand, protection of tree canopy (currently 44.4%) is very important to the city's residents, and the city's effectiveness in this area has resulted in a longstanding Tree City USA designation. On the other hand, the city's tree protection regulations are more complex than most we have reviewed. Chapter 55 (Trees) is 16 pages long and provides for seven different types of tree permits that regulate nearly every interaction with a tree. Seven permits is significantly more than most cities use, and the recent Matrix management study confirmed that a large share of the city's permit volume involves tree permits. While tree verification, emergency, and Type 1 permits require little staff time, others require more time and effort. In addition, it is not clear how the tree preservation requirements work with the Resource Protection overlays for tree groves and various landscaping requirements, and that should be clarified. At present, it appears that Lake Oswego is satisfied by this tradeoff between tree preservation effectiveness and the complexity of the regulations and staff time needed to administer the system. o Floor Area Ratios (FARs) for Residential Development It is unusual for modern development codes to use floor area ratios to regulate the size of single family homes. FARs are most commonly used to regulate the intensity of use in commercial projects. However, because all single-family homes have the same basic intensity of use (i.e., one household), this type of regulation is usually considered unnecessary for residential development. We are aware that the city's Infill Task Force recently reviewed the need for the residential FAR standards and concluded that they are still necessary because the bulk and size of houses are not being adequately addressed by other dimensional controls. We also understand that the City Council and Mayor recently agreed with the Task's Force's recommendation on this topic. In light of this history, we understand that Lake Oswego will probably retain residential FAR controls for the foreseeable future, but re -iterate that this is a minority approach that adds complexity to the CDC. Lake Oswego, Oregon, CDC Audit July 2010 Page 26 Detailed Findings o Complex Setback Standards The current CDC uses a very complicated and variable system of setbacks, both for the building foundation and upper stories, that is confusing and may require significant staff time to enforce. In many cases, the intent behind the variable setbacks is to address compatibility between houses of different size. Where the issue is compatibility of houses within the same zone district, contextual regulations can be an effective alternative. For example, an increasing number of cities struggling with the impacts of large and smaller houses on adjacent lots have adopted contextual setback standards (for example, the front setback must be within 2 or 5 feet of those on adjacent properties) or height (for example, the maximum building height must be within 2 or 5 feet of those on adjacent properties, taking into account terrain). At least one city has adopted contextual volumes requiring that the volume of a house be within a certain range of the volume of neighboring houses. Contextual standards lead to gradual change over time because each new house is limited by the location and size of existing houses rather than jumping to the maximum size allowed by the zoning district. House A may exceed the maximum height of House B by.2 feet, but when House B is replaced or expanded the applicable maximum height will be 2 feet taller than House A. o Scattered Dimensional Standards Setbacks, heights, minimum lot size, minimum lot frontage, and other dimensional standards are found in text or lists scattered text throughout the CDC and related regulations. Most modern codes summarize those requirements in tables that shorten the document and allow easier comparison of dimensional standards across districts. Special dimensional standards would still be necessary for unusual situations, but most dimensional regulations should be found in the table. o Incomplete Sustainability Tools Sustainability is not an "add-on" but a building block of good development regulations. Sustainable development strategies overlap many different regulatory topics and cannot be detached easily from their context. A modern CDC improves the sustainability of development by removing barriers and integrating incentives and regulations throughout a code, but the current CDC does not do that very well. Rather than thinking in terms of a separate chapter on sustainability, it is more helpful to think about barriers, incentives, and regulations throughout the CDC. The first task in reviewing a CDC for sustainability is to identify provisions that are barriers to sustainable development. Examples include requirements that mandate water -consuming landscaping or barriers to sustainable energy equipment like as solar collectors. It is Lake Oswego, Oregon, CDC Audit July 2010 Page 27 Detailed Findings important to distinguish between barriers that are contained within zoning regulations and those that are in the building or plumbing codes (e.g., prohibitions on grey water systems), which are not the subject of this Audit. The Lake Oswego CDC does not have many obvious barriers to sustainable practices. However, there are instances where sustainability requirements can conflict, such as the standards to preserve trees and protect solar access. In addition, there are some barriers to sustainability in the city's outdated lists of permitted, conditional, and accessory uses. It is not clear where solar panels, geo-thermal heat pumps, and urban wind turbines are allowed as either primary or accessory uses of property. Allowing such energy sources and activities as a primary use is important to allow development of community energy systems that serve multiple structures but that need to be located on a separate lot. It is also not clear where urban agriculture and community gardens are allowed and to what extent. We recommend that CDCs be updated to clearly state that sustainable uses and alternative energy equipment are allowed as both primary and accessory uses in appropriate zone districts. In addition to reducing barriers to sustainability, many communities encourage sustainable development through non -mandatory incentives. Incentives send powerful messages to the market about what types of development the community wants to see and does so in a way that increases support for new ideas and change while minimizing opposition from those who dislike mandates. The City of Portland is a national leader in providing sustainability incentives, so there is no shortage of good local models for integrating incentives into the city's CDC. Incentives could target renewable energy systems, green roofs, cool roofs, urban agriculture/community - gardens, and water conserving development. 5.4 Land Use Decision Process Lake Oswego's land use decision process is sometimes criticized due to a perception that it relies heavily on staff interpretations and that those interpretations are not always consistent or predictable. Clarion Associates' primary observations are that the decision processes embedded in the CDC and related ordinances (a) include a mix of both good and bad practices, (b) appear disjointed and scattered in several sections of the CDC, and (c) do not clearly inform readers about how the system works. We also believe that some of the complaints regarding unpredictability reflect the complexity of the substantive development standards rather than flaws in the decision making system. Given a CDC this complex it is doubtful that any land use decision system could avoid the need for interpretations that produce differing outcomes. Steps to simplify Lake Oswego, Oregon, CDC Audit July 2010 Page 28 Detailed Findings and integrate the CDC and related regulations may also reduce dissatisfaction with the decision making process. No land use decision making system can be evaluated without first identifying the characteristics of a "good" decision making process. We believe that a healthy land use decision making system has the following characteristics: o Consolidated The code puts all procedural matters in one section of the CDC, and consolidates information about application forms, fees, public notices, appeals, and other standards that apply to several procedures in a single section of the CDC to avoid repetition. o Clear, Coordinated Procedures The code clearly informs readers about what procedures will apply to each application, who will review the application, who will make the decision, what criteria will guide that decision, and who will hear any appeal of that decision. It also clarifies how multiple reviews will be coordinated when more than one type of approval is needed. o Understandable Criteria The CDC uses terms and procedures that are understandable to persons of average intelligence and states them in plain English. o Graphics It uses graphics to consolidate information about each of the city's decision making procedures and to show the flow from application to decision and appeal in each process. o Delegation It delegates decision making to the lowest competent level of the city government in order to speed up reviews and reduce politicization of routine decisions and opportunities for NIMBYism. o Efficient/Effective Notice The regulations use effective but cost-efficient notice methods — including signs and electronic notice — wherever state law does not require mailed or published notice. o One Hearing The CDC requires no more than one substantive hearing for each quasi- judicial (i.e. property -specific) decision and only one appeal hearing on each decision — as recommended by the American Bar Association's model land use ordinance. Lake Oswego. Oregon, CDC Audit Jul}_ '010 Page 29 Detailed Findings o Efficient Decisions The CDC produces land use decisions as quickly as reasonably possible, because every dollar spent getting through the process is a dollar that cannot be spent on development quality. o Consistent Decisions The CDC produces consistent, predictable decisions and enables applicants to know with reasonable certainty whether an application is likely to be approved. Lake Oswego's current land use decision making system scores well in some of these areas and less well in others, as noted below. Detailed Review Specific observations about the city's land use decision making system include the following: o Not Very Consolidated Lake Oswego's procedures are scattered and poorly organized in both the CDC and the related regulations. The CDC structure makes it difficult to identify procedural sections and almost impossible to visualize which ones apply or how they work together. Procedures in the CDC are distributed among 15 sections towards the end of the CDC, including: o 50.68 Variances o 50.69 Conditional Uses o 50.71 Overall Development Plan and Schedule 0 50.75 Legislative Decisions o 50.76 Development Application Hearing Procedure and Record o 50.77 Application Requirements o 50.79 Types of Development and Review Criteria for Each Type of Development o 50.80 Review of Ministerial Development Applications o 50.81 Review of Minor Development Application o 50.82 Review of Major Development Review Application and Appeals of Minor Development Decisions o 50.85 Hearings Before a Hearing Body o 50.84 Filing of Appeals o 50.85 Remands o 50.86 Effect of Approval or Denial of Development Permit/Modification or Revocation of Permit o 50.87 Compliance with Approved Permit Lake Oswego, Oregon, CDC Audit July 2010 Page 30 Detailed Findings In addition, because there are separate ordinances that address land development, procedures are found in one section of Chapter 45 (Fences), ten sections of Chapter 57 (Solar Access), and twelve sections of Chapter 58 (Historic Preservation). While Clarion Associates generally favors integrating as many land use procedures as possible, that may not be possible (or wise) in this case because of Oregon's land use statutes. The Deputy City Attorney has pointed out that under Oregon law the application of land use regulations for the issuance of permits or the conduct of hearings require specific types of notice, opportunities to present and review evidence in specific ways, and the issuance of written findings. Appeals are also handled differently depending on whether the regulation is included in the city's 'land use regulations" rather than freestanding regulations on discrete topics (even though they may involve land use). For those reasons, we are not recommending the integration of Chapter 47 (Signs) or Chapter 55 (Trees) into a reorganized CDC, even though those chapters include procedures that could interact with those of the CDC, and even though we usually recommend that type of integration. o Procedures Not Very Clear or Coordinated Most land use approvals in Lake Oswego fall into one of four categories: ministerial, minor, major, or legislative. While this is a fairly simple structure for decision making, it suffers from some weaknesses: o The structure is not communicated clearly to the reader. In part this is because the CDC is split into multiple short articles each attempting to deal with a single topic (although in practice they have expanded over time to cover combinations of topics), but it is not clear how the articles relate to each other. o There are subtle variations within each of these four basic procedures buried in the substantive zoning provisions. o The descriptions of what types of decisions fall into each category are wordy and imprecise, making it difficult for readers to tell which one applies to their case. This is probably one source of frustration about high levels of staff interpretation. o The CDC uses the term "hearing body" to refer to the development review committee, planning commission, and city council, depending on the type of decision being made, but there is no easy way to find out which group will be the hearing body for each type of application. The information in section 50.79 (Types of Development and Review Criteria for Each Type of Development) needs to be coordinated with the information in Section 50.76.020 (Jurisdiction of Hearing Body). Lake Oswego. Oregon, CDC Audit July 2010 Page 31 Detailed Finding=s o Lake Oswego's development review procedures do not appear to be coordinated. The need for coordination arises when proposed development requires more than one approval. Although section 50.76.015 states that the City Manager may permit more than one approval to be processed concurrently, it is not clear whether that applies only to CDC approvals or to approvals required by the related regulation. For example, although Section 55.02.035 describes how an application for tree removal is processed in conjunction with major or minor development permits, it is not clear how the application and permit requirements in Chapter 57 (Solar Access) work with the ministerial/minor/major development review procedures in the Chapter 50. o Some Decision Criteria are Subjective The criteria for making different types of decisions are wordy and in some cases subjective, allowing wide latitude for the decision -maker to make different decisions in similar cases. In addition, the listed criteria are in fact supplemented by numerous standards in substantive sections of the CDC, and the criteria in various sections do not appear to be coordinated. For example, the general criteria for approval of a conditional use in Section 50.69.010 need to be read together with the specific criteria for different types of conditional uses in Sections 50.69.050 through .085, and those need to be read together with the criteria for major development decisions (which include conditional uses) in Section 50.79.035. This need to track multiple sets of standards across multiple sections or chapters is a probably a major source of frustration with the code. In addition, some of the criteria themselves are subjective. For example the criteria for conditional uses in Section 50.69.010 include the following: "c. The site is physically capable of accommodating the proposed use; and, d. The functional characteristics of the proposed use are such that it can be made to be reasonably compatible with uses in its vicinity." Applicants, neighbors, and city staff can easily disagree as to whether the site is physically capable of accommodating the proposed use and whether the proposed use is reasonably compatible with nearby uses. Although many cities continue to use standards based on "compatibility", and some courts have upheld the use of that standard as adequate to guide decision-making, other courts have held it inadequate unless the elements to be considered in evaluating compatibility are clarified. The "compatibility" standard continues to be a source of much disagreement over land use decisions in many cities. Lake Oswego, Oregon, CDC Audit Jody 2010 Page 32 Detailed Findings Good decision criteria also link back to planning goals and "make it easy to do the kind of development the city wants." Complaints about the complexity of the decision making system suggest that the Lake Oswego CDC may not make it easy to complete either favored or disfavored types of development. In addition, the complexity of the CDC and related regulations leads to more interpretations at the staff level than would be required with a clearer code. o Graphics This is a weak point of the CDC discussed in more detail in section 4.1 above. The current ordinances do not use either summary tables or flowcharts (like those in the city's handouts) to illustrate how development applications are processed. While the CDC Appendix does contain many drawings and tables illustrating development standards, it is generally silent on procedural matters. Procedural graphics are found in the city's handouts. Graphics would go a long way towards making the interrelationships between the various procedural chapters clear. Just as importantly, the process of creating flowcharts often helps clarify the city's thinking about how each procedure — or combination of procedures — works, and significantly improves consistency in staff interpretations about what procedural steps are necessary, and in what order. o Good Delegation Delegation is one area where the Lake Oswego CDC ranks high. Many decisions can be made through ministerial action by city staff, which is good. Another wide range of decisions are categorized as minor decisions that are also subject to City Manager approval. Using the term City Manager for the decision maker, however, may be misleading to citizens who do not understand that decisions are routinely delegated by the City Manager to department heads and other staff. It would be clearer to the public to name the departments or officials who actually make the decisions, even if the City Manager remains legally responsible for their decisions. Relatively few types of decisions are categorized as major decisions requiring a hearing before the Planning Commission, Development Review Commission, or Historic Resources Advisory Board. Designing a system where the "default" process is administrative decision making based on objective standards in the CDC increases predictability, reduces politicization of the process, and speeds up decisions. In contrast, many high quality -of -life communities tend to push too many decisions "upward" for consideration by a development review committee, planning commission, design review group, or city council. However, Lake Oswego's heavy reliance on staff decision making is probably one reason why staff are criticized for their interpretations of the CDC. If more Lake Oswego. Oregon, CDC Audit July ?010 Page 33 Detailed Findin s decisions were handled by the Planning Commission or Development Review Commission then more of the criticism might be aimed their way. o Efficient/Effective Notice In some cities the timeliness and effectiveness of notices regarding upcoming hearings and discretionary decisions is a flashpoint in city - citizen relations, but that does not appear to be the case in Lake Oswego. Survey respondents generally found the current notice procedures adequate. However, the CDC does include some provisions that could complicate the notice process, including the following: The requirements for notification of parties other the applicant by certified mail in Section 50.70.025 (Neighborhood Contact Required for Certain Applications) is unnecessary. Many cities are moving away from requiring certified mail notice to anyone except the applicant or appellant/ appellee, and are relying instead on regular mail or electronic notification that can be faster and just as effective. In addition, the provisions in Sections 50.81.010 and 50.82.010 (stating that if a 300 foot radius of the property does not include 50 properties then the notification radius is expanded to include at least 50 properties) is very unusual and unnecessary. The fact that few properties are located near the applicant's property does not mean that its impacts are greater and that wider notification is required. This provision also complicates administration, because each notification requires a check as to how many properties are included and then expansion of the notice area if there are fewer than 50. o Only One Hearing Required Lake Oswego CDC meets this benchmark, in that only major developments (or minor developments referred to a hearing body by the City Manager) require a hearing, and there is no case in which more than one substantive hearing is required. Legislative decisions are the exception, but those are not quasi-judicial hearings, and a double hearing (first at the Planning Commission, and then at City Council) process is common in many U.S. cities for these types of decisions. o Efficient Decisions Lake Oswego scores fairly high in this area, although the score goes down when frequent appeals are taken into account. Notice periods of 14 days for minor decisions and 20 days prior to hearings are close to the minimums used throughout the U.S. As noted above, classifying most decisions as ministerial or minor also speeds up the review process by reducing the time needed to notice and prepare for hearings. However, it appears that the complexity of the standards and criteria being applied during the land use decision process is leading to regular dissatisfaction Lake Oswego, Oregon. CDC Audit July ?010 Page 34 Detailed Findings with decisions and the filing of appeals that seriously erode the efficiency of the system. One exception to the general efficiency of the system is the provision in Section 50.81.015(2) providing that the City Manager may make a final decision on a tentative RID decision if no comments are received within the 14 day comment period, but that if comments are received then a notice of decision must be provided. The wording of this clause requires the extra effort of a notice of decision even if the written comments received are supportive of the application, and should be narrowed to apply to written comments that object to or seek a modification of the draft decision. o Decisions Perceived to be Inconsistent This is apparently a weak point of the Lake Oswego land use decision process. One of the most common complaints from both builders and citizens is that the CDC and related regulations produce inconsistent and unpredictable decisions. This is somewhat ironic, because it appears that Lake Oswego has gone to great lengths to add standards designed to ensure consistency. In fact, Lake Oswego's is one of the more "wordy" CDCs that Clarion Associates has reviewed; some sections use two or three times as many clauses to guide decision -makers as we see in other CDCs. For example, the standards in section 50.69.055 for skilled nursing facilities in some residential zones cover one -and -half -pages of text, including is standards and 13 sub -standards. In some cases, procedures have been tailored to specific areas — such as the separate definition of minor developments in the DD zone in Section 50.79.020. In other cases it appears that the criteria or procedures have been refined over. time to state more clearly how they apply to specific situations. In short, many words have been added in an attempt to make the procedures more predictable — but the perception of inconsistency and unpredictability remains. As noted above, the Residential Infill Development (RID) process appears to have fed complaints of inconsistency. RID was created to provide an alternative process for reviewing single-family development. This process addresses situations where the strict application of objective standards was preventing development that was otherwise compatible with the immediate neighborhood (in part because of the varied topography and old platting that characterizes the city), but the added flexibility and case -specific review that it introduces inevitably produce decisions that are more site-specific and therefore less predictable. The RID process illustrates one of the fundamental challenges facing any revision of the Lake Oswego CDC — how to introduce enough flexibility Lake Oswego. Ore -on, CDC Audit Jule 2010 Page 35 Detailed Findings to respond to topography, platting, and environmental conditions, which will inevitably produce site-specific decisions, while reducing the perception that those decisions are inconsistent. We believe that two factors may be leading to the perception of inconsistency. First, the link between the complexity and wordiness of the ordinance and the need for frequent interpretations of its applicability to specific cases was noted above. The more detailed the standards, the more likely that two sections (or ordinances) may appear to require inconsistent outcomes and the greater the likelihood that citizens or builders may need to consult with staff to sort out which is the governing standard. Any time a decision is made that standard A rather than standard B applies (even though both are in the CDC) a perception of inconsistency may be created. Second, the highly detailed development standards and criteria in the CDC may result in situations where different outcomes are driven by relatively minor differences in development applications. The CDC may be very clear that standard X applies in situation Y but not in situation Z, but the difference between situations Y and Z may seem to the applicant to be so minor that the outcomes in the two cases are "inconsistent". Recommendations on Decision Making Procedures Any effort to revise Lake Oswego's CDC should build on its strengths — a high degree of delegation, generally efficient/effective notice, use of a single substantive hearing, and (on paper at least) a relatively efficient decision making process — while addressing its significant weaknesses. The first step is for Lake Oswego to consolidate all review and approval procedures in one or two sections of the CDC that readers can clearly identify as the place where questions about procedure are answered. In addition, similar provisions on major topics should be consolidated and minor differences between them eliminated. For example, provisions on pre -applications, application forms, public notice, appeals, and modifications of prior approvals can be consolidated and stated once, rather than being stated several times with minor wording differences. After consolidating those common procedures, each specific review and approval path should be summarized in one or two sections of the CDC. The benefits are not just organizational, however. Consolidating similar provisions helps highlight unintentional differences in wording and standards that have crept into the CDC and related regulations over time, and they can then be removed. The second and relatively easy step is to use summary tables and graphics to illustrate the flow of each procedure, and to give readers a snapshot of the different types of review and approval procedure and how they differ. Lake Oswego, Oregon, CDC Audit July ?010 Pale 36 Detailed Findings The third step is to simplify the criteria used for various types of approvals, which are much wordier than in many CDCs. The existing criteria also have more variations and sub -criteria for different situations than is normal. While objective standards are a key to good land use administration, the high level of detail in Lake Oswego's criteria may not be leading to greater satisfaction with land use decisions and are almost certainly feeding frustration with the CDC as a whole. All those words and sub -rules (together with the lack of graphics) result in a long, turgid set of regulations that few readers have the patience to plow through. Additional recommendations for procedural changes are summarized in the discussion of exceptions, adjustments, and interpretations below. 5.5 Exceptions, Adjustments, and Interpretations Detailed Review of Exceptions and Adjustments Another source of criticism of the Lake Oswego CDC and related regulations is that they contain too many exceptions and too many ways to adjust and vary individual rules. We agree. Not only does the plethora of exceptions and adjustments make the CDC complex to read, but it is probably a major contributor to the perception that zoning outcomes are not predictable. The difficulty this creates for citizens to understand the city's land use system is compounded by the fact that these exceptions and adjustments are scattered throughout several ordinances. Provisions addressing various ways to adjust the development rules are found in: o Section 50.68 (Variances), which covers Class 1 and 2 variances. Class 1 variances do not require a showing of hardship and are apparently routinely approved. It appears that no Class 1 variance has ever been appealed. Class 2 variances, on the other hand, are true variances that require a showing of hardship and are approved much less frequently. o Section 50.22 (Exceptions to Site Development Standards and Special Determinations), which contains exceptions to site development standards and special determinations. o Section 50.11A.070 (Lake Grove Village Center Overlay District), which contains a major/minor adjustment process for certain standards to allow flexibility. o Section 50.07.065 (First Addition Zone), which has its own administrative modification process. o Section 50.72 (Residential. Infill Design (RID) Standards) which includes a modification process for specific standards. By way of reference, many cities only have one form of exception — a hardship -based variance, but that, too, can be a source of criticism. A majority of cities that have Lake Os -,%ego. Oregon. CDC _Audit July 2010 Page 37 Detailed Fimdimgs only one adjustment system erode the hardship standard over time (in effect finding hardship where a court would not) and are criticized as undermining the predictability of zoning standards. On the other hand, a minority of cities appear to take the hardship standard seriously, with the result that they grant relatively few variances and are criticized for being inflexible. In response, some of these cities are adopting an administrative adjustment/modification system to allow variations where the proposed change is supported by planning considerations and/or there is no significant impact on neighboring property owners but the applicant cannot show true hardship. While both approaches have disadvantages, the fact remains that most cities typically have two procedures to adjust or vary development standards. Instead of creating additional mechanisms, cities that want to address special situations (for example, sign variances, or adjustments to form standards) usually adopt a set of specialized criteria to be applied in a standard variance or administrative adjustment process — not a new process. In a few cases where requests for adjustments require specialized technical knowledge (for example, flood plain variances), cities create a separate process involving a different body (e.g., a flood plain variance board). While we do not know how Lake Oswego's many exception and adjustment mechanisms evolved over time, it appears that some of them may be the result of "reactive" drafting. Reactive drafting occurs when the city applies its standard development standards to a specific property and finds that they produce an unexpected or harsh result. The city then drafts an exception to the rule to avoid that result. If that exception itself produces an unexpected result in the future, then an exception to the exception may be drafted. It also appears that some of the need for exception and adjustments is driven by the high level of detail in the Lake Oswego CDC standards themselves. The more the city tries to write very rigid rules to require a specific outcome, the more likely it is that unusual terrain, platting, or environmental situations will require an exception to that rule. In contrast, less detailed rules might require fewer exceptions. Recommendations on Exceptions and Adjustments We recommend that the number of ways to vary development standards in the Lake Oswego CDC be reduced and consolidated in order to simplify the code. That will make it easier for applicants, investors, and neighbors to understand what types of adjustments are available, what the procedure is to request an adjustment, and what criteria will be applied to make the decision. For example, we recommend that all exceptions to dimensional standards from the CDC and the related regulations (with the exception of the tree and sign ordinances) be consolidated and relocated near the dimensional standards. While the original structure of the CDC used Section 50.22 to fill that purpose, it is not clear that all of the exceptions have been captured. Lake Oswego, Oregon, CDC Audit July ?010 Page 38 Detailed Findings Interestingly, Lake Oswego's Class 1 / Class 2 variance system already matches the "normal" solution to adjustments adopted in modern CDCs — one administrative path to minor variations that does not require a showing of hardship and another traditional variance procedure based on a showing of hardship. In other CDC reform projects, Clarion Associates has often simplified and consolidated the various "one- off' modification procedures in the CDC into one of those two categories. In addition, the RID process was created in response to residential infill standards a few years ago, as an alternative way to review single family applications subject to those standards. However, because the RID process can be used to vary the infill standards, it serves as a third "adjustment" process for single family homes — one that falls somewhere between the "easy" standards of Class 1 variances and the "very hard" standards applicable to Class 2 variances. We do not believe that the Class 1 and Class 2 variance procedures can be "stretched" to cover the middle ground that the RID process is currently covering. The types of "building shaping" decisions being made through the RID process are more significant than those made in Class 1 variances, and the attempt to broaden administrative decision making to cover these more significant decisions would probably not be popular. RID decisions are beyond the scope of most administrative adjustment mechanisms, many of which are limited to variations of 10% in specific numerical standards, and may in fact benefit from the considered judgment of design professionals. At the same time, most RID applications would not meet traditional hardship standards applicable to Class 2 variances. Since the inception of this Audit process, City Council decided to retain the RID process with few changes. We agree that the RID process fills a need for an "intermediate" adjustment procedure - at least in the case of infill -related residential development. We understand that the RID process is not likely to be revisited in the near future, but believe that at some point Lake Oswego may find a need for a similar intermediate, design -based review for development other than single family homes. If that occurs, the city will need to decide whether to create a new, separate process to meet this need or to broaden the RID approach to address more types of development. Consistent with our bias towards consolidation and simplicity, we would lean towards amending the current RID process rather than creating another similar procedure. Detailed Review of Interpretations As noted above, the perception of the need for frequent interpretations of the CDC also needs to be addressed. We identified three distinct criticisms related to interpretation of the Lake Oswego CDC: (1) it requires too many interpretations, (2) the interpretations are inconsistent, and (3) there is no way to know in advance how the application of the CDC to your property will be interpreted. In the report sections above, we have already addressed how simplification of the CDC should address criticism (1), so the discussion below will focus on perceptions of inconsistency and unpredictability. Labe Oswego, Oregon, CDC Audit Jul- 2010 Page 39 Detailed Findings This is an area where many cities have weak or informal procedures, and good examples are hard to find. We believe that there is a need for two types of procedures. First a formal interpretation procedure (like that found in Section 50.04.010) that can be used when the applicant wants a determination of how the CDC and other land regulations will be applied to a specific piece of property before filing an application. These types of interpretations need to be in writing and often require consultation between more than one department before the city is willing to make a decision that will bind its future actions. The tradeoff for this time and complexity is that the applicant gets a written decision that can be relied on before it invests money in purchasing a piece of property or retaining architects, engineers, or planners to work on the project. The second type of interpretation is informal — and unavoidable. By their very nature, development codes cannot answer all the questions that will come up in their administration. Even regulations within a single zone district will face unexpected questions when lots are very irregular, soils differ from those nearby, heritage trees are present, or a neighboring property has a non -conforming structure (for whatever reason) that constrains development in ways that could not be anticipated. As a result, planning staff are called upon to interpret development codes on a daily basis, and requiring a formal written interpretation in each case would clog the decision making process and slow clown approvals for everyone. In light of this reality, city staff need to be able to interpret the CDC based on their best judgment without a formal process. However, that does not mean that those interpretations cannot be made available to the public or that later interpretations should not strive to be consistent with earlier ones. Recommendations on Interpretations The best response to criticisms of inconsistency and unpredictability is for Lake Oswego to promptly post all interpretations (even informal ones) on the city's web site so that other applicants and property owners know they have been made. In addition, the city should create a database or manual of all .formal and informal interpretations and require that staff use that database/manual to make consistent decisions on a clay -to -day basis, unless a clear error was made in a previous interpretation and it needs to be corrected. The solution in this case is not legislative but administrative. Being transparent and consistent about informal interpretations is a better approach than banning them altogether or complicating the CDC in a (fruitless) attempt to wring out all possible need for interpretation. On an annual basis, the city's interpretations should be reviewed and the CDC amended if necessary to clarify standards, to reduce the need for future interpretations, and to reduce the need for applicants to refer to both the CDC and the interpretation database. Periodic reviews and amendments on predictable timeframe can reduce the need for lengthier "clean up" processes that get bogged down because of the sheer number of minor amendments that need to be made. Lake Oswego, Oregon, CDC Audit July ?010 Page 40 Content and Policy Issues Importantly, informal interpretations need to be treated as judgments made in the process of making land use decisions (not land use decisions themselves), so the CDC needs to make clear that informal interpretations cannot be appealed. Making informal judgments appealable would clog decision making as surely as requiring a formal interpretation in every case. Once a land use permit or approval has been made based on an informal interpretation, that decision can be appealed and the informal judgment made in the course of that decision can be questioned if the appellant feels that it contributed to the illegal decision. 6. Content and Policy Issues During the course of this Audit, Clarion Associates has identified two topics that require additional policy guidance. Although materials on each of these two topics can be consolidated for readability and understandability as described in the Annotated Outline below, we believe that the city may want to revisit, clarify, and simplify the regulations in these areas in substantive ways. Rather than holding up the reorganization of the CDC, we recommend that Lake Oswego pursue a two-phase approach in which the CDC and related ordinances are first reorganized per the Annotated Outline. That in itself will lead to simplification of many topics by removing overlaps and inconsistencies. As that is being done, the city should prioritize the content and policy issues listed below and appoint working groups to address them and to adopt a set of policy recommendations for review by the Planning Commission and City Council. We suggest that these groups not be asked or allowed to draft new CDC language, but that when a draft of the reorganized CDC is available each working group be given the draft sections of the reorganized CDC that relate to its topic and then suggest amendments to those sections as necessary to implement the policy direction endorsed by City Council. That will make it much easier to incorporate working group changes into the new CDC structure. 6.1 Sustainability and the CDC Sustainability is an inherently vague concept. Although almost all cities want new development and redevelopment to be significantly more sustainable than it has in the past, few can address what that means or how exactly their rules will make that happen. Lake Oswego has significant history in this area, with solar access and tree protection provisions dating to the 1970s. However, Chapters 55 (Trees) and 57 (Solar Access) are good examples of how topic -specific sustainability rules can become difficult to administer and integrate with standard development practices. Both chapters read as if they were written by experts who focused only on that topic, with little concern for how those concerns would balance with the city's many other planning goals or how difficult they would be to administer. Lake O As ego. Oregon, CDC _ Liclit JUIN- 2010 Page 41 Content and Policy IssueS The problem is that most discussions of sustainability become very conceptual as more and more topics are brought under the sustainability umbrella. Once the concept of sustainability is stretched to include topics such as workforce housing, neighborhood character, or job creation it is difficult to answer the question "what is NOT included in sustainability". Those topics can and should be addressed in development codes, but rolling them into a sustainability discussion muddies the waters and makes consensus that much harder to achieve. Sustainability regulations can also become very "preachy" rather than regulatory. Finally, they tend to create new review procedures because of the difficulty of setting objective standards and incentives that can be used without individualized site review. Perhaps most importantly, some aspects of sustainability cannot be effectively addressed through zoning and development standards — or rather, they can be more effectively addressed through other tools like building codes, business licensing, and public spending. Increasingly, cities that have focused on this topic have chosen to focus CDC provisions on a relatively short list of topics where land use regulations can be effective. That list usually includes: o Greenhouse Gasses — reducing carbon dioxide emissions and increasing carbon sequestration. o Energy -- Reducing energy consumption and encouraging renewable energy production through accessory solar, wind, and geothermal equipment. o Water — Reducing water consumption and increasing water reuse. o Urban Agriculture — Permitting and encouraging local production of food and improving access to fresh food in underserved areas. o Connectivity and Walkability — Allowing easier circulation and better connections for pedestrians, bicyclists, and autos in order to reduce the number of auto trips and shorten their average length. In the course of this work, the working group needs to research and give policy direction on the following specific issues that are left unresolved in the current CDC. The first is the tension between strong support for tree protection and growing support for solar access. This is a cutting edge issue, and there are no dominant models in use, but without clear direction these two values will remain in tension and decision making about the balance between the two is likely to be perceived as ad hoc or inconsistent. Lake Oswego's provisions on trees and solar access need to be revised to pursue a balanced policy that property owners can count on as they plan future development. Lake Oswego. Oregon, CDC Audit July 2010 Page 42 Annotated Outline The second key issue is Lake Oswego's treatment of streams, wetlands, and tree groves. The current RP and RC zones have been criticized as overly strict and beyond the levels of protection required by Metro in these areas. The city has convened a Second Look Task Force to review the Sensitive Land Overlay and recommend ways to improve it. This is an area where the state of the art is rising steadily, and there may be more narrowly tailored approaches that could achieve equal or better protection of the city's planning goals in these areas. We recommend that the findings and recommendations of the Second Look Task Force be integrated into the recommendations of the working group suggested for this topic. 6.3 Simplifying the District Structure Some areas of Lake Oswego are subject to a complex layering of base and overlay districts that is difficult for readers to understand. Those areas include: o West Lake Grove Commercial/West Lake Grove Design/Lake Grove Village Center; and o Old Town Neighborhood/Downtown Redevelopment District We suggest that the city appoint a working group to explore whether a simpler district structure could achieve the same or better results while being easier for the public to understand. While overlay districts are clearly useful to achieve planning goals, it requires discipline not to create too many of them, because each new zone district or overlay zone sends ripples of complexity through the entire CDC. Each new zone needs to be coordinated with the standards and criteria elsewhere in the CDC, and new overlays intended for one situation may have unintended consequences when applied to a different area of the city. At a higher level, this raises the issue of how closely the CDC should be "tailored" to the existing character of specific neighborhoods. Just as CDCs can become unnecessarily complex by adding too many detailed development standards, they can become complex by proliferating new zone districts in attempts to more closely match existing neighborhood fabric. While there are clearly areas that need added levels of character protection, this approach can be overused and result in "locking in" character in areas that need more flexibility to allow redevelopment over time. 7. Annotated Outline This section describes how the confusing structure and some of the weaknesses in Lake Oswego's land use regulations could be addressed in a revised CDC. As noted in sections 2 through 6 above, one of the most obvious weaknesses of the current system is its poor organization and the scattering of related information in different ordinances — as well as Lake Oswego, Oregon, CDC Audit July 2010 Page 43 Annotated Outline throughout the CDC. The focus of this section is therefore on re -organization and restructuring for clarity and understandability. Each section of the annotated outline describes the sections of the CDC and related regulations that should be included and integrated. Each section also describes challenges to be addressed and potential solutions. Finally, the recommendations presented in sections 2 through 6 above are integrated into this outline. A good annotated outline is an essential step for an efficient development code reform project. It helps staff and citizens visualize an end goal that is clearly easier to use than the current system, and it helps organize internal thinking about how to coordinate material and remove inconsistencies. Simply organizing the topics to be reformed allows staff to focus on recommended improvements in specific areas and allows the formation of stakeholder or working groups for targeted issues and groups of issues. Cities often revise a draft annotated outline a few times before adopting one for use, and changes to the annotated outline are not uncommon in the drafting process. However, those changes usually affect the organization of smaller subsections, and the "backbone" of the structure seldom changes once drafting begins. In this case, we recommend that a revised Lake Oswego CDC integrate materials from the following chapters of the current code: o Chapter 50: Community Development Code o Article 45:15: Fences o Chapter 57: Solar Access o Chapter 58: Historic Preservation We do not recommend that the revised Lake Oswego CDC incorporate the content of Chapters 38 (Utilities) or 42 (Streets and Sidewalks), because they address urban management more than urban development. They describe standards that the city uses primarily for its public improvements and procedures that it uses to manage, maintain, and find those improvements. In order to keep development codes aimed at their primary audience — private property and property owners — most cities do not include these provisions in their development codes. In addition, in response to legal concerns, we are not recommending that the revised CDC incorporate the content of Chapters 47 (Signs) or 55 (Trees). Clarion often recommends that stand-alone tree ordinances be integrated into the main land development code because requirements for tree preservation can significantly affect house and site design and often need to be addressed concurrently with all the other rules that affect the location of development on a property. Similarly, we often recommend that separate sign ordinances be integrated into a unified development code so that all requirements affecting the development of land are in one place. In this case, however, the Deputy City Attorney has raised valid concerns about why the city does not want these regulations treated as "land use regulations" under Oregon law. Other states have similar legal issues that lead some development regulations to be kept separate from the primary development code. Lake Oswego, Oregon, CDC Audit July 2010 Page 44 Annotated Outline There is one caveat to the proposed list of included materials above — historic preservation. Current historic preservation regulations in most cities are based on very old model standards issued by state agencies. Many cities have a separate group to deal with historic preservation (like, Lake Oswego's Historic Resources Advisory Board). These review bodies are often very familiar with the model regulations in their areas and are reluctant to see them changed. It is important to remember, however, that the models themselves are often very old and poorly organized, and the same logic that drives the revision of a development code suggests that they be reorganized for clarity. We believe that incorporating historic preservation standards and procedures into a CDC strengthens public understanding that the consideration of historic resources is part of the overall development review process of a city — not an isolated sideshow. We are aware of no case in which a development decision was challenged or a city incurred liability because its historic preservation were incorporated into an integrated approach rather than kept in a free-standing and familiar -looking standard ordinance. For all those reasons, the following outline includes historic preservation, but it can be left as an independent chapter of the municipal CDC if necessary. Article 1. General Provisions Every development code needs an introductory article containing basic information related to the adoption of the CDC as a legal document, and citing the city's legal authority for the regulations it adopts. In this case, the article would include: 1.1 Title and Purpose Carried over from 50.01. 1.2 Authority Carried over from 50.01, but expanded to include sources of authority for current Article 45.15 and Chapters 57 and 58, if any. 1.3 Applicability Carried over from 50.08. 1.4 Zoning Designations, Boundaries, and Maps Carried over from 50.05. PROPOSED CDC STRUCTURE Article 1. General Provisions Article 2. Base Zoning Districts Article 3. Overlay Zoning Districts Article 4. Use Regulations and Conditions Article 5. Dimensional Standards Article 6. Sustainable Development Standards Article 7. Review and Approval Procedures Article 8. Variance and Adjustments Article 9. Enforcement and Penalties Article 10. Definitions and Rules of Lake Oswego. Oregon, CDC Audit Jul- 2010 Pa -e 45. Annotated Outline 1.5 Authority to Interpret CDC and Zoning Map This is a new section clarifying that the City Manager (or another designated city official) has authority to interpret the meaning of the CDC, whether a proposed land use is included in a listed land use in the CDC, and the location of disputed zone district boundaries. 1.6 Non -conforming Lots, Structures, Uses, and Signs This section would carry over the provisions of 50.70 (Non -Conforming Uses) but should update and revise those provisions to provide more detail. Although 50.70 only dates from 2002, it does not cover many important topics regarding non -conformities. For example, it does not clearly distinguish between the five common types of non -conformities, namely (1) lots, (2) structures, (3) uses, (4) site features (for example, non -conforming parking) and (5) signs. The content of this section needs to be significantly expanded. If some types of non -conformities are routinely ignored, the text should exclude them from the definitions of non -conformities. In many CDCs, this topic gets its own chapter, because the issue of enforcing (or ignoring) non -conformities is a contentious issue. We are not aware of this being a contentious issue in Lake Oswego, so it has been grouped with other general provisions explaining the applicability of the CDC. However, this section could be moved to Article 9 (Enforcement and Penalties) if the city prefers that structure. Article 2. Base Zoning Districts This section would list all of the base zoning districts available in Lake Oswego in a more organized and consistent manner than the current CDC. Each section would include a purpose statement and any development standards unique to that zone district, but would not include a list of permitted or conditional uses. Those would be organized into a master permitted use table in Article 4 below. Similarly, the dimensional standards for each base district would not appear here, but would appear in a set of dimensional tables in Article 5. The menu of zoning districts would be changed in only minor ways, at least until the city completes the review of this issue suggested in Section 6 of this Audit. The names of some districts would be changed to better convey their place in the density spectrum to CDC readers. Material would be organized as follows. 2.1 Residential Districts These districts would be slightly reorganized to form a single spectrum based on density — with the lowest density zoning districts listed first (which is the convention in most development codes), and all using the `R" designator. Lake Oswego, Oregon, CDC Audit July 2010 Page 46 Annotated Outline o Residential - Low Density Zones R-7.5, R-10, and R-15 zones carried over from 50.08. o Residential- Medium Density Zones R-6 (First Addition), R-5, and Old Town Design districts carried over from 50.06, 50.07, and 50.09. DD should be renamed R -D or R -5D to use the `R" designator and better convey the character of the district, and the Old Town Design District should be merged with the newly renamed district because they cover the same area. o Residential - High Density Zones WR, R-3, R-2, and R-0 zones carried over from 50.06. WR should be renamed R -W for consistency in the use of the `R" designator. 2.2 Commercial/Mixed Use Zones Lake Oswego has a relatively large number of commercial zone districts for a city its size. Cities as large as Milwaukee, Minneapolis, Portland, and Vancouver use between 7 and 9 districts — about the same as Lake Oswego. We recommend some consolidations in order to simplify the basic structure of the CDC. The purpose statements of these districts should clarify that they allow both commercial and residential development, and should clarify the intended scale and character of that development. Reducing unnecessary separation of commercial and residential uses in these areas is a significant step in reducing carbon dioxide emissions and promoting sustainability. o Neighborhood Commercial -Mixed Use Carried over from 50.11. o General Commercial -Mixed Use Carried over from 50.11. o Highway Commercial -Mined Use This zone should carry over and consolidate the provisions of the existing Highway Commercial and Mixed Commerce Zones from 50.11. o Campus Office -Mixed Use This zone should carry over and consolidate the provisions of the existing Office Campus and Campus Research and Development Zones from 50.11. o East End Commercial -Mixed Use Carried over from 50.11. o West Lake Grove Commercial -Mixed Use Carried over from 50.11. Lake Osm (-o. Oreami. CDC .Audit Jule 2010 Pace 47 Annotated Outline 2.3 Special Purpose Zones As with commercial zones, few changes are needed in this area (at least until the city completes its policy review of this area). The number of special purpose zones is reasonable for a city of Lake Oswego Is size and character. Grouping the zones this way gives the city a clear location to place specialized zone districts if some unique zones need to be added in the future. o Campus Institutional Zone Carried over from 50.12. o Industrial Zone Carried over from 50.13. o Industrial Park Zone Carried over from 50.13. o Public Functions Zone Carried over from 50.13.A. o Park and Natural Area Zone Carried over from 50.13. B. Article 3. Overlay Districts Overlay districts should be grouped together and reordered to match the general flow of the base districts (residential - then commercial/ mixed use - then special purpose) to improve understandability for CDC readers. The current structure of overlay districts is somewhat confusing, and some overlay districts seem to have been created to implement fairly minor changes from the underlying zoning, so some simplification may be possible. The number of overlay districts is rather high for a city of Lake Oswego's size and character, but three (Greenway Management Stream Corridor/Wetland, and Tree Grove) of the nine districts listed below may be required for compliance with state law. Material would be organized as follows. 3.1 Evergreen R-7.5 Overlay District Carried over from 50.08A. This is a very simple district with relatively minor changes to basic dimensional standards. It may be possible to reflect these differences in the dimensional standards of Article 6 without the need for a separate overlay. 3.2 Downtown Redevelopment District Carried over from 50.65. Lake Oswego, Oregon, CDC Audit July 2010 pace 48 Annotated Outline 3.3 West Lake Grove Design District Simplified from 50.67. Although these standards were adopted relatively recently, they are among the most complex in the CDC and contribute significantly to the perception that the city's land use regulations are more complex than they need to be. These standards look like an effort to micro - manage a complex development area at a level of detail that is rarely possible to achieve given changing land uses, building technology, and real estate markets. The standards themselves are wordy and appear to have substantial overlap with other substantive standards in the CDC. They appear to have been drafted as a freestanding chapter with little effort to coordinate the content with general city standards and terminology. In several instances they seem to use different words to say the same thing that appears elsewhere in the CDC. Landscaping, tree, and lighting standards, in particular, should be consolidated with general standards on those topics in Article 6 if possible. 3.4 Lake Grove Village Center Overlay District Simplified from 50.11A. Most of our comments on the West Lake Grove Design District apply here as well. The standards are very complex and may represent over -management of a complex development area. Some of the material in these standards probably belongs as design guidance outside the CDC rather than regulations. This is an area where significant simplification may be possible 3.5 Greenway Management Overlay District Carried over from 50.15. 3.6 Stream Corridor/Wetland Overlay District Carried over from 50.16, but with Resource Conservation and Resource Protection provisions separated into two separate overlay districts and renamed to clearly communicate the purpose of the district. While the current RP and RC districts relate to Oregon's statewide Goal 5 and use terminology related to that Goal, the terms Resource Conservation and Resource Protection are fairly opaque to citizen readers unfamiliar with Oregon's unique growth management system. Burying them in a Sensitive Lands Overlay adds a layer of opacity, since there are several types of sensitive lands other than streams, wetlands, and trees. As noted earlier, this is a topic where there is some dissatisfaction with Lake Oswego's current regulations. There is also confusion as to which parts of those regulations are required for consistency with Oregon state law and Metro requirements and which are not. The outcome of the Second Look Task Force review of these issues should be reflected in this section. Lake Oswego.. Oregon, CDC Audit July 2010 Page 49 Annotated Outline 3.7 Tree Grove Overlay District Carried over from 50.16. See the discussion of the Stream Corridor/Wetland Overlay above. Current 50.16 is poorly organized and probably needs to be pulled apart and procedural matters relocated to Article 7 to better integrate them with other procedures and to avoid the need for repetition in these two related overlay districts. Recommendations from the Second Look Task Force related to this issue should be reflected in revisions to this overlay district. 3.8 Flood Management Area Overlay District Carried over from 50.44. 3.9 Planned Development Overlay Carried over from 50. 17, with revisions for clarification. This district is very narrowly drafted for a district of its type, and appears to be only usable in connection with the subdivision process. It may be possible to merge these provisions into the land division procedures in Article 7, and if so there may not be a need for this overlay district. Article 4. Use Regulations and Conditions In many cities, a development code reform project is driven by dissatisfaction with the list of permitted uses available in the city and the zone districts where various uses are permitted. That does not appear to be the case in Lake Oswego. Few survey respondents and interviewees expressed dissatisfaction with the city's regulation of specific land uses or highlighted this topic as an area where significant changes are needed. We attribute this to the fact that Lake Oswego is a predominantly residential city with a limited number of commercial/mixed use areas, and most of those commercial/mixed use areas are generally healthy. While significant substantive reform of permitted and conditional uses may not be necessary, this is an area where the CDC can be simplified. Instead of repeating lists of permitted and conditional uses in each individual zone district, those uses should be organized into a single permitted use table that covers all zone districts in the city. In addition, uses should be organized and grouped together in clear and intuitive categories. Not only does this significantly reduce repetition and the length of the CDC, but it often uncovers unintentional differences between the wording and conditions on specific uses that have crept into the CDC over time. Often, simply assembling a use table highlights inconsistent treatment of uses in similar districts that the city needs to resolve. Using clear use categories and groupings also makes it easier to insert new uses in the proper place in the future, to quickly check that the proposed addition of that use in different zone districts is logical, and that it does not differ from the treatment of similar uses in unreasonable ways. This chapter should be organized as follows: Lake Oswego, Oregon, CDC Audit July 2010 Page 50 DEFECTS IN ORIGINAL DOCUMENT Annotated Outline 4.1 Introduction to the Permitted Use Table This introductory section should explain the organization and structure of the permitted use table and the abbreviations used in the table. 4.2 Permitted Use Table The core of this chapter is the permitted use table itself, which lists all of the zone districts in the city in vertical columns and all of the possible land uses in the city down the left hand column. Each "cell" of the table then indicates whether the use is a permitted, conditionally permitted, or not permitted in a specific zone district. The content of this table would be derived from the individual lists of permitted and conditional uses in each zone district, and would incorporate the content of 50.69 (Conditional Uses) and 50.14 (Accessory and Temporary Uses). Importantly, the right hand column of the table lists any "use -specific" standards applicable to that land use — for example, special standards that apply only to gas stations or to bed and breakfast establishments. A partial example of a permitted use table from another community is shown in Figure 7, and a second example is shown in Appendix F. Figure 7: Sample partial permitted use table 4.3 Use -Specific Standards This section should include all portions of the current CDC, Section 45.15, and Chapters 57 and 58 that impose special conditions or requirements on specific land uses. Examples of specific conditions include use -specific hours of operation, design requirements, limitations on size/scale, or buffering or landscaping requirements. This section should incorporate materials from 50.30 (Special Requirements for Type of Facility), 50.48 (Manufactured Lake Oswt-o, Oregon, CDC Audit ,JLII\ 2010 Page 51 Annotated Outline Homes), and 50.22.040 (Rooftop Decks) among others. As noted above, these should be cross-referenced in the right hand column of the permitted use table. Use -specific standards apply to both permitted and conditional uses without the need for separate review or approval of those conditions. The use -specific standard approach avoids the need to insert substantive standards in the definitions of land uses, which is a bad practice. If substantive standards (for example, hours of operation or size limits) are included in definitions, then each time the city wants to adopt a new set of conditions it needs to adopt a new and slightly different definition for essentially the same use. Separating use -specific standards allows definitions to be what they should be — plain English definitions of uses and development terms. One subsection of the use -specific standards would contain standards related to accessory uses and structures, and a final section should consolidate conditions related to temporary uses and structures. Article 5. Dimensional Standards Much of the criticism of the current CDC and related ordinances centers on the complexity of Lake Oswego's development standards and the perception that standards in different sections of the CDC may not be consistent with each other. This section would bring together all of the city standards that address "how big" a lot or building needs to be or can be — including but not limited to lot size and shape requirements, maximum building heights, required setbacks, front and side bulk planes, and the like. The issue of building size in relation to lot size and constraints is a key point of contention in the city (as evidenced by the creation of the infill standards and then the RID process to adjust those standards). Collecting all dimensional requirements in one section of the new CDC should provide a clearer Picture of what sizes of homes and non-residential buildings are permitted. If changes to those standards are made in the future, they can be accomplished through amendments to this article rather than through scattered amendments to different zone districts. 5.1 Dimensional Table As with permitted uses, the revised CDC should consolidate as many dimensional standards as possible into a dimensional table that covers all the zone districts in the city. Where unique or complex rules apply, those should be cross-reference from the table to a section of text following the table. An example of part of a dimensional table from another community is shown in Figure 8. Lake Oswego, Oregon, CDC Audit July 2010 Page 52 DEFECTS IN ORIGINAL DOCUMENT t Figure S: Sample partial dimensional standard table A I R -T I R-1 I R-2 I R-3 Rocirionfial Annotated Outline R-31) I R -TN I RMF -1 I RMF -2 Min. Area Residential Greater of Greater of 5,000 Lot 1 acre 14,500 10,000 7,200 = 3,500/DU; 6,000 sf. 4,200 sf./ 5,000 sf. sf. Or 1,000 Size sf. sf. sf. Other = DU Or 2,000 sf./DU 6,000 sf sf./DU Width at Row House Row House = 24 Setback Line 150 ft. 80 ft. 65 ft. 60 ft. 45 ft. 50 ft. 30 ft. = 24 ft. Other = 30 ft.; ft. Other = 30 ft. Frontage 50 ft. 25 ft. 30 ft. 0 ft. 0 ft. Min. Front 25 ft 25 ft. up to 3 Yard 35 ft. 30 ft. 15 ft. 25 ft. story Size 50 ft. over 3 story Interior Single- ingle 15 ft. up to Side 15 ft./ 10 ft/ family= 5 ft./ 5 ft./mily & 3 ft./ 3 story 30 ft 20 ft 5 ft./14 14 ft. 14 ft. J2-family,= 8 ft. 30 ft. over15 ft. up to 3 ft t/14 ft. 3 story story 30 ft. 3 Comer 25 ft. 20 ft. 15 ft. 10 ft. 15 ft. over story Side Rear 25 ft. up to 3 35 ft. 30 ft. 25 ft. 10 ft. 25 ft. story 50 ft. over 3 story The content of this section should be drawn primarily from the individual zone district chapters of the current CDC. In addition, the Lake Oswego Setbacks in 50.22.030, the Special Street Setbacks found in 50.22.035, and the residential density bonuses in current 50.06.030 and 50.08.020 should also appear in this section and should be cross-referenced to the dimensional table. A sample graphic from a waterfront setback regulation is shown in Figure 9 5.2 Exceptions Table Figure 9: Sample waterfront setback graphic In addition, we recommend that this section include a comprehensive list of all exceptions to those standards and encroachments into setbacks and height limits that do not require individual review and approval. The core of this subsection would be the content of 50.22, but there may be others in the related regulations. In the process of consolidating these lists, many most cities discover that they need to be updated to address new sustainability structures and equipment such as rainbarrels, raingardens, lightshelves, and solar, wind, and geothermal energy equipment. An example of a permitted encroachments table from another community is shown in Figure 10. Lake Osxceao. Oreaon. CI)C Audit ,Juin- 2010 Daae 5J Annotated Outline Figure lo: Sample partial encroachment table TABLE 5- 7: Permitted Projections Features Zoning District - Encroachments Permitted Front Yard Side Yard Rear Yard Use -Designation Building Elements Alcoves, bay A Max. depth 5 feet windows, vestibules, and RMF District and multi- family uses in C1, C2, Max. depth = 5 ft. similar C3, C4 q' y y Max. floor area = 50 s ft. in an and additions Max. depth - 2 ft; creating interior floor All Others Max. depth = 5 ft; Not within 1 ft of Max. depth = 5 ft area, limited to Maxi. floor area = property line; Max. floor area = 50 50 sf Max. floor area = sf one storey 20 sf Balcony RRSRR2, Rl, R2 Not permitted for Not permitted for required under , Districts and Single- and new construction; new construction; a Fire Two -Family Uses in Cl, Those existing on Those existing on Max. depth = 4 ft; Protection C2, C3, C4, or CMU effective date of effective date of Max. area = 48 sf By-law; Districts this By-law may be this By-law may be unenclosed fire replaced replaced RMF District and multi Max. depth = 4 ft escape family uses in Cl, C2, Max. area = 48 sq ft C3, C4 or CMU Districts Other Uses in Ci, C2, Not permitted Max. depth = 2 ft Max. depth = 5 ft; C3, C4, CMU Districts Max. area = 50 sf Article 6. Sustainable Development Standards This section of the CDC should consolidate all substantive standards that apply to new development and redevelopment other than the permitted dimensions of lots, buildings, and structures. It should contain all those standards that answer the question "how good does development have to be", rather than "how big can it be" or "how can the building be used". The content of this section should be organized into the headings shown below, which will assist the city in coordinating standards with each other and with new standards on similar topics when the CDC is amended in the future. More than any other chapter of the CDC, this chapter requires good graphics to explain visually the intent of different development standards. Many of those graphics can be moved from the current Appendix, but new ones will be needed as well. We recommend that the content of each of these sections include a purpose statement that explains how it relates to the sustainability goals of the city, and that new sustainability standards or incentives be added to the substantive sections listed below. An alternative approach is to create a separate section of this Article titled "sustainability". However, in our experience many of the standards and incentives sometimes grouped in sustainability sections overlap other sections of the CDC. For example, a listing of green building features overlaps the topic of the Building Design section. So a separate sustainability section, while giving more visibility to this important topic, sometimes complicates administration because applicants have to look in two different places for similar standards. Whenever similar materials are covered in two different portions of the CDC the likelihood of inconsistencies and confusion increases. We therefore recommend that sustainability Lake Oswego, Oregon, CDC Audit July 2010 Page 54 Annotated Outline incentives and regulations be built into each of the substantive sections below rather than being given their own section. 6.1 6.2 6.3 6.5 Geologic Hazards Carrying over content from 50.43 (Weak Foundation Soils), 50.43 (Hillside Protection), 50.40 and 50.41 (Drainage Standards). All three of these chapters are dated and in need of revision to incorporate more recent approaches to these key environmental issues. In addition, Chapter 52 (Erosion Control) will be cross-referenced to alert readers to other relevant standards, although that chapter will not be incorporated into the revised CDC. See Figure 11 for protection. Figure 11: Sample Retaining Wall Standards a sample graphic related to hillside Circulation and Connectivity Carrying over content from 50.57 (Access), 50.58 and 50.59 (On-site Circulation), 50.60 (Local Street Connectivity), and 50.56 (Transit System). Landscaping and Site Design Carrying over content from 50.47 (Landscaping, Screening, and Buffering), 50.63 (Lighting), 50.21 (Vision Clearance), 30.20 (Flag Lots), and the all of Article 45.15 (Fences) except the definitions in 45.15.015, variance provisions in 45.15.012, the procedures in 45.15.035, and the maintenance provisions in 45.15.030, each of which is integrated into the articles that follow. Park and Open Space Contributions Carried over from 50.46. Solar Access This section should integrate the substantive requirements for solar protection from Chapter 57 (Solar Access), including provisions addressing applicability, exemptions, design standards and the solar balance point. The regulations in Chapter 57 are complex, however, and should be reviewed based on evolving best practices that have emerged since these controls were first adopted in 1974 and then amended in 1988. The provisions of 57.04.030 Lake Os.%eao, Oregon, CDC Audit ,1uh- 2010 Page 55 6.7 Antiotated Outline allowing adjustments to design standards should be grouped with other adjustment mechanisms in Article 8. Building Design This section will carry over the content of 50.45, as well as any general building design standards (other than basic height and setback standards covered in the Dimensional Standards section) embedded in the current base zone districts. The current CDC and related regulations contain several de facto building design regulations that are not labeled as such. By identifying those constraints on building form and grouping them in this section, potential consistencies can be identified, and residents and builders can be more confident that they will not later discover hidden provisions that require expensive building redesign. That content may need to be revised to better coordinate with the dimensional standards in Article 5. In addition, more detailed cross referencing to overlay districts that have additional building design standards is needed. New sustainability standards related to the physical design of the building (light shelves, green roofs, etc.) could be added to this section. See Figure 12 for a sample building design graphic. Figure 12: Example of Height Compatibility Standard •■ ,. =�=sem nu m' a �� n ,�, „ ,� „ j - - - _ We also recommend that Lake Oswego reorganize the existing building design regulations into separate subcategories addressing residential, commercial/ mixed use/ institutional, industrial, and parking structure building types. Because the residential design standards can be modified through the RID process, a cross-reference to that section of the revised CDC should appear in this section. Parking Carrying over content from 50.55 (Parking). Historic Preservation This section will carry over and integrate the substantive (but not procedural) provisions of Chapter 58 (Historic Preservation), including Lake Oswego, Oregon, CDC Audit July 2010 Page 56 Annotated Outline 58.02.010 (Purpose), 020 (Scope and Compliance), 025 (Authority), 025 (Landmarks Designation List), and 030 (Exemptions). 6.9 Utilities Carrying over content of 50.64 (Utilities). 6.10 Maintenance and Operation This new section would include all provisions of the CDC and related ordinances addressing how property and improvements need to be maintained or operated after construction. Current provisions of 50.47.020 on landscaping maintenance and 45.15.050 on fence maintenance should appear in this section. In addition, these sections often contain standards from other sections of municipal codes specifying acceptable levels of noise, odor, vibration, glare, smoke, electromagnetic radiation, hazardous materials, etc. When future CDC amendments address how properties, structures, or sites are to be maintained over time (rather than how they are to be constructed initially), those provisions would be added to this section. Article 7. Review and Approval Procedures Lake Oswego's application review and approval procedures drew more negative comments from more quarters than even the complex development standards listed in Article 6. In addition to perceptions that the various review processes are not well coordinated, there is a perception that the criteria for decision making are too vague and subjective, feeding the need for regular interpretations. In addition, the procedures themselves are poorly organize and provide few clues for new readers to find what procedure will apply to their situation (or their neighbor's situation). This is an area of the CDC that would benefit greatly from improved graphics. The two most helpful improvements would be a master table summarizing each type of application and approval, who reviews the application, who makes the decision, who hears the appeal, whether there is a hearing required, and cross-referencing the section of the CDC describing that procedure in detail. A sample of a "Procedures Table" from another jurisdiction is shown below in Section 7.1. Because the issue of variations and adjustments to development standards is controversial in Lake Oswego, we suggest that those be addressed separately in Article 9. Normally, we suggest including variance and adjustment processes in a procedures chapter of the development code, but in this case collecting those provisions in a single Article may help the public better understand the various options for adjusting development standards. The creation of a procedures table will be instrumental in the much harder work of simplifying and consolidating the large number of procedures (and variations of procedures) used by the city. Once the existing procedures are organized into a table Labe Oswego, Oregon, CDC Audit Jul-, 2010 Page 57 Annotated Outline like the one shown below, it becomes easier to see similarities and points of possible consolidation. As noted earlier, the basic structure of approvals in Lake Oswego — ministerial, minor, or major — is simple in concept, but its administration has apparently been modified by internal practices or informal rules of administration so that at least some members of the public are unclear about the basic structure of the decision making system. This chapter will be key to improving that situation. The material in Article 8 could be organized as follows. 7.1 Summary Procedures Table This section should contain a summary table such as the one described above, clearly listing each type of decision covered by each specific review and approval process. Part of a sample procedures table from another jurisdiction is shown in Figure 13. Figure 13: Sample partial procedures table TABLE 14-202: PROCEDURES SUMMARY TABLE R = Review D =Decision A= Appeal N = Newspaper Notice S =Sign Notice M = Mail Noticea' c 0 .a c m4.1 .a a� = C .Q �, a a Review, Decision, o o H y E = o od J m N o tM o_ = y f0 a U 0 Type of Application Plan Adoption N, W D Zoning Amendment Map Amendment S, W ✓ ✓ R D A Text Amendment N, W ✓ R D A to Plan of -Development Amendments- - - ------------------------------------------------- -------------------------------M----inor-------Amendme--------nts --- Major Amendments --------- ------ --- W S, W ------------ ------------ R R -------------------------------- ------------ -- D ---- ----- D A ------ A ✓ ✓ Conditional Use Approval S ✓ R D A Regulated Use Approval S ✓ R D A Design Review W R R Subdivision Plat ✓ R D A Designation of Historic District or Structure S, N, M ✓ ✓ D R A Construction in Historic District or Alteration/Demolition f Historic rc D R A Zoning Variance S R D A Administrative Permits D A Lake Oswego, Oregon, CDC Audit July 3010 Page 58 Annotated Outline 7.2 List of Decision -Makers This section should identify and describe the responsibilities of various groups that make development decisions in Lake Oswego, such as the City Manager, Development Review Commission, Planning Commission, Historic Resources Advisory Board, Sustainability Advisory Committee, and the like. In our experience, many administrators take the roles of these groups for granted, while many citizens do not have even a basic understanding of "who's who" in development review. The current CDC relies heavily on the term "hearing body" to cover several possible decision -makers, but that term is fairly meaningless to citizen readers, and it would be clearer to avoid the use of that umbrella term and use the names of the appropriate bodies involved in each procedure. 7.:3 Common Procedures This section should collect from throughout the CDC and the three other ordinances all provisions common to multiple types of development applications. For example, the current chapters contain multiple sections addressing application fees, but those could all be addressed in a single section of the CDC. Doing so would avoid the need to address that topic each time a new zone or process is added to the CDC in the future, and would avoid the inadvertent creation of inconsistencies when new ordinances have to continually reinvent the wheel on these types of supporting clauses. The introduction to this section would cross-reference Chapters 47 (Signs) and 55 (Trees) and remind readers that regulations in those sections also apply to the development and redevelopment of property in the city. This section could include and reorganize the following materials. o Application Carrying over content from 50.77 (Application Requirements). This section would describe who can apply for various types of approvals and where lists of application materials can be found. We recommend taking lists of individual application requirements out of the CDC and collecting them in an administrative document that can be updated as needs and technology change without the need to amend the CDC. o Fees Carrying over 50.88 (Fees), and 58.02.035 (fees for historic preservation). Rather than putting fees in the CDC, we suggest that this be a reference to the most recent schedule of fees adopted by City Council. o Public Notice This section would collect all material in the CDC and related ordinances regarding what kind of public notice is given, to whom, and the content of the notice in land use decision making. Lake Oswego. Oregon, CDC Audit July- 2010 Page 59 Annotated OLlthile o Hearings Carrying over 50.83 (Hearings Before a Hearing Body) and 50.76 (Development Application Hearing Procedure and Record). o Conditions on Development Carrying over 50.79.040 (Conditions on Approval). o Effect of Decision Carrying over portions of 50.86 addressing the Effect of Approval or Denial of Development Permit. o Improvements and Security Carrying over portions of 50.87.020 addressing Obligation to Construct Public Facilities, Security, Acceptance of Improvements, and 50.87.023 (Failure to Fulfill Obligations, Lien Created). o Certificate of Occupancy Carrying over 50.87 (Certificate of Occupancy). o Appeals Carrying over 50.84 (Filing of Appeals) and the portion of 50.82 addressing appeals of minor development decisions. o Remands Carrying over 50.85 (Remands). o Modification of Development Permits Carrying over the portion of 50.86 addressing Modification of a Development Permit. One criticism of the current CDC is that even small modifications to approved development permits require a fill review of the project and possibly a return trip through the approval process. Most cities include a minor modification process, with defined limits, to avoid the costs and inefficiencies of that approach. 7.4 Specific Review and Approval Procedures This section of the CDC should include a separate sub -section for each distinct type of review and approval recognized by the city. Unlike the current CDC, the order should start with the most common and simplest type of approval, so that readers unfamiliar with land use or development do not have to read through information about relatively complex procedures before finding that the one they are interested in is relatively simple. This section would also include procedures for land divisions that are under the control of the city — which is currently missing from both the CDC and related provisions. Each procedure should be accompanied by a simple flowchart so the public can visualize the steps in each process and the Lake Oswego, Oregon, CDC Audit July 2010 Page 60 Annotated Outline relative complexity of the procedure. A sample flowchart from another community is shown in Figure 14. The content of this section could be organized as follows. Types of Review Procedures Carrying over those portions of 50.79 describing Types of Development Review, as well as a table incorporating the provisions of 50.79.020, o3o, and 040 (Ministerial, Minor, and Major Development Classifications). The description of what types of decisions follow each process should precede the description of the individual processes. For example, the approval of a secondary dwelling unit would appear in the table as a minor development decision. o Exempt Development Carrying over 50.79.005. Figure 14: Sample flowchart CDC Text or Zoning Map Amendment Preapplication Conf. Staff Review Planning Commission Review and Public Hearing o Ministerial Development Decisions Carrying over 50.80 (Review of City Council Decision Ministerial Development Applica- tions) and that portion of 50.79 describing the criteria for ministerial development review and approval. ........... ••••••••••••••• This subsection would list all specific Appeal to Courts permits and approvals that are considered using this procedure. That Indicates Public list includes, for example, exterior O Hearing Required modifications to the exterior of single- family detached dwellings and certain lot line adjustments. Specific variations of the standard ministerial process should be described in this section. For example, applications for solar access permits under 57.08 are an example of a slight variation of the ministerial permit process. In order to help citizens understand the nuanced differences between these various processes, each variation should have an associated simple flowchart of the decision process in the margin. Better yet, after comparing all the minor variations of an essentially over-the-counter process, the city may decide that some of them can be collapsed into the general ministerial process. Lake O., eao. Ort—on. CDC Audit July 2010 Pay=e 61 Annotated Outline o Minor Development Decisions Carrying over 50.81 (Review of Minor Development Applications) and that portion of 50.79 describing the criteria for minor development review and approval. It would list all specific permits and approvals that are considered using this procedure, as well as the criteria that are to govern review and decision making for each of those permits and approvals. o Major Development Decisions Carrying over 50.82 (Review of Major Development Applications) and that portion of 50.79 describing the criteria for major development review and approval. This subsection would list all specific permits and approvals that are considered using this procedure, as well as the criteria that are to govern review and decision making for each of those permits and approvals. That list includes an Overall Development Plan and Schedule, so most provisions of 50.71 would be included in this section. Provisions of 50.69 addressing conditional uses would also appear here. As with other forms of approval, variations need to be carefully described within this category. For example, the historic designation provisions in Chapter 58 are variations on this procedure because the decision is made by the HRAB. The many types of decisions regarding historic resources need to be consolidated if possible. In several cases, these very detailed provisions simply articulate different criteria for different types of decisions, rather than a different review and approval procedure. o Legislative Decisions Carrying over 50.75 (Legislative Decisions). Article 8. Variance and Adjustments Because the CDC has been criticized for allowing too many variances and adjustments to adopted development standards, and because there is a perception that those provisions result in unpredictable development decisions, we suggest that Lake Oswego consolidate and then simplify these procedures in a separate Article of the revised CDC. Simply organizing these procedures in one place will help highlight areas of overlap or inconsistency. This structure will also help citizens understand the variance and other adjustment processes and the limits on types of relief that can be approved through each process. Modern development codes address this issue by categorizing adjustments and variations into one of two classes — (1) adjustments that do not require a showing of hardship, but generally require that there be no adverse impacts on surrounding land uses, and (2) traditional variances requiring a showing of hardship. Other procedures that allow development standards to be varied based on review by a decision making body (rather than an administrator) based on planning Lake Oswego, Oregon, CDC Audit July 2010 Page 62 Page Annotated Outline considerations, but not requiring a showing of hardship, should also appear in this section. The resulting spectrum of adjustment mechanisms would be clearer to understand than the current scattered provisions on this topic. The introduction to this section would cross-reference the subsection of Article 5 consolidating all exceptions to development standards that do not require review and approval. Content in this Article would be organized as follows. 8.1 Type 1: Administrative Adjustments This section would carry over the content of 50.68 (Variances) related to Class 1 variances and 47.25 (Fence Variances). 8.2 Type 2: Residential Infill Development (RID) This section would carry forward the contents of 50.72 and recognize this procedure as an intermediate level of review for adjustments to development standards. Since the City Council recently reaffirmed its desire to continue the current RID system, it can form the core of a procedure for those cases where review by a group with special expertise (rather than a single city administrator) is required, where the primary consideration is review of a proposed building design in relation to its site and neighbors, and where objective design review criteria are listed but no showing of hardship is necessary. In addition to the RID process, the current regulations already contain other design -based adjustment, for example, in 5o.11A.070 (Lake Grove Village Center Overlay District), 50.07.065 (First Addition Zone), and 57.04.030 (Adjustment of Solar Access Standards). Those provisions allow for an intermediate level of review and adjustment similar in concept to the current RID process. If the city wants to continue the current RID process as a stand-alone process, then the provisions in these three sections can be maintained in their current contexts (for example, solar adjustment language would be found in new Article 6.5 with the rest of the solar development standards — even though they are procedural) with cross-references to those articles inserted here. In the future, however, we believe that the city may want to broaden Type 2 adjustments to include these three types of review - based adjustments (as well as any other review -based adjustments adopted in the future). 8.3 Type 3: Hardship Variances This section would carry over the provisions of 50.68 (Variances) related to Class 2 variances and would retain the current (strict) criteria for hardship variances. As noted above, the concept of a hardship variance is deeply rooted in zoning administration and cities that weaken these standards have trouble upholding the integrity of their design and development standards. Lake OsN%e,o. Oregon, CDC Audit Jules 2010 Page 63 Annotated Outline We recommend that the city uphold its current, strict approach to hardship relief. Article 9. Enforcement and Penalties Article 9 should consolidate all provisions in the CDC and related regulations about what constitutes a violation, how Lake Oswego's land use regulations are enforced, and the penalties for violating the CDC. It should carry forward the content of 50.90 (Enforcement of Permits and Penalties), those provisions of 50.86 addressing revocations of permits, 45.15.025 (fence regulation enforcement), 57.08.030 (solar access permit enforcement) and 58.02.040 through 070 (historic preservation violations, enforcement, abatement, and remedies). It may also include provisions from 50.87.010 (Preparation and Submittal of Final Plan or Plat) and/or 50.87.015 (Review of the Final Plan or Plat, Filing Requirements), which sound like subdivision procedures but appear to be used as general enforcement tools. These materials would be integrated and organized as follows. 9.1 Violations This section should contain a list of all actions that violate the CDC. 9.2 Enforcement This section should include a list of all enforcement tools used by the city or authorized by state law in response to violations of the CDC. 9.3 Penalties This section would include a list of penalties for different violations of the CDC. Article lo. Definitions and Rules of Measurement Article 10 would consolidate definitions from all sections of the CDC and related ordinance that contain definitions, rules of construction, or rules of interpretation. Including: o 50.02 Definitions; o 50.04 Rules of Interpretation; o 45.15.015 Definitions (Fences); o 57.02 Definitions (Solar Access); and o 58.02.015 Definitions (Historic Preservation). This article could be organized as follows: 10.1 Rules of Construction This section should document both formal and informal practices that Lake Oswego uses in the interpretation of words and phrases in CDC. In addition, it should cross-reference any administrative manuals that contain additional Lake Oswego, Oregon, CDC Audit July 2010 Page 64 Conclusion detail on specific topics. Clearly stated rules of construction should reduce the need for interpretations as well. However, because all development codes involve some level of interpretation on a day-to-day basis, the real key to improvements in this area is (1) to post all interpretations on the city's web site promptly, and (2) to require that staff, and the DRC make decisions consistent with past interpretations unless or until they are formally changed by the city and the change is posted on the web site. 10.2 Rules of Measurement This section would consolidate all materials related to how dimensions are measured, and should cross-reference Article 9.1 regarding exceptions to those measurements that do not need review or approval. 10.3 Definitions As noted earlier, this section should consolidate all definitions in the CDC alphabetically, and should include illustrations wherever helpful. S. Conclusion We hope that the information presented in sections 1 through 7 of this Audit paints a clear picture of how the Lake Oswego CDC and related regulations could be integrated and reorganized to be clearer and more user friendly, as well as some key areas where the current regulations could be simplified and made more effective. Collectively, they address what the city can do to improve CDC performance. The next question is how to move forward with CDC reform, and the final question is what can be done to avoid the tendency for the CDC to become more complex in the future. This conclusion addresses those two issues. 8.1 Next Steps If Lake Oswego decides to move forward with a CDC update effort, we recommend that it consider the following steps. o Finalize the Annotated Outline. Planning Commission refines the Annotated Outline to meet the city's needs, ; and City Council endorses the Annotated Outline. o Two Phase Strategy. Split the work into two phases — with Phase 1 being a CDC reorganization and Phase 2 including substantive changes to the code. That way, debates over substantive changes will not derail a reorganization and integration that will be much appreciated by citizens and stakeholders who use the CDC but do not want to participate in debates over substantive issues. This strategy has been used effectively by many Clarion clients — including Bainbridge Island, Washington, Lathe Osisego, Oregon. CDC audit Jule 2010 Page 65 Conclusion another high quality of life community with a strong environmental ethic and high standards for compatible development. o Appoint a Steering Committee. This should be a group of' 1 o-12 individuals including representatives from city council, the planning commission, the Sustainability Work Group, neighborhood organizations, and developers. The role of this group is to review draft materials and to ensure that the perspectives of their constituencies on the issues of clarity, usability, and organizational (not substantive) changes are reflected in those materials. In addition, and importantly, this group will also resolve questions as to whether a proposed change is "organizational" or "substantive". The line between the two is often unclear. For example, integrating similar provisions often leads to the discovery of arguably inconsistent standards, and while a choice between those standards needs to be made as part of the organizational effort, that choice will have "substantive" impacts. While this issue seems difficult in theory, a functioning Steering Committee can often agree on which standard makes more sense to include in the reorganized CDC without much difficulty. As a second example, code integration efforts often reveal "gaps" in regulations — situations that everyone assumed were addressed but in fact are not addressed — and a balanced Steering Committee can often agree how to plug those gaps while remaining true to the spirit of the current standards. Each such decision should be recorded so that if City Council disagrees with the decisions made by the Steering Committee those can be discussed during the adoption hearings for the revised CDC. o A Three Draft Strategy. Generally comprehensive code revision/ integration projects require about three drafts of the revised document before adoption. The first draft simply integrates and reorganizes material and identifies questions and choices that were made or need to be made in the process. Once the Steering Committee has reviewed and made or endorsed those choices, the second draft is for review by the public. In each case, all changes (i.e. inconsistencies reconciled and gaps filled), should be identified so the public can focus on them in the review process. The final draft incorporates corrections and comments from the public and is ready for formal adoption hearings by the Planning Commission and City Council. o Maintain Momentum by Using a "Parking Lot" for Tough Issues. During the CDC reorganization process, it is likely that some issues that appear small or "technical' when first identified will turn out to involve policy choices that require more analysis. In order to keep the project focus on reorganization and integration, those issues should be "parked" for more focused review during Phase 2 of the process. Lake Oswego, Oregon, CDC Audit July ?010 Page 66 Conclusion o Be Transparent. Use the city's web site to keep the public informed about the two phase process, to post the draft materials, to post the "parking lot" of substantive issues to be reviewed in Phase 2, and to give the public a chance to sign up for e-mail notifications of public review meetings. We believe that the above approach will work whether the city chooses to revise the CDC internally (i.e. using staff resources) or to use a consultant in the process. While some cities (including Boulder, Colorado) have successfully revised their development codes using only staff resources, the city should be aware that this is not a job that can be done in someone's spare time. It requires a significant commitment of staff resources — often the dedication of a middle or senior staff person on a full-time basis for the duration of the effort. Our experience is that internal CDC reform efforts often take longer than consultant -supported efforts simply because (despite the best of intentions) the staff member assigned to do the job is not relieved of their other responsibilities. Even if the city chooses to use a consultant to assist in the work, it is usually necessary to dedicate a seasoned staff member as a project manager and to allow them to devote one-quarter to one-third of their time (often more) to the effort. The assignment and commitment of a good project manager is essential to the success of CDC reform projects. Maintaining transparency and momentum are the keys to most CDC reform efforts. The city must resist efforts by interest groups to insert substantive changes into the reorganization effort, and must resist efforts to delay the drafting process until controversial issues are debated. The public will be involved and will give quality input on the draft if it has confidence that the process will result in a revised CDC within a reasonable period of time and that substantive changes will not be inserted into the document. Losing momentum erodes public confidence and reduces the quality of input received. When code reform projects include both reorganization and substantive changes, Clarion usually recommends dividing the drafting work into "modules" to allow for more focused discussion of key issues. Often, a substantive CDC reform effort divides the drafting into (1) revised zoning districts and permitted uses, (2) revised development standards, and (3) revised procedures and definitions. Once a draft of each module is produced and reviewed by the public, a final draft incorporating all three modules and responses to public comments is produced and discussed. Using a module approach lengthens the code reform timetable, but is often necessary so that citizens and stakeholders can focus on related sets of issues and changes rather than trying to absorb the combined effect of scores or hundreds of changes in a single draft. After an Annotated Outline has been approved, a code reorganization effort can generally produce a final draft ready for formal adoption hearings within 6-12 months if an external consultant is used. If substantive changes are included and the drafting and discussion work is divided into modules a full CDC revision often requires two years (and sometimes longer if key issues require further analysis) to produce a full draft ready for adoption hearings. Lake Oswego. Oregon, CDC Auclit July 2010 Page 67 C011CILIS]'011 8.3 Avoiding "Complexity Creep" If Lake Oswego pursues the CDC reorganization strategy outlined above, it still needs to guard against "complexity creep" — the tendency for development codes to become more complex and internally inconsistent over time. There are two effective strategies to address this issue. The first has already been discussed — a good annotated outline and rational CDC structure. By organizing and consolidating information as shown above (or some variation that better meets the city's needs) it becomes clear where certain types of provisions "belong". When a new idea, or a new type of development, or a new type of regulation is needed, the city should resist the temptation to write a freestanding chapter addressing that issue and then add it as a new last chapter of the CDC. New districts should be addressed in the same way as existing districts, new use regulations should be integrated with other similar use regulations, etc. Having a well -organized code makes it easier for the city to "draft for integration" — that is, to draft future amendments so that they fit in with similar types of regulations. Doing so also helps identify needless complexity before it is adopted — for example, drafting a new definition that is very similar to an existing definition is often necessary, but the similarity is not noticed if definitions are spread over multiple ordinances or sections. The second key to resisting complexity creep is to adopt an annual schedule for amendments to the CDC. Instead of adopting amendments as they are proposed (which some cities do almost monthly), Lake Oswego should adopt and publicize an annual schedule for consideration of amendments. That way, several proposed amendments can be considered for their combined impact before any are adopted, public discussions can focus on their combined impact, and city staff have more time to ensure that the proposed amendments fit into the established structure of the CDC before proponents become committed to a particular version of a proposed amendment. Slowing down and regularizing the CDC amendment process also tends to reduce the number of proposed amendments, because there is more time to discover the possible unintended impacts of ill- conceived amendments before they are adopted. As part of a periodic update program, Lake Oswego could also consider adopting a set of criteria to guide the structure and drafting of future amendments to the CDC. Possible criteria might include the following: 1. Amendments should address an issue that affects many properties or a neighborhood with similar zoning or site characteristics, rather than a site-specific issue that affects only one or a few sites. 2. Amendments should be clearly enforceable by an understood process with a reasonable investment of time and effort, without the need to learn and maintain additional review or enforcement skills, and without complicating the process of applying for and receiving approvals for simple structures and additions. Lake Oswego, Oregon, CDC Audit July 3010 Page 68 Conclusion s. Amendments should use terms that are intuitive, that are understandable to a person with a high school education, and that is not similar (or identical) to other terms used in other contexts within the CDC. 4. Amendments should avoid vague introductory language, should use the fewest words possible to describe the requirement, and should use graphics to convey requirements whenever possible. Lake Os« ego. Oregon. CDC Audit Juh 2010 Page 69 Appendix Materials Appendix Materials A. Summary of Comments On -Line Public Survey B. Buckeye, AZ, Development Code Table of Contents C. Buckeye, AZ, Development Code Text Page Format D. Irving, TX, Development Code, Text and Graphics Page Format E. Duluth, MN, Unified Development Chapter, Graphics Page Format F. Buckeye, AZ, Partial Sample of Permitted Use Table G. Elliott, Better Webbing, Zoning Practice (American Planning Association October 2008. Lake Oswego, Oregon, CDC Audit July 2010 Page 70 Appendix Materials APPENDIX A: Summary of Comments from On-line Public Survey 1 Lack of Clarity The one complaint that nearly all survey respondents agreed on was that the CDC and related regulations are extremely difficult to understand. Some citizens complained that the CDC is so complicated that it is not even worth taking the trouble to read it. This complexity results in nearly everyone, including seasoned professionals, needing to repeatedly consult with planning staff for interpretations of various CDC provisions. City staff, in turn, acknowledged that they are often frustrated by the amount of time they spend explaining the CDC to others and that this time could be better spent on matters of more value to the public if the CDC were simplified. Respondents made the following suggestions to improve clarity. o Write in Plain English: Many respondents said that the CDC needed to be written in plain English and not technical planning or legal terms. o Definitions are Too Vague: The meaning of many defined terms or concepts is not clear. In some cases this is because the definitions use words that themselves need to be defined. Direct links from the text to the definitions might be helpful as well. o Too Much Interpretation: Several respondents perceived that the lack of clarity led to too much interpretation by staff and that staff interpretations were often inconsistent or, in some cases, too restrictive and not fair to the landowner. Frustrating experiences over interpretations have led to mistrust between some members of the public and staff. o Too Many Hidden/Scattered Requirements: A number of respondents were aggravated by the lack of cross-references to other sections of the CDC with related and important requirements or exceptions. The lack of necessary cross- references misleads readers about the rules that control development and can often lead to unwelcome surprises late in the development process. This also makes readers distrust their ability to read the CDC and correctly determine what can or cannot be developed on their property — which again leads to reliance on staff for interpretation. o Need More Graphics and Less Text. The CDC is hard to read because it is mostly unbroken text that does not clearly show a hierarchy of information or importance. The text is dense and intimidating and does not have enough graphics to explain difficult concepts. Providing more white space on the page might help to reduce the sea of words that some readers find difficult. Development Standards Survey respondents focused many of their sharpest criticisms on the substance of various development standards in the CDC and other ordinances. In general, there Lake Oswego, Oregon, CDC Audit Juh- 2010 Pa -e 71 Appendix Materials were concerns that some development standards were onerous, counterproductive, inconsistent with other standards, or not protective enough of the community's character or natural resources. The most common survey comments regarding development standards include the following: o Sensitive Lands Overlay (SLO) standards need to be improved: There was a split of opinion on the SLO, which addresses streams, wetlands, and tree groves. Some respondents felt that the requirements are far too extreme and deny property rights, while others advocated stronger SLO standards and/or better enforcement of the existing standards. In the middle were those who felt that the SLO standards were probably adequate but needed to be clarified and streamlined so that the rules were clear to landowners and applied consistently. c Too Many Exceptions: Another common comment was that there are too many exceptions scattered throughout the CDC and related regulations. Some feel that the exceptions have become more important than the rules or that the rules no longer matter, creating the perception that the city has a way to "allow anything," especially large houses that are incompatible with the neighborhood. For others, the perception was that exceptions give staff a way to inject their own interpretations and biases into the project or to impose requirements that are not listed in the CDC. In both cases, there was dissatisfaction that the high number of complex exceptions empowered staff to make determinations that should more appropriately be established in the text of the CDC itself. At minimum, exceptions need to be better cross-referenced or relocated closer to the standards they modify. o Residential Infill Development (RID) Needs Improvement: Like the SLO comments above, respondents were divided on what they liked and disliked about the RID process and how to improve it. There was strong concern that the RID process was being used (or misused) as a bypass around the variance process to allow large additions that were out of character with the neighborhood and could not have met the standards for a variance. In fact, the issue of residential compatibility was a major theme throughout the survey comments, with much concern focused on the perceived failure of the current regulations to ensure that large new houses and additions are compatible with their surroundings and the character of Lake Oswego. Since this input was received, City Council has completed its review of the RID program and decided that it should be continued with only minor changes. o Tree Regulations Needs Modifications: Another issue that split respondents was the tree protection regulations in Chapter 55. Some felt that the tree code was onerous and prevented people from reasonably developing their property, while others passionately felt that the tree regulations are not doing enough to protect trees or were not being enforced properly. Even those who supported keeping or strengthening the tree ordinance sometimes acknowledged that it should be simplified. Lake Oswego, Oregon, CDC Audit July 2010 pane 7 Appendix Materials o Overlays are Too Complex and Numerous: Although overlay districts received less criticism than the issues mentioned above, a few survey takers strongly felt that overlays were too numerous, complex, and conflicted with other CDC requirements. The Lake Grove Village Overlay was mentioned specifically as in dire need of major simplification. o Development on Steep Slopes Not Well Controlled: A number of survey takers were concerned that the city was allowing over -sized houses on steep lots and that the steep slope regulations are insufficient to protect those slopes. Some of those' respondents also thought that stormwater control on steep parcels was inadequate due to overdevelopment or excessive impervious surfaces on constrained sites. 3 Development Review Procedures Another major group of survey comments focused on the city's development review procedures. Interestingly, complaints about the review process were often linked to problems with the development standards — i.e., because the development standards are often so vague and complex the review process gets bogged down in trying to resolve these deficiencies with staff interpretations and ad-hoc determinations that lead to inconsistent results and erode public confidence in the integrity of the process. Specific comments included the following: o Variance Process Should be Revised: A number of respondents noted that class 1 variances are nearly automatically approved while class 2 variances are nearly never approved. The ease of obtaining a class 1 variance suggests to some that city simply approves (almost) all landowner requests in this area. o Inadequate Notice Regarding Pending Applications: There was substantial concern that, while the original notice to the public was adequate, the public was not notified when major changes were made to development applications during the review process. o Residential Remodeling is Too Difficult or Expensive: Related to the above concerns regarding the RID process, there was a general sentiment that the city seemed to make it more difficult and time-consuming to remodel a house, especially as compared with other communities. They perceived that benefits were not proportionate to the time and money spent on the process. o Lack of Monitoring and Enforcement: Several respondents perceived that the city is unable or unwilling to consistently ensure that landowners comply with the conditions of their approval or properly maintain their projects and operations over the long term. There was particular concern that required SLO mitigation and required landscaping are not being monitored for proper installation and maintenance. Lake Oswego, Oregon, CDC Audit July 2010 Page '43 Appendix Materials APPENDIX B: Buckeye, AZ Development Code Table of Contents gUG KEyC CONTENTS ARTICLE 1: GENERAL PROVISIONS ........................................... _.............................................. 1 1.1. Title and Effective Date..................................................................................................1 1.2. Authority........................................................................................................................1 1.3. Purpose of this Development Code................................................................................ l 1.4. Relationship to General Plan.....................................................»..»..............................1 1.5. Applicability and Jurisdiction........................................................................................2 1.5.1. General Applicability....................................................................._....................................2 1.5.2. Annexed Territory.................................................................................................................2 1.5.3. Application to Public Agencies............................................................................................2 1.5.4. Required Compliance............................................................................................................2 1.6. Official Zoning Map......................................................................................................2 1.6.1. General ..... .......................... ....»..»................ _...................................................................... 2 1.6.2. Interpretation..........................................................................................................................2 1.7. Conflicting Provisions ................... ......... _....... »............................................................ 3 1.7.1. Minimum Requirements...._....................................................................................................3 1.7.2. Conflict with Other Public Laws, Ordinances, Regulations, or Permits ........................3 1.7.3. Conflict with Private Agreements.......................................................................................3 I.S. Transitional Regulations................................................................................................4 1.8.1. Purpose............................................................ ....................................... ..._......................... ...4 1.8.2. Violations Continue......................................................................................_...__.................4 1.8.3. Uses, Structures, and Lots Rendered Conforming .......................... _................................ 4 1.8.4. Uses, Structures, and lots Rendered Nonconforming......................................................4 1.8.5. Processing of Applications Commenced or Approved Under Previous Ordinances 4 1.9. Nonconformifies............................................................................................................7 1.9.1. General Provisions .................. .................. .»..... ........................... ............................... 7 1.9.2. Nonconforming Structures....................................................................................................9 1.9.3. Nonconforming Uses of Structures and Land.................................................................10 1.9.4. Nonconforming lots of Record......................................................................................... 11 1.9.5. Nonconforming Signs ...................... ..... _.................................................... _....................... 11 1.10. Severability..................................................................................................................12 ARTICLE 2: ZONING DISTRICTS............................................................................................... 13 2.1. Districts Established; Zoning Map................................................................................13 2.1.1. Zoning Districts Established .... .......................................................... ..... _.......................... 13 2.1.2. Zoning Map................................................................................................_........................ 14 2.1.3. Relationship to Overlay Zoning Districts........................................................................ 14 2.2. Agricultural District ......................................................................................................14 2.2.1. Agricultural(AG)................................................................................................................. 14 2.3. Residential Districts......................................................................................................14 2.3.1. General Purposes of Residential Districts...................................................................... 14 2.3.2. Single -Family Rural Residential(SF-43).......... _............................................................. 15 2.3.3. Single-Famliy Residential 18(SF-18)............. ............................ ... ............................... 15 2.3.4. Single-Fomily Residential 10(SF-10)............................................................................. 15 2.3.5. Single -Family Residential 6(SF-6).._.._..._..... .............. ........ .................................... 15 2.3.6. Single -Family Residential 3(SF-3)__..... ___... _..... _... ... ............................................. 16 2.3.7. Single -Family Residential 1(SF-1)..................................................................................16 2.3.8. Residential Multi-Fomily 1(MF-1)_... ............... ......_..... .............. ................................ 16 2.3.9. Residential Multi Family 2 (MF-2)................................................................................... 16 2.3.10. Mobile Home/RV Park(MH)............................................................................................ 16 2.4. Mixed -Use Districts........................................................»............................................17 2.4.1. General Purposes of Mixed -Use Districts ................ _................. „................................. 17 2.4.2. Neighborhood Mixed Use (NMU)....__................... ........... .....»... _.............................. 17 Redthnr Arizona I pwelepteettt Mede September 2009 Consolidated Discussion Draft I Page I Lake Oswego, Oregon, CDC Audit July 2010 Page 74 Appendix Materials APPENDIX C: Buckeye, AZ Development Code Text Page Format ARTICLE 8: REVIEW AND APPROVAL PROCEDURES SECTION 8.9 SITE PLAN REVIEW SUBSECTION 8.9.1 PURPOSE 8.9.1. Purpose Bu6KEYi�7 The site plan review process is intended to ensure compliance with the development and design standards of this Development Code and to encourage quality development reflective of the goals, policies, and objectives of the General Plan. For land uses requiring a site plan review, such uses may be established in the Town, and building or land use permits may be issued, only after a site plan showing the proposed development has been approved in accordance with the procedures and requirements of this Section 8.9. 8.9.2. Applicability A. Administrative Site Plan Review The following types of projects may be approved by the Director through the administrative site plan approval process: 1. A single use proposed in a structure that is less than 10,000 square feet in building size for that use, not including a single-family detached dwelling. 2. A combination of uses proposed in a single structure, such as a shopping center or a multi -building development, that is less than 20,000 square feet in building size, not including a single-family detached or duplex dwelling. 3. Antenna co -location on existing tower; non -concealed freestanding towers; and concealed antennae and towers Planning Commission Site Plan Review The following types of projects shall require site plan review by the Planning Commission: 1. Any development, with the exception of single-family detached or duplex dwellings, that exceeds the size threshold for administrative site plan approval and does not meet the threshold for Town Council site plan review. 2. Any administrative site plan referred to the Planning Commission by the Director. Town Council Site Plan Review The following types of projects shall require site plan review by the Planning Commission: 1. A single use/building that is greater than 120,000 square feet. Buckeye, Arizona I Development Code November 2009 Adoption Draft I Page 214 Lake Oswego. Oregon, CDC Audit July 2010 Page 75 DEFECTS IN ORIGINAL DOCUMENT Appenclix Materials APPENDIX D: Irving, TX Development Code, Text and Graphic Page Format SECTION 2.4: NON-RESIDENTIAL AND OTHER DISTRICTS t + SUBSECTION 2.4.2: LOW-RISE OFFICE (1,0) 2.4.2. LOW-RISE OFFICE (LO) The LO district is established to provide areas primarily for high- quality, low-rise office development that will be compatible with nearby residential uses and that will protect these office developments from potential disruption by Incompatible commercial and industrial uses. Secondary commercial uses whose primary purpose is to serve the businesses and employees of the district are allowed. Figure 1.4.2-B: LO Example Lot Configuration lot area: 60000 of min. height: 35' max. let vtldatt 60' (nine Bide aetbads: 10' 1QVIN6 Lot area, min. (sq h) 6,000 Lot width, min 00 60 Lot depth, min. (h) 100 Let coverage lbuildings), max. 1%) 40 Lot coverage (total Impervious surfaces), max. (%) 70 Front (h) 30 Side (h) 10 Rear (hi 15 Principal building height, max. (h) ' 35 Accessory building height, max. (ft) 35 Distance between; '*'h.d b0dinas, min. (h1 12 loovers" (bisildngs): 40% max. coveraga (total impervious sxsrfac"y 70% max. /t—'t gear setback: IS' min. City of Irving I uniflod Development Cade Public Review Draft — December 20091 Page 21 Or/ lot depth: 100' min. (let depth greater than.100' shown) Lake Oswego, Oregon, CDC Audit July ?010 Page 76 Appendix Materials APPENDIX E: Duluth, MN, Unified Development Chapter, Graphic Page Format OULL4 H 50-22.8 Main Street Building I Figuro tso-zz.e(A): Building Stting. A 50-22 Building Form Standards 50-22.6 Main Street Building I A. Building Biting a. Haigw 1. Stmt Feoudge Minimum Overall Height I story Multiple Principal Buildings Not permitted 2.5 atones 137 .long East Maximum Overall Height Superior,3 stories /45' along© Front Build-wZone Covmge B5%;Mmav exclude penotmed dnvauvy Land—Road Ground Story: Minimum Height 15' Occupation of Corner Required 0 Maximum Height' 24' Front BM 0' to 15'Q Upper ST, ries: Minimum Height 9' Comer 9=0' to 15' a 2. Bea illahle Area Masmx run Height l4' Side Yard Setback 0' Q Notes. ' If 20' or more in height, ground story shall count as 2 scoria Rear Yard Setback 5' towards marimum building height Minimum Lot Width 30' C. l�K Minimum Landscape Area 10% Ground Story Refer to Section 3, Permitted Uses3. Pad=g Lot, Loading & Acoreas Parking Lot lo Rear}ard Q Upper Story spto Section 3. Penmaed acation Loading Facility Location Rear building fapdc Pettrnitted in dee rear of the I driveway pertnimcd per �ry� Parking within Building ground floor and fully in any {� frontage: 2 driveways may he other Boo: Acus permitted through Ispecial 30' depth space require! an "mptionl if fronngc exceeds Occupied Sparc ground floor faring Primary 300' Street January 2010 26 Lake Oswego, Oregon, CDC Audit July ?010 Page 77 Appendix Materials APPENDIX F: Buckeye, AZ, Use Table (partial) ARIKEF 3: USE REGULATIONS SECTION 3,1 TAKE Of ALLOWED USES SUB SEC 110YJ 3.1.5 ABLE OF AiLO.y ;) 03E 3. i,5. Table of Allowed Uses kxkoyo, Aaisoea 10mlepmmeet Co" November 2004 Aboption Draft I Popc 2$ Lake Osweco. Ore on, CDC Audit July 2010 pace 78 Appendix Materials APPENDIX G: Elliot, Better Webbing, Zoning Practice (APA Oct. 2008) ZONINGPR"'ACT[CE October 2008 AMERICAN PLANNING ASSOCIATION Q ISSUE NUMBER TEN PRACTICE BETTER WEBBING Lake Oswego, Ore_on, CDC Audit Jules 2010 Pa -e 79 Appendix Materials Better Zoning on the Web By Don Elliott, FAicp The Internet is transforming the field of planning in myriad ways. Combinations of Google Earth images, GIS database layers, visualization tools, and infinitely manipula- ble census and survey information have dramatically increased the data and analytical tools available to planners. Virtually no aspect of planning has been untouched by this revolution. The changes have not been quite so dramatic in the field of land - use regulation, though virtually all cities now have an electronic version of their zoning and subdivision codes, searchable by keywords. Public versions of those documents are often kept more current, as well, since the ability to upload amendments electronically means that cities do not have to wait until the next three- month, six-month, or annual reprinting of the paper versions. A few cities have gone further to adopt more widely searchable and graphi- cally rich codes like the Visual Interactive Code, but those cases are still fairly rare. Nevertheless, most cities still maintain paper versions of their land -use regulations and they are sometimes still the "official" ver- sion—so users of the web documents are sometimes at risk for misinformation. But it's only a matter of time until web -based tools transform zoning and subdivision codes the same way they have changed planning. When that happens, what will it look like—and what should It took like? A BETTER WAY TO ZONE In A Better Way to Zone (Island Press 2008), 1 identified io changes that could make big - city zoning more effective, more efficient, and easier to use and understand. Change num- ber nine was "Better Webbing"—using the web more effectively. I identified four changes that will transform the organization, use, and maintenance of local land -use laws—as well as how we make land -use decisions. Those four innovations are: i. Cities will develop web portals that link plan- ning, zoning, subdivision, and utility informa- tion. Much of that information is already avail• able but not linked. Since it is easier to draw and digitize planning maps than it is to interpret how written policies affect different parcels of land, it is not common for comprehensive and neighborhood plans to be linked to GIS data— but they will be in the future. 2. A good planning and zoning web portal will make clear to property owners the difference between the plan designation and the zoning for their property. What parts of the plan are binding—if any—and hour do planning goals make it Into the land -use decision-making process? 3. Future web -based zoning will link written information on what permits may be required for a proposed development with mapped information about notification and protest areas and graphic displays about the steps in the decision-making process—who makes the decision, who hears the appeal, on what crite- ria, and in what time frames. p. The fourth and biggest improvement will be the ability to tailor complete answers to zoning process questions—like "How do I get a condi- tional use permit?"—for specific addresses. Once the portal knows your address it will be able to provide answers that take into account your current use of the land, your neighbors' current use, the future land -use designation, when your lot was platted and your house was built, what regulations were adopted before or after those dates, and whether there are vari- ances or conditional uses on adjacent parcels that affect what you can do. The key will be link- ing address -based data structures with more sophisticated query -based searchability. The technology for each of these tasks is already available, but few cities have commit- ted themselves to making the most of it. This article reviews some attempts by large North American cities to harness the power of the internet for planning and zoning. More specifi• tally, it reviews how io cities have tried to enhance and link their web -based planning and zoning tools to make them significantly more usable for the public. EMERGING BEST PRACTICES Visiting the planning and zoning websites for large American and Canadian cities reveals how quickly technology has advanced in the past to years. Detailed GIS systems and accu- rate mapping are now the norm rather than the exception. Satellite imagery is routinely available as an additional layer on the same base maps as other GIS information—making it much easier for users to orient themselves or to find major landmarks. The user-friendli- ness and graphic quality of public portals has improved dramatically, making it much more likely that citizens will actually be able to rind the information they need. Despite these common themes. how- ever, large city websites still show enormous variation in the information they provide, how they present it, how they link it together, and what questions they can answer for John Q. Public. Some of these differences are illus- trated in the examples below. In each case, 1 focused on characteristics that distinguish the city websites from each other rather than what they have in common. Because many of these cities use multiple mapping bases and infor- mation systems it is quite possible that 1 missed additional sites and linkages that would rill some of the gaps, and I apologize in advance for any errors in this information. ZONINGPRACTICE 10.08 AMERICAN PLANNING ASSOCIATION I page 2 Lake Oswego, Oregon, CDC Auclit July ?010 Page 80 DEFECTS IN ORIGINAL DOCUMENT Appendix Materials Anchorage, Alaska Anchorage maintains multiple maps to display planning and zon- ing information. These include a generalized land -use map for the entire city with companion maps showing residential intensity, commercial intensity, and community facilities—all in PDF format that can be zoomed but with some loss of resolution. Unfortunately, map legends are not visible once you have zoomed in—you need to zoom back out or pan laterally to read them. Separate maps cover streets, wetlands, streams, assembly dis- tricts, zoning districts, and land -use categories, but do not include address searchability. An online platting and zoning notice system shows active cases with case numbers, but not the notification areas (in fact, none of the cities surveyed had a parcel -based noti- fication area feature). One nice feature is that the zoning and plan- ning cases are searchable by neighborhood or community organi- zation area. Zoning is shown by a letter designation, zoning boundaries by colored lines, and general existing (not future) land use by shading. Most of the different maps are linked but some use different base maps. Chicago Chicago's municipal code is maintained by American Legal Publishing and has separate chapters for its Land Use Ordinance and Zoning Ordinance. Fortunately, information related to both chapters has been packaged together through its website. The Land Use Ordinance covers topics like Lake Michigan and Chicago waterfront protection, flood protection, planned manufacturing, enterprise zones, adult uses, and impact fees, while zoning infor- mation is grouped by type of district. The map interface is very usable and accessed through a single map; using the cursor to highlight a smaller area zooms to that smaller area. Information layers are easy to tum on and off without zooming back out or returning to a master map. Information is searchable by street address to find information on parcels, wards, ward offices, schools, and neighborhood features. Planning information is not well linked with GIS and zoning infor- mation. To access planning data, users must navigate to a separate web portal hosted by the Chicago Metropolitan Agencv for Planning (wmrw.goto2o4o. org) that is not linked to the city's master map. The online resources for the io cities mentioned in this article are available at the following addresses: • ANCHORAGE www.muni.org/iceimages/Planning/ LandUse%2o_Plan_i1x17. pdf; www.muni.org/Planning/Maps.cfm; http://munimaps.muni-Org/MOx52/advanced.cf n • CHICAGO: hitp://maps.cityofchicago.org/web,site/zoning • DENVER: ww,A-.denvergov.org/DenverMal3s/repori.asp?rpt=zone&c.at=cprop • HENDERSON: www.cityofhenderson-com/gis/interactive_maps.php • INDIANAIROUS: http://imaps.indygov.org/Zoning/ • MINNEAPOUS: www.ci.minneapolis.mn.us/zoning/maps PORTLAND: www.portiandmaps.com ♦ 5AN DIEGO: mvw.sandiego.gov/development-services/zoning/zoninggridmap.shtmi; www.sandiego.gov/planning/genplan/pdf/peir/Peir331thTU34i.pdf; www.sandiego.gov/planning/genplan/Figures.shtmi; wWW.5andiego.gov/planning/community/proriles • SEAML wvm.seattle.gov/dpd/Research/Zoning_Maps/default.asp; http: / /webi.seattle,gov/ dpd/maps/; http://webi.seattle.gov/dpd/maps/dpdgis.aspx • VANCOUVER: www.city.vanCOuver.bc.cafvanmap/; www.city.vancouver.bC.ca/Comm Svcs/ currentpIan ning/ coloured zoning_ map.pdf). ZONINGPRACTICE 10.08 A/AERKAN PLANNING ASSOCIATION I ooae 3 Lake Oswego. Oreton. CDC Audit Juh- 2010 Pa -e 81 a I e. 'r ® Henderson, Nevada's map selection interface is based on user- friendly graphics. Denver Denver maintains a thorough and user-friendly interface that is strong on zoning, GIS, and community data, though weaker on planning information. An address query takes you to a parcel map, and clicking on the parcel takes you to a property table with further links, includ- ing zoning history and zone district descriptions. Additional links take you to the MuniCode website, but the city quickly gives you which sections to search for in order to find district information—signifi- cantly improving the usability of the MuniCode system. Since Denver is in the middle of a multiyear zoning code update, there is also a link Appendix Materials to the zoning update website. Moving back to the search page allows you to click on a link to the registered neighborhood organizations whose area includes the property, with boundaries and contact persons listed. Another link provides a table listing all of the addresses on the same block as your property, waiting to be filled out with the names, phone numbers, and e-mail addresses of your neighbors (though none of that individual information is provided). Additional links bring up lists (not maps) of schools and public safety facilities within one mile of the prop. erty, crime statistics for the neighborhood, and the subdivision where the property is located. Importantly, a final set of links ties into Blueprint Denver (the land -use element of Denver's comprehensive plan) and shows future land -use classifications, future street classifications, and whether the property is in an area designated for change or stability. These final maps are not zoomable to property level, but despite this weakness, Denver's linkages between planning and zoning information are among the strongest in the cities surveyed. Henderson, Nevada Henderson was one of the first large cities in the U.S. to use the Visual Interactive Code (VIC) format, and is now involved in a "second genera. tion" update. Viewers access mapping through a Windows Vista -like graphic of nine topical maps covering zoning, future land use, watering groups, elementary school zones, sex offender registries, parks and recre- ation, points of interest, voting precincts, middle school zones, high school zones, and crime statistics. But not all the maps are created on the same base, many allow the user to zoom into small areas through the use of a cursor drag box. While satellite imagery can superimpose build• ings on to some maps, turning on that layer sometimes makes informa- tion on other layers difficult to read, and the resolution of the satellite imagery is limited (i.e., if you zoom in very close the buildings become blurs—a problem common to many of the systems that use Google Earth images). Zoning map layers include ti overlays, but do not include a direct link to the future land -use designations (to see them, you need to click out of zoning and into the land -use map). An address search func• tion centers the map on that site but does not link directly to more infor- mation about it. However, these are minor Flaws in an otherwise user- friendly site, and Henderson is one of the few cities that has made serious efforts to bring planning and zoning information closer together. Indianapolis Like Denver, Indianapolis presents zoning data through an address query that immediately links to a parcel map showing adjacent streets, parcel lines, and building footprints. Clicking on the parcel links into GIS data that covers a wide variety of topics, including primary and secondary zon- ing, rezoning history, variances, legal nonconforming uses on the parcel, zoning approvals (with links to a very cryptic summary of the document), location in wellhead and flood zones or historic districts, regional center designations, and the subdivision where the property is located. In some cases, tuming on a layer indicates which parcels the status applies to by putting a dot on each parcel, while in other cases more data is given. Unfortunately, the dot approach can get confusing when multiple dot -lay- ers are turned on simultaneously. In addition, the property table entry for "comprehensive plan" just indicates whether the property is covered by a subarea plan, and clicking on the link takes you to the plan document— no specific plan designation is presented or mapped. ZONINGPRACTICE io.oa AMEIUCAN PUNNING ASSOCIATION I page 6 Lake Oswego, Oregon, CDC Audit July ?010 Page 82 Minneapolis Unlike the Chicago and Vancouver, Minneapolis does not use a single map inter- face, but instead a grid map where users select a grid square to begin their search. While functional, this approach requires the user to either know which grid contains the property or use a trial -and -error approach to finding it (particularly when the property is located near the edges of a grid square). The website contains two separate map layers for base and overlay zones, and it is not easy to view both at the same time. Minneapolis's zoning code is maintained by MuniCode, and links to that site are not particularly friendly— many links simply take you to the beginning of the code and require the user to restart the search within the code document. Similarly, links from maps to zoning district descrip- tions take the reader to the beginning of a list of districts with short titles—clicking on those titles takes you to the MuniCode site rather than a description of the district. A link from the maps to the development review proce- dures also leads to the MuniCode site. As for many cities, links between planning and zon- ing information are weak. Portland, Oregon Portland has a very detailed GIS system accessible through a map interface that pro- vides an unusually wide range of information. An address search takes the user to an asses- sor's parcel map showing the building foot- print and the following property data: • assessor's data • zoning permits and cases • schools within one mile parks within one mile • businesses within one mile (not particularly helpful since they show up as unidentified dots and appear to include home businesses) • capital improvement projects within one- half mile (dots with codes but no description) • stormwater incentive areas • floodplains within 5o feet • slopes over zo percent • potential landslide hazards • potential wildfire hazard • earthquake hazards • noise contour areas crime statistics • water and sewer lines • transit lines • zoning While many of the maps are thorough, they are sometimes not scalable—zooming in and out is not easy without a cursor drag box feature. In addition, some of the information is displayed on different base maps, so that turning on a new layer takes you to a different map, sometimes at a different scale. Like many other cities. links between GIS/zoning information and planning information are not particularly strong. San Diego Like Anchorage, San Diego uses multiple maps to convey planning and zoning informa- tion. General zoning maps are shown as PDF grid maps (i.e., the user selects a grid square to begin using the system and must click back out to the main map to select a second grid). Unlike some PDF maps, these are zoomable without much loss of resolution, but there is no cursor drag box feature. The zoning map legend appears to cover both base and overlay districts—which means a total of 82 legends with subtle color differ- ences that are difficult to distinguish on the map. Searching by address can confirm what zone the property is in but requires that the user actually know the property address in question. A link can take the user to the com- munity planning area containing the property (including the contact person) but does not map any plan information. A "base zone guide" link takes users to the code text, and the searchable PDFformat makes navigation through the code fairly easy- General Plan maps are helpful but not complete. The three maps presented appear to have been devel- oped as part of a habitat conservation plan- ning process, and they distinguish between vegetation/urban land, city owned/non- owned lands, and active fault areas. Other plan maps are in citywide PDF formats that lose resolution as you zoom in and cannot easily be used to find designations for spe- cific parcels. In spite of some weaknesses. however, San Diego is one of the few sur- veyed cities that has tried to link planning and zoning information. Seattle Like Minneapolis, Seattle uses a grid map to present zoning information, but the "grain" is much finer than many other cities. The grid cells are smaller and more detailed, but the user needs to be able to find the proper grid square, which may take some trial and error. Appendix Materials Zoning maps are zoomable without losing res- olution and present information on parcel boundaries, boundary adjustments, zoning boundaries, and sometimes the names of key buildings and developments. Unfortunately, the map legend is not repeated on each grid square map—you need to click back out to the main map to see it. Like Portland, a very wide range of information is presented, including assessor numbers, lot dimensions, meander lines, z,000 -foot rail station buffers, urban villages and centers, historic land- marks, critical areas requiring SEPA review, critical areas not requiring SEPA review, closed or nonpublic streets, mineral or aerial rights, known landslide locations, and streets with special requirements. Among the cities surveyed, this is a standout GIS/mapping sys- tem with the GIS information linked to Microsoft Virtual Earth data. There are sub - menus that show permitting and approval data as flags on a zoomable map. Aerial satellite images can be shown on the same base map as parcel and GIS data while remaining mostly readable. Unfortunately, the zoning layer sometimes requires panning off the property in question to find the designa- tion for the area, and does not link to a description of that zoning designation. The user-friendly layer menu minimizes the need to zoom in and out or between different maps—once you find the property in question you can toggle layers on and off without hay. ing to move around to understand the data. Only assessor's data is available by address query, however. Vancouver, British Columbia Like Chicago and Anchorage. Vancouver bases its presentation of data in a single map (not a grid map) where you use a cursor drag box to zoom in on the desired search area. In tact the map appears to be a very high-resolution scan of a wall map available for sale to the public. The quality of the Vancouver map is very high, and can be zoomed from the base 14 percent image to almost a parcel -level image with no loss of resolution. A single legend on the main map shows both zone designations and descrip- tions. Unfortunately, this amazing map is not linked to a query function—either you find the information you are Looking for or you don't. To supplement this map, the city's GIS system is searchable by address and (like Portland and Seattle) contains many layers ZONINGPRACTICE 10.o8 AMERICAN PLANNING ASSOCIATION I Oo9e j Labe Osm ego. Oregon, CDC Audit July 2010 Page 83 DEFECTS IN ORIGINAL DOCUMENT c CITY or vAhcouvua covering zoning district labels and types, utilities, parcel information, subdivision titles, public art, streetlights, legal places to place posters, child care facilities, truck routes, view cones, and even Olympic venues. Passing the cursor over a prop- erty lights up a zone district designation for the parcel, and clicking on a parcel can light up all of the contiguous properties in the same zone district. GIS information is presented on maps with a cursor drag box zoom feature and links to satellite orthophotography. Like Seattle, Vancouver has a standout GIS/mapping system. SUMMARY TABLE Although the art of compiling and presenting GIS planning, zoning, subdivision, and utility data is evolving rapidly, the linkages between those types of data is still incomplete. None of the io cities surveyed had completely implemented any of the four planning and zoning -oriented innovations identified in A Better Wayto Zone, though some were close. The performance of each city against those four benchmarks is summarized in the table at right. CONCLUSION Of the four web -based zoning and planning improvements suggested in A Better Way to Zone, the surveyed cities had made the most progress on the first—creation ofweb portals that link information about planning, zoning, subdivisions, and utilities. All io cities had por. tals that linked at least two, if not three, of those levels. Unfortunately for planners, link- ages between GIS layers (usually including sub- division parcel maps and utilities, and some- times zoning) and planning designations are Appendix Materials particularly weak. This may be because future land -use des. ignations are considered "softer' (i.e. advisory) and because planning lines are more general than lines representing plat. ted lots, zoning districts, or built infrastructure. Indeed, some city attorneys and planners might resist mapping future land -use designations for precisely these reasons, but mapping them (even with appropriate disclaimers) would help educate the public about the anticipated future for their block and neighborhood and could involve them more effec. tively in the planning process. The second area of progress is in the area of address -based queries for zoning and planning informa- tion. Based on available GIS information and a specific properly address, we should be able to tell property own- ers what steps would be required for various zoning per- mits and approvals—taking into account neighboring land uses, existing and adjoining variances, nonconforming uses, and structures on his lot and on adjoining lots and the dates those structures were built. This is still far from the case, however. While several of the survey cities had address -based querying capability, it was linked mostly to GIS data layers and not designed to answer planning and zoning questions. In short, the evolving web -based sys- tems can lead users to lots of data about the current state of the property and services in the neighborhood (and, increasingly, to neighborhood groups concerned with land use and zoning in the area). But they cannot yet tell the owner much about how to go about changing the planning Chicago Maps clarify No Address -based Portals link between Steps for queries for planning, zoning, planning and zoning approvals zoning approvals subdivision and zoning and mapped based on lot and city utility information designations notification areas structure history Anchorage Partial No No Partial—some No utilities incomplete queries possible Chicago Partial, but on No No No different maps Denver Partial—links to No No Partial—some utilities incomplete queries possible Henderson Partial—links to No No No utilities incomplete Indianapolis Partial—links to No No Partial—some planning incomplete queries possible Partial—links to Minneapolis Partial No district descriptions No and general procedures Portland Partial—links to No No Partial—some planning incomplete queries possible San Diego Partial No No No Partial—links to No No Seattle planning and Partial—same subdivision incomplete queries possible Vancouver Partial—links to No No Partial—some planning incomplete queries possible 20NINGPRACTICE 10.08 AMERICAN PLANNING ASSOCIAirdN I page 6 Lake Oswego. Oreton, CDC Audit July 2010 page 84 designation or the zoning designation or per mits for the property. Doing so would be another effective way of involving citizens in planning and zoning issues more effectively. The final two innovations have seen almost no progress. None of the io surveyed cities had a map- or address -based system to explain the difference between planning and zoning designations—one of the major areas of confusion for many property owners. In addition, almost none had made progress in organizing their GIS and mapping systems so that they could automatically map for property owners the notification areas around their properties necessary for different types of zoning permits and approvals. Nevertheless, this is an area where the technological foundations are already in place. The time is ripe for developing new linkages and tailoring our massive abilities to collect and organize to begin answering planning and zoning questions for property owners. As the survey above shows, to large North American cities are on their way to doing just that. It is probably only a matter of time. NEWS BRIEFS ZONING DISTRICTS MUST INCLUDE PERMITTED USES By Brian W. Ohm In July 2008, the Wisconsin Supreme Court addressed the basic issue of whether a zoning district must include some permitted uses. The case involved the unincorporated community of the Town of Rhine in Sheboygan County, north of Milwaukee. The town had a zoning ordinance that included a "B-2 Commercial Manufacturing or Processing" district that expressly stated "[t)here are no permitted uses" and "[all] uses are conditional." The ordinance listed six cate- gories of conditional uses for the district: (1) fab- rication of consumer or industrial commodities; (2) garbage, rubbish, offal, industrial waste, and dead animal reduction or disposal; (3) quarry- ing: (4) mining and ore processing: (5) salvage yards for wood, metals, paper, and clothing; and t6) stockyards. The case arose after a private off-highway vehicle club purchased 77.2 acres of land zoned B-2 in 2003 and used the property for riding all - terrain vehicles. At the time of the purchase, the land had been zoned B-2 for 20 years. In 2004, the town informed the club that it needed a con. ditional use permit to use the land. The club applied for a conditional use permit but the town denied it. The club applied to rezone the property but that request was also denied. The town then sued to stop the ATV use, The town alleged that the ATV uses violated Rhine's public nuisance ordinance and asked fora determina- tion of whether the club was violating its zoning ordinance. The trial court held that the town lacked standing to raise the public nuisance claim because the property at issue was not a pub- lic place. The trial court also determined that Rhine's zoning ordinance was unconstitu- tional. The town appealed the trial court's decision to the Wisconsin Court of Appeals. Because of the importance of the fundamental question presented in the case, the Wisconsin Court of Appeals did not issue an opinion in the case and certified the case to the Wisconsin Supreme Court, which accepted it. The Wisconsin Supreme Court agreed with the trial court that the B -z zoning district was unconstitutional, finding that that the town's zoning district was arbitrary and unreasonable because it precluded any uses in the district as a matter of right. According to the court, this practice bore no substantial relation to the pub- lic health, safety, morals, or general welfare and hence was a violation of the constitutional guar- antee of substantive due process. The court noted that the town's exclusive reliance on con- ditional use permits "opens the door to favoritism and discrimination." However, the court did state that there may be limited circum- stances, such in the case of floodplain zoning, in which not allowing any permitted uses is valid because the restriction bears substantial relation to public health, safety, morals, or wel- fare. The Wisconsin court also held that the trial court had applied the wrong definition in the public nuisance claim and sent that issue back to the trial court for a new hearing. To support its decision on the need for per- mitted uses in the zoning district, the Wisconsin Supreme Court cited several zoning treatises and publications of the American Planning Association including Zoning Practice and its predecessor, Zoning News. Several issues of Zoning Practice play a prominent role in the court's opinion. It cited S. Mark White, "Classifying and Defining Uses and Building Forms: Land -Use Coding for Zoning Regulations," Zoning Practice (September 2005), to note that conditional uses are different than permitted uses: "While a permitted use is as of right, a can. Appendix Materials ditional use does not provide that certainty with respect to land use." In addition, the court quoted extensively from Gail Easley, "Conditional Uses: Using Discretion, Hoping for Certainty," Zoning Practice (May 2006), to sup- port its conclusion that "accepted zoning prac- tice is to provide permitted uses as of right and then, in addition to permitted uses, the ordi- nance may provide for conditional uses." Later in the opinion. Easley's piece is used to support the court's statement that "Conditional uses may be expressly permitted by the ordinance so long as the conditions are met, but this does not ren- der them 'permitted uses."' The court also quoted from John B. Bredin's Zoning News con- tribution entitled "Common Problems with Zoning Ordinances" (November 2002) to note the problems that arise when ordinances rely too heavily on conditional use permits. (Town of Rhine v. Bizzell, Wisconsin Supreme Court, Decided July t, 2008, 2008 WI 76) Brian W. Ohm is professor and choir of the Deportment of Urban & Regional Planning at the Universityof Wisconsin -Madison and reports on recent court cases for the Wisconsin Chapter of the American Planning Association. Vul. 25, No. 20 Zoning Practice is a monthly publication of the American Planning Association. Subscriptions are available for 575 (U.S.) and 5200 (foreign). W. Paul farmer, FwEr, Executive Director; William R. Klein, Arc;-, Director of Research. Zoning Practice (ISSN 2548-0735) is produced at APA. Jim Schwab. Atcr, and David Morley, Editors; Julie Von Bergen, Assistant Editor; Lisa Barton, Design and Production. Copyright CJ20oS by American Planning Association. 122 S. Michigan Ave., Suite 2600, Chicago, 1: 6o603. The American Planning Association also has offices at 3776 Massachusetts Ave., N.W., Washington, D.C. 2on36: www.planning.org. All rights reservec. Na part of this publication may be reproduced or utilized in anv form or by any means, electronic or mechanical, including pnotocubving,recording. or by any mormalion storage and retrieval system, with. out permission in writinr from the American Planning Association. Printed on iecvcleu paper,inclucinv50-70`., recycled fiber and 2o'X, postconsumer waste. ZONINGPRACTICE Io.as AMERICAN PLANNING A550CIATION I page 7 Lake 0_,Nvego, Oregon, CDC Audit Jul- 2010 LAKE OSWEGO Centennial 1910-2010 COUNCIL REPORT TO: Jack Hoffman, Mayor Members of the City Council Alex D. McIntyre, City Manager FROM: Ursula Euler, Finance Directorzll� SUBJECT: Series 2010 Wastewater Bond - LOIS DATE: July 19, 2010 ACTION r 3.S CITY OF LAKE OSWEGO 380 A Avenue PO Box 369 Lake Oswego, OR 97034 503-675-3984 www.ci.oswego.or.us Review the amount, type, structure and fiscal impact of the Series 2010 Wastewater Bond for LOIS. INTRODUCTION/BACKGROUND In August 2007, the City Council approved the Lake Oswego Interceptor System (LOIS), one of the City's largest Public Works projects, at a then estimated cost of $110 million. It replaces and upgrades an aging wastewater system backbone and is expected to be completed by December 31, 2011. The Wastewater utility serves residential and commercial customers through about 12,500 connections, and financially functions as an enterprise fund, which charges its customers a fee for service in an amount necessary to recover ongoing operating expenses and to fund capital improvements. At the beginning of the LOIS project, it became clear that the then existing customer rates were not sufficient to fund LOIS, given its scope, schedule and budget. A rate study was conducted and completed in December 2009. The table below provides history of past average rate increases and those recommended by the aforementioned rate study. As of July 1 2006 2007 2008 2009 2010 2011 Average customer rate increases 5%* 10%* 10%* 30%* 30%** 30%** Source: Master Fees and Charges for 2010 *Adopted * * Adopted and recommended by rate study Page 2 These rate increases were designed to fund ongoing capital improvements and fund LOIS through two bond issues. The first bond issue was completed in June 2009 as Full Faith & Credit (FF&C) bond with all debt service payments to be made from the utility, with the intent to complete a second issue in time to fund construction Phase II. The second bond issue is proposed for Council authorization on August 3, 2010 (see Attachment 1). DISCUSSION Bond Size Staff proposes that the second bond issue should be in the amount of the current cost estimate of $90 million, plus an additional $5 million contingency, less $60 million, the amount of the first bond issue. As of June 30, 2010, project -to -date cost of LOIS is $56 million. Project management reviews cost estimates periodically and has revised the cost estimate of the entire project from a rounded $110 million to roughly $90 million, for reasons discussed on previous occasions and not repeated here for brevity purposes. The revised cost estimate includes a construction contingency of $4.5 million representing an allowance of approximately 16% on construction costs under contract. It is important to note that the value of this contingency fund does not contemplate the possibility of extraordinary weather events possibly preventing completion of the Lake Down phase by March 21, 2011, nor does it include potential costs for renewal and replacement of existing waterfront sewer lines currently being evaluated as part of the Lake Down contract. With this in mind, staff proposes that Council authorize a bond issue in the amount of up to $35 million, $5 million more than current cost estimates would suggest. The LOIS Project Director recommends this additional amount to be prepared for possible contingencies not covered by current project cost estimates. The City Manager recommends that the bond authorization be even greater (to $40 million) to reduce the risk of the need to return to the bond market should the final costs of the project prove to be underfunded. It is important to note that there are fixed costs for each bond issue, regardless of size of issue. A greater authority will not necessarily result in expending the funds, rather it preserves the option to do so should the project need them. Proposed Bond Type The first LOIS bond issue was initially authorized as a revenue bond of up to $140 million through Ordinance No. 2521 and Ordinance No. 2539. Subsequent discussions lead to Resolution No. 09-22 (see Attachment 2) and a change to a $60 million FF&C bond issue, where debt service payments are made entirely by the Wastewater utility. Average customer rate increases, mentioned above, enable the utility to do so while adhering to the City's Financial Policies. In consideration of the current financial environment, staff evaluated two types: a utility revenue bond, and a FF&C bond, where the utility makes 100% of the debt service payment. Page 3 Distinguishing features of the two can be described as follows: Type Distinguishing Features Utility Revenue Rating agencies (S&P, Moody's) rate the credit risk of the utility as a stand-alone Bond enterprise; this rating estimates risk to the investor, which leads to an interest Bond rate. which is disadvantageous when A debt service reserve is required. The amount usually correlates to the largest resources; the utility and the utility annual debt service payment over the life of the bond. Issue costs range between 1.0% and 2.0% of the par value. FF&C Bond, Rating agencies apply a rating based on the backing of the FF&C of the City's where utility General Fund; the rating is a measure of the credit -worthiness of an issuer, makes 100% of which leads to an interest rate. debt service A debt service reserve is not required. payments Issue costs range between 1.0% and 1.5% of the par value. The distinguishing features then lead to each option's possible advantages and disadvantages. Type Advantages Disadvantages Utility Revenue Bondholders have no claim against A debt service reserve is required Bond the City's general fund or available which is disadvantageous when resources; the utility and the utility current interest rates earned are users are the sole bondholder significantly less than interest rates security. paid. The credit rating would be lower than the City's FF&C, and interest rates would, as a result, be higher. FF&C Bond, where Interest rates and issuance costs are Shifts some funding risk to the utility makes 100% lower than for the revenue bond. General Fund; an inability by the of debt service A reserve fund is not required. This is utility to make full payments results payments advantageous when interest earned is in payments from the General Fund. significantly lower than interest paid. Can create the perception that debt The impact of the City's pledge of its service payments are made from FF&C is minimal as long as the utility property taxes. can demonstrate its ability to make the full debt service payments. Attached is a hypothetical issue of a $40 million bond to show the scale of cost difference under certain assumptions. The assumptions are a $40 million par value, a 25 -year term, and a true interest cost (TIC) of 3.94% for the FF&C bond option (see Attachment 3), and 4.12% for the revenue bond option (see Attachment 4). For this evaluation, staff engaged the professional help and judgment of the City's Financial Advisor, Western Financial Group. The City's Bond Counsel is Orrick, Herrington & Sutcliffe LLP, who advises on legal matters specific to the bond issue. Page 4 The Wastewater utility has made current debt service payments and can demonstrate its ability to make future payments because: • Two 30% average customer rate increase have been implemented as of July 1, 2009 and 2010; • The revenue is considered to be very stable because the service can be viewed to be a basic needs service and because the larger proportion of the fee is fixed and not consumption -based, or variable. • The utility has realized almost 99% of its budgeted revenue for the fiscal year that ended June 30, 2010, using preliminary and unaudited year-end information. It is also useful to know that we currently earn 0.55% on balances in the Local Government Investment Pool. The spread between that and expected bond interest to be paid is considered to be large. The argument could be made, and rightfully so, that the current estimated project cost is lower than when the above mentioned average customer rate increases were approved and that those increases should be softened. Additionally, they were implemented assuming a more expensive revenue bond issue. Staff proposes that the future rate increase discussion might be left for the Master Fees & Charges discussion in October or November of this year, by which time an updated rate study can be finalized. In the meantime, we want to pursue a course to which we committed ourselves in the past so that we can continue to demonstrate a strong and reliable financial course for the Wastewater utility to rating agencies. Proposed Bond Structure The American Recovery & Reinvestment Act of 2009 has made a new financing tool available, called Build America Bonds (BABs). They are taxable bonds with a subsidy equal to 35% of the interest payment as direct payment to the issuer after filing of appropriate periodic documents. Staff and its advisors believe that these bonds are advantageous to the City when used in conjunction with conventional bonds. As a result, staff proposes a 25 -year bond, with annual principal payments to begin on June 1, 2013 and semi- annual interest payments to begin on June 1, 2011. The bonds will be issued in $5,000 increments and in annual series, where the series between 2010 and 2024 involves a conventional bond, because its costs is estimated to be lower than for BABs, and where the series between 2025 and 2035 involves BABs. The bid (i.e. sale) process is proposed to be competitive. Staff also proposes to incorporate a call feature after 10 years for two reasons: 1. To take advantage of possible future interest rate declines, and 2. To provide the option to convert FF&C bonds to revenue bonds, if desired. The FY 2010-11 adopted budget anticipates a $50 million of bond issue and no amount for debt service payments for the new issue. Staff will return with a resolution for the August 3 Council meeting to make the necessary changes to the FY 2010-11 budget. ALTERNATIVES & FISCAL IMPACT The utility could certainly issue revenue bonds. With staff's best understanding and knowledge of current conditions and circumstances, FF&C bonds are more economical than revenue bonds, without noticeable impairment of future debt capacity of the General Fund. The savings to the utility and ratepayers is estimated to be $3.8 million on a $40 million bond issue over the next 25 years. Page 5 RECOMMENDATION It is recommended that the City Council review the amount, type, structure and fiscal impact of a second bond issue to complete construction of LOIS and provide direction to staff to return with an enabling resolution at the August 3 Council meeting. ATTACHMENTS 1. Financing Schedule 2. Resolution 09-22 3. Sample bond structure - FF&C Bond 4. Sample bond structure - Revenue Bond 5. Draft Resolution 10-40 Reviewed by: 44 Alex D. Mclnty City Manager /�� t� L City Attorney JULY S M T W T F S 1 2 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 City of Lake Oswego Revenue Bonds, Series 2010 Financing Schedule AUGUST S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Attachment 1 Fri -Jul -2-10 City and WG provide comments on first draft POS and legal docs LO, WG Tue-Jul-6-10 SEPTEMBER BC, FA S M T W T F S Distribute third draft of preliminary officials statement and legal documents. Final BC, FA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Circulate draft rating presentation FA Fri -Jul -2-10 City and WG provide comments on first draft POS and legal docs LO, WG Tue-Jul-6-10 Distribute second draft of preliminary officials statement and legal documents BC, FA Mon -Jul -12-10 Comments due on second draft of legal documents and POS WG Mon -Jul -12-10 Distribute first draft rating presentation FA Thu -Jul -15-10 Distribute third draft of preliminary officials statement and legal documents. Final BC, FA resolution for council packet. Mon -Jul -19-10 Meeting with Ursula & Joel to go over draft rating presentation LO, FA Mon -Jul -19-10 Staff Report for council packet due LO Thu -Jul -22-10 Working Group call to discuss POS and legal documents WG Fri -Jul -23-10 Cirulate draft rating presentation to presenters FA Tue-Jul-27-10 Council Study Session Wed -Jul -28-10 Final draft of POS and legal documents distributed BC, FA Fri -Jul -30-10 Comments due on draft rating presentation LO, FA Tue-Aug-3-10 Council Meeting- adoption of authorizing resolution and supplemental budget WG Wed -Aug -4-10 Send rating agencies draft POS, legal documents, file form 1 FA Thu -Aug -5-10 Circulate draft rating presentation FA Thu -Aug -12-10 Meeting with all presenters to go over Rating Presentation - confirm logistical detail of tour LO, FA 8,/19 and 8/20 Rating Agency Presentations LO, FA Mon -Aug -30-10 Deadline for Structure revisions LO Tue-Aug-31-10 Ratings received FA Thu -Sep -2-10 Electronic posting of POS FA Thu -Sep -16-10 Bid Opening LO, FA Thu -Sep -16-10 Transcript preparation begins BC Mon -Sep -20-10 Preparation of final official statement, file form 2 FA Wed -Sep -22-10 Closing documents distributed to WG BC Page 1 JULY S M T W T F S 1 2 3 4 5 6 7 8 910 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 City of Lake Oswego Revenue Bonds, Series 2010 Financing Schedule AUGUST S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Wed -Sep -22-10 Final official statement to printer FA Thu -Sep -23-10 Final official statement to underwriters FA Tue-Sep-28-10 PRE-CLOSING WG Wed -Sep -29-10 CLOSING WG Page 2 SEPTEMBER S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Wed -Sep -22-10 Final official statement to printer FA Thu -Sep -23-10 Final official statement to underwriters FA Tue-Sep-28-10 PRE-CLOSING WG Wed -Sep -29-10 CLOSING WG Page 2 Attachment 2 CITY OF LAKE OSWEGO COUNCIL REPORT TO: Jack D. Hoffman, Mayor Members of the City Council Alex D. McIntyre, City Manager FROM: Darin Rouhier, Finance Director SUBJECT: Resolution 09-22 authorizing up to $60 million in Full Faith and Credit (FF&C) Obligations to fund LOIS project costs through June 30, 2010 in lieu of Revenue Bonds DATE: April 28, 2009 ACTION Adopt Resolution 09-22 authorizing up to $60 million in FF&C Obligations to fund LOIS project costs through June 30, 2010 in lieu of Revenue Bonds. INTRODUCTION/BACKGROUND The Project: The LOIS system will replace the interceptor sewer line, the backbone of the City's wastewater system, located in Oswego Lake. Replacement of the interceptor is critical to ensuring the environmental protection of Oswego Lake and maintaining sewer service for residents. The existing interceptor is undersized, resulting in overflows during heavy rains, and is vulnerable during an earthquake. The first major construction phase will occur later this year. Funding: The total present worth cost for the project, originally estimated at $100 million, was revised to $124.5 million in February 2009, then to $410 million in April 2009 to reflect the lower than expected bid amount for the Lake Full work. This figure includes initial design, construction, estimated escalation, and contingency costs. In October 2007, the City commenced the first phase of financing by selling $12 million in bond anticipation notes (BANS) to fund costs through the start of construction. In July 2008, the Council authorized the issuance of up to $100 million in revenue bonds to retire the BANS and finance the remainder of the project. In April 2009, the Council increased the revenue bond authorization to a not -to -exceed limit of $140 million to provide bonding capacity for the Project (when it was estimated at $124.5 million), a debt service reserve and potential completion bonds. The Council also authorized the 17 Council Report April 28, 2009 Page 2 use of a FF&C pledge to improve the marketability and reduce the interest cost of the revenue bonds. DISCUSSION On April 21, Council was briefed on the benefits of issuing straight FF&C obligations this year in lieu of a subordinate revenue bond with an attached FF&C pledge. In short, a straight FF&C issue will be more marketable and will allow the City to obtain a more favorable interest rate in the debt market. This reduction in debt service costs will, in turn, reduce the pressure on wastewater rate payers in the future. The attached Resolution, if approved, would authorize the issuance of up to $60 million in FF&C obligations to refund the 2007 BANs and provide financing for the Project through June 2010. Although the FF&C obligations would be issued in lieu of Wastewater Revenue Bonds, the intended repayment source will continue to be wastewater rate revenue. ALTERNATIVES & FISCAL IMPACT The fiscal impact of approving the FF&C Resolution is expected to be a reduction in the amount of interest expense that the City would otherwise incur under the subordinate revenue bond with a FF&C pledge alternative. The actual benefit is based on market forces that cannot be known with certainty, but it is believed that this approach may save rate payers as much as $100,000 per year in interest expense. RECOMMENDATION Adopt Resolution 09-22 authorizing up to $60 million in Full Faith and Credit (FF&C) Obligations to fund LOIS project costs through June 30, 2010 in lieu of Revenue Bonds. ATTACHMENTS 1. Attachment A — Resolution 09-22 Reviewed by: Sustainability has been considered as part of this recommendation. Finance .D Icr City AltVAN Alex "rlrif City Manager 18 RESOLUTION NO. 09-22 A RESOLUTION OF THE CITY OF LAKE OSWEGO, OREGON, AUTHORIZING THE EXECUTION AND DELIVERY OF A TAX- EXEMPT FINANCING AGREEMENT, ESCROW AGREEMENT, AND RELATED SALE DOCUMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF THE CITY OF LAKE OSWEGO, OREGON FULL FAITH AND CREDIT OBLIGATIONS, IN ONE OR MORE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $60,000,000 TO FINANCE CAPITAL IMPROVEMENTS TO THE CITY'S WASTEWATER SYSTEM, TO REFUND THE CITY'S BOND ANTICIPATION NOTES, SERIES 2007, AND FOR PAYMENT OF COSTS OF ISSUANCE; DESIGNATING AUTHORIZED REPRESENTATIVES AND DELEGATING AUTHORITY; DECLARING AN INTENT TO REIMBURSE; AND RELATED MATTERS. WHEREAS, the City Council (the "City Council") of the City of Lake Oswego, Oregon (the "City"), a municipal corporation of the State of Oregon, previously enacted Ordinance No. 2521 and Ordinance No. 2539 authorizing the issuance of sewer revenue bonds in one or more series to finance and refinance the Project (the "Revenue Bonds"); and WHEREAS, the City is authorized pursuant to Oregon Revised Statutes ("ORS") Section 271.390 to enter into financing agreements, lease -purchase agreements or other contracts of purchase for any real or personal property that the City Council determines is needed and to provide for the issuance of certificates of participation in the payment obligations of the City under such financing agreements, lease -purchase agreements or other contracts of purchase; and WHEREAS, in lieu of issuing the Revenue Bonds at this time, after consultation with its financial advisor, the City finds it is in the best interests of the City to authorize the execution and delivery of a Tax -Exempt Financing Agreement (the "Financing Agreement") between the City and Wells Fargo Bank, National Association (the "Escrow Agent") and an Escrow Agreement (the "Escrow Agreement") between the City and the Escrow Agent, to provide the terms for the execution, delivery and sale of certificates of participation in the Financing Agreement in the form of full faith and credit obligations of the City (the "2009 Obligations"); and WHEREAS, on October 18, 2007 the City issued its Bond Anticipation Notes, Series 2007 in the aggregate principal amount of $12,000,000 (the "2007 BANs") pursuant to Ordinance No. 2493 adopted by the City Council on September 4, 2007 to finance and refinance the costs of design, acquisition, construction, improvement and equipping of, and additions, replacements, expansions and/or improvements to, the City's wastewater system (the "S stem"), and the acquisition of all real and personal property necessary, useful or convenient thereto, and to pay related 2007 BANs issuance costs; and WHEREAS, the 2007 BANS are subject to redemption prior to maturity at the option of the City; and W, WHEREAS, the City intends to use the proceeds of the Financing Agreement to finance and refinance all or a portion of the following (collectively, the "Project"): (1) To refund and redeem on a current basis all or any portion of its 2007 p.1 (2) To pay costs of, or to reimburse the City for the payment of costs of capital improvements to the System; and (3) To pay costs of issuance of the 2009 Obligations; and WHEREAS, the City anticipates incurring expenditures ("Expenditures") in connection with the Project and wishes to declare its official intent to reimburse itself with the proceeds of the 2009 Obligations for qualifying Expenditures incurred in connection with the Project in conformity with the requirements of the Internal Revenue Code and Uluted States Treasury Regulations Section 1.150-2; and WHEREAS, the City is authorized to issue refunding obligations to refund and redeem all or any portion of the 2007 BANS; and WHEREAS, the City adopts this Resolution (i) to authorize the execution and delivery of the Financing Agreement, and the Escrow Agreement, (ii) to provide the terms under which the City may sell the 2009 Obligations through a public competitive sale or a negotiated sale and enter into the Financing Agreement and the Escrow Agreement, (iii) to provide the terms of execution, delivery and sale of the 2009 Obligations, in one or more series, evidencing and representing the payment 2009 Obligations of the City under the Financing Agreement, (iv) to refund and redeem the 2007 BANS, and (v) to designate certain officials and employees of the City as authorized representatives to take action on the City's behalf. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Lake Oswego, as follows: Section 1. Authorization of the 2009 Obligations and Related Agreements. The City hereby authorizes the execution and delivery of the Financing Agreement and the Escrow Agreement, and related documents and the execution and delivery of the 2009 Obligations, in one or more series, by the Escrow Agent, in an aggregate principal amount not to exceed Sixty Million Dollars ($60,000,000). The.proceeds of the 2009 Obligations received by the City pursuant to the terms of the Financing Agreement and the Escrow Agreement shall be used to pay all or a portion of the costs of the Project including to refund and redeem the 2007 BANS. The true interest cost of the 2009 Obligations shall not exceed five and three-quarters percent (5,75%) per annum and shall have a final maturity not later than December 1, 2034. The 2009 Obligations may be issued in one or more series of obligations for all or any portion of the Project, as determined by the Authorized Representative (as defined in Section 2 hereof). The 2009 Obligations shall be subject to a book -entry only system of ownership and transfer as provided in Section 8 hereof. Page 2 — Resolution No. 09-22 20 The remaining terms of the 2009 Obligations, the Financing Agreement, the Escrow Agreement and such other documents necessary or relating to the sale, execution and delivery of the 2009 Obligations and the refunding of the 2007 BANs shall be established as provided in Section 9 hereof. The City hereby authorizes the 2009 Obligations to be sold by negotiated sale or by a public competitive sale and delegates to the Authorized Representative (as defined in Section 4 hereof) the authority to establish the terms for the sale as set forth in Section 9 hereof. Section 2. Authorized Representative. The City authorizes and directs each of the City Manager, the Finance Director, or the designee of either of them (each acting individually or collectively, an "Authorized Representative") to act on behalf of the City and execute and deliver the Financing Agreement, the Escrow Agreement and such other agreements, certificates and documents necessary or related to the sale, execution and delivery of the 2009 Obligations and to determine the remaining terms of the 2009 Obligations to be established as set forth in Section 9 hereof. Section 3. Security. The financing payments (the "Financing Pavments") under the Financing Agreement shall be payable from the City's general non -restricted revenues and other funds that are lawfully available for that purpose, including the proceeds of the Financing Agreement and revenues from an ad valorem tax authorized to be levied under the City's permanent rate limit under sections 11 and l lb, Article XT of the Oregon Constitution, and revenues derived from other taxes, if any, levied by the City in accordance with and subject to limitations and restrictions imposed under applicable law or contract, that are not dedicated, restricted or obligated by law or contract to an inconsistent expenditure or use. The City pledges its full faith and credit and taxing powers to the repayment of the Financing Payments as contemplated by ORS 287A.315, or any successor statute. The registered owners of the 2009 Obligations will not have a lien or security interest on the Project financed with the proceeds of the Financing Agreement. Section 4. Form of 2009 Obligations. The 2009 Obligations shall be prepared in book -entry only form by Special Counsel in substantially the form approved by the Authorized Representative and the Escrow Agent. The 2009 Obligations may be printed or typewritten. Section 5. Authentication, Registration, Payment, Exchange and Transfer. (a) None of the 2009 Obligations shall be entitled to any right or benefit under this Resolution unless an authorized officer of Wells Fargo Bank, National Association or other designated registrar (the "Re istrar") shall have authenticated it. The date of authentication shall be the date the Registered Owner's name is listed on the register for the 2009 Obligations (the "Re ig ster") (b) All 2009 Obligations shall be in registered form. The Registrar shall authenticate all 2009 Obligations to be delivered on the closing date of the transaction and shall additionally authenticate all 2009 Obligations properly surrendered for exchange or transfer pursuant to this Resolution. Page 3 — Resolution No. 09-22 21 (c) The ownership of all 2009 Obligations shall be entered in the Register maintained by the Registrar, and the City and the Registrar may treat the person listed as owner in the Register as the owner of the 2009 Obligations for all purposes. (d) The Registrar shall mail or cause to be delivered the amount due wider each 2009 Obligations to the registered owner at the address appearing on the Register on the fifteenth (150) day of the month preceding the payment date (the "Record Date"). If payment is so mailed, neither the City nor the Registrar shall have any further liability to any party for such payment. (e) The 2009 Obligations may be exchanged for obligations representing the same aggregate principal component payment amounts with the same principal payment date in different authorized denominations, and the 2009 Obligations may be transferred to other owners if the Registered Owners submit the following to the Registrar: (1) written instructions for exchange or transfer satisfactory to the Registrar, signed by the Registered Owner or his attorney in fact and guaranteed or witnessed in a manner satisfactory to the Registrar; and (2) the 2009 Obligations to be exchanged or transferred. (f) The Registrar shall not be required to exchange or transfer any 2009 Obligations submitted to it during any period beginning with a Record Date and ending on the next following payment date; however, such 2009 Obligations shall be exchanged or transferred promptly following that payment date. (g) The Registrar shall not be required to exchange or transfer any 2009 Obligations that have been designated for prepayment if such 2009 Obligations are submitted to the Registrar during the 15 -day period preceding the designated prepayment date. (h) For purposes of this section, 2009 Obligations shall be considered submitted to the Registrar on the date the Registrar actually receives the materials described in subsection (e) of this Section 5, (i) In the event any Obligation is mutilated, lost, stolen or destroyed, the Registrar may issue a new Obligation of like principal payment date, interest component and denomination if the asserted owner of such Obligation provides to the Registrar and the City.an affidavit, certificate or other reliable proof that the Registrar or the City reasonably finds protects the City from conflicting claims for payment under the 2009 Obligations. (j) The City may alter these provisions regarding registration, exchange and transfer by mailing notification of the altered provisions to all Registered Owners and the Registrar. The altered provisions shall take effect on the date stated in the notice, which shall not be earlier than 45 days after notice is mailed. Section 6. Book -Entry System. During any time that the 2009 Obligations are held in a book -entry -only system (the "Book -Entry System'), the registered owner of all of the 2009 Obligations shall be The Depository Trust Company, New York, New York ("DTC"), and the Page 4 — Resolution No. 09-22 22 2009 Obligations shall be registered in the name of Cede & Co., as nominee for DTC. The City has entered into a Blanket Issuer Letter of Representations (the "Issuer Letter') wherein the City represents that it will comply with the requirements stated in DTC's Operational Arrangements as they may be amended from time to time. Under the Book -Entry System, the 2009 Obligations shall be initially executed and delivered in the form of a single fully registered obligation certificate, one for each Series and maturity of the 2009 Obligations. Upon initial execution and delivery, the ownership of such 2009 Obligations shall be registered by the Registrar on the registration books in the name of Cede & Co., as nominee of DTC. The City and the Registrar may treat DTC (or its nominee) as the sole and exclusive registered owner (the "Registered Owner") of the 2009 Obligations registered in its name for the purposes of: (i) payment of the principal component evidenced and represented by such 2009 Obligations; (ii) prepayment price of, and premium, if any, or interest component evidenced and • represented by the 2009 Obligations; (iii) selecting the 2009 Obligations or portions thereof to be redeemed, if any; (iii) giving notice as required under this Resolution; (v) registering the transfer of 2009 Obligations; and (vi) obtaining any consent or other action to be taken by the owners and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. The Registrar shall not have any responsibility or obligation to any person claiming a beneficial ownership interest in the 2009 Obligations under or through DTC or any DTC Participant ("Participant"), or any other person that is not shown on the registration books of the Registrar as being a registered owner, with respect to: (i) the accuracy of any records maintained by DTC or any Participant; (ii) the payment by DTC or any Participant of any amount in respect of the principal component evidenced and represented by or prepayment price of or interest component evidenced and represented by the 2009 Obligations; (iii) any notice or direction which is permitted or required to be given to or received from owners under this Resolution or the 2009 Obligations; (iv) the selection by DTC or any DTC Participant of any person to receive payment in the event of a partial prepayment of the 2009 Obligations; or (v) any consent given or other action taken by DTC as owner; nor shall any DTC Participant or any such person be deemed to be a third party beneficiary of any owners' rights under this Resolution or the 2009 Obligations. The Registrar shall pay,from moneys available under the Escrow Agreement all principal components evidenced and represented by and premium, if any, and interest components evidenced and represented by the 2009 Obligations only to or upon the order of DTC, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations under the Financing Agreement and the Registrar's obligations under the Escrow Agreement and the 2009 Obligations with respect to the principal components evidenced and represented by and premium, if any, and interest evidenced and represented by the 2009 Obligations to the extent of the sum or sums so paid. So long as the 2009 Obligations are held in the Book -Entry System, no person other than DTC shall receive an authenticated Obligation for each separately stated principal component payment date evidencing the obligation of the Registrar to make payments of principal components evidenced and represented by the 2009 Obligations and premium, if any, and interest components evidenced and represented by the 2009 Obligations pursuant to this Resolution. Upon delivery by DTC .to the Registrar of DTC's written notice to the effect that. DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions of this Resolution with respect to transfers of 2009 Obligations, the term "Cede & Co.," in this Resolution shall refer to such new nominee of DTC. Page 5 — Resolution No. 09-22 23 At any time it determines that it is in the best interests of the owners, the City may notify the Registrar, and the Registrar will subsequently notify DTC, whereupon DTC will notify the DTC Participants, of the availability through DTC of Obligation certificates. In such event, the Registrar shall issue, transfer and exchange, at the City's expense, Obligation certificates as requested in writing by DTC in appropriate amounts. DTC may determine to discontinue providing its services with respect to the 2009 Obligations at any time by giving written notice to the Registrar and discharging its responsibilities with respect thereto under applicable law. If DTC resigns as securities depository for the 2009 Obligations, such Obligation certificates shall be delivered pursuant to this section. Under such circumstances (if there is no successor securities depository), the Registrar shall be obligated to deliver Obligation certificates as described in this Resolution, provided that the expense in connection therewith shall be paid by the City. In the event Obligation certificates are executed and delivered, the provisions of this Resolution shall apply to, among other things, the transfer and exchange of such Obligation certificates and the method of payment of principal components evidenced and represented by the 2009 Obligations, premium, if any, and interest components evidenced and represented by such 2009 Obligations. Whenever DTC requests the Registrar to do so, the Registrar will cooperate with DTC in taking appropriate action after written notice (a) to make available one or more separate Obligation certificates evidencing the 2009 Obligations to any DTC Participant having 2009 Obligations credited to its DTC account, or (b) to arrange for another securities depository to maintain custody of certificates evidencing the 2009 Obligations. Section 7. Optional and Mandatory Prepayment. Amounts payable by the City under the Financing Agreement and amounts payable under the 2009 Obligations may be subject to optional prepayment and mandatory prepayment prior to stated principal component payment dates as determined by the Authorized Representative pursuant to Section 9 hereof. Section 8. Tax -Exempt Status and Covenant as to Arbitrage; Reimbursement. (a) The City covenants to use the proceeds of the Financing Agreement and the Project financed with the proceeds of the Financing Agreement, and to otherwise comply with the provisions of the Internal Revenue Code of 1986 (the "Code") so that interest components paid pursuant to any of the 2009 Obligations designated as tax-exempt pursuant to Section 9 hereof will not be includable in gross income of the Registered Owners of such 2009 Obligations for federal income tax purposes. The City specifically covenants; (1) To comply with "arbitrage" provisions of Section 148 of the Code, and to pay any required rebates; and (2) To operate the Project or to cause the Project to be operated so that any of the interest components paid pursuant to any of the 2009 Obligations designated as tax- exempt are not "private activity bonds" under Section 141 of the Code; and (3) To comply with all reporting requirements. The Authorized Representative may enter into covenants on behalf of the City to protect the tax-exempt status of any interest component of the 2009 Obligations. Page 6 — Resolution No. 09-22 24 Attachment 3 Jul 8, 2010 10:49 am Prepared by Western Financial Group, LLC SOURCES AND USES OF FUNDS Lake Oswego 2010 LOIS Bonds (Assuming FF&C Bonds) Sources: Bond Proceeds: Par Amount 37,790,000.00 Premium 2,572,835.25 40,362,835.25 Uses: Project Fund Deposits: Project Fund Deposit 40.000.000.00 Delivery Date Expenses: Cost of Issuance 150,000.00 Underwriter's Discount 207,845.00 357,845.00 Other Uses of Funds: Additional Proceeds 4,990.25 40,362,835.25 Page 1 Jul 8, 2010 10:49 am Prepared by Western Financial Group, LLC Page 2 BOND SUMMARY STATISTICS Lake Oswego 2010 LOIS Bonds (Assuming FF&C Bonds) Dated Date 09/29/2010 Delivery Date 09/29/2010 Last Maturity 06/01/2035 Arbitrage Yield 3.470603% True Interest Cost (TIC) 3.935468% Net Interest Cost (NIC) 4.163469% All -In TIC 3.969612% Average Coupon 4.569676% Average Life (years) 15.407 Duration of Issue (years) 11.185 Par Amount 37,790,000.00 Bond Proceeds 40,362,835.25 Total Interest 26,605,261.39 Net Interest 24,240,271.14 Total Debt Service 64,395,261.39 Maximum Annual Debt Service 2,687,650.00 Average Annual Debt Service 2,610,030.86 Underwriter's Fees (per $1000) Average Takedown Other Fee 5.500000 Total Underwriter's Discount 5.500000 Bid Price 106.258244 Par Average Average Bond Component Value Price Coupon Life All Bond Maturities 37,790,000.00 106.808 4.570% 15.407 37,790,000.00 15.407 All -In Arbitrage TIC TIC Yield Par Value 37,790,000.00 37,790,000.00 37,790,000.00 + Accrued Interest + Premium (Discount) 2,572,835.25 2,572,835.25 2,572,835.25 - Underwriter's Discount -207,845.00 -207,845.00 - Cost of Issuance Expense -150,000.00 - Other Amounts Target Value 40,154,990.25 40,004,990.25 40,362,835.25 Target Date 09/29/2010 09/29/2010 09/29/2010 Yield 3.935468% 3.969612% 3.470603% Jul 8, 2010 10:49 am Prepared by Western Financial Group, LLC NET DEBT SERVICE Date Principal Lake Oswego 2010 LOIS Bonds (Assuming FF&C Bonds) Total Net Interest Debt Service Debt Service Annual Net D/S 06/01/2011 1,061,136.39 1,061,136.39 1,061,136.39 1,061,136.39 12/01/2011 789,275.00 789,275.00 789,275.00 06/01/2012 789,275.00 789,275.00 789,275.00 1,578,550.00 12/01/2012 789,275.00 789,275.00 789,275.00 06/01/2013 1,105,000 789,275.00 1,894,275.00 1,894,275.00 2,683,550.00 12/01/2013 778,225.00 778,225.00 778,225.00 06/01/2014 1,130,000 778,225.00 1,908,225.00 1,908,225.00 2,686,450.00 12/01/2014 766,925.00 766,925.00 766,925.00 06/01/2015 1,150,000 766,925.00 1,916,925.00 1,916,925.00 2,683,850.00 12/01/2015 755,425.00 755,425.00 755,425.00 06/01/2016 1,175,000 755,425.00 1,930,425.00 1,930,425.00 2,685,850.00 12/01/2016 737,800.00 737,800.00 737,800.00 06/01/2017 1,210,000 737,800.00 1,947,800.00 1,947,800.00 2,685,600.00 12/01/2017 719,650.00 719,650.00 719,650.00 06/01/2018 1,245,000 719,650.00 1,964,650.00 1,964,650.00 2,684,300.00 12/01/2018 700,975.00 700,975.00 700,975.00 06/01/2019 1,285,000 700,975.00 1,985,975.00 1,985,975.00 2,686,950.00 12/01/2019 681,700.00 681,700.00 681,700.00 06/01/2020 1,320,000 681,700.00 2,001,700.00 2,001,700.00 2,683,400.00 12/01/2020 658,600.00 658,600.00 658,600.00 06/01/2021 1,370,000 658,600.00 2,028,600.00 2,028,600.00 2,687,200.00 12/01/2021 634,625.00 634,625.00 634,625.00 06/01/2022 1,415,000 634,625.00 2,049,625.00 2,049,625.00 2,684,250.00 12/01/2022 606,325.00 606,325.00 606,325.00 06/01/2023 1,475,000 606,325.00 2,081,325.00 2,081,325.00 2,687,650.00 12/01/2023 576,825.00 576,825.00 576,825.00 06/01/2024 1,530,000 576,825.00 2,106,825.00 2,106,825.00 2,683,650.00 12/01/2024 542,400.00 542,400.00 542,400.00 06/01/2025 1,600,000 542,400.00 2,142,400.00 2,142,400.00 2,684,800.00 12/01/2025 506,400.00 506,400.00 506,400.00 06/01/2026 1,670,000 506,400.00 2,176,400.00 2,176,400.00 2,682,800.00 12/01/2026 468,825.00 468,825.00 468,825.00 06/01/2027 1,745,000 468,825.00 2,213,825.00 2,213,825.00 2,682,650.00 12/01/2027 429,562.50 429,562.50 429,562.50 06/01/2028 1,825,000 429,562.50 2,254,562.50 2,254,562.50 2,684,125.00 12/01/2028 388,500.00 388,500.00 388,500.00 06/01/2029 1,910,000 388,500.00 2,298,500.00 2,298,500.00 2,687,000.00 12/01/2029 340,750.00 340,750.00 340,750.00 06/01/2030 2,005,000 340,750.00 2,345,750.00 2,345,750.00 2,686,500.00 12/01/2030 290,625.00 290,625.00 290,625.00 06/01/2031 2,105,000 290,625.00 2,395,625.00 2,395,625.00 2,686,250.00 12/01/2031 238,000.00 238,000.00 238,000.00 06/01/2032 2,210,000 238,000.00 2,448,000.00 2,448,000.00 2,686,000.00 12/01/2032 182,750.00 182,750.00 182,750.00 06/01/2033 2,320,000 182,750.00 2,502,750.00 2,502,750.00 2,685,500.00 12/01/2033 124,750.00 124,750.00 124,750.00 06/01/2034 2,435,000 124,750.00 2,559,750.00 2,559,750.00 2,684,500.00 12/01/2034 63,875.00 63,875.00 63,875.00 06/01/2035 2,555,000 63,875.00 2,618,875.00 2,618,875.00 2,682,750.00 37,790,000 26,605,261.39 64,395,261.39 64,395,261.39 64,395,261.39 Page 3 Attachment 4 Jul 8, 2010 10:48 am Prepared by Western Financial Group, LLC Page 1 SOURCES AND USES OF FUNDS Lake Oswego 2010 LOIS Bonds (Assuming Revenue Bonds) Sources: Bond Proceeds: Par Amount Premium Uses 41,860,000.00 2,298,074.60 44,158,074.60 Project Fund Deposits: Project Fund Deposit 40,000,000.00 Other Fund Deposits: Debt Service Reserve Fund 3,713,656.46 Delivery Date Expenses: Cost of Issuance 210,000.00 Underwriter's Discount 230,230.00 440,230.00 Other Uses of Funds: Additional Proceeds 4,188.14 44,158,074.60 Jul 8, 2010 10:48 am Prepared by Western Financial Group, LLC BOND SUMMARY STATISTICS Lake Oswego 2010 LOIS Bonds (Assuming Revenue Bonds) Dated Date 09/29/2010 Delivery Date 09/29/2010 Last Maturity 06/01/2035 Arbitrage Yield 3.700514% True Interest Cost (TIC) 4.122751% Net Interest Cost (AIIC) 4.323346% All -In TIC 4.165384% Average Coupon 4.627723% Average Life (years) 16.230 Duration of Issue (years) 11.484 Par Amount 41,860,000.00 Bond Proceeds 44,158,074.60 Total Interest 31,439,325.97 Net Interest 29,371,481.37 Total Debt Service 73,299,325.97 Maximum Annual Debt Service 6,609,750.00 Average Annual Debt Service 2,970,925.17 Underwriter's Fees (per $1000) Average Takedown Other Fee 5.500000 Total Underwriter's Discount 5.500000 Bid Price 104.939906 Page 2 Par Average Average Bond Component Value Price Coupon Life All Bond Maturities 41,860,000.00 105.490 4.628% 16.230 41,860,000.00 16.230 All -In Arbitrage TIC TIC Yield Par Value 41,860,000.00 41,860,000.00 41,860,000.00 + Accrued Interest + Premium (Discount) 2,298,074.60 2,298,074.60 2,298,074.60 - Underwriter's Discount -230,230.00 -230,230.00 - Cost of Issuance Expense -210,000.00 - Other Amounts Target Value 43,9271,844.60 43,717,844.60 44,158,074.60 Target Date 09/29/2010 09/29/2010 09/29/2010 Yield 4.122751% 4.165384% 3.700514% Page 2 O •-O �-O �O•-O•-O•-O•-O•-O`-O'-O`-O�-O�-+O�-O �-O �-O--O`-0�- O\ S N 0. 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W U U U z N N w 00 00 00 00 00 00 00 00 w 00 CDD O� 00 N N N N N N N 00 00 00 00 00 00 r A A W A A w O N VO O J O w A A J 00 U U U U U 0 d C Attachment 5 OHS FIRST DRAFT DISTRIBUTED: JULY 19, 2010 RESOLUTION NO. 10-40 A RESOLUTION OF THE CITY OF LAKE OSWEGO, OREGON, AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCING AGREEMENT, ESCROW AGREEMENT, AND RELATED SALE DOCUMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF THE CITY OF LAKE OSWEGO, OREGON FULL FAITH AND CREDIT OBLIGATIONS, IN ONE OR MORE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $35,000,000 TO FINANCE CAPITAL CONSTRUCTION AND IMPROVEMENTS TO THE CITY'S WASTEWATER SYSTEM AND FOR PAYMENT OF COSTS OF ISSUANCE; DESIGNATING AUTHORIZED REPRESENTATIVES AND DELEGATING AUTHORITY; DECLARING AN INTENT TO REIMBURSE; AND RELATED MATTERS. WHEREAS, the City Council (the "City Council") of the City of Lake Oswego, Oregon (the "City"), a municipal corporation of the State of Oregon, previously enacted Ordinance No. 2521 and Ordinance No. 2539 authorizing the issuance of revenue bonds (the "Revenue Bonds"), in one or more series to finance and refinance (1) the costs of design, acquisition, construction, improvement and equipping of, and additions, replacements, expansions and/or improvements to, the City's wastewater system and the acquisition of all real and personal property necessary, useful or convenient thereto, (2) the funding of debt service fund, if necessary and (3) related bond issuance costs (collectively, the "Project"); and WHEREAS, the City is authorized pursuant to Oregon Revised Statutes ("ORS") Section 271.390 to enter into financing agreements, lease -purchase agreements or other contracts of purchase for any real or personal property that the City Council determines is needed and to provide for the issuance of certificates of participation in the payment obligations of the City under such financing agreements, lease -purchase agreements or other contracts of purchase; and WHEREAS, on June 3, 2009 the City issued its Full Faith and Credit Obligations, Series 2009A in the aggregate principal amount of $60,000,000 pursuant to Resolution 09-22 adopted by the City Council of the City on May 5, 2009; and WHEREAS, in lieu of issuing the Revenue Bonds at this time, after consultation with its financial advisor, the City finds it is in the best interests of the City to authorize the execution and delivery of one or more taxable or tax-exempt Financing Agreements (the "Financing Agreement") between the City and Wells Fargo Bank, National Association (the "Escrow Agent") and one or more Escrow Agreements (the "Escrow Agreement") between the City and the Escrow Agent, to provide the terms for the execution, delivery and sale of certificates of participation in the Financing Agreement in the form of one or more series of full faith and credit obligations (the "2010 Obligations"); and WHEREAS, all or any portion of the 2010 Obligations may be issued as Build America Bonds authorized by the American Recovery and Reinvestment Act of 2009 and this Resolution; and Page 1 — Resolution No. 10 - OHS West:260935434.2 WHEREAS, the City intends to use the proceeds of the Financing Agreement to finance or refinance all or any portion of, or to reimburse the City for the payment of costs of, the Project and to pay costs of issuance of the 2010 Obligations; and WHEREAS, the City anticipates incurring expenditures ("Expenditures") in connection with the Project and wishes to declare its official intent to reimburse itself with the proceeds of the 2010 Obligations for qualifying Expenditures incurred in connection with the Project in conformity with the requirements of the Internal Revenue Code and United States Treasury Regulations Section 1.150-2; and WHEREAS, the City adopts this Resolution (i) to authorize the execution and delivery of the Financing Agreement, and the Escrow Agreement, (ii) to provide the terms under which the City may sell the 2010 Obligations through a public competitive sale or a negotiated sale and enter into the Financing Agreement and the Escrow Agreement, (iii) to provide the terms of execution, delivery and sale of the 2010 Obligations, in one or more series, evidencing and representing the payment 2010 Obligations of the City under the Financing Agreement, and (iv) to designate certain officials and employees of the City as authorized representatives to take action on the City's behalf. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Lake Oswego, as follows: Section 1. Authorization of the 2010 Obligations and Related Agreements. The City hereby authorizes the execution and delivery of the Financing Agreement and the Escrow Agreement, and related documents and the execution and delivery of the 2010 Obligations, in one or more series, by the Escrow Agent, in an aggregate principal amount not to exceed Thirty - Five Million Dollars ($35,000,000). The proceeds of the 2010 Obligations received by the City pursuant to the terms of the Financing Agreement and the Escrow Agreement shall be used to pay all or a portion of the costs of the Project. The true interest cost of the 2010 Obligations shall not exceed six and one-half percent (6.50%) per annum. The 2010 Obligations shall have a final maturity not later than December 1, 2035. The 2010 Obligations shall be subject to a book -entry only system of ownership and transfer as provided in Section 6 hereof. The remaining terms of the 2010 Obligations, the Financing Agreement, the Escrow Agreement and such other documents necessary or relating to the sale, execution and delivery of the 2010 Obligations shall be established as provided in Section 9 hereof. The City hereby authorizes the 2010 Obligations to be sold by negotiated sale or by a public competitive sale and delegates to the Authorized Representative (as defined in Section 2 hereof) the authority to establish the terms for the sale as set forth in Section 9 hereof. Section 2. Authorized Representative. The City authorizes and directs each of the City Manager, the Finance Director, or the designee of either of them (each acting individually or collectively, an "Authorized Representative") to act on behalf of the City and execute and deliver the Financing Agreement, the Escrow Agreement and such other agreements, certificates and documents necessary or related to the sale, execution, delivery and administration of the Page 2 —Resolution No. 10-_ OHS West: 260935434.2 2010 Obligations and to determine the remaining terms of the 2010 Obligations to be established as set forth in Section 9 hereof. Section 3. Security. The financing payments (the "Financing Payments") under the Financing Agreement shall be payable from the City's general non -restricted revenues and other funds that are lawfully available for that purpose, including the proceeds of the Financing Agreement and revenues from an ad valorem tax authorized to be levied under the City's permanent rate limit under sections 11 and l lb, Article XI of the Oregon Constitution, and revenues derived from other taxes, if any, levied by the City in accordance with and subject to limitations and restrictions imposed under applicable law or contract, that are not dedicated, restricted or obligated by law or contract to an inconsistent expenditure or use. The City pledges its full faith and credit and taxing powers to the repayment of the Financing Payments as contemplated by ORS 287A.315, or any successor statute. The registered owners of the 2010 Obligations will not have a lien or security interest on the Project financed with the proceeds of the Financing Agreement. Section 4. Form of 2010 Obligations. The 2010 Obligations shall be prepared in book -entry only form by Special Counsel in substantially the form approved by the Authorized Representative and the Escrow Agent. The 2010 Obligations may be printed or typewritten. Section 5. Authentication, Registration, Payment, Exchange and Transfer. (a) None of the 2010 Obligations shall be entitled to any right or benefit under this Resolution unless an authorized officer of Wells Fargo Bank, National Association or other designated registrar (the "Re isg tray") shall have authenticated it. The date of authentication shall be the date the Registered Owner's name is listed on the register for the 2010 Obligations (the "Register"). (b) All 2010 Obligations shall be in registered form. The Registrar shall authenticate all 2010 Obligations to be delivered on the closing date of the transaction and shall additionally authenticate all 2010 Obligations properly surrendered for exchange or transfer pursuant to this Resolution. (c) The ownership of all 2010 Obligations shall be entered in the Register maintained by the Registrar, and the City and the Registrar may treat the person listed as owner in the Register as the owner of the 2010 Obligations for all purposes. (d) The Registrar shall mail or cause to be delivered the amount due under each 2010 Obligations to the registered owner at the address appearing on the Register on the fifteenth (15th) day of the month preceding the payment date (the "Record Date"). If payment is so mailed, neither the City nor the Registrar shall have any further liability to any party for such payment. (e) The 2010 Obligations may be exchanged for obligations representing the same aggregate principal component payment amounts with the same principal payment date in different authorized denominations, and the 2010 Obligations may be transferred to other owners if the Registered Owners submit the following to the Registrar: Page 3 —Resolution No. 10 - OHS West:260935434.2 (1) written instructions for exchange or transfer satisfactory to the Registrar, signed by the Registered Owner or his attorney in fact and guaranteed or witnessed in a manner satisfactory to the Registrar; and (2) the 2010 Obligations to be exchanged or transferred. (f) The Registrar shall not be required to exchange or transfer any 2010 Obligations submitted to it during any period beginning with a Record Date and ending on the next following payment date; however, such 2010 Obligations shall be exchanged or transferred promptly following that payment date. (g) The Registrar shall not be required to exchange or transfer any 2010 Obligations that have been designated for prepayment if such 2010 Obligations are submitted to the Registrar during the 15 -day period preceding the designated prepayment date. (h) For purposes of this section, 2010 Obligations shall be considered submitted to the Registrar on the date the Registrar actually receives the materials described in subsection (e) of this Section 5. (i) In the event any Obligation is mutilated, lost, stolen or destroyed, the Registrar may issue a new Obligation of like principal payment date, interest component and denomination if the asserted owner of such Obligation provides to the Registrar and the City an affidavit, certificate or other reliable proof that the Registrar or the City reasonably finds protects the City from conflicting claims for payment under the 2010 Obligations. 0) The City may alter these provisions regarding registration, exchange and transfer by mailing notification of the altered provisions to all Registered Owners and the Registrar. The altered provisions shall take effect on the date stated in the notice, which shall not be earlier than 45 days after notice is mailed. Section 6. Book -Entry System. During any time that the 2010 Obligations are held in a book -entry -only system (the "Book -Entry System"), the registered owner of all of the 2010 Obligations shall be The Depository Trust Company, New York, New York ("DTC"), and the 2010 Obligations shall be registered in the name of Cede & Co., as nominee for DTC. The City has entered into a Blanket Issuer Letter of Representations (the "Issuer Letter") wherein the City represents that it will comply with the requirements stated in DTC's Operational Arrangements as they may be amended from time to time. Under the Book -Entry System, the 2010 Obligations shall be initially executed and delivered in the form of a single fully registered obligation certificate, one for each Series and maturity of the 2010 Obligations. Upon initial execution and delivery, the ownership of such 2010 Obligations shall be registered by the Registrar on the registration books in the name of Cede & Co., as nominee of DTC. The City and the Registrar may treat DTC (or its nominee) as the sole and exclusive registered owner (the "Registered Owner") of the 2010 Obligations registered in its name for the purposes of. (i) payment of the principal component evidenced and represented by such 2010 Obligations; (ii) prepayment price of, and premium, if any, or interest component evidenced and represented by the 2010 Obligations; (iii) selecting the 2010 Obligations or portions thereof to be redeemed, if any; (iii) giving notice as required under this Page 4 —Resolution No. 10-_ OHS West:260935434.2 Resolution; (v) registering the transfer of 2010 Obligations; and (vi) obtaining any consent or other action to be taken by the owners and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. The Registrar shall not have any responsibility or obligation to any person claiming a beneficial ownership interest in the 2010 Obligations under or through DTC or any DTC Participant ("Participant"), or any other person that is not shown on the registration books of the Registrar as being a registered owner, with respect to: (i) the accuracy of any records maintained by DTC or any Participant; (ii) the payment by DTC or any Participant of any amount in respect of the principal component evidenced and represented by or prepayment price of or interest component evidenced and represented by the 2010 Obligations; (iii) any notice or direction which is permitted or required to be given to or received from owners under this Resolution or the 2010 Obligations; (iv) the selection by DTC or any DTC Participant of any person to receive payment in the event of a partial prepayment of the 2010 Obligations; or (v) any consent given or other action taken by DTC as owner; nor shall any DTC Participant or any such person be deemed to be a third party beneficiary of any owners' rights under this Resolution or the 2010 Obligations. The Registrar shall pay from moneys available under the Escrow Agreement all principal components evidenced and represented by and premium, if any, and interest components evidenced and represented by the 2010 Obligations only to or upon the order of DTC, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations under the Financing Agreement and the Registrar's obligations under the Escrow Agreement and the 2010 Obligations with respect to the principal components evidenced and represented by and premium, if any, and interest evidenced and represented by the 2010 Obligations to the extent of the sum or sums so paid. So long as the 2010 Obligations are held in the Book -Entry System, no person other than DTC shall receive an authenticated Obligation for each separately stated principal component payment date evidencing the obligation of the Registrar to make payments of principal components evidenced and represented by the 2010 Obligations and premium, if any, and interest components evidenced and represented by the 2010 Obligations pursuant to this Resolution. Upon delivery by DTC to the Registrar of DTC's written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions of this Resolution with respect to transfers of 2010 Obligations, the term "Cede & Co.," in this Resolution shall refer to such new nominee of DTC. At any time it determines that it is in the best interests of the owners, the City may notify the Registrar, and the Registrar will subsequently notify DTC, whereupon DTC will notify the DTC Participants, of the availability through DTC of Obligation certificates. In such event, the Registrar shall issue, transfer and exchange, at the City's expense, Obligation certificates as requested in writing by DTC in appropriate amounts. DTC may determine to discontinue providing its services with respect to the 2010 Obligations at any time by giving written notice to the Registrar and discharging its responsibilities with respect thereto under applicable law. If DTC resigns as securities depository for the 2010 Obligations, such Obligation certificates shall be delivered pursuant to this section. Under such circumstances (if there is no successor securities depository), the Registrar shall be obligated to deliver Obligation certificates as described in this Resolution, provided that the expense in connection therewith shall be paid by the City. In the event Obligation certificates are executed and delivered, the provisions of this Resolution shall apply to, among other things, the transfer and exchange of such Obligation certificates and the method of payment of principal components evidenced and represented by Page 5 —Resolution No. 10 - OHS West:260935434.2 the 2010 Obligations, premium, if any, and interest components evidenced and represented by such 2010 Obligations. Whenever DTC requests the Registrar to do so, the Registrar will cooperate with DTC in taking appropriate action after written notice (a) to make available one or more separate Obligation certificates evidencing the 2010 Obligations to any DTC Participant having 2010 Obligations credited to its DTC account, or (b) to arrange for another securities depository to maintain custody of certificates evidencing the 2010 Obligations. Section 7. Prepayment. Amounts payable by the City under the Financing Agreement and amounts payable under the 2010 Obligations may be subject to optional, mandatory, extraordinary and/or conditional prepayment prior to stated principal component payment dates as determined by the Authorized Representative pursuant to Section 9 hereof. Section 8. Tax -Exempt Status and Covenant as to Arbitrage; Reimbursement. (a) The City covenants to comply with the instructions and requirements of the Tax Certificate to be executed upon delivery of the 2010 Obligations. This covenant shall survive payment in full or defeasance of the 2010 Obligations. (b) The City hereby declares its official intent to use proceeds of the 2010 Obligations to reimburse Expenditures. This declaration is made solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations. This declaration does not obligate the City to make any expenditure, incur any indebtedness, or proceed with the Project. Section 9. Delegation for Establishment of Terms and Sale of the 2010 Obligations. Each Authorized Representative is hereby authorized and directed, on behalf of the City without further approval of the City Council to: (a) establish the series designations, the principal and interest component payment dates, principal component amounts, prepayment provisions, if any, interest component amounts, premium and/or discount, if any, denominations and all other terms for the Financing Agreement and the 2010 Obligations; (b) establish the method of sale of the 2010 Obligations as authorized in Section 1 hereof, and if the 2010 Obligations are sold on a negotiated basis, negotiate, execute and deliver a bond purchase contract in the form approved by the Authorized Representative and such other agreements, certificates or sale documents as are necessary in connection therewith, or if the 2010 Obligations are sold on in a public competitive sale, approve the final form of and cause an Official Notice of Obligation Sale (the "Notice") for a competitive sale, substantially in the form approved by the Authorized Representative to be published electronically and award the successful bid or reject the bids for the 2010 Obligations, as directed by this Section 9; (c) make any covenants necessary or desirable to obtain favorable financing terms on the 2010 Obligations with respect to the pledge of the City's full faith and credit to secure the 2010 Obligations; (d) negotiate the terms of, and execute and deliver the Financing Agreement and the Escrow Agreement; Page 6 —Resolution No. 10-_ OHS West:260935434.2 (e) approve and authorize the preparation and distribution of preliminary and final official statements relating to the 2010 Obligations; (f) obtain ratings on the 2010 Obligations if determined by the Authorized Representative to be in the best interest of the City and expend 2010 Obligation proceeds to pay for such ratings; (g) approve the form of the 2010 Obligations and take such actions as are necessary to qualify the 2010 Obligations for the book -entry system of DTC; (h) apply for and negotiate the terms of a financial guaranty insurance policy or other credit instrument (the "Insurance Policy") with respect to payment of principal and interest on the 2010 Obligations if determined by the Authorized Representative to be in the best interest of the City, and if purchased, direct expenditure of Obligation proceeds to pay any insurance premium and to execute and deliver any agreements, commitments, Obligation certificates or documents determined by the Authorized Representative to be in the best interest of the City; (i) approve, execute and deliver a Continuing Disclosure Certificate pursuant to the Securities and Exchange Commission Rule 15c2-12, as amended (17 C.F.R. § 240.15c2-12); 0) enter into covenants regarding the use of the proceeds of the 2010 Obligations received by the City pursuant to the Financing Agreement and the use of the Project to maintain, if applicable, the tax-exempt status of the 2010 Obligations; (k) enter into covenants regarding the use of the proceeds of the 2010 Obligations received by the City pursuant to the Financing Agreement and the use of the Project to maintain, if applicable, the qualification of the 2010 Obligations as "Build America Bonds" under the Code; (1) approve, execute and deliver closing documents and certificates relating to the sale of the 2010 Obligations and the execution and delivery of the Financing Agreement, the Escrow Agreement and the 2010 Obligations; (m) execute and deliver a certificate specifying the actions taken pursuant to this Section 9, and any other certificates, documents or agreements that an Authorized Representative determines are desirable to execute and deliver the Financing Agreement and the Escrow Agreement and otherwise to sell and deliver the 2010 Obligations in accordance with this Resolution. Section 10. Procedures for Sale of the 2010 Obligations. Pursuant to Sections 1 and 9 hereof, the Authorized Representative shall establish the method of sale of the 2010 Obligations. If the 2010 Obligations are sold pursuant to a public competitive sale, the Authorized Representative shall cause the Notice, or a summary thereof, to be published electronically on the Internet prior to the sale date stated in the Notice. For a competitive sale, bids to purchase the 2010 Obligations shall be received and reviewed on the date specified by the Authorized Representative in the Notice or upon such later date determined by the Authorized Representative if the sale is postponed based on market or other conditions. The Authorized Representative is authorized, on behalf of the City, to accept or reject the bids for the 2010 Page 7 —Resolution No. 10-_ OHS West:260935434.2 Obligations. The Authorized Representative may postpone the sale of the 2010 Obligations to a later date, cancel the sale based upon market conditions or, alternatively, enter into a negotiated sale of the 2010 Obligations pursuant to terms determined and approved by the Authorized Representative and as authorized by this Resolution. Section 11. Provisions Relating to Insurance. In the event that an Insurance Policy is obtained in connection with the 2010 Obligations, the applicable terms and conditions of the Insurance Policy shall be set forth in the Escrow Agreement. If and to the extent necessary and desirable, the Escrow Agreement may provide as follows with respect to the Insurance Policy: (a) That pursuant to the provisions of the Financing Agreement regarding defaults and remedies, if an Event of Default (as defined in the Financing Agreement) shall have occurred and be continuing, the provider of the Insurance Policy (the "Insurer") with respect to the insured 2010 Obligations shall be deemed to be the Owner of such insured 2010 Obligations in connection with any consent or direction, appointment, request or waiver to be provided thereunder; (b) That the Insurer with respect to the insured 2010 Obligations shall have the right to institute any suit, action or proceeding at law or in equity under the same terms as an Owner of such insured 2010 Obligations in accordance with this Resolution and the Escrow Agreement; and (c) That the Insurer shall, to the extent it makes any payment of principal components or interest components pursuant to the insured 2010 Obligations it insures, become subrogated to the rights of the recipients of such payments in accordance with the terms of its Insurance Policy. Section 12. Notices to the Insurer; Payment Procedures. (a) The City shall send or cause to be sent to any Insurer copies of notices required to be sent to Owners or the Escrow Agent pursuant to this Resolution or the Escrow Agreement. (b) The City shall observe and perform any payment procedures under the Insurance Policy required by the Insurer as a condition to the issuance and delivery of such Insurer's Insurance Policy. Section 13. Defeasance. The City may defease its 2010 Obligations under the Financing Agreement by setting aside, with a duly appointed escrow agent, in a special escrow account irrevocably pledged to the payment of the principal and interest components of the Financing Agreement to be defeased, cash or direct obligations of the United States of America, including obligations of any federal agencies to the extent they are unconditionally guaranteed by the United States of America, in an amount which, in the opinion of a nationally recognized expert in the field of mathematical calculations relating to tax-exempt obligations, is sufficient without reinvestment to pay all principal components and interest components of the defeased Financing Agreement until the principal payment date or any earlier prepayment date. The obligations of the City under the Financing Agreement that have been defeased pursuant to this Section shall be deemed paid and no longer outstanding, and shall cease to be entitled to any Page 8 —Resolution No. 10 - OHS West:260935434.2 lien, benefit or security under this Resolution, the Financing Agreement or the Escrow Agreement except the right to receive payment from such special escrow account Section 14. Appointment of Special Counsel and Financial Advisor. The City hereby appoints Orrick, Herrington & Sutcliffe LLP of Portland, Oregon, as special counsel to the City with respect to the 2010 Obligations and Western Financial Group, LLC, as Financial Advisor to the City with respect to the 2010 Obligations. Section 15. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the 2010 Obligations by those who shall own the same from time to time (the "Obligation Owners"), the provisions of this Resolution shall be part of the contract of the City with the Obligation Owners and shall be deemed to constitute a contract between the City and the Obligation Owners pursuant to ORS 287A.315 and ORS 287A.325, or any successor statute. The covenants, pledges, representations and warranties contained in this Resolution, or in the closing documents executed in connection with the 2010 Obligations, including without limitation the City's covenants and pledges contained in Section 3 hereof, and the other covenants and agreements herein set forth to be performed by or on behalf of the City shall be contracts for the equal benefit, protection and security of the Obligation Owners, all of which shall be of equal rank without preference, priority or distinction of any of such 2010 Obligations over any other thereof, except as expressly provided in or pursuant to this Resolution. [Remainder of this Page Intentionally Left Blank] Page 9 —Resolution No. 10 - OHS West:260935434.2 Section 16. Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council. Considered and enacted by the City Council of the City of Lake Oswego, Oregon, at a regular meeting held on the 3rd day of August 2010. AYES: NOES: EXCUSED: ABSTAIN: Jack D. Hoffman, Mayor ATTEST: Robyn Christie, City Recorder Approved as to Form: David D. Powell, City Attorney Page 10 —Resolution No. 10 - OHS West:260935434.2 CITY COUNCIL SPECIAL MEETING INTERVIEWS JULY 27, 2010 Mayor Jack D Hoffman called City Council Special Meeting to order at 4:06 p.m. on July 27, 2010, in the City Council Chambers, 380 A Avenue. Present: Mayor Hoffman, Councilors Moncrieff, Tierney, Olson, and Jordan. Council President Johnson and Councilor Hennagin were excused. Staff Present: Robyn Christie, City Recorder Alex McIntyre, City Manager; David Powell, City Attorney 3. INTERVIEWS FOR COUNCIL VACANCY Mayor Hoffman explained the interviewing and applicant selection process to replace the pending City Council position being vacated by Kristin Johnson. An official decision to fill the vacancy would be made in August. 3.1 James Radda Q: Why would he like to fill this vacancy, was there a specific issue that motivated him to apply? A: Prior to the vacancy, he had not considered running for City Council. He had served on several boards, including the Downtown Portland Condo Association, Citizens Advisory for Lake Oswego School Board and as President of his Neighborhood Association. His work experience placed him in positions where he had to perform in stressful situations. He was the Regional Manager of an engineering company for two of their regional offices. His last position was as a non -engineer managing 175 employees in Beijing, China. He found he thrived in difficult situations. He believed even though he had limited experience with the City of Lake Oswego, he has the ability to learn a lot, learn on the fly, and exercise good judgment. Q: Were there any particular or specific issues facing the City Council over the next four months that lead him to apply? A: He would like to pursue the sustainability issue. Although he did not call it that, he believed the highest and best use for resources was to do nothing. If sustainability was going to be developed, they needed to consider the amount of damage they would cause and with minimal development, no matter where it was, to make something that was viable for people and yet did minimal environmental damage. He believed any time there was development there would be damage and nothing people had done to the environment had improved it. Q: What did he think were the biggest issues facing the Council now and in the next four months? A: He believed it was the money issue, and if something had to be cut, the last thing to be cut should be the infrastructure because that was the longest to recover. Q: Did he have any thoughts regarding the programs or issues facing the Council over the next four months, which include West End Building Refinance, Foothills/Streetcar, and Sensitive Lands? A: Regarding the West End Building refinance and property, he had been through the building several times and there was a lot of excess space. He did not know about the financing part but the building was an under-utilized facility, which could cause financing issues. Regarding the Foothills/Streetcar Development, he frankly believed the millions being spent on this potential development was a waste of money at this time and that it should not be done. It certainly did not City Council Special Meeting Minutes Page 1 of 8 July 27, 2010 need be done this year or even the next; most believed it would be 5 to 10 years before the City could be viably developing that project. Regarding the Sensitive Lands process and decision, although he was interested in resources, it was a complicated subject. He had read and seen many arguments, but was not sure what position he would take, nor what the objective was. Q: Would he still be interested in running for the City Council interim position, knowing that this current appointment only lasted until December 31, 2010 and with the position being available again for the November 2010 elections? A: If he were selected as the replacement Councilor, he would want to see it for a couple of months to decide if he wanted to continue in that role after the November 2010 elections. He probably would be interested in running but he did not want to commit. Q: Could he expand upon his comment that the money issue was the number one issue facing the Council? A: He believed it was not unusual for Lake Oswego that revenues had decreased and expenses had increased or stayed the same, but the question was how to make it work. If there were cuts, he would like the last cut to be the infrastructure. Infrastructure was a long-term thing, and though it might be cruel to say, people were easier to find, and losing infrastructure means losing something for years down the road. Q: Was he the past Chair of the Glenmorrie Neighborhood Association? A: Yes, he was the President of the Committee that formed the neighborhood plan, and once formulated he became the Chair of the Association for two to three years. He returned to the board last year and was now the Treasure for the Association. Q: Did he personally have a Sensitive Land overlay? A: He replied no. Q: Did he have any issues that he would like the City Council to focus their attention on? A: He stated other than what the Council was doing now, no. Q: What was his impression on how the City was doing? A: He believed the City was doing well, even with the constraints put on by Metro, the State of Oregon, and the economic situation. Coming from a small town in Iowa, he liked a small town atmosphere with city development done in a suburban area, a village concept; he liked what had already occurred in that regard. Q: Are there any final comments he would like to add? Why should he be selected over the other applicants? A: Although he did not have as much experience working with the City as the other applicants, which might make him less qualified, he did have a lot of general management experience. He admitted the Councilors did not know him personally and that selections were made based on being familiar or having a certain rapport with someone but as he stated, his strength was being placed in difficult positions where he had to make due and make corrections. Mayor Hoffman called for a short minute break and reconvened at 4:25 p.m. 3.2 Ellie McPeak Ms. McPeak withdrew her application. 3.3 Daniel Vizzini Q: Why would he like to fill this vacancy and what specific issue motivated him to apply? A: He believed it was an interesting opportunity to be on that side of the room, although four months was not a long time, it was just enough time to get a sense of what being on the Council City Council Special Meeting Minutes Page 2 of 8 July 27, 2010 would be like in the capacity of decision maker rather than advisor. City Council was the one part of government in which he did not have experience; therefore the four-month interim position would be enough time to fulfill his curiosity of a City Councilor's role and the dynamics inside a decision- making, government body. He had no specific issue that motivated him to apply; he had lived in the community for a quarter of a century, was intensely involved in the community and the Planning Commission, and wanted to be involved in a meaningful way. The vacancy on the board was so short that he had no agenda or intent to change the course of the City in that time. However, there are issues in the calendar that run the gamut, and this was a great opportunity for somebody interested, so he didn't think there was just one issue. He was more interested in the dynamics and process of government rather than the issues. Q: What did he see were the biggest issues for the Council over the next five months? A: The issues currently before the Council have long-term effects, Foothills, Streetcar, WEB, and the managing of the budget in terms of how the Council tees it up was an issue all by itself. In addition, the Comprehensive Plan and Stafford was a huge issue. The issues facing the City Council will involve discussions and early decisions that are at the beginning of a much longer process with longer-term ramifications. As a former Planning Commissioner, he believed it felt right to be involved with the big issues that have long-term reach. Q: Are there any issues he felt the Council should focus their attention on over the next five months? A: He believed the Council should focus on the management of public services. He shared his prior boss's outlook on conserving public resources, staying focused on the core mission and attending to the "knitting," the small items, so it doesn't come back to bite you. In tough economic times, how the Council manages the City, both the budget and the performance of Staff, becomes a critical and credibility issue that would pay the City back if they came out of this fiscal year both with a stronger organization, with the blue print for a stronger community. He believed it would benefit the City to deal with the small items and performance. Many things in the City get high marks while the controversial issues, like land use, were harder to manage and required more attention. Q: What were his thoughts regarding the programs or issues facing Council, including West End Building, Foothills/Streetcar, and Sensitive Lands? A: Regarding Sensitive Lands, the test scores had done exactly what they were asked, which was figure a way to balance the demands as stewards of the city's natural resources and the concerns raised by property owners. The way the Council worked through it over the year was a good investment because of what it meant in terms of engaging the community as much as the end results. He believed there was still a lot of work to do on that issue. Regarding WEB, he did not know enough to speak intelligently about it. He agreed that once property came into the public trust it should never be gotten rid of, lease it for 150 years but never get rid of it, because it was hard to get property into the public domain. The future of WEB depended upon effectively using the space in a way as not to drain the treasury. Regarding Foothills/Streetcar, he would not link them, although he understood they were. There was a faster timeline than he suspected; he would have preferred to see Foothills develop in its own time and way with the guidance and investment of the City without the faster paced development influenced by the Streetcar. Regarding the Streetcar, he believed Lake Oswego needed to become a more efficient community with the hope for a greater linkage to the rest of the region and a lower carbon footprint; part of the decision on moving forward needed to be about how to make things more efficient. Q: Where should the Council focus its attention and what are the biggest issues for the Council over the next five months? A: He believed the biggest issues were the "knitting," focusing on what they should be spending their time and attention on and long-term issues needing near-term decisions; those should not be City Council Special Meeting Minutes Page 3 of 8 July 27, 2010 ignored. The Comprehensive Plan needed moving in the right direction and Foothills needed to be addressed, but it was really about the "knitting." Q: What made him stand out from the other applicants and why should the Council select him? A: He did not know the other applicants so it would be unfair for him to speak about them. However, the time he would spend in the position he would bring a certain independence of thinking and a long resume of experience dealing in municipal affairs, from the financial side, to infrastructure, to community process, and civic engagement. He was not viewing the appointment as a path to get into public office. Q: Did he intend to run in the November 2010 elections, when the position opened again. A: He stated no, he did not intend to run. Q: Could he expand on his comment regarding how the "knitting" was like managing the public services and as a Council member how would he accomplish that? A: He works in Portland where the lines are blurred between executive and legislative. However, there are a series of status reports on the Council's calendar and check -ins with Staff on areas that are critical or of interest to the Council. Those engagements give opportunities to work with the City Manager and Senior Management to increase performance, proficiency, and to move towards their goals. It's a little more indirect, and just a different way of doing things. During the recession of the 1980s, Portland's City Council and Office of Finance, initiated an allotment system. The budget appropriations were done by the quarter, and when things got really bad, they were looking to allocate by the month. That turned out to be administratively insane, but allocating by quarter meant that savings within the budget could be culled and protected. He believed there were other ways of doing oversight with the administration and over the next couple of years, there would be more oversight type meetings, which was the way he would pursue it. Q: Could he give his thoughts on his statement that the Council would need to address the Stafford issue soon? A: He regretted that when he was on the Planning Commission, they had begun work around 2001-2002 regarding the Master Planning around Stafford; Ron Bunch even prepared a preliminary draft of a Concept Plan for what Stafford might look like that was enlightening and far- sighted. Regardless of the current process, the Master Planning around Stafford was a lost opportunity for the City to control Stafford's level of density and development. Resources are tight but it would be money well spent to start thinking about the future of Stafford. 3.4 David Poulson Q: Why would he like to fill this vacancy and did any specific issue motivate him to apply? A: He said he wanted to apply as away to give back to the community for their support of him and his family. He worked as a civil engineer and office manager and shared specific information regarding his children's health and his family's commitment to their education. He was now in the position to serve in a role as City Councilor and wanted to increase his exposure. Q: What motivated his decision? A: He believed he could bring special qualifications that would represent a perspective he had gained over the last 25 years, not only as a private consultant for property development in cities like Lake Oswego, but also as a formal city engineer for a small community in Alaska. He has experience on both sides of the table and understood the dynamics and perspective of the city. His business education from managing a business in Lake Oswego would be refreshing and the Council could learn from his perspective. He spent two years in China with an MBA in International Business and his experience with the economy would bring a global perspective that would inform his local decisions, which would be beneficial to the Council. Q: Was there any specific issue that motivated him to apply for the position? City Council Special Meeting Minutes Page 4 of 8 July 27, 2010 A: It was his practical knowledge of how cities functioned and his perspective on both sides of the equation. He did not have any agenda in terms of Sensitive Lands or the rail car; he would like to discuss those issues in detail with the Council to elaborate on his larger vision of things that time would not allow. He wanted to offer his practical knowledge, experience and perspective to Council, which will help him get more exposure. Q: What did he see were the biggest issues for the Council over the next five months? A: He stated it was the economy. He did not believe this was a cyclical recession, but a sea change was coming and decisions could not be made unless based on the larger economic perspective. He discussed in detail the yield curve, long-term bond rate, Federal Reserve, the Carter years, and concluded that his point was the interest rate must and would adjust. He stated that he brings an economic perspective to inform Council decisions. Q: Were there any local issues that he felt the Council should be focusing on? A: Using Sensitive Lands as an example, he tried to negotiate resource protection areas, buffers, for clients who had large developments. As an engineer, he had learned when designing something complex, the design or policy needed to include some type of adjustment when applying it to the real world. The Sensitive Land issue needed that type of adjustment. Q: What were his thoughts regarding the West End Building and Streetcar issues? A: Regarding the WEB, he did not know what the City's current finances were in terms of affordability and maintaining debt services but he believed the City should hold on to the building as an asset something that has intrinsic value. Regarding the Streetcar, he believed it was a larger subject and that the model used to establish the economic viability was based upon past demographic and economic models. He was not against it, but believed a closer look should be taken at the Streetcar issue as his concern was with past loose credit issues and the momentum was pushing the Streetcar in that direction. Q: Did he intend to run in the November 2010 election? A: He stated it was not his plan to run for election at this time. Once the Council became familiar with him he would than consider running in another year or two. Q: What type of exposure did he hope to gain by sitting on the Council for the next five months? A: He believed it would give people the chance to get to know him as a serious person with an extensive background, education, and perspective. 3.5 Mike Kehoe Q: Why would he like to fill this vacancy, was there a specific issue that motivated him to apply? A: He would be running for City Council in the November 2010 election and believed the position required a lot of time and energy. By starting in the position as soon as possible, it would help him to get up to speed, learn the facts of the City, help him make good decisions, and become a part of the team. He did not apply for the vacancy based on one issue, but he has lived in Lake Oswego for 25 years and had always been involved and worked hard in the community and organizations to help make decisions. Q: What did he see were the biggest issues for the Council over the next five months? A: The financial situation was a key issue but he would like to see the Council get more involved with helping the school districts. He was concerned with significant cutbacks. He believed the schools are the driving force for getting great, active, and vibrant people into the community. The second issue was how to keep businesses in Lake Oswego, there is vacant business space that could be filled. A good approach could be fostering an incubator space for small businesses to help them develop and then move them into some of the larger spaces. City Council Special Meeting Minutes Page 5 of 8 July 27, 2010 Q: Did he have any thoughts regarding the programs or issues facing Council over the next five months, which include West End Building, Foothills/Streetcar, and Sensitive Lands? A: Regarding the WEB, he believed more research was needed to make an informed decision; he was familiar with commercial real estate, acquisition, disposition, and management. The decision of what to do with the WEB is challenging now that it was worth less than when first purchased. Regarding the Foothills area, he believed that it would be a fabulous addition to Lake Oswego one day, a perfect way for the city to grow. However, it needed to be done in a financial, reasonable, and practical way. Based on the current real estate market he believed it was too early to get involved in development of the area. Regarding the Streetcar project, any program to get cars off the road was a good step but more research was needed to determine if it was financially feasible. Regarding the Sensitive Lands, he believed Lake Oswego has many features that make it the best city to live in and one factor was Lake Oswego's attention to preserving the land. Q: What made him stand out from the other applicants and why should the Council select him? A: He explained his background as a self-starter, hard worker with a great work ethic, and being a strategic and creative thinker would be an asset to the Council. He has had a successful career in building ownership and management, invested and started companies with up to 80 employees, and has sold and purchased businesses. The key to his success has been researching and making good decisions. Q: If appointed to the position and as a standing candidate for the Council, how would he answer the question if asked by someone in the community that the Council was influencing the election by choosing an applicant for the interim position that they wanted to see elected in November 2010? A: He believed the Council did not have any preconceived criteria nor indicated that an applicant who was running for the position during the November 2010 elections could not apply; therefore, the Council was not being placed in an awkward position. He expected the selected applicant would have a leg up during the elections and it still was up to the voters. He agreed the applicant selected would have an advantage due to the exposure. Q: Given that there were State Statues that provided separation between what the cities and schools could do with regard to finances, did he research where those lines were and what creative suggestions he believed the City could do to help the school districts? A: He understood that Statues did exist and he was working on ideas that could help the school districts. Q: Did he have any closing comments? A: He appreciated the opportunity to speak with the Council and hoped he was selected to help make decisions that would make Lake Oswego an even better place to live. Mayor Hoffman called for a 5 minute break at 5:10 p.m. 3.6 Paul Moredock (Interview conducted over the telephone) Q: Why would he like to fill this vacancy, was there a specific issue that motivated him to apply? A: He has been living in Lake Oswego for a long time, loves the community, and believed he could make a valuable contribution for the short period needed by the position. He did not apply based on a specific issue, he believed the multitude of issues including the LOIS and Sensitive Lands Projects currently before the Council were important issues, and he was not looking to be a policy maker causing the Council to head in a new direction. Based on his background as a store manager, entrepreneur, business planner, and local resident, he would be a good contributor to the Council. Q: What did he see were the biggest issues for the Council over the next five months? A: The Sensitive Land issue and its impact on the residents, and the implementation of the recommendation of the Council are critical. The ongoing supervision and input on the LOIS Project City Council Special Meeting Minutes Page 6 of 8 July 27, 2010 and being involved in the Transit Project from Portland to Lake Oswego are other issues of importance. Q: Where did he think the Council should focus their attention over the next five months? A: He believed the Council's goal should be the implementation of recommendations for the Sensitive Land Project, to stay on time and on budget with the LOIS Project while dealing with community concerns on both of those issues. Q: What were his thoughts, understanding, and opinion of the Foothills/Streetcar Project? A: He was a fan of the concept and liked the idea of using alternative modes of transportation however, he believed staying proactive and aware of how those projects would impact the environment and land was important. He was also a fan of development in the Foothills area subject to the project's environmental impact, community reaction, overall grand vision, and having a strategy with a purpose. Q: What were his thoughts regarding the West End Building? A: He shared his understanding of the issue, as a Council member his focus would be to identify what would be the appropriate use of the building, funds, and resources. Q: Were there any other issues he saw the Council facing over the next five months? A: He believed that due to the difficult economic times the City needed to be supportive of the Lake Oswego business owners. He saw his role as a Council member to be a good listener and collaboration builder; these were strengths that he could bring to the Council position if selected. Q: Did he intend to run for the Council Position during the November 2010 election? A: He stated it was not his intention to run beyond the term of the current vacancy. Q: What made him stand out from the other applicants and why should the Council select him? A: His background as an entrepreneur, business manager, and marriage counselor provided him experience with managing budgets, other people's money, being a good listener and collaborator, as well as a good community builder would be a unique skill set for the Council. He would be the right choice for Council as an interim member with no political ambitions but with a passion for the city. 4. DISCUSSION Mayor Hoffman reiterated the process and time frame for making a decision on which applicant would be selected to fill the interim Council position. He appreciated the five candidates that applied. He was looking for an applicant that had knowledge of what was going on in the City, because of the amount of time it takes to get up to speed on the issues. He was comfortable with Dan Vizzini due to his background and experience on the Planning Commission. He believed Mike Kehoe was qualified but was concerned with his interest of running for election in November 2010 and would be uncomfortable appointing a candidate to the interim position. His top two candidates would be Dan Vizzini and Paul Moredock; he believed Mr. Moredock had a grasp of the issues. Councilor Moncrieff believed that all the applicants had something to offer the City. She appreciated Mike Kehoe as a candidate for applying, which showed he was ready to get on with the job. She agreed that he was qualified for the interim position and his dedication to the future of the city. She appreciated David Poison's finance comments and hoped if he did not get appointed to the position that he apply for the Budget Committee or work with the City in another capacity. Likewise for James Radda with his interest for sustainability, he might be interested in the Sustainability Advisory Board. She agreed Dan Vizzini was a strong applicant because of his experience being on the Planning Commission, the Lake Oswego Neighborhood Action Coalition (LONAC), and his long history with the City. She liked his comments regarding priorities that skip to the "knitting," the City's financial strength, and how the Council deals with the City Staffing departments. Her top two candidates were Dan Vizzini and Mike Kehoe, adding Mr. Vizzini would City Council Special Meeting Minutes Page 7 of 8 July 27, 2010 be an interesting selection since it would be a short-term appointment and she was confident the City would have other opportunities for Mr. Kehoe. Councilor Tierney stated each candidate brings their own set of skills and are each qualified in their own right. The criteria he originally had for the interim position was for an applicant to also be running as a candidate so they could participate and have a good foundation. He now believed the Council should not be in a position of showing favor to a candidate over any applicant running for the position. The applicant that met his experience criteria was Dan Vizzini, who had demonstrated over the years his grasp of the issues that face the City and that he could make an impact during the five-month period of the interim position. Councilor Jordan stated she also was impressed with the applicants and believed they were all qualified. However, as a Councilor, it was awkward for her to say that she could not appoint an applicant who was also running for a Council position in the November 2010 elections. However, choosing an applicant had to do with them knowing the City, having a grasp of the City's budget and financial situation. Having knowledge of the budget was important to her and she believed that Dan Vizzini had seen and understood the City's budget. She did not believe that some of the financial concerns mentioned were as dire as indicated by some of the applicants. She would select Dan Vizzini as he was a hard worker, interested and involved, a big communicator with people, a good listener, and knows about the issues that the Council would be facing over the next five months. Councilor Olson was concerned by Dan Vizzini's reasons for wanting to be a Council member; the fulfillment of his curiosity and his interest of the Council dynamics of their decision-making process rather than the issues themselves. She believed they needed someone that would get into the policy issues and decision-making process and not just be on the Council to satisfy their curiosity. In addition, she believed there was a conflict with Mr. Vizzini being a good friend and the prior campaign manager for the Mayor. She believed it was disingenuous for the Council to say that they would not show favor to Mike Kehoe as an applicant that was running for Council Candidacy in the November 2010 elections, as Council had opened the interim position up to anyone that wanted to apply. She did not want to second-guess why other candidates chose not to apply for the interim position but they too had the opportunity to apply and the candidacy should not have bearing on applicant selection. She agreed it would benefit Mr. Kehoe if selected to have the five-month experience prior to the November 2010 elections, this would bring him up to speed by January 1, 2010. She was impressed that all the applicants understood the Council would be facing some difficult economic decisions, that the applicants were willing to look at the big picture, to think outside the box, and with their management and decision making experience. Her top choice was Mike Kehoe, with David Poulson and Paul Moredock in a close second. Mayor Hoffman thanked the Councilors for the comments and stated the final decision on applicant selection would be August 3, 2010. Mayor Hoffman adjourned the meeting at 5A0 p.m. APPROVED BY THE CITY COUNCIL: ON Decernber 7 2010 Ja . Hoffman, or Respectfully submitted, Robyn Christie City Recorder City Council Special Meeting Minutes Page 8 of 8 July 27, 2010