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HomeMy WebLinkAboutApproved Minutes - 2024-05-07 o s� CITY COUNCIL REGULAR MEETING MINUTES V +� May 7, 2024 °RFGO 1. CALL TO ORDER Mayor Buck called the regular City Council meeting to order at 5:33 p.m. on Tuesday, May 7, 2024. The meeting was held both virtually via video conferencing and in-person in the Council Chamber at City Hall 380 A Avenue. 2. ROLL CALL Present: Mayor Buck, Councilors Verdick, Mboup, Rapf, Corrigan, Afghan and Wendland Staff Present: Martha Bennett, City Manager; Ellen Osoinach, City Attorney; Kari Linder, City Recorder; Melissa Kelly, Library Director; Andrea Milano, Youth and Technical Services Manager; Allison Arnold, Adult Services Manager; Stefan Broadus, Director of Special Projects; Jessica Numanoglu, Community Development Director (via video conferencing) School Board: Brian Bills, Board Chair, John Wallin, Board Vice Chair; Neelam Gupta, Board Member; Kirsten Aird, Board Member; Liz Hartman, Board Member; Dr. Jennifer Schiele, Superintendent Others Present: Kyle Rhorer,Vice President of Carollo Engineers (via video conferencing) 3. PLEDGE OF ALLEGIANCE Mayor Buck led the Council in the Pledge of Allegiance. 4. PRESENTATIONS 4.1 Ehlers-Danlos Syndromes & Hypermobility Spectrum Disorders Awareness Month Mayor Buck declared May 2024 as Elers Danlos Syndromes and Hypermobility Spectrum Disorders month. The signed proclamation was available on the City's website. 4.2 Asian American, Native Hawaiian and Pacific Islander Heritage Month City Council Regular Meeting Minutes Page 1 of 15 May 7, 2024 Mayor Buck proclaimed May as Asian American, Native Hawaiian, and Pacific Island Heritage Month in Lake Oswego. The signed proclamation was available on the City's website and a citywide celebration would be held at Millenium Plaza Park later this month. 4.3 If I Were Mayor Contest Winners Mayor Buck described the annual If I Were Mayor Contest sponsored by the Oregon Mayors! Association, noting winners were selected from two categories: a poster contest for 4th and 5th graders and a middle school essay contest for grades 6 through 8. This year had a 42 percent increase in contestants over last year. Drishti Singh, a member of Lake Oswego's Youth Leadership Council, joined the Mayor to present the awards and was the first YLC member to be involved in the If I Were Mayor selection process. The winners of the 2024 Lake Oswego If I were Mayor Contest were: elementary poster winners were Kenzie James (1st place), Gia Hill (2nd place), and Torben Grosse-Wortmann (3rd place); and middle school essay winners were Leuca Wanford (1st place), Megan Rim (2nd place), and Jad Chahin (3rd place). First place winners in each category would be entered into the statewide contest for a chance to win $500. The winners shared a few words about the ideas in their entries. The Council recessed from 5:50 p.m. to 5:53 p.m. 5. JOINT MEETING WITH THE LAKE OSWEGO SCHOOL BOARD Mayor Buck introduced Lake Oswego School District Superintendent and members of the School Board, noted that the City Council and School Board served distinct but overlapping constituencies and had partnered over the years to find ways to serve both. The School Board was presently engaged in discussions about facility needs ahead of a potential bond renewal to modernize and right-size the District, exploring options that could involve changes to current school sites. The Board had engaged in its own community engagement processes regarding the potential use of current sites, which the City Council looked forward to hearing about. At the same time, the City had been engaging residents on long-term needs for a larger library to replace the undersized current facility that lacked accessibility. The City also hoped to realize other long-term plans for the community, including a space for community enjoyment in the Lake Grove Town Center through the Lake Grove Urban Renewal Area (URA). The City had a strong funding mechanism in place to bring a potential project to fruition to Lake Grove that could meet long-term community needs, benefit local students, adjacent neighbors, and the community at large. • If the School Board's process led to repurposing the Lake Grove Elementary site, the City proposed discussing incorporating a community center at the site that would maintain a community hub serving students and residents per the Lake Grove Village Center Plan, while respecting the District's independent decision process centered on students' best interests. • The City acknowledged the difficult trade-offs involved but was jointly meeting with the School Board this evening to share ideas openly, think comprehensively, understand each body's process, and make decisions in the entire community's best long-term interests, ensuring public space was not lost. Brian Bills, School Board Chair, stated he was excited to hear about the City's vision. However, as the Mayor acknowledged, the District and City shared some interests but followed distinct processes that needed to be respected. Fortunately, the School District and City enjoyed a relationship that allowed for synergies, such as the Lake Oswego Recreation and Aquatic Center (LORAC) and other collaborative efforts. The District's timing differed from the City's, and it sometimes had to make independent decisions separate from the City's envisioned plans. Even City Council Regular Meeting Minutes Page 2 of 15 May 7, 2024 so, it would be fortunate to take advantage of aligning their efforts if opportunities arose. The District's Superintendent would provide the City Council with details about the District's process, timing, and how both would proceed. City Manager Bennett proposed the School Board and City Council hear first from the Library Director, who would provide a brief overview of how the Library supported the mission of the School District. The City Manager would then present the City's idea, which had been presented to several groups, including the District's Long-Range Facility Taskforce. District Superintendent Jennifer Schiele would conclude with an update on the School Board's decision-making process. 5.1 Lake Oswego Library Events, Participation and Facility Needs Melissa Kelly, Library Director, presented the report via PowerPoint, noting that the Lake Oswego Public Library served as an essential support component to the Lake Oswego School District by providing community-wide access to life-long learning for all ages, 7 days per week, and during school breaks when students were out of class. The Library's diverse classes covered many forms of literacy such as early learning, social skills, digital literacy, research skills, and financial literacy. The programs complemented and supported the learning continuum, drove economic advancement, fostered inclusivity and connection, and enhanced quality of life. Andrea Milano, Library Youth and Technical Services Manager, continued the presentation, summarizing the Library's vital role in developing early literacy skills and fostering a love of reading from infancy through adulthood. Early literacy programs, such as story times, built critical pre-reading and promoted socialization for toddlers, while librarians modeled for caregivers how to encourage literacy through reading, singing, and engaging with their children. The 1,000 Books Before Kindergarten challenge excited kids about reading preparation. The Library also offered programming for elementary-aged children and teenagers, as well as family programs, providing a place to learn and socialize for many ages. Ms. Milano noted the Library had profoundly influenced her own language development and writing skills. Allison Arnold, Library Adult Services Manager, resumed the presentation, outlining the range of adult events and classes aimed at improving quality of life, promoting community, and supporting different types of literacy. The demand for programming had increased by more than 275 percent over the past 20 years, and the Library frequently hosted events at other community spaces due to capacity issues. Last year, the Library hosted an average of 1.5 classes or events per day, including 291 events specifically for youth that were attended by nearly 13,000 youth and caregivers. The Lunar New Year Festival had the single highest attendance at over 1,100 residents. Director Kelly concluded the presentation, noting the Library could not measure up to comparable libraries due to space constraints. During the 2023 Library Visioning Process, residents indicated they wanted the Library to be an accessible community hub and active learning space, but the current facility created barriers resulting in inefficient service delivery. Staff regularly heard from residents who visited other libraries with larger facilities, dedicated event spaces, and modern amenities Lake Oswego's Library lacked. Other needs identified during the Visioning process included: cafe space; flexible event/meeting spaces; a larger children's area; dedicated tween/teen space with reservable study rooms; a makerspace/technology lab; sensory- friendly areas; and adjacent outdoor space. It was clear the community was significantly underserved by the shortage of Library facility space. The entire Library Staff looked forward to City Council Regular Meeting Minutes Page 3 of 15 May 7, 2024 working with the community to create a solution for better access to enhanced and innovative library events and services. Mayor Buck thanked Director Kelly and Staff for the presentation and for all the Library did to create programs within the restraints of the current facility. 5.2 Lake Oswego I Lake Grove Community Center and Library Concept City Manager Bennett presented the vision for a Lake Grove Community Center and Library via PowerPoint, noting the City Council had expressed interest in the idea during its goal setting in January, which aligned with the District's long-range facility planning discussions and decisions about elementary schools. • In 2023, the City completed its Library Visioning project, began work on the long-range plan for the Parks and Recreation Department and facilities, and conducted its biennial Community Survey. Several common themes were heard from the community across all three efforts: a desire for inclusive facilities that were easy to find and easy to use; a desire for community connection; a desire for intergenerational spaces that served people of different physical abilities; a desire for environmentally sustainable and disaster resilient facilities; and a desire for event space. Notably, across all three efforts, the City heard about the need to better serve teens. The Council previously discussed whether there was an opportunity to address those themes and identified needs on the Lake Grove Elementary property if the School District decided to repurpose that facility. The Lake Grove Village Center plan, adopted in 2006, spoke to the need for a community center that included a library. City Staff's research found communities were providing community center/library facilities with a suite of different services that shared functions and overlapping needs; without being just as a library or recreation facility. The current library facility created barriers and resulted in inefficient delivery of services because community needs had outgrown the space originally built in 1983. In addition, the current facility needed costly repairs and its neighborhood location meant a lot of people in the community did not know where to find the library. • Staff conducted research and found examples of community centers that homed libraries, which enabled cities to meet a variety of needs, not just library-specific needs. A community center with a library would also allow the City to host its award-winning teen program in a more modern, accessible facility instead of the current church basement location, and offered the possibility of integrating the City's teen programming with the Library's teen programming. • The City would not invest in work to determine needed square footage or acreage until it knew what the School District planned on doing with Lake Grove Elementary School. If the District decided to keep Lake Grove an elementary school, the City would have to wait for a piece of property to become available. Should the District decide it was in its best interests to close or repurpose the school, then the City would start the second part of the process. • The Lake Grove Elementary School was an attractive property due to its location in the Lake Grove Urban Renewal District, which meant that urban renewal funding was available to build the majority of the project without raising taxes. The Lake Grove Urban Renewal Plan also offered opportunities to think about shared City/District public spaces and associated cost savings and efficiencies, similar to other shared spaces such as the LORAC. While the School District was contemplating facility needs across the city, Lake Grove Elementary was the only property within the URA. City Staff addressed questions as follows: • The current Urban Renewal District would expire in 2034 if not extended. If the City decided to pursue the project, it would extend the life of the project for another 30 years. Oregon's City Council Regular Meeting Minutes Page 4 of 15 May 7, 2024 Urban Renewal Law had changed, and the City was required to share revenue with the School District. Although the project would not require a tax increase, the District's duration would need to be extended to enable the City to finance the project. • The first step in the process would be conducting an urban renewal study. The City would use the revenue to sell a bond, though it would probably be a couple of years for the increment to grow enough before the City could have enough revenue to sell the bond. Because the City had not put pen to paper and did not have any consultants or architects on the project, it would be two to three years before the City could get started on this project under a best-case scenario. If Council gave Staff the go ahead the next day, the City could probably break ground in 2028. Regardless of what the District decided, Lake Grove would remain a school for that length of time anyway. 5.3 Lake Oswego School District Long Range Decision Schedule Dr. Jennifer Schiele, Superintendent, reviewed the anticipated timeline for the School District's long-range facility planning and bond development process, noting the public education period and opportunities for public testimony. A bond development committee would develop the proposed bond measure, cost estimates, and voter polling in the fall of 2024. The notice of ballot title must be filed by February 28, 2025, to appear on the May 20, 2025, ballot, though final dates were subject to the Oregon Secretary of State Election Calendar. Bond items under discussion included cafetoriums at all elementary schools, additional CTE space at high schools, rebuilding Forest Hills Elementary, and safety technology in all schools. She confirmed the bond was the third step in the District's bond process and was a renewal, not a new bond, so there would be no tax increase. Mayor Buck noted changes to school facilities throughout his childhood and career in Lake Oswego and asked what had taken the community from a consistent number of schools for some years to the more recent changes. Dr. Schiele responded the District had been using Uplands Elementary School for its rebuild. In the last bond, Lakeridge Middle School was built, and its students were at Uplands for two years during the rebuild period. Next year, those students would move back into its new school and then students from LO Middle School would move into Uplands for two years while the LOMS was rebuilt. The next steps depended on when the bond passed. If the bond passed, Forest Hills students would go to Upland for two years. At that time, depending on whether the District rebuilt or remodeled Lake Grove, or rebuilt/remodeled Uplands, those students would stay in their own school. It was about seven years before the planning would affect students at any of the schools. Mayor Buck asked if school population changes had influenced plans. Dr. Schiele replied that the population had remained steady between 6,800 and 7,000 students. There had been a decrease in population at elementary schools and an increase in secondary schools. Mayor Buck confirmed the middle schools used to just be seventh and eighth grades but were now sixth, seventh, and eighth grades, and asked whether that was part of the reason for the updates to facilities. Dr. Schiele replied that when the District moved sixth graders to middle school, it closed Palisades and Uplands, and Bryant was repurposed to allow sixth graders to be part of Lake Ridge Middle School. 6. PUBLIC COMMENT • Karl Ockert, 910 Cumberland Road, noted the Library often held classes or events at other public venues due to capacity issues, but had not used the recently remodeled Adult City Council Regular Meeting Minutes Page 5 of 15 May 7, 2024 Community Center, which was a state-of-the-art, Parks Department facility one block away. The Library and Parks Department should be able to efficiently use the existing City services and assets. Now was the time to show the community how well interdepartmental synergy could work by holding valuable programs the community wanted in an already existing but underutilized facility. • Ruth Bregar, resident, West Ridge neighborhood, opposed closing Lake Grove Elementary School, citing concerns about the loss of the neighborhood hub, shifting student populations, and the increased need for busing. Local residents wanted to keep Lake Grove Elementary where it was. • Thomas Eldridge noted that Lake Grove Elementary School served a high number of minority students and students from low-income households. He asked Council to recommend that the School District scrap the idea of flattening the Lake Grove Elementary School, which would generate capital to be spent in high net worth and predominantly white school districts. • Laurel Mahar, resident, and Lake Grove Elementary alumnus, opposed closing the Lake Gove Elementary School, citing the Lake Grove Village Center Plan which stated the school was central to the long-term vision for Lake Grove. The school had been a hub for the community since 1924 and was projected to have the highest enrollment in the District by 2030. • Kacey Carpenter, parent, and Lake Grove resident, opposed closing Lake Grove Elementary School, citing concerns about diversity and population. Other resources were available for community centers and libraries. • Lindsey Boccia opposed closing Lake Grove Elementary, noting volunteers would provide Council and School District with a packet of fact-based research about the issue in the coming weeks. She urged the City and District to listen to residents without dismissing their arguments as emotional. The Council recessed from 6:51 p.m. to 7:04 p.m. • Betsy Wosko, Chair, Old Town Neighborhood Association, asked Council to ban gas- powered leaf blowers, citing Portland's recent phase-out ban and the harms of gas blowers to people, animals, birds, insects, and the environment. Mayor Buck thanked Ms. Wosko for sending the Council informative articles on the topic. 7. CONSENT AGENDA 7.1 Public Improvement Contract Award for the Construction of Work Order 348—2024 Pavement Rehabilitation. Motion: Move to authorize the City Manager to sign a public improvement contract with Knife River Corporation for the Construction of Work Order 348 — 2024 Pavement Rehabilitation in the amount of$1,179,324. City Council Regular Meeting Minutes Page 6 of 15 May 7, 2024 7.2 Resolution 24-20, A Resolution of the City Council of the City of Lake Oswego Amending Resolution 24-02, Authorizing an Intergovernmental Agreement with the Riverdale Rural Fire Protection District Providing for the Continuation of Fire and Emergency Medical Services for Fiscal Years 2024-25 through 2030-31. Motion: Move to adopt Resolution 24-20. 7.3 Resolution 24-21, A Resolution of the City Council of the City of Lake Oswego Authorizing the Mayor to Execute Amendment No. 1 to Subrecipient Agreement 24- 006 Between the City and Clackamas County Human Services Department's Social Services Division for Fiscal Years 2024-2027. Motion: Move to adopt Resolution 24-21. END CONSENT Councilor Mboup moved to adopt the Consent Agenda. Councilor Corrigan seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Verdick, Mboup, Rapf, Corrigan, Afghan, and Wendland voting `aye', (7-0). 8. ITEMS REMOVED FROM CONSENT AGENDA No items were removed from the Consent Agenda. 9. PUBLIC HEARINGS 9.1 Ordinance 2945, An Ordinance of the Lake Oswego City Council Amending LOC Chapter 24 to add Article 24.10, Providing for a Property Tax Exemption Program for Nonprofit Corporation Low Income Housing Pursuant to ORS 307.540 - .548 and Renaming Chapter 24. Ellen Osoinach, City Attorney, reviewed the hearing procedures and asked if any Councilor wished to declare a financial conflict of interest. None were heard. Jessica Numanoglu, Community Development Director, presented the Council Report for Ordinance 2945, which would establish a property tax exemption for nonprofit organizations that created affordable housing targeted at or below 60 percent of area median income (AMI). The exemption would apply to taxes levied by the City only; however, the ordinance included an option to apply the exemption to other taxing districts if requested.Applicants would be required to renew the exemption annually. Both the Planning Commission and City Council supported including the nonprofit affordable housing exemption as a strategy to include in the upcoming Housing Production Strategy (HPS) report. • She reviewed the request received from Mercy Housing Northwest in October 2023 and at the April 2, 2024, meeting, urging Council to adopt the exemption before the HPS was adopted. In its October 2023 letter, Mercy Housing noted that adopting the tax exemption in the summer of 2024 would allow the organization to underwrite the exemption when it moved from its construction loan to a permanent loan, saving more than $1 million over the lifetime of the loan. Staff noted the tax exemption would be available to any nonprofit corporation that City Council Regular Meeting Minutes Page 7 of 15 May 7, 2024 created affordable housing meeting the eligibility criteria, including the Hacienda project on Boones Ferry Road. • The ordinance established the eligibility and criteria requirements as well as the application and renewal process for the tax exemption. If approved, the next step would be to process Mercy Housing's application for the exemption. The organization's October 23 letter met the criteria for an application and therefore met the deadlines established by the ordinance. Staff would return to Council in June with findings on how Mercy met the tax exemption criteria and City Council would then approve a resolution that served as certification of tax exemption by the City for the County Tax Assessor. In order for the ordinance to be effective before the upcoming tax year, this process would need to be completed before July 1. Mayor Buck asked if the exemption allowed for partial abatement to developers who made a portion of the project affordable to those making 60 percent AMI or less. Director Numanoglu said the developer could maintain the entire abatement because the City had defined affordable in the ordinance using an averaging approach which would allow certain residents up to 80 percent AMI if some units were provided at 30 to 50 percent AMI to offset the higher income. Mayor Buck asked if language in the ordinance stating, "properties held for the purpose of developing low-income rental housing," meant developers could apply for and receive the exemption before they had saleable units. Director Numanoglu believed the ordinance allowed up to two years prior so developers could apply while the project was under construction. Mayor Buck asked if developers would owe back taxes if they abandoned the project after receiving the exemption. Director Numanoglu read from the ordinance language stating, "If after the exemption is granted, the property was being used for any purpose inconsistent with the determination granting the exemption, the City Manager shall follow the procedures for termination set forth in the ORS", confirming there was a termination clause in the ordinance if the developer did not use the site for the allowed purpose or if the project was not completed on time. Mayor Buck opened the public hearing, confirmed there was no public testimony, and closed the public hearing. Councilor Mboup moved to enact Ordinance 2945. Councilor Wendland seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Verdick, Mboup, Rapf, Corrigan, Afghan, and Wendland voting `aye', (7-0). 9.2 Resolution 24-19, A Resolution of the Lake Oswego City Council, Acting as the Lake Oswego Public Contracting Review Board Pursuant to ORS 279A.060, Making Certain Findings and Approving an Amendment to Resolution 18-55 and Authorizing a Special Procurement to Enter into a Design, Build, Operate and Maintain Contract for the New Wastewater Treatment Plant Facility; and Resolution 24-18, A Resolution of the Lake Oswego City Council, Acting as the Lake Oswego Public Contracting Review Board Pursuant to ORS 279A.060, Making Certain Findings and Approving a Special Procurement for Owner's Advisor Services for the Wastewater Treatment Plant Facility (DBOM Phase) and Authorizing the City Manager to Execute a Contract with Carollo Engineering, Inc. City Council Regular Meeting Minutes Page 8 of 15 May 7, 2024 City Attorney Osoinach reviewed the hearing procedures and asked if any Councilor wished to declare a financial conflict of interest. None were heard. Stefan Broadus, Director of Special Projects, presented the Council Report on Resolution 24- 19 via PowerPoint, providing a brief overview of the project's history and summarizing the Council's direction to Staff to explore competitive procurement methods to deliver the remainder of project. The project team compared the schedule risk, cost, construction review, and operations and recommended the design, build, operate, maintain (DBOM) model since it had all the advantages of the original design, build, finance, operate, maintain model, also referred to as a P3, public/private partnership, without the private equity element that caused the project to stall during the City's partnership with EPCOR. Under the DBOM model, the City's chosen partner would finish the design, construct the facility, and enter into a long-term operations and maintenance period. When the City put out its request for qualifications (RFQ) and request for proposals (RFP) the work completed to date would be identified as the preferred design option. Vendors would be able to pick up the completed work and continue to deliver the project or provide an alternative design that met the established design criteria. To offer an alternative design, vendors would have to meet the design criteria and at a better value to the City than the established design. Councilor Rapf preferred moving forward with the assumption that the City would operate and maintain its facility adding the City should think about engagement in phases, moving first through the design/build phase to build trust and equity with a partner after which the City could consider the operating and maintenance element of the relationship. The operation and maintenance element held significant value to a partner and should be held back to ensure the City was working with the right partner. City Manager Bennett believed that the project would have to be bid as a DBOM, but offramps could be written into the preliminary services agreement if the City did not feel confident in its operating partner. The previous agreement did not have the same type of offramps, and one reason the City had contracted with EPCOR was because of its operating expertise. Some firms that would bid on the project would do so in a way where the operator was not the designer and others bid as a single entity. She supported the DBOM model, noting the City Attorney could explain whether an agreement could be structured so it could be reevaluated if the City lost trust in some element. Councilor Rapf agreed, adding the value to a third party was a 40-year operation and maintenance phase. City Manager Bennett replied it may not be the same company since some would bid the project as a single entity and others as a series of companies. Mayor Buck noted it was a lot of trust to put into an entity the City would not know much about at the beginning. City Manager Bennett replied when the operational company was at the table during the design phase, operational efficiencies were designed in, which was a significant advantage to the City. Mayor Buck commented that the design part of the project was minimal at this point. Councilor Mboup noted the project was at 90 percent design and wondered whether design should be removed in favor of just build, operate, and manage. Mayor Buck said the City needed the final 10 percent. Councilor Mboup sought clarification on comments that potential partners would not bid more than what the City had already paid, taking the 90 percent design into account. Director Broadus explained that while there would be options, company would likely put some effort into taking ownership of the plans since it would be the engineer of record. A proposing team could take ownership of the plans, move the design to 100 percent, and then proceed with construction. City Council Regular Meeting Minutes Page 9 of 15 May 7, 2024 Alternatively, a vendor could propose taking a slightly different direction. The City's procurement document would specify the criteria the proposal had to meet in order to deliver a successful facility, and as long as all the criteria were met, the City could compare different designs and make a selection based on what was best for the City. As to whether it could be broken up, there was a risk cost to the relationship. No one took on additional risk, they bought risk. The City could provide more flexibility for itself by building in the opportunity to sever ties with the partner at the end of the construction phase, and there could be entities interested in that proposal, but those entities would cost just as much because the bulk of the financial incentive for a company to do the project was the operations piece, which was more than half the value. Taking the operations piece out or building into the contract the ability to take it away meant proposers would offset that with their own needs. Councilor Rapf agreed but said it went the other way, too. If the City wanted to allow a potential partner to operate, then it should see significant savings going the City's way. Councilor Mboup asked if Lake Oswego had ever operated a P3 project. Director Broadus replied he was not aware if the City of Lake Oswego had used the model, but several had been completed in the industry. Councilor Mboup believed the City should develop its own workforce and operate its own facilities. The bidders would be venture capitalists, not friends. The City should be in a position to develop and run its own facilities and avoid what happened with EPCOR. Mayor Buck believed many of the changes with EPCOR were around the financing piece, which would now be carved out. Councilor Wendland asked if the City's current situation was typical and how the industry would respond. Kyle Rhorer, Vice President, Carollo Engineers, replied that the industry was poised for the DBOM model, which was familiar. Generally, when looking at a DBOM, the entities, whether a single firm or consortium, were looking at operating and maintenance as the revenue- generating objective. As such, DBOM teams were generally led by the operations arm of either the company or the consortium. While an offramp in the procurement or contract was feasible, the efficiencies came from an operations-led DBOM team that expected to run the facility for 30 years which also dovetailed into other efficiencies where the operator would have input into completion of design, the construction, and the phasing of the construction. It was an entirely different model in terms of efficiencies from a life-cycle perspective. There was no reason the City could not craft contractual and procurement documents in a way that addressed the concerns expressed. Councilor Wendland inquired whether the City could expect another company to incorporate the 90 percent design, AquaNereda technology, etc. for a top performing sewer treatment plant. Director Broadus replied the City's procurement document would include qualitative performance criteria. Flexibility would be included for the City to have a preferred design while enabling vendors to propose alternate designs, but odor criteria had to be met, the design would have to fit the same footprint, have an energy component for sustainability, and any other parameters the City wanted to put in place. Vendors could propose something different as long as it performed at or better than this level. Councilor Wendland asked if it was typical for a company to pick up a project like this and deliver or was the City at a disadvantage. Mr. Rhorer replied it was unusual; however, it was not so unusual that the market would not be interested in it. Generally, DBO's were greenfield projects where the designer, contractor, and operator discussed the project before any design was made. Operations firms or operations-led teams were used to operating all kinds of technologies. The bigger question was to what degree would the new engineering firm take responsibility as a designer of record for the advanced AquaNereda technology. Carollo expected to unwind the City Council Regular Meeting Minutes Page 10 of 15 May 7, 2024 design a bit for the new engineer to be comfortable, but despite the newer technology, the design was very good and an appropriate use for the application. Carollo was confident internally and based on preliminary market soundings, that the design itself would be utilized in advance and operated. He could not guarantee there would be 5 or 10 proposals, but he did know the market was not shying away from the DBOM model. Councilor Wendland expressed concern that the situation was so unusual, vendors would add 25 percent to the cost because they would have to accept the risk. Mr. Rhorer replied based on what Carollo had seen and its comfort level with the original EPCOR approach, they were not overly concerned no market would be interested in the project. The RFQ had a relatively low bar in terms of submittal requirements for the teams to prepare a response. Carollo would do formal market sounding prior to issuing the RFQ to vet the informal market sounding done earlier with the firms to ensure there was more than one firm or consortia willing to embrace the project. The City would likely pay for some unwinding of the design in the design/build price, but Carollo was comfortable with what the City had in the applicability and suitability for the site. Mayor Buck asked how much flexibility there was for a new firm given the AquaNereda process and how much a firm could unwind the design and still keep the technology. Mr. Rhorer replied it was difficult to give a percentage, but he did not believe the design needed to go back to 60 percent. Some engineering firms, including Carollo, would like to address some aspects of the design. In the RFQ and sounding meetings, Carollo would address specific things that could be done differently with the AquaNereda system and give its peer engineering firms insight on what could be tightened up. Carollo and its contemporaries were familiar with AquaNereda, which was an excellent system for Lake Oswego due to the City's peaking factors and small footprint of the site. Any design firm, if it stamped it as the designer of record, would want to get under the hood a bit to make sure everything was okay. Councilor Afghan asked if operating a wastewater treatment plant of this size was the City's core competency. City Manager Bennett replied no, which was why Staff recommended the City not create a new competency. In the long run, outsourcing operations and maintenance would be more cost effective and lead to a better result for the community. Councilor Afghan inquired whether there were termination clauses in the future contract. Director Broadus said the contract had not been written yet, but the City needed to balance any sort of flexibility it wished to build into the contract with the cost it would pay for the flexibility. Councilor Afghan asked if any other technology would deliver the same performance. Director Broadus replied having a 90 percent design in hand was unique, but it was also a unique opportunity in that the City could put a near completed product on the table for vendors to choose from, or it could challenge the vendors to do something better for a better value and cost to the City. Whether better technology is available was uncertain, but if so, and a vendor was willing to do it at a value that was competitive for the City, then the City would receive that proposal and evaluate it against the others. City Manager Bennett replied Staff did not believe there was another technology available because the RFP process for the plant included a significant evaluation of alternative technologies.All available technologies had some limitations, but the City had explored all available technologies and optimized the design for the variables available. If a vendor had access to something the City did not know about, and it performed on energy efficiency, seasonal rainfall, and the nature of the City's flows, which were mostly residential, then the City would entertain the proposal, but the City would write the criteria with AquaNereda as the baseline. City Council Regular Meeting Minutes Page 11 of 15 May 7, 2024 Councilor Afghan asked if there were novation clauses in the current contract that would allow the new vendor to pick up the design and the engineers, so the new designer did not have to go to another engineer. He was concerned the current designers would not finish the design. Director Broadus replied the City owned the work product delivered at 90 percent. Any new team would need to be the official engineer of record for the design so there would need to be some unwinding of the work product if the vendor chose to pick up the 90 percent product. It was important to keep in mind the percentage of effort in doing that relative to the project as a whole. Relative to the entire project, that unwinding was probably in the magnitude of .1 percent or less. Councilor Afghan confirmed the City owned the documents with a specific design company and asked if the future vendor contract could work with the original engineer under a novation agreement to finish the design and limit the unwinding. Director Broadus said that approach was not recommended because if the original engineer was able to participate it would create an uncompetitive environment, put other vendors at a disadvantage, and drive up the cost to the City. Councilor Afghan asked if the City had a proposal from the original engineer to finish the design to 100 percent. Director Broadus replied the City could complete the design and then do a procurement for construction and operations, but the disadvantage was the City would then be setting out a procurement where the proposers did not own the design meaning the City would not get constructability and operating input.While that would limit the unwinding, the disadvantage was that the construction and operation would be set up with more risk. Councilor Wendland noted a lot of work had gone into the project besides the drawings, and a lot of the obstacles had been removed in the process. He understood the City wanted to proceed with AquaNereda but there was the possibility someone would pick it up and move forward in their own way, which would have a small cost. Director Broadus said the cost would be small relative to the overall product. The overall program was about $600 million and there was a few hundred thousand dollars of design remaining. Any efficiencies the City gained in construction or operations would outweigh the remaining expense in the design phase. Councilor Wendland commented that the City should open the bid process as much as possible to encourage competition and asked whether the procurement process required the City to pick the lowest bidder who met all the criteria. City Manager Bennett did not believe that would be the requirement. The City would want to pick the best proposal overall, and some of the criteria would not be financial, which was another advantage of the proposed procurement method. Councilor Wendland noted the City wanted to enter into a contract where both parties won because it was a 30-year commitment. He wanted to create a competitive marketplace and liked the idea that the vendor would be in the project for the long term, which would give the best economic outcome for both parties. Mayor Buck agreed and said it sounded as though that was where the market was. There was not a big market for design/build and the City may not get as many responsive proposals. City Manager Bennett said the City may get many proposals, but construction costs are currently very high. Mayor Buck asked if there was overlap between firms that did DBOM and firms that just did construction. Mr. Rhorer replied there was overlap in the market. Some teams did design builds and others did fully integrated design/build/operate. If the City went a design/build route, the challenge would be to find a contract operations firm willing to take on an AquaNereda technology, City Council Regular Meeting Minutes Page 12 of 15 May 7, 2024 or a plant in general, where the firm was not involved in operations-led design and construction. It would be an unusual arrangement, considering the size of the City's facility. Councilor Afghan believed the strategy the City discussed some months ago had changed. The Council previously discussed using the same design but a different company and financing the project. Now the City was opening the project to other engineers and may change the design, which seemed to be going backwards and penalized the engineers who had already finished 90 percent of the work. Those engineers could complete the work and it may be less expensive than getting other engineers involved. City Manager Bennett did not believe the plan had changed. Even when the City decided to leave EPCOR, it knew any other engineering firm would need to review the design. If the Council wanted to allow the previous engineer to participate it would give that firm a competitive advantage. Director Broadus stated having the previous engineers finish the design was the most cost- effective way since those engineers did not have to reperform the calculations previously done. However, that was not necessarily best for the project as a whole because while using the original engineering firm could save maybe $100,000 to $200,000, not having the advantage of the constructability and operations input, and the potential competitive impact that could have, could wipe away any potential savings. The constructability and operational input were done through the EPCOR construction and operation team. The other vendors would be different construction and operations teams with different means and methods of building and operating the plant. The City could hire a third party to provide constructability input or a peer review how to operate the plant, but if it was not the contractor who would be building it, or the operating entity, it was only worth so much. Director Broadus presented the Council Report on Resolution 24-18 via PowerPoint, noting the resolution would amend the existing contract with Carollo Engineers that helped guide the City from an administrative, procedural, legal, and technical perspective to get to the 90 percent design point. The proposed amendment would take the City through the upcoming procurement, including the RFQ, RFP, negotiating terms and conditions with the selected vendor, and into the design phase. Upon execution of the contract with the eventual partner for the design/build/operate phase of the project, the Carollo contract would be amended to provide the owner's advisors services to the City for the remaining phases. The selected vendor would begin design in the fall of next year and break ground at some point in 2026. The construction process was anticipated to take about 30 months. • He explained a lot was included in the scope of the contract, as quite a bit of complicated language needed to go into the contract to fold in the design parameters and criteria, as well as market sounding and market outreach. Additionally, unfinished, unresolved elements needed to be completed, including a headwords element, generator sizing, and the alkalinity effluent, which was essentially a new component of the plant that needed to be designed and permitted. The unresolved items needed to be properly framed in the procurement to ensure the proposers write on them. The City was actually quite a bit under the general guidelines for what was a reasonable amount to spend on professional services for the project. Councilor Rapf asked how the Carollo's fees are structured. Director Broadus replied Carollo's contract was a task-based, hourly contract not to exceed. The fee did not include any sort of royalty or percentage value of the DBOM and noted that the City would amend the contract again upon execution of the contract for Carollo to continue its owner advisor role through design/construction and an initial operations period. City Council Regular Meeting Minutes Page 13 of 15 May 7, 2024 Director Broadus clarified the$890,000 Staff was seeking to approve got the City to an executed contract with a new partner. Attorney fees were included in a contract with a separate consultant, Hawkins. Carollo provided the City with technical and alternative delivery expertise. The team of consultants included Universal Field Services and Cable Huston, who provided the City with land rights assistance. Jill Jamieson's firm, Illuminati, provided the City with alternative delivery, legal, and technical advice. City Manager Bennett confirmed the City would have to do land use permits again. Mayor Buck opened the public hearing, confirmed there was no public testimony, and closed the public hearing. Councilor Wendland moved to adopt Resolutions 24-19 and 24-18. Councilor Rapf seconded the motion. A voice vote was held, and the motion passed,with Mayor Buck and Councilors Wendland, Verdick, Mboup, Rapf, and Corrigan, voting `aye', Councilor Afghan, voting 'no' (6-1). 10. INFORMATION FROM COUNCIL Councilor Rapf congratulated the City on its supporting role in the successful Lake Run. Mayor Buck stated May 10 was the deadline for all boards and commissions applications and asked Councilors to encourage people in the community to apply. • Lake Oswego had discussed a community shuttle for a long time, but no funding resources existed. People who worked in Lake Oswego paid a payroll tax for transportation, and employers paid an even larger tax for transportation, but the City saw limited benefits from that tax. The advisory board guiding the Statewide Transportation Improvement Fund (STIF) Get Oregon Moving dollars, which were meant to support transit funding and service expansion, had heavy representation from Multnomah County and nonprofits but no city representatives except for one staff member from Portland. Metro Mayors were making an effort to get mayors represented on the advisory board to better address cities'funding needs. • Metro was proposing changes to the allocation of Regional Flexible Fund Allocation (RFFA) dollars. The region typically bonded on the dollars to fund large projects instead of many smaller projects, so a portion of the funds went to repay the bonds. Metro was considering raising the threshold for applications, which was not responsive to the needs of smaller cities and rural communities. Raising the dollar threshold for planning grants to $1 million would preclude Lake Oswego from submitting any project. Lake Oswego was advocating against the new policies. City Manager Bennett noted Staff had concluded a City-run shuttle was not viable with STIF funds. Staff planned to meet with TriMet to discuss short-and long-term plans for connecting Lake Oswego's two town centers. 11. REPORTS OF OFFICERS City Council Regular Meeting Minutes Page 14 of 15 May 7, 2024 City Manager Bennett noted it was Public Service Week and thanked her colleagues at the City and City Councilors for their dedication. Next week, the City would recognize police officers and later in the month it would recognize its Public Works crews, who never got the credit for being first responders. A significant national dignitary was hosting a fundraiser close by on Thursday and the motorcade would most likely significantly disrupt traffic on Thursday afternoon. She could not provide further details, but confirmed the dignitary was not the President. The first farmers market of the year was scheduled for this Saturday, right before Mother's Day. 12. EXECUTIVE SESSION: The Lake Oswego City Council will meet under authority of ORS 192.660 (2)(a) Consider employment of an officer, employee, staff member or agent; and (f) Consider records that are exempt by law from public inspection. City Attorney Osoinach read the legal parameters for the Executive Session. The Council met in Executive Session from 8:35 p.m. to 9:15 p.m. 13. ADJOURNMENT Mayor Buck adjourned the City Council meeting at 9:15 p.m. Respectfully submitted, Kari Linder, City Recorder Approved by the City Council on July 17, 2024. • Joseph Buck, Mayor City Council Regular Meeting Minutes Page 15 of 15 May 7, 2024