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HomeMy WebLinkAboutApproved Minutes - 2009-05-05 ` \° CITY COUNCIL REGULAR MEETING 10 MINUTES —__ May 5, 2009 aFwM Mayor Jack Hoffman called the regular City Council meeting to order at 6:38 p.m. on May 5, 2009, in the City Council Chambers, 380 A Avenue. Present: Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson. Councilors Moncrieff and Hennagin were excused. Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Kathy Kern-Schilling, Events Supervisor; Maddie Ovenell, Farmers' Market Manager; Diana Smith-Bouwer, Citizen Information Project Specialist; Lt. Doug Treat, Traffic Enforcement; Guy Graham, Public Works, Director; Joel Komarek, LOIS Project Director; Jane Heisler, LOIS Communications Director; Darin Rouhier, Finance Director; Denise Frisbe , Planning & Building Director; Sidaro Sin, Senior Planner; Denny Egner, Assistant Planning Director. Youth Council Present: Youth Councilors Kosloff, Cooper, and Silbert. 3. PRESENTATIONS 3.1 Farmers' Market Poster Contest Winners Mayor Hoffman congratulated Jaime Sutton and Joanna Faris on their winning posters. He presented each with a Lake Oswego Farmers' Market sweatshirt and a gift certificate. Ms. Sutton, the adult winner, explained that her daughter Harmony helped her think of her poster theme of fruits and vegetables raining down from the sky. Her daughter also served as the poster model. Ms. Faris, the youth winner, commented that having not seen photos used in the poster contest before, she decided to use a photograph of a poppy on her poster. She mentioned that photography was her forte. Ms. Kern presented the Council with picnic baskets of supplies for the members to use while attending any of the over 80 events offered by the City throughout the summer season. Ms. Ovenell announced that the Farmers' Market opened May 16 and ran for 22 weeks. She mentioned the sustainability sponsor, New Seasons Market. 3.2 Neighbors Helping Neighbors Review Dawn and Kevin D'Haeze presented the video that Mr. D'Haeze made of the Neighbors Helping Neighbors event held last month. Mr. D'Haeze indicated to Mayor Hoffman that he has worked in the video industry for 15 years. Making socially aware videos was a new venture for him. Ms. D'Haeze explained that several people with similar ideas met through the 50 Plus Forum, and developed the Neighbors Helping Neighbors program to help senior citizens in one's own neighborhood. She confirmed to Mayor Hoffman that the neighbor-to-neighbor concept had been her idea. Mayor Hoffman thanked the D'Haeze's for their work and presented them with a token of the City's appreciation. Th Council watched a video of the Neighbors Helping Neighbors event. City Council Regular Meeting Minutes Page 1 of 16 May 5, 2009 3.3 Pr sentation of Landmark D signation Plaques and Historic Preservation Merit Award Mayor Hoffman read the proclamation declaring May 2009 as National Historic Preservation Month with the theme of This Place Matters. Jeannie McGuire, Historic Resources Advisory Board (HRAB) Chair, noted the exhibits in City Hall and the West End Building celebrating Lake Oswego's history as part of National Historic Preservation month. Ms. McGuire presented the 2009 Historic Preservation Merit Award to Claire Kellogg, Reference Librarian, for her work with the library's collection of historic photographs and publications related to the City's history. She mentioned Ms. Kellogg co-authoring with Susanna Kuo, The Diary of Will Pomeroy. Ms. Kellogg thanked the Board for the award. She described the library's long history of protecting and promoting the city's history. She indicated that she found it gratifying to receive this award in her role as an ambassador for the library, as well as personally. Ms. McGuire explained that the HRAB Landmark Plaque program recognized stewardship of historic properties on the City's Landmark Designation List. Mayor Hoffman thanked Marylou Colver and presented her with a plaque for her stewardship of the 1925 Headrick-Carothers House in Old Town. Ms. McGuire reviewed the house's history as one of the few remaining Craftsman Bungalow-style houses left. Mayor Hoffman congratulated Lynn Saxton, the Christie Care representative, and presented her with a plaque for the organization's stewardship of the 1908 Christie School building. Ms. McGuire reviewed the building's history as an American Renaissance-style building located near Marylhurst. Ms. Saxton mentioned that Christie Care at Christie School would be celebrating its 150th birthday this July. She indicated that the organization now owned the school, and not the Sisters of the Holy Name. She thanked the City for a terrific partnership with the police and fire departments. She noted that they have served thousands of children over the years and employed 150 people from Lake Oswego. Mayor Hoffman congratulated Kevin and Shela Perrin, and presented Mr. Perrin with a plaque for the couple's stewardship of the 1917 Trueblood House. Ms. McGuire reviewed the house's history as a Colonial Revival-style house in the Glenmorrie neighborhood. Mr. Perrin commented that restoring the house has been quite an undertaking, but he thought that the City would be pleased with the result. Mayor Hoffman congratulated Patt Bilow, the Oswego Pioneer Cemetery Association representative, and presented her with a plaque for the Association's stewardship of the 19th century Oswego Pioneer Cemetery, located in the Stafford area. Ms. McGuire reviewed the cemetery's history, noting that the earliest graves dated to the 1880s. Ms. Bilow thanked the Board for the award. She recalled that volunteers helped clean up and restore the cemetery in 1970. 3.4 Pedestrian Safety Enforcement Presentation Lt. Treat recalled his realization during the 2007 Holiday Tree Lighting that the downtown had a serious need for pedestrian safety enforcement, especially at the 5th Street and A Avenue crosswalk. He explained that the Department received an $1,800 grant in 2008 from the Bicycle Transpiration Alliance for pedestrian safety enforcement, which they used to conduct two missions at Fifth and A and at G and Shelley. He mentioned that out of the 108 citations issued last year, only two went to court, which the Department won. City Council Regular Meeting Minutes Page 2 of 16 May 5, 2009 He reported that the Bicycle Transportation Alliance gave the Department $4,000 for 2009 enforcement events. He indicated that the first event was scheduled for May 11, and described how it would work. He stated that their intent was not to entrap anyone or to be punitive, but rather to reduce the number of pedestrians struck by vehicles. Mayor Hoffman concurred that the goal was to educate and increase awareness, and not to make money for the City. Lt. Treat mentioned the diversion program available for those receiving first- time citations to take a high impact driving class with dismissal of the citation upon completion. 3.5 National Public Works Week Proclamation Mr. Graham introduced Kenton Alldritt, their Engineering Intern from Oregon State University, who was participating in the Civil Engineering Co-op Program (CECOP). He described the program's benefits in providing member companies with talented and motivated students able to do virtually any work at a low price, in providing the students with real world experience, and in providing the engineering schools with an opportunity to get their students into a laboratory. He indicated that this was the City's first year participating in the program. He explained that he gave Mr. Alldritt the task of organizing the events for National Public Works Week. He acknowledged that this was not typical engineering work, but it did provide Mr. Alldritt with an opportunity to get out of his comfort zone and talk to people. He said that Mr. Alldritt did a great job. Mr. Alldritt reviewed the events scheduled for National Public Works Week (May 17 through 23). He mentioned the display booth at the Farmers' Market on May 16, with a backhoe and street sweeper parked nearby for people to look at and ask questions. He said that the second event was the Public Works Department Ice Cream Social on May 21, which provided City Council members with an opportunity to meet with Public Works Department staff and to take a tour of the Maintenance Services facility. Mayor Hoffman read the proclamation declaring the week of May 17 —23, 2009 as National Public Works Week in Lake Oswego. 3.6 Lake Oswego Interceptor Sewer Update (LOIS) Mr. Komarek reported that the Kelok project was 95% complete with paving scheduled for mid- May. He mentioned deliberately scheduling the Bryant Road work for after school let out for the summer because the work would likely disrupt traffic significantly on Bryant Road. Ms. Heisler mentioned receiving a letter from Margie Beckett, who had high praise for Canby Excavating, describing the workers as very polite and accommodating to her. Ms. Beckett also praised LOIS Team member, Pat McDougal, whom she said set the stage for the residents to have a good feeling about the project before construction started. Mr. Komarek presented an update on the lake full project phase. He reported that Advanced American Construction was in the process of submitting the paperwork required before it could mobilize its equipment on site. He mentioned that they were on track with respect to the financing for next year's work. He noted that the City secured the McVey access last week with both houses now in the City's possession. Ms. Heisler reported mailing out 1,200 letters today to all lakefront/canal front/bay front property owners announcing commencement of the work in about a month. She said that this week staff would go door-to-door to the merchants between lower Millennium Plaza and Middlecrest to discuss the City's moving into the former US Bank building site, and the loss of that public parking. She mentioned the tour that staff gave to Councilors Tierney, Moncrieff, and Johnson of the various staging sites. She spoke of planning for contractor meetings with the public to answer questions. City Council Regular Meeting Minutes Page 3 of 16 May 5, 2009 Mr. Komarek reported that the project was on schedule, but a bit over budget for the Bryant/Kelok project, due to the contractor's efforts to control the ground water unexpectedly encountered in the Maple Circle area, and the need to provide more substantial paving on Kelok Road than originally anticipated. He indicated that they did not expect project costs to rise any more than what they were currently. Councilor Tierney suggested that the LOIS Team give its updates only once a month, instead of at every regular Council meeting. Mr. McIntyre indicated that they could do so. Councilor Jordan asked for clarification on the projected plan and budget for the Lakewood Bay and Foothills sewer extensions. Mr. Komarek explained that staff had always contemplated the relining of those pipes as part of the renovation project, given that the pipes were 40 plus years old. He confirmed to the Councilor that staff added the project to take advantage of the cost efficiencies in doing it as part of this project. Councilor Jordan commented that she did not recall the Council making the decision to include that project in the LOIS project, as the City had been waiting on the possibility of obtaining stimulus money to pay for it. Mr. Komarek reported that the City's application for stimulus money made the first cut on the list but it was not very high on the list. Staff was waiting to see whether it made sense to move forward with the environmental impact analysis on those projects, knowing that the analysis could cause design changes. Mr. Komarek concurred that the staff report showed that phase of the work within the overall $110 million project. He indicated that he could provide a more focused report, detailing the pros and cons of including the project within the LOIS project, so that the Council could make an informed decision about including it or taking it out. Councilor Jordan commented that she thought including the project was the right decision, but she wanted to see more transparency in explaining why the City added the work to the project, when it had not been part of the original scope of work. Mr. Komarek indicated to Councilor Tierney that the lead-time needed to plan for the West Bay and Lakewood Bay elements was relative to the rest of the phases. He explained that it was very simple work that could be done during the lake full project phase. He said that staff could return with the information after the lake down phase bids were in. Councilor Olson recalled that the Council included this work in the maximum amount that it authorized for the bonds. 4. CONSENT AGENDA Councilor Olson moved the consent agenda. Councilor Jordan seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson voted `aye.' [5-0] 4.1 RESOLUTIONS 4.1.1 Resolution 09-24, accepting a certified local government grant for historic preservation activities Action: Adopt Resolution 09-24. END CONSENT AGENDA 5. ITEMS REMOVED FROM THE CONSENT AGENDA 6. CITIZEN COMMENT Mayor Hoffman reviewed the testimony time limits of five minutes per individual. City Council Regular Meeting Minutes Page 4 of 16 May 5, 2009 • Debra Erickson, 5044 Foothills Road, Lake Oswego Amateur Radio Emergency Services (LO ARES) She noted that LO ARES formed in response to the need for better emergency communications revealed during the mid-1990s floods. She invited the Council, City dignitaries, and the community to attend the Fourth Annual Ham Radio Field Day on Saturday, June 27, at the Westlake Park picnic shelter (noon to 5 p.m.). She explained that this was a national event to exercise ham radio and antenna setups, and to allow the public an opportunity to experience operating ham radios. She mentioned the outstanding support that LO ARES received from the City Emergency Manager, Larry Goff at the Fire Department, and the extensive collaboration it enjoyed with Clackamas County ARES. She stated that in the event of an emergency, LO ARES had the training, expertise, and commitment to make a difference. She mentioned that they had their first lost child rescue at the Lake Run this year. She stated that the monthly LO ARES meetings (third Wednesday, 7 to 9 p.m.) at the Main Fire Station were open to the public. • Gordon Fulks, 953 B Avenue He stated that he was a physicist. He read his statement recounting his experience in contacting the City regarding the scheduled appearance of Bill Bradbury and his sustainability presentation on the signs of global warming. He spoke of his alarm upon learning that the City had adopted an official policy endorsing climate hysteria, and that it was not considering allowing equal time for real scientists to talk about real science. He explained that after conversations with staff, including the City Manager, he contacted the ACLU regarding his First Amendment rights. He indicated that in a subsequent conversation, the City Attorney asserted that Mr. Fulks could exercise his First Amendment rights. He asked whether the City should take a position on a scientific topic on which it had no technical expertise, and invite a former politician, with no technical expertise or a college education, to speak on that topic. He asserted that the City would not invite Mr. Bradbury to speak on swine flu, to discuss the First Amendment, or to help engineer a bridge, as practicing medicine, law, and engineering were all illegal without licenses. He contended that Bill Bradbury could get away with giving advice on global warming because scientists were not licensed in the same way. He argued that Mr. Bradbury's lack of education and his basing his presentation on what he learned from other politicians who also lacked a science education should give the Council pause. He referenced the letter he provided to the Council, which he had written to Mr. Bradbury last November detailing ten fundamental errors Mr. Bradbury made in a similar presentation in St. Helens. He stated that Mr. Bradbury never responded nor did he correct the errors. He discussed two of the errors. He said that Mr. Bradbury claimed that there was no opposition among scientists. However, Mr. Fulks was a scientist in opposition, and the Petition Project has collected the signatures of 31,000 scientists (9,000 with Ph.D.$) in opposition. He discussed point 4 in the letter, in which Mr. Bradbury claimed that extreme weather events were something new. He contended that extreme weather events were nothing new. He pointed out that there have been no peak record high temperatures in recent decades. He cited peak high temperatures in various locations around the world, all of which were set in the 19th or early 20th centuries. He referenced his second handout documenting a newspaper ad, which ran in various large American newspapers, in which 125 scientists (several of whom were well known, including a Nobel Prize in Physics winner) signed a statement maintaining that the case for alarm regarding climate change was purposely incited. He argued that the Council should not insult the intelligence of Lake Oswego residents by staging a propaganda event and refusing to support any balance when so requested. City Council Regular Meeting Minutes Page 5 of 16 May 5, 2009 • Jim Karlock, Portland He provided copies of his prepared testimony and presentation. He referenced the movie made by Al Gore. He reported that the British Royal Court of Justice ruled on a complaint filed regarding the movie's inaccuracies, and found nine things that it, as a court of law in England, found inaccurate. He stated that Mr. Bradbury chose to explicitly include three of those inaccuracies, and another four by reference, although the court made the ruling one and a half years ago. He read his prepared testimony. He observed that Joseph Goebbels perfected the modern art of propaganda, and the technique of repeating the big lie over and over again until the general public believed it. He commented that while the U.S. democracy did not have the Ministry of Propaganda that many dictatorships did, he found last Saturday's presentation to be propaganda. He argued that the Council put its stamp of approval on a presentation that made false assertions that Lake Chad, Hurricane Katrina, and polar bears were adversely affected by man's activities regarding CO2, even though court law from over a year ago stated that the evidence remained insufficient to establish attribution. He noted that the only scientific study looking at polar bears found that four had died due to a storm, with no mention of global warming. He contended that Mr. Bradbury presented a large number of other claims that were outright wrong. He spoke of the presentation of normal events in an alarmist manner or the presentation of non-mainstream scientific opinion as though it were mainstream. He recalled that after the presentation, he had asked Mr. Bradbury several questions regarding scientific facts related to the greenhouse effect and CO2 emissions, but Mr. Bradbury had not known the answers. He contended that the Council had chosen a person who was ignorant of the most basic facts underlying his subject, and who used deceptive information to scare people into supporting his political philosophy. He described those tactics as classic propaganda in the tradition of Goebbels. He mentioned that virtually all reputable scientists on both sides of the discussion agreed that water vapor, and not CO2, caused 60% to 80% of any global warming. He noted the general agreement that only about 5% of the annual CO2 reaching the atmosphere was due to man's activities. • Carolyne Jones, 2818 Poplar Way She endorsed the testimony of the two prior speakers. She stated that she attended the event and had been appalled by the quality of information presented. She reported that her later Internet search found that Mr. Bradbury had not presented science, but rather political science. She described the event as a pre-campaign event for Mr. Bradbury's upcoming run for Governor. She objected to the City hosting it. She commented that apparently the City was using the same quality of research to take over the rights of 2,000 property owners. She alleged that much of that research was fabricated by Osprig. She asked the City to respect the principles of science, and not to subject the citizenry to that kind of event again. Mayor Hoffman mentioned that Mr. Bradbury was one of the original 50 trained by former Vice President Al Gore. He read a prepared statement noting that Mr. Gore and the Intergovernmental Panel on Climate Change shared the 2007 Nobel Peace prize for their efforts to build up and disseminate greater knowledge about manmade climate change, and to lay the foundation for the measures needed to counteract such change. 7. PUBLIC HEARINGS 7.1 Resolution 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 r lat d sal docum nt ; authorizing th x cution and d liv ry of th City of Lak O wego, Or gon, full faith and credit obligations, in one or mor seri s, in an City Council Regular Meeting Minutes Page 6 of 16 May 5, 2009 aggregate principal amount not to exceed $60,000,000 to finance capital improvements to the City's wastewater system, to refund th 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 Mr. Powell reviewed the standard hearing procedures and testimony time limits. STAFF REPORT Mr. Rouhier stated that this resolution would provide up to $60 million worth of full faith and credit bond authorization for the LOIS project expenses through June 2010 in lieu of issuing wastewater revenue bonds. He reviewed the City's history of financing the LOIS project, beginning with the $12 million in bond anticipation notes authorized in August 2007, the $100 million worth of revenue bonds in July 2008, and the amendment in April 2009 to increase that amount not to exceed $140 million. He noted that the project cost estimates also increased to include the bond issuance costs. He discussed the information presented at the Council's April 22 study session regarding the benefits of issuing up to $60 million in full faith and credit obligation bonds in lieu of revenue bonds, which would improve the issues marketability and further reduce interest costs paid by ratepayers. He noted that the City obtained the best possible ratings from Moody's (AA1) and Standard and Poor's (AAA)for its bonds, which would allow it to get the most favorable rates in the market (up to a full percentage point better than revenue bond rates). He stated that this change would save ratepayers anywhere from $500,000 to $600,000 per year, which would total millions over the life of the bonds. He emphasized that per the Council's emphatic direction, the City would use only wastewater fees to repay this debt. He noted the recommended language in the motion to convey the Council's intent. He indicated that the bid opening was set for May 20 and closing for June 3. QUESTIONS OF STAFF At Mayor Hoffman's request, Chip Pierce, Bond Analyst, described the bond bidding process. He mentioned that the winning low bidder would wire $500,000 to the City within three days of the award as a good faith deposit, and the remainder of the funds on June 3. He indicated that the market was currently in a good place, with Lake Oswego's ratings at the top of the best tier. He said that he expected a successful sale, as top-rated bonds were in high demand right now. Mr. Rouhier indicated to Councilor Tierney that the resolution did not contain the language explicitly limiting repayment of the bonds from the wastewater fees because doing so might raise a question in bond buyers' minds about why the City would do so for full faith and credit bonds. He explained that staff included that language in the motion. He clarified that the resolution contained language stating that the City would use any and all of its legally available resources to repay the debt, which made the bonds more marketable. Councilor Tierney commented that he recalled the Council saying to include the language in the resolution. He asked if the Council felt that it needed to add that language. Councilors Jordan and Olson each indicated that she was fine with having the explicit language in the motion instead of the resolution. Mr. Pierce mentioned that both ratings agencies' reports specifically stated that they predicated the City's ratings on the assumption that it would use wastewater revenues to pay the bonds. He indicated that based on comparable bond sales that he looked at today, he thought the City would be in the 4.5% interest range. Councilor John on thanked Mr. Rouhier, Mr. Pierce, Mr. McIntyre, and Mayor Hoffman for their work on the City's behalf in obtaining these bond ratings. Councilor Jordan concurred. City Council Regular Meeting Minutes Page 7 of 16 May 5, 2009 Mr. Pierce indicated to Councilor Jordan that following receipt of the bond bids on May 20, staff would do the calculations and select the bid. He explained that the most likely bidders were investment banks who would remarket the bonds to secondary purchasers. PUBLIC TESTIMONY Mayor Hoffman opened the hearing to public testimony. THOSE OPPOSED • John Surrett, 1685 Edgecliff Terrace He presented a copy of his prepared testimony to the City Recorder. He expressed his concern with the language in the resolution, "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 the 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 Section 11 and 11 b, Article 11 of the Oregon Constitution." He acknowledged the reasons for changing to straight faith and credit bonds in lieu of revenue bonds, but questioned why there was no language in the resolution stating the intent to restrict repayment to wastewater fees. He mentioned his understanding from the April 21 Council meeting that staff would include such language in the resolution itself. He expressed concern at the possibility allowed by the language that property tax payers could repay the debt. He indicated to Councilor Olson that he had not previously seen the proposed motion, which he noted called out for repayment using wastewater fees. Councilor Olson explained that including the language in the resolution could affect the City's interest rates. Mr. Surrett mentioned that he preferred revenue bonds to general obligation bonds because they reached a broader payment base, as many properties were exempt from property taxes. Mr. Surrett noted the statement in the Council report (p.2) under Alternatives and Fiscal Impact that staff believed the change in approach could save ratepayers as much as $100,000 a year in interest rate. He asked why Mr. Rouhier had said between $500,000 and $600,000 in his verbal report. Mr. Rouhier indicated to Mr. Surrett that the $100,000 estimate reflected the change from a subordinate issue of a full faith and credit pledge to a straight full faith and credit pledge. The $500,000 to $600,000 figure represented the savings when moving from straight revenue bonds to a straight full faith and credit pledge. He clarified that while the resolution made the ad valorem property tax legally available, the reality was that the City only had six cents left under its property tax rate cap, which would generate only $285,000 a year. He indicated that the full faith and credit did not permit the City to increase property taxes beyond the cap, in contrast to general obligation bonds that could increase beyond the cap. Mr. Powell discussed the language in Section 3, which he agreed could be confusing. He explained that `payable,' in contrast to `to be paid,' typically meant that the source was available for repayment, but it was not a directive that City would repay the debt from that source. He pointed out that the phrase `other funds that are lawfully available for that purpose' included the restricted sewer revenue funds in this case. He emphasized that this was not a general obligation bond authorization. He recalled that Mr. Blonde, Bond Counsul, did say that he could put the direction to use wastewater fees to repay the debt in the resolution, but the Council consensus had been to leave it out in order to avoid confusing the bondholders. He indicated to Mayor Hoffman that he used the term 'sewer utility' because that was the legal term in the City's ordinance. City Council Regular Meeting Minutes Page 8 of 16 May 5, 2009 COUNCIL DISCUSSION Councilor Olson moved to adopt Resolution 09-22 authorizing up to $60 million in Full Faith and Credit Obligations to refund the 2007 Bond Anticipation Notes and to fund LOIS project costs through June 2010; 2) to direct that repayment of these obligations shall be from sewer utility revenues; and 3) to direct staff to present sewer utility rate adjustments necessary to ensure sufficient revenue to meet the repayment requirements. Councilor Johnson seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson voted `aye.' [5-01 7.2 Resolution 09-23, a resolution of the Lake Oswego City Council revising wastewater (sewer) rates and updating the Lake Oswego Master Fees and Charges Schedule Mr. Powell reviewed the standard hearings procedure and testimony time limits. STAFF REPORT Mr. Rouhier stated that Resolution 09-23 would increase wastewater rates by 30%, as of July 1, 2009, as part of satisfying the debt service and overall system operating needs in the wastewater system. He noted that the City had planned on raising the rates over a 10-year period to fund this project, but further analysis of the project costs found a 10% rate increase per year insufficient to fund the system and the debt service. He indicated that additional rate increases would be necessary: 30% in 2010, 27% in 2011, and 13% in 2012. After that, the increases would level off roughly equivalent to inflation. He mentioned the factors involved in needing higher rates increases as the market forces reducing the SDC revenues, the revised cost of project estimate, and an updated projection of debt service costs. He observed that this project had front-loaded costs. He acknowledged that the lower than expected bid for the lake full phase should reduce the rate increases needed for later years, but he was not willing to reduce his 30% increase recommendation for 2009. He explained that a rate study in progress would be finished in time to inform future rate decisions, but not this one. He indicated that this 30% rate increase would generate approximately $1.7 million of additional revenue over the current rates, or an additional $18 every two months on the typical utility bill. He said that the previously approved 10% rate would have generated approximately $560,000, or an additional $6 every two months. He explained that the additional revenue would fund projected systems and debt service costs for FY 2009/2010. He noted the exhibits showing the impact on a typical utility bill, the city sewer rate comparables, and the updated Master Fees Schedule pages. He indicated that following this rate increase, Lake Oswego's bills would be slightly higher than the comparables average until the comparable cities increased their rates to pay for their capital projects. QUESTIONS OF STAFF Councilor Jordan commented that it was unfortunate that the Council had to authorize this large increase in order to make up for the Council keeping the sewer rates flat from 2003 to 2006. She pointed out that had the Council raised the rates 10% a year for those three years, those increases would have equaled this 30% spike needed today, but it would have done so in an easier manner. She observed that sometimes, even in a bad economy, if they did not keep up with what they knew was coming down the road, they then ended up playing catch up. Mr. Rouhier clarified to Councilor Tierney that this rate increase was sufficient to meet the first bond debt service payment when added to the monies collected from earlier rate increases and set aside for this purpose. He clarified that the City would have two debt service payments in FY 2009/2010. City Council Regular Meeting Minutes Page 9 of 16 May 5, 2009 Councilor Tierney asked for a forecast of interest payments based upon the estimates that staff had available today. He recalled his initial negative reaction to the 30% rate increase, and his eventual support of an even higher rate increase based on the information provided by staff. He commented that infrastructure was expensive but the community had to pay for it. He said that he saw no alternative to this unpleasant task. Councilor Olson commented that she had shared Councilor Tierney's concerns, and came to the same conclusion that the community had to do this. She indicated that she understood the need for the large increase, even though she did not like it. She recalled asking for a reconsideration of the implementation of the tiered water rates, scheduled to go into effect on July 1 also, but the Council has not yet discussed the issue fully. She held that even a two-month delay to avoid the high use summer months of July and August would help mitigate the increase. Mr. Rouhier indicated to Mayor Hoffman that staff hoped that this current issue of up to $60 million would take the City through June 2010. He spoke of a second bond issue occurring after the July 1, 2010, rate increase. He indicated to the Mayor that the City had a policy of having every bond issue rated, and therefore, staff would seek a rating for the revenue bonds at the appropriate time. At Mayor Hoffman's request, Mr. Pierce described what would happen in the next 16 months. He indicated that the unknowns were how much actual revenue the rate increase would generate, and how far the proceeds of the bond sale would take the City. He noted that this depended on the pace of the project. If it slowed down, then they could push off the next bond sale until late summer or early fall, but if it accelerated, then they would not have the next rate increases in place before the next bond sale. He pointed out that Lake Oswego had a history of having sufficient revenues collected to pay future debt service, but if it issued bonds before the next round of rates were in place, that would not be the case. He recalled talking to the rating agencies about potentially doing bridge financing to allow more time to get the rates in place, similar to the bond anticipation notes from 2007. He indicated that they told the rating agencies that the next round would be either a transitional interim funding process or a straight revenue bond process. He confirmed to the Mayor that the City would have to obtain a rating for its wastewater revenue bonds. He reiterated that the straight wastewater revenue bonds had no pledge from the City beyond the net system revenues. He pointed out that the economic factors affecting the City's full faith and credit pledge had little effect on a straight revenue transaction, which was dependent on enterprise funds. PUBLIC TESTIMONY Mayor Hoffman opened the hearing to public testimony. NEUTRAL • Yvonne Campbell, 4330 Orchard Way She clarified that she was not opposed to either the sewer or water project, nor was she opposed to the large 30% rate increase. She referenced the article that she read in the Oregonian regarding the rate increases and their effect on the average monthly bill. She commented that the $150 average mentioned was a large number, especially for what was usually the smaller portion of the water bill. She expressed her frustration that the City always discussed the rate increases to the sewer and to the water separately, and never together. She argued that this presented the picture that the bill would be smaller than it actually would be, which she felt was orchestrated. She contended that putting the numbers together yielded a utility bill higher than $300. She speculated that when the public started getting the water bill under the tiered water rate schedule, the City would reap the whirlwind. City Council Regular Meeting Minutes Page 10 of 16 May 5, 2009 She said that she only remembered receiving information about the rates once with the water bill. She argued that the obvious way to inform the public about the rates and the City's plans was through the water bill, and not through newspapers. She stated that she would appreciate a more forthcoming attitude on the City's part about communicating those high number items to citizens. She commented that she kept track of this issue, but she doubted that most citizens did. She reiterated that the City needed to make more of an effort to inform the people because it would be hearing from them. She asked Councilor Jordan for clarification on her comment regarding starting the rate increases five years ago. She indicated that since she lacked confidence that the City would have set aside the revenues collected from earlier rate increases for this project, she thought that the City would simply be adding a 30% increase to an already larger bill. Councilor Jordan explained that the purpose of rate increases was to collect revenue to pay for capital improvements to the system. The City would put those revenues in a dedicated fund to use only for improving the sewer line. Ms. Campbell indicated that she would favor that idea if she had confidence that the City would have actually done that. She commented that projects, such as the sewer and water projects, were why citizens wanted to see a minimization of fluff projects and other money wasters. She questioned redesigning Lake Grove at this time. She observed that this was a big expense that would hurt, and asked that the Council minimize unnecessary expenditures. Mayor Hoffman closed the hearing. COUNCIL DISCUSSION Mr. Rouhier confirmed to Councilor Jordan that the most recent water bills included information on the water rate increase. He said that staff would send out similar information on the wastewater rate increase as soon as Council approved it. Mayor Hoffman summarized Ms. Campbell's request as asking the City to provide advance notice of upcoming rate increases. He suggested providing information from the rate study, once it was completed. Councilor Tierney agreed that the request was for information that the Council was going to consider raising rates, rather than only notification of a rate increase. Councilor Jordan recalled the Council discussing going to a monthly bill, rather than the bimonthly bill. She acknowledged that doing so would add costs to the billing process. She asked staff to look into it within the next year. Mr. Rouhier indicated that a monthly bill was not part of the rate study but staff could cost it out and have it available for the Council during the Master Fees Schedule process. Councilor Olson recalled discussing a monthly billing system in conjunction with making online payments available. Mr. McIntyre indicated that staff would bring back a report to Council explaining the costs of a monthly billing process. Councilor Jordan moved Resolution 09-23. Councilor Johnson seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson voted `aye.' [5-0] 8. REPORTS 8.1 Financial Report(no written report) Mr. Rouhier indicated that staff would have the report on the previous month's finances at the second regular meeting of the Council. 9. INFORMATION FROM THE COUNCIL 9.1 Councilor Information City Council Regular Meeting Minutes Page 11 of 16 May 5, 2009 Councilor Johnson reminded the audience that May was Sustainability Action Month, and that it was important to conserve water and energy. She directed citizens to the City website for the list of sustainability month events running throughout the month, such as Friday night movies, Thursday morning business forums, and the Water and Energy Expo on Saturday, May 23, at Millennium Park Plaza. Mayor Hoffman reminded the citizens of the community roundtable scheduled for Saturday, May 7, in the Council Chambers to discuss the West End Building strategy. 9.2 Reports of Council Committees, Organizational Committees, and Intergovernmental Committees 10. REPORTS OF OFFICERS 10.1 City Manager 10.1.1 Council Schedule Mr. McIntyre explained that this was an opportunity for Council members to hold a public discussion on future agenda items, including any not already listed on the City's Rolling Agenda. He reviewed upcoming agenda topics for the May 19 and June 2 regular Council meetings. He noted next Tuesday's LORA study session on project updates, and Citizen Budget Committee weekly meetings. He confirmed to Councilor Olson that the Council would hold the public hearing on the budget on June 16, and adopt the budget that same evening. Councilor Jordan suggested that the Council take a step back regarding the Sensitive Lands process, now that the Council has adopted the housekeeping measures to bring the City into compliance with the Metro standards. She spoke of making sure to involve the interested parties in looking at how the City moved forward on the sensitive lands issue, especially with Clean Streams. Councilor Olson concurred with slowing down the Sensitive Lands process. She mentioned that she might have a proposal on the process to bring to Council. Ms. Frisbee confirmed that staff was no longer in a rush, and anticipated Metro determining that the City was now in compliance. She mentioned hearing from citizens that they did not understand the impacts of the regulations. She spoke of following up on possible partnerships in the region, especially regarding the educational component of the program, which was critical in developing core public acceptance. She explained that staff hoped to receive Council feedback and input at the upcoming study session regarding their educational/outreach plan. Councilor Olson commented that they did not need to postpone the study session, as that was an opportune time to discuss ideas. Mayor Hoffman asked staff to work on setting up a more informal arrangement at the study session to allow greater public interaction than normally allowed. Councilor Jordan suggested that staff meet with interested citizens (as many different groups as possible) prior to the study session to get feedback before coming to Council with the proposal. Ms. Frisbee indicated that staff could do so, although it would not reach all groups by then. She commented that this would be a long outreach process that would run through late fall. Mayor Hoffman discussed potential upcoming tours. He suggested driving through Sandy, downtown Fairview, downtown Gresham, and downtown Milwaukie on the way to the Clackamas Cities Dinner on May 26, to view the areas for which these cities received place-making awards. He mentioned the Metro trip to Vancouver, B.C., to look at their densification of their suburbs. He explained that Metro was trying to get representation from the southern tier of cities. He noted Councilor Olson's suggestion to send planning staff also. He commented that some cities, such as Tigard, sent citizen downtown activists along as well. City Council Regular Meeting Minutes Page 12 of 16 May 5, 2009 Mr. McIntyre informed the Council of the intent to hold no meetings in August. He spoke to making sure that any business that the Council wanted to complete before then to be put on an agenda. 10.2 LOIS Insurance Councilor Jordan declared a conflict of interest with the insurance discussion, as Advanced American Construction was a client of her husband's law firm. She recused herself from the discussion. Mr. Komarek explained that prior to letting the bid, he had discussed insurance for large capital projects with his colleagues at other municipalities (who were also undertaking large capital projects), and with the City's insurance advisor, Wells Fargo. He mentioned learning of an owner- controlled insurance program that provided better terms to the project owner and contractors. He indicated that on the advice of Wells Fargo, staff put a separate line in the bid documents for the pollution liability insurance coverage that the bidder would provide. This gave the City the information it needed to get quotes from the underwriters of this type of insurance. He said that Advanced American's bid listed $200,000 for the pollution liability policy. He reported that staff directed Wells Fargo to take the line item bid amount and the other contractor information required by underwriters and solicit quotes. He said that Wells Fargo evaluated the three bids that it received (out of the five bids solicited), and selected Excel Insurance as providing the best value to the City with respect to both the insurance cost and the coverage provided to the City and the other project participants. He said that the cost for a premium for a two-year term with a $15 million limit and a 10-year completed operations tail was approximately $122,000. He asked the Council to authorize the City Manager to bind the City with Excel Insurance in order to allow staff to tell the contractor that he did not need to provide this insurance any more. He noted that this would deduct $200,000 from Advanced American's bid. He mentioned the $78,000 savings to the project in obtaining this insurance policy with more favorable terms to the City. He commented that this policy would also put the City in control in terms of responding to claims. He confirmed to Councilor Tierney that having this insurance coverage as a separate line in the contract allowed the City to remove it. He indicated that he has spoken with the contractor, who did not care who provided the insurance, as long as his interests were protected equivalent to what they would have been under his own insurance policy. He clarified to Councilor Tierney that the contract documents established that the party responsible for a spill was also responsible for clean up costs, which would be assessed against the deductible. He indicated that the City would not be out of pocket. Mayor Hoffman declared a potential conflict of interest because he did not know whether his law firm represented Excel Insurance, and he has not had an opportunity to do an ethics check. Mr. Komarek indicated to Mr. Powell that the motion need not include an authorization to change the contract, as staff would handle that through the change order process. Councilor Olson moved to authorize staff to execute the binding policy with Excel Insurance in the amount of$122,189.06. Councilor Johnson seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson voted `aye.' [5-0] 10.2 City Attorney Mayor Hoffman recessed the meeting for a break at 9:05 p.m. He reconvened the meeting at 9:12 p.m. City Council Regular Meeting Minutes Page 13 of 16 May 5, 2009 11. STUDY SESSION 11.1 Periodic Review Mr. Sin explained that his intent was to prep the Council for the May 19 public hearing on the proposed adoption of the Periodic Review program. He recalled the Council discussion at the February 24 study session regarding the distinction between the Comprehensive Plan and the visioning process. He noted that Attachment 1 of the staff report provided a comparison of the two processes. He used an analogy of building a house to further clarify the distinction between the Comprehensive Plan and a visioning process. He compared the idea of what one wanted the house to look like to the community visioning process identifying what the community would look like. He noted that the values and elements arising out of that house vision drove what the blueprints would look like. He indicated that the Comprehensive Plan was the blueprint for the community; it provided the detail and specifics for how to build a house. He recalled the Council discussion at the study session regarding the level of public engagement in the Periodic Review process. He noted that the whole of community process took a broader look at the community, while the visioning light process took a penlight focus on the Comprehensive Plan. He commented that while there had been some level of support for a visioning process, there was also concern about the timing of it, especially during these economic times. He mentioned the staff suggestion to postpone the visioning process from Fall 2009 to Fall 2010. He noted the advantage of giving the Council additional time to reflect on community issues. He pointed out that the upcoming Centennial celebration in 2010 was a time to reflect on where the community has been in the last 100 years, and where it wanted to be in the next 40 years. He commented that it would also be good to wait for Metro's adoption of the Relook Report, the Regional Transportation Plan, and the Reserves Process, scheduled for late 2009. He explained that at the public hearing, staff would ask the Council to adopt the Periodic Review Evaluation Work Program. He noted that Attachment 2 in the packet was the revised three-year schedule to complete the process, from June 2009 to June 2012. He said that staff would not ask Council to make a decision on the level of public engagement (whole of community or visioning light) because staff wrote the program broadly enough to move forward with the program while allowing Council more time to discuss the issue. He indicated that another question staff would ask of Council was how to proceed with the Periodic Review. He explained that the State was going through substantive budgeting issues, and was uncertain whether it would have grant money available to help jurisdictions with the Periodic Review process. He presented the three options provided by the Department of Land Conservation and Development (DLCD) staff that the City could pursue regarding compliance with periodic review. The first one was to continue with the Periodic Review with the understanding that the grant funding might or might not come through. Under this option, the three-year period would begin upon DLCD's approval of the work program. He explained that the second option was to ask for a delay of the Periodic Review on the grounds that the City could not move forward on it without State grants. The third option was to submit the City's work program but request that DLCD not approve it until grant funding was available. He noted that Option 3 meant that the City would have met its DLCD commitment by providing the work program, but it would also have the flexibility of delaying the start of the three-year clock. Mayor Hoffman asked Mr. Sin to present the staff recommendation at this time. Mr. Sin recommended Option 3, which provided the City with a better opportunity to plan. He explained that he did not recommend Option 2 because staff has completed the work program and was ready to move on. City Council Regular Meeting Minutes Page 14 of 16 May 5, 2009 Mr. Egner commented that the City could always go back and request DLCD to approve the program without the grant money when staff felt ready to move forward. He mentioned beginning background research work now in anticipation of plan updates. He indicated to Councilor Tierney that DLCD was not required to provide grant money, but it was unlikely that it would require the City to move forward without grant money. He explained that the grant money was the State's response to complaints about mandates without funding. Mr. Sin indicated to Councilor Tierney that the $725,000 cost did not include staff time. Mr. Egner mentioned that those funds primarily focused on updating major public facility plans, such as the Transportation System Plan, the Sewer Master Plan, and the Water Master Plan. He explained that staff thought that delaying the start of the Periodic Review process gave staff an opportunity to start all those projects and complete them around the same time. He noted that delaying the process also gave the City more chance to spread the costs out. Councilor Jordan asked about the sequencing of the Comprehensive Plan update, the visioning process, and the development code update. Mr. Egner indicated that the ideal sequence was vision, Comprehensive Plan, development code. He explained that staff proposed doing a code audit as the code update work mentioned in the report. The findings of that audit could help inform decisions regarding the Comprehensive Plan and visioning process approaches. Mr. Egner indicated to Councilor Tierney that the visioning process took a broader look at the community than the Comprehensive Plan update. He explained that the Comprehensive Plan update focused on the statewide planning goals, which were primarily land use related. The broader whole of community effort would address things beyond the Comprehensive Plan and help inform other decisions about City operations. He noted that one option was to roll the visioning process and the land use process together into one package. Mr. Egner indicated to Councilor Olson that $725,000, which were general funds, would include paying for the recent Water Master Plan updates. Mr. Sin noted the $250,000 budgeted for the Wastewater Master Plan update. Mr. Egner mentioned the possibility of getting a grant through DLCD's Transportation Growth Management Program to help pay for the Transportation System Plan. He clarified to Councilor Olson that the $100,000 listed in the 2009/2010 proposed budget for initiating Periodic Review and determining the scope of the visioning process was an up to amount. He mentioned the various projects staff anticipated using that money for, including engaging a consultant in the spring to do prep work. He indicated that the City did not have to spend that money. He concurred with Mayor Hoffman that sustainability should be a major theme of visioning, as it would not be covered by the Comprehensive Plan update. Councilor Jordan asked if adopting Option 3 meant that the City would not spend all the budgeted funds because staff would not do anything until it received approval and grant assistance. Mr. Egner clarified that Option 3 delayed the start of the three-year time clock triggered by DLCD, and allowed the City to move forward with the work that it wanted to fund now. He indicated that staff's biggest concern was getting all the major facilities plans done by the end of those three years. He confirmed that by doing the facilities plans before the start of the three years helped insure that the City could get through the Periodic Review process in three years. 11.2 Community Aspirations Mr. Egner recalled that staff first presented a draft statement of aspirations to the Council at the April 14 study session. He mentioned the Council direction that staff do a better job of emphasizing sustainability, walkability, and connectivity. He noted the suggestions to adjust some of the language as it related to Stafford. City Council Regular Meeting Minutes Page 15 of 16 May 5, 2009 He remarked that staff developed this statement in response to Metro's request for a statement of aspirations from the City, so that it could have an idea of how to understand the City's direction relating to UGB amendments and transportation infrastructure planning. He presented the second draft statement related to the topics that Metro asked about. He asked for Council feedback. He mentioned that staff did receive helpful comments from the Sustainability Advisory Board. Councilor Olson said that she liked the changes. She asked if the Open Space Plan referred to at the bottom of page 3 was part of the Parks Master Plan. Mr. Egner indicated that the purpose of the language was to reflect's Parks & Recreation Director Kim Gilmer's intent to update the Open Space Plan. He commented that the history of the City's interest in acquiring open space focused on protecting open space through acquisition and regulation. Councilor Olson noted that Mr. McIntyre has been talking about slowing down on the acquisition of open space and focusing more on maintaining the land that the City already owned. Councilor Johnson suggested including language speaking to acquiring additional open space and parkland in the future and to maintaining the City's current park and open space assets. Mayor Hoffman commented that a byproduct of the City acquiring land in the Luscher area along Rosemont has been to change the dynamic of the discussion of that area. He reported that in the urban/rural reserves discussion, he heard people suggesting not developing the upper Stafford area closest to the 150 acres that Lake Oswego has already committed to open space, and locating a town center in the lower Stafford area. Councilor Olson asked about the practicality of running high-capacity transit through the 1-205 corridor where there was only basalt cliffs and the river. Mr. Egner indicated that the high capacity transit draft document under consideration by MPAC showed a conceptual line along the 1-205 corridor. He indicated that Metro did not want to put lines in the roadway along 1-205 because that would not activate the property around the line for development. Metro wanted to look at the stations as elements helping to spur additional development. Councilor Tierney commented that he thought that the modifications looked good. He mentioned his understanding from the study session that Metro wanted something sooner than later. Mr. Egn r concurred. Councilor Tierney moved to adopt the statement of community aspirations and forward it on to Metro. Councilor Tierney accepted Councilor Olson's friendly amendment to add language to the effect that the Council wanted to maintain what land the City had and at sometime in the future, continue to purchase open space and parkland. Councilor Jordan seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Jordan, Olson, Tierney, and Johnson voted `aye.' [5-0] Councilor Tierney asked staff to provide a list of all City plans with the dates of their latest revisions. 12. ADJOURNMENT Mayor Hoffman adjourned the meeting at 9:40 p.m. Respectfully submitted, APPROVED BY THE CITY COUNCIL: O my 21 200 Robyn Christie Ja . off , ayor City Recorder C. Council Regular Meeting Minutes Page 16 of 16 ay 5, 2009