HomeMy WebLinkAboutApproved Minutes - 2010-07-27 SpecialCITY COUNCIL SPECIAL MEETING
MINUTES
July 27, 2010
Mayor Jack D Hoffman called the special City Council meeting to order at 6:39 p.m. on
July 27, 2010, in the City Council Chambers, 380 A Avenue.
Pr sent: Mayor Hoffman, Councilors Olson, Moncrieff, Jordan, Tierney, and Johnson.
Councilor Hennagin was excused.
Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie,
City Recorder; Laura Weigel, Associate Planner; Denise Frisbee, Director of Planning;
Jessica Numanoglu, Associate Planner; Ursula Euler, Finance Director; Joel Komarek, LOIS
Project Director; Debra Andreades, Senior Planner
Planning Commission: John Gustafson, Chair, Russell Jones
Oth rs: Don Elliot, Clarion Consulting; Kieu-Oanh Nguyen, Western Financial Group.
3. STUDY SESSION
3.1 Distinguished Service Award for Councilor Kristin Johnson
Mayor Hoffman related that Council President Kristin Johnson was the youngest elected City
Councilor in the city. She was embarking on a new journey to University of San Diego Law School
and would be stepping down August 1, 2010. Her accomplishments and contributions to the City
and community were many. Mayor Hoffman presented the Distinguished Service Award to
Councilor Johnson, who expressed her appreciation to the City, Council and the community for the
opportunity and their support.
3.2 Comprehensive Plan Update
Laura Weigel, Associate Planner, presented an update on the Comprehensive Plan. Staff had
talked to about 150 people at the City's booth at the Centennial event. There was a video booth
where people could record their stories as well as a wishing tree where people could write on tags
what they wanted to see in the year 2035.
An overview of the new website was presented. To date, more than 40 people had taken the online
community values survey. The video shown to Council a couple of weeks ago was online, and staff
had received a lot of good feedback about it. The "Action Areas" of the site broke down the
Comprehensive Plan categories to educate people about what would be discussed. Stories and
pictures about Lake Oswego could also be posted online. There were different avenues available
for feedback such as a Facebook page.
On August 3, the Citizen Advisory Committee would be discussed and hopefully appointed. In early
September, staff would be back to talk about the demographic studies conducted by Todd Chase.
3.3 Resolution 10-51A, a resolution of the Lake Oswego City Council directing staff to
implement revisions to the City's Natural Resource Protection Program
David Pow II, City Attorney, presented an overview of Resolution 10-51A, which had been
drafted with Council's suggested changes. Staff recommended adoption of Resolution 10-51A.
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Councilor Tierney moved to adopt Resolution 10-51A. Councilor Johnson seconded the
motion. The motionap ssed with Mayor Hoffman, Councilors Tiern y, Jordan, Moncrieff and
John on voting `aye', and Councilor Olson voting 'nay'. [5-1]
Mayor Hoffman appreciated all the work by staff and hours invested by Council, staff, neighbors
and citizens. The outcome struck the balance between protecting natural resources and respecting
and accommodating private property lines. Voluntary environmental stewardship has been
encouraged through greater outreach, incentives, grant programs and leading by example. It was
appropriate to talk about maintaining or improving the levels of protection for natural resources.
Lake Oswego would now be in compliance with Metro and state requirements. The Council had
heard the need for flexibility by not only allowing de minimus impacts but listing the specific
allowances. He liked the fact that the Council was directing staff to simplify and clarify the Code
and permit application process to allow more flexibility.
Alex McIntyre, City Manager, informed Council that he had been working with staff and created a
rough template for a work program. They really did not know what the resource demands would be
until it was brought back to Council for policy direction, which would then create a resource need.
The work program would probably return to Council sometime in August for feedback.
3.4 Code Audit Report
Denise Frisbee, Director of Planning, introduced Don Elliott of Clarion Consulting and reviewed
his educational qualifications and extensive professional experience.
Jessica Numanoglu, Associate Planner thanked everyone on the project management team for
their work, advice, input and direction. She briefly reviewed the project. The Development Code
regulated all development within the Lake Oswego city limits. It had been amended numerous
times over the decades and had become a very complex document. To address this issue, Council
directed staff to undertake an audit of the Development Code with the goal of identifying issues
with regard to format, organization, readability, etc. and devising an approach to make the Code
more user-friendly.
Clarion Consulting had conducted the audit and finished at the end of May. The draft presented to
the Planning Commission was very well received.
Some questions the Council should consider were scope of work, staffing needs and technology
requirements. The current 1992 software used to maintain the Code was beyond its capacity and
needed to be replaced in the near future, even without the Code audit. The Code audit could
improve the readability of the Sensitive Lands article and possibly incorporate regulations and
incentives for sustainable development standards. The audit could also improve the dissemination
of information, such as information availability on the website.
Don Elliott, Clarion Consulting, presented an overview of the Code Audit report via PowerPoint,
relaying Clarion's extensive nationwide code drafting experience and describing key components
of the project.
The audit was organized into four steps: an overview and review of relevant ordinances,
stakeholder input and summary of comments, examples of Code organizations including the
incorporation of drawings, pictures and the actual audit report.
Key audit findings were summarized. Not surprisingly, readability was an issue. The language was
archaic, the overlays were scattered, too much was in the appendix, flowcharts and definitions
were missing and there was no user guide. Additions needed were basic tools to orient the reader
such as headers and footers, descriptive section headings, integrated graphics, etc.
The Development Standards were extremely complicated. It was very detailed and nuanced with
many exceptions, and exceptions to the exceptions. There were many complicated overlays. The
dimensional standards were scattered.
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Regarding the land use decision process, the strengths were that decisions were delegated more
than many comparably sized cities, notice was given effectively, one hearing was utilized rather
than multiple hearings, and the number of steps to get to a decision was pretty efficient before the
appeal process. Weakness included the Code not being consolidated, the criteria applied to
different decisions and were scattered in several ordinances making how they related to each other
unclear.
The Code was perceived by the public as being uncoordinated and that it produced inconsistent
results. People perceived that there were exceptions to rules and criteria scattered throughout the
CDC; that for every rule, there was an exception. Another perception was that the CDC required a
lot of interpretations that were not always consistent, which was caused in part by the complexity of
the Code.
The current Code Master software was a dinosaur. It was a huge weakness not to have integrated
graphics, and have each article treated as a separate document. There were no headers and
footers and searchability was very limited. Three better technologies were available: PDF,
database/server dependent and web browser -based, which was the recommended solution.
Major improvements could be made in readability and usability without moving to a different zoning
approach. Reorganization and integration of the existing content would make the public much
happier with their ability to find and understand what applied to their property. Better graphics and
integration would dramatically increase understanding of the Code. Performance zoning was an
approach that was very flexible but did not produce predictable results and was also expensive to
maintain over time. Form -based zoning would not be a good fit for Lake Oswego.
Integration was recommended for these for chapters: CDC, Fences, Solar Access and Historic
Preservation, but not for Utilities, Streets and Sidewalks, Signs or Trees.
The four major chapters of the Code could be reorganized into ten articles that would hang
together: general provisions, base zone districts, overlay zone districts, use regulations and
conditions, dimensional standards, sustainable development standards, review and approval
procedures, variances and adjustments, enforcement and penalties and definitions and rules of
construction.
The proposed layout would make it much easier for the public to find materials. The structure
would also make it easier for amendments to be made and integrated into the Code in the future. It
would also help focus on key topics that were of interest to the public.
An overview was presented of how to group subjects in chapters to make topics more consistent.
He also presented an example of a use table which depicted graphically what uses were permitted
in each district, and a procedures table example, which was helpful in getting the public to
understand how their local government did business.
A two-phase strategy was proposed for moving forward. Phase 1 was to reorganize, integrate and
illustrate the current content. Phase 2 would consider substantive changes to the standards.
There were several advantages to this two phase approach: gains in readability, usability and
consistency were achieved up front; gaps and inconsistencies were found and filled; it was easier
to identify necessary substantive changes once things were organized; and it avoided "capture" of
the process by special interests or gridlock over contentious issues.
The next steps would be finalizing the annotated outline, appointing a steering committee, and
using a three draft strategy, involving staff, public and final drafts for consideration. Maintaining
momentum was very important.
Phase 1 could be completed by in-house staff or a consultant. Handling Phase 1 in-house would
take about one full-time employee to manage the project, and a graphics consultant could still be
needed. In-house Code revisions usually took longer than those that utilized a consultant. Staff
sometimes found it harder than consultants to say unpopular things. Most people hire a consultant
for this work. The cost of staff resources could be lower; the cost of a full time employee for the
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year or year and a half might be lower than a consulting fee. Handling this phase in-house ran a
greater risk of getting bogged down and not getting to the finish line.
Using a consultant, drafting would take about 9 months and adoption an additional 2 months in a
best case scenario. The Phase 1 consultant cost would be approximately $100,000. Putting the
Code on the web would take an additional 3 months and $25,000 to $30,000.
An alternative would be a comprehensive Code revision addressing substantive issues and
integration. The issues that would need to be considered with this approach would be simplifying
the menu of districts, reconciling tree protection and solar access, enhancing sustainability
standards, parking and signage. The time frame for this would be approximately 2 to 2 '/z years,
possibly 3 years. The cost would be roughly $225,000 to $250,000.
Mr. Elliot responded to Councilor Moncrieff that fixing the Code at the same time as the
comprehensive planning process was underway would not be an issue and the Code project
should not wait until after the comprehensive planning process was completed. Because the
comprehensive planning was going on, the two-phase strategy would be the better way to go.
Phase 2 might be deferred until after the comprehensive planning was completed so the values
that needed to be changed would be known. Phase 1 could be put up on the web whenever it was
completed. The recommended sequence was Phase 1, technology, complete comprehensive plan,
and then Phase 2.
Councilor Jordan wanted the Code project to happen; however, they had not budgeted for it. She
supported doing the phased in development process described, particularly with regard to the
revised Comprehensive Plan. She hoped funding could be found to do the project and move
forward as soon as possible.
Councilor Tierney asked the Planning Commissioners present to comment. Commissioner
Gustafson, stated that Mr. Elliot's presentation was very well received at the Planning
Commission. Everyone agreed, whether a builder, homeowner, or someone pro or against
development, that the current Code did not work. The timing was perfect considering the
Comprehensive Plan update and the Code project and Comprehensive Plan update really went
hand in hand, especially with the two-phase approach. Commissioner Jones suggested this
would be a good Centennial gift for the Council to give the city.
Commissioner Gustafson explained to Mayor Hoffman that as a Planning Commissioner, he
believed it needed to be a two phase approach, because the community was so involved in even
the slightest changes to the Code. As a Code user, it would be nice if it was all done as one
package, but he did not believe that was realistic.
Mr. Elliot responded to Councilor Tierney that the first thing was to get the structure right. Every
change would be footnoted, even just filling a gap or correcting an inconsistency. He suggested
taking minor changes to a group for review and then having a "parking lot" for major topics. He
explained that the Comprehensive Plan process could lay out what was wanted in the future as far
as types of housing, etc. Once the planning foundation was laid, it was easier to say why the Code
was being amended. In every project, hot issues come up. If the Council wanted to pass an
amendment in the middle of the planning process, it could be done, but it should be kept clear in
the public's mind that it was not part of the reorganization process. The reorganized Code would
be up to date the day it was adopted and include everything Council had adopted along the way.
Commissioner Gustafson responded to Councilor Tierney that it would be best to address the
Comprehensive Plan, the Planning Commission's housekeeping chores, and the reorganization of
the Code at the same time.
Ms. Frisbee indicated to Mayor Hoffman that staff had not done a timeline to see how this would
match up with the Comprehensive Plan process, which was a three-year process. The Code
project would be a total of two years. Staff was waiting to get Council's sense about going forward
before addressing timelines. Commissioner Jones stated a three-year Comprehensive Plan
project could be worked on at the same time as the Code was being reorganized. Mr. Elliot added
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there was value in just getting it done to get it done. The Council would not be short on anything to
talk about in terms of substance while the planning was going on. The Code process would also
help Council spot things they wanted to address in the Comprehensive Plan.
Mr. Elliot clarified for Councilor Olson that the pending housekeeping amendments should be
rolled into this process, and would involve whatever the Council could agree upon. If Council got
bogged down on some things, they should be taken off the table and put in the parking lot to be
discussed within the context of where the City was going with the Comprehensive Plan. He
reviewed the amendments, which appeared to be a mixed bag of big and little issues. The
Planning Commission should do what they could, and then send it to the consultant and ask them
to be included and footnoted in the revised Code. The key was transparency. As long as the public
knew they would be informed of all the changes, they would understand housekeeping
amendments.
Ms. Frisbee noted that the keys of momentum and transparency would argue for not stopping any
process, but moving forward as long as there was momentum. Staff was poised with the
housekeeping amendments, and could do some sorting and still move things forward. She did not
believe they would end up sitting and waiting for the completion of the Comprehensive Plan.
Councilor Olson fully supported doing as much as they could as soon as possible. The
housekeeping amendments were started when she was on the Planning Commission three years
ago. Fixing the Code was a big issue to the community and a priority for her.
Councilor Moncrieff agreed that they should get started with the reorganization and then move on
to the technology as soon as possible. Keeping the existing substance while also allowing citizens
to search the web for information would serve the community well. There was no problem waiting
until the Comprehensive Plan process was over to then move into the substantive issues and
changes. The report was wonderful.
Councilor Johnson agreed that the technology was critically important, especially since they were
going through the Comprehensive Plan process. Councilor Jordan added that the graphics were
a key part in the reorganization.
Mr. Elliot clarified for Councilor Tierney that performance-based zoning was an approach that
has been around since the 1950s that focused not so much on objective and predictable setbacks
or heights as in performance: does the structure cast shadows, block the wind, create noise, or
other adverse impacts. This approach made sense if trying to make the Code less rigid. However,
performance standards took a lot of time to develop and required staff trained to evaluate the
standards. Form -based zoning focused less on a building's uses and more on how a building fit
into the fabric of the city. This approach fit the template of most residential areas where the use is
not the issue. Building form was a big issue. The character of every residential area in the city
could be defined and a template created against which projects would be evaluated. Usually, this
was much more complicated than what currently existed. Creating an intellectual model that
matched what was on the ground was difficult. Form -based could probably work in areas where a
flat grid existed, but he believed form -based zoning had theoretical strengths that did not match the
needs of Lake Oswego very well. He explained that there really were two different issues. The
theory was to lighten up on the use regulations and crank up the form regulations. Most cities that
did this cranked up on the design but did not lighten up on the uses, essentially increasing
government regulation. In areas like downtown or other industrial commercial areas, it was
recommended to lighten up on uses when the substantive changes were addressed, even if form -
based zoning was not done.
Mayor Hoffman stated one of the next steps would be finance, but the timing was good because
of the Comprehensive Plan. He saw the first phase as a civic engagement/citizen outreach
because people would get involved in the community as well as the Building and Development
Codes. The timing was also good because the City was in a lull in terms of the pressure of infill on
their neighborhoods, which could be discussed further in Phase 2. The question was finding money
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to fund the project. It was the sense of the Council they would like to go forward on this if at all
possible.
Mr. McIntyre asked if the Council wanted to have the work done internally, externally, or have staff
return with a recommendation. Mayor Hoffman and Councilors Tierney and Olson preferred to
use a consultant. He confirmed that the next step was for staff to return with possible financing
strategies.
Mayor Hoffman called for a break at 8:00 p.m. and the meeting resumed at 8:10 p.m.
Councilor Olson stated that she supported the project, but it would be better to find something to
delay or not do in order to have the money rather than adding more funds to the budget.
3.5 Series 2010 Wastewater Revenue Bond — LOIS
Ursula Euler, Finance Director, introduced financial advisors Kieu-Oanh Nguyen and Chip
Pierce from Western Financial Group. Mr. Pierce had joined the meeting by speaker phone. She
presented a background and history of the Wastewater Review Bond.
In August 2007, Council approved one of the largest public works projects ever undertaken or
planned by the City to that point, the Lake Oswego Interceptor System (LOIS), which was
estimated to cost about $110 million at the time,. LOIS was a wastewater backbone that needed to
be upgraded and partially replaced. It was and still was necessary, serving approximately 12,500
connections to residential and commercial customers. The wastewater utility functioned as an
enterprise fund, which was a self supporting fund that charged fees for services to its customers.
When LOIS was planned and approved, it was clear that customer fees were not large enough to
fund a project of that size, scope and budget. As a result, financial staff determined that a rate
increase of 30 percent was needed and was implemented July 1, 2009. Shortly thereafter, a rate
study was conducted that recommended another 30 percent increase as of July 1, 2010 and
followed by another 30 percent increase on July 1, 2011.
The rate increases were to fund the first bond issue to fund LOIS. The City was currently about $56
million into the project in terms of the cost. The first issue of $60 million was finalized in June 2009,
and it was becoming clear that it was time to replenish the coffers to take LOIS to completion.
Staff was asking Council to authorize the issue of a maximum bond. They were also seeking input
on the type of bond to be issued. The maximum size bond staff recommended was $40 million.
They would only issue bonds sufficient to cover remaining costs plus a reasonable contingency.
The bond type could be a full faith and credit, if the utility was able to make 100 percent of the debt
service payments, or it could be a pure revenue bond that was purely assessed based on the
utility's credit worthiness and its own merits and credit rating. The financial advisors recommended
a mix of taxable and tax exempt bonds.
The current total cost estimate for LOIS was $90 million, which incorporated a 16 percent
contingency, but did not cover the entire contingency. The project had not been done before
anywhere and so brought a fairly high risk.
Joel Komarek, LOIS Project Director, responded to Councilor Tierney that staff did not fully
know what events might transpire to cause a bond for more than the $30 million or $35 million.
They were in the early stages of assessing the condition of all the waterfront sewer lines. The
present system was in a difficult environment to operate in and some problems being seen
included infiltration into the manholes adjacent to the waterfront or in the water, and into the pipes
draining into the LOIS system that need addressed. A couple of years ago, Council agreed with a
recommendation by staff to do a pump around as an alternative to replacing the main canal trunk
sewer, but there were still 4,000 ft of main canal trunk sewer serving 100 homes that should be
given the same opportunity to improved, which was not included in the $90 million figure. Some
real economies might be realized by implementing that work now in terms of inspection and
condition assessment. The inspection work could be done reasonably economically assuming they
could access the canal with watercraft, but the inspection and cleaning was anticipated to cost
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$50,000 to $100,000; the relining and laterals that go into the seawalls alongside the canal would
bring the figure to $1.5 million to $2 million.
Councilor Tierney understood that the City Manager suggested $40 million, which was $30 million
plus the $5 million contingency plus $5 million for unforeseen items. Ms. Euler explained that the
bond amount was not just about what they might learn between now and the end of September. If
$35 million or $33 million was issued, but the authority was given for $40 million, the City could still
get funding and financing for additional, unforeseen needs that cost within that range.
Ms. Nguyen explained to Councilor Tierney that a second bond issue would cost about $100,000
in fixed costs. If bonds are issued, but not expended, a carry cost is paid in interest. Hypothetically,
the debt would be retired in 10 years, which was when the debt would be called. Mr. Pierce added
that bonds would be recallable at par, so if $25 million of bonds were outstanding, in 10 years the
existing bond holders could be paid the $25 million to wipe out the obligation.
Mr. Pierce confirmed for Mr. McIntyre that if the City authorized $40 million in bond issues, sold
$30 million in September and discovered in February $5 million more was needed, the
authorization would still allow the additional $5 million to be sold. He was not sure of the shelf life,
but certainly within a year they could issue against that same authorization. There would be a cost
to issue the additional $5 million. Certain costs increased with the issue size, primarily the cost of
the underwriter which typically charged a percentage of the deal. Other costs included rating
agencies and bond council. The marginal costs between a $30 and $35 million transaction would
be nearly zero, but there would be significant marginal costs incurred by issuing a $30 million bond
and then a $5 million bond separately.
Ms. Nguyen clarified for Councilor Jordan that the City would not pay interest on bonds that were
authorized, only on those that were issued.
Mr. McIntyre indicated to Mayor Hoffman that there would be $100,000 in fixed costs regardless
of the amount of the bond issue. The second issue was timing. Staff started the process six weeks
ago; it was just getting to Council now, and the bonds would not sell until the end of September. If
an unexpected situation came up, there could be a cash flow issue if getting necessary funds took
three months. The City would continue to invest until the project was completed.
Councilor Tierney stated the City should only borrow the needed amount of money, because of
the interest that would have to be paid. It was a $90 million project with a potential scope change.
The rate structure put in place probably supported a $100 million project. There was some ability
within the existing rates with no change to do more. It was critically important to protect all the
City's resources and to take care of the issue. He questioned if it was better to borrow a larger
amount of money when it was unknown whether it would be spent, or to borrow additional money
with the associated fixed costs when it became necessary. Mr. McIntyre replied there were two
amounts to be considered, the amount to be authorized and the amount to be borrowed. He was
requesting that Council authorize $40 million, which lead to the consideration of how much they
wanted to borrow and that was contingent upon if the Council wanted to consider additional scope
for the project, which would increase the total project cost. The current figure was $35 million, so
the question was what kind of contingency Council felt was comfortable so that a reissue would not
be needed should something be found in March or February.
Ms. Euler responded to Mayor Hoffman if $40 million was authorized and $30 million was
borrowed and something happened that required an additional $5 million, staff would still have to
jump through various hoops in order to do the bond issue. The selling process itself would take
several weeks. Ms. Nguyen noted if the City were to borrow funds, the process of obtaining a loan
from a bank would take about a month's time. The process for selling bonds for the additional
funds would probably take 2'h months. Ms. Euler confirmed the City's could fund the $5 million
and then be reimbursed later.
Councilor Ti rn y requested that staff return with the information on the fixed and variable costs
of issuing bonds and the best spot to be by August 3.
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Councilor Olson stated issuing the least amount of debt would help the rate payers. The City had
done a great job with LOIS and had come in on time and under budget. Borrowing extra money
would not help lower the rate increases.
Councilor Jordan stated before making a decision about issuing or authorizing a larger amount of
money for bonds, the scope really needed to be discussed. Contingency for an emergency on
what was already approved for the project was one thing; adding projects was a different
discussion, especially in light of the fact that the amount of rate increase already put in place was
going to build a stronger capital fund for replacing and refurbishing the sewer system in the ground
without borrowing. More discussion was needed about what the project scope was and whether it
was worth bonding to do those things and if the City could handle that over time.
Councilor Tierney suggested it would be most prudent for the City to borrow the money for the
difference from itself and not going to the market.
Mayor Hoffman clarified there were two issues. One was about authorizing, and the City had
authorized $40 million. The other regarded the amount authorized, but not borrowed.
Councilor Olson noted that Council had authorized $140 million the first time.
Ms. Nguyen responded to Councilor Tierney that the market did not care about the authorization
amount or what was actually borrowed. The revenue bonds had a notification period and people
could file a petition to call that into question. The City wanted to have the full authorization in place,
so there would not be a risk of starting a project and being unable to complete it. But that was not
the same case with this issue.
Ms. Euler continued that discussion was also needed about the bond type, whether it should be
full faith and credit or a pure revenue bond for the utility. The full faith and credit route presented
some advantages. When credit rating agencies evaluated the credit worthiness of such a bond,
they would actually view it as being backed by the full faith and credit of the City, which could result
in a better credit rating than if they evaluated the utility on a standalone basis. To the best of their
knowledge, this would have very little impact on the General Fund as long as a fairly favorable
interest rate could be obtained for the utility. A favorable interest rate could be obtained as long as
they could demonstrate that the utility could make 100 percent of the utility's debt service
payments. The only disadvantage to this type of bond was the perception that the City was using
tax dollars to make the debt service payments.
Ms. Euler confirmed for Councilor Moncrieff that doing a full faith and credit bond paid off
through the wastewater revenues would not impair future full faith and credit bonding in the current
economic circumstances. Mr. Pierce added that the feedback they had been getting from the
rating agencies was that with a utility or enterprise system that was demonstrating that it was
taking the steps necessary to insure that the full faith and credit was never called upon, it had very
little if any impact on the rating agency's perception of the general credit. As long as it would not be
used, the rating agency's viewed it as an insurance policy. If general funds were ever used to pay
some portion of the wastewater bond, it would have a dramatic and immediate impact on the rating
agency's view of the full faith and credit pledge. The current forecast considered that scenario very
unlikely. By going the full faith and credit route, the City would save an estimated 20 to 80 basis
points on the interest costs, and more importantly, it avoided having to fund the reserve which
would be very expensive in this environment.
Ms. Nguyen responded to Councilor Tierney that on page 38 of the staff report, the net debt
service of $68.2 million, should be compared against the $64.4 million on page 33. This was about
a $3.8 million advantage to the City of a full faith and credit bond as opposed to a revenue bond.
Ms. Euler stated the example in the staff report assumed a $40 million bond.
Mr. Pierce responded to Councilor Olson that if the bond issued was $35 million, the figures
would be $59.7 million for the revenue bond and $56.4 million for the full faith and credit.
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Mr. McIntyre responded to Councilor Tiern y that although the Council had more control about
raising revenue in a utility fund than in a general fund, responsible Councils could raise revenues;
less responsible Councils could choose not to raise revenues while the need might be increasing.
Ms. Nguyen added the pledge was to pay the debt from all available revenues if necessary, so it
was larger than just the sewer utility.
Mr. Powell clarified for Councilor Olson that the charter would not allow money to pay the debt to
come from the Water Fund. Mr. Pierce noted it was basically a broader guarantee by the City
which allowed the City to access its AAA S&P and Aa1 Moody's interest rates as opposed to what
would likely be lower AA or potentially even A interest rates from a revenue bond.
Mr. Pierce indicated to Councilor Olson that any general obligation/unlimited tax bonds issued by
the City would come with a revenue stream to pay for them, so the City's future full faith and credit
ability would not be impacted. The risk on full faith and credit was that the City would actually end
up using the General Fund to pay it. With an unlimited tax pledge, they would not be using the
General Fund, because people would vote to tax themselves on their property taxes. With regard
to the future Tigard partnership water project, if the City implemented the enterprise rate structure
to keep the General Fund protected, plenty of capacity still existed to use the full faith and credit
pledge. Councilor Johnson commented that even if they only did revenue bonds, the City was still
at risk if they defaulted on those bonds. Defaulting would destroy the rest of the City's credit rating,
because it was all attached.
Ms. Euler explained the bond structure being suggested was based on a cost analysis by Western
Financial Group of the most favorable mix to rate payers of taxable and nontaxable bonds. For the
first 10 years, the maturities would be purely tax exempt followed by maturities that were the
taxable bonds. One cost was lower than the other, but mixing the two provided the most benefit,
which would still hold true by the end of September.
Mayor Hoffman received consensus by a nod of heads that the authorization would be for $40
million. A separate work session would be scheduled to discuss the scope of the project, which
was already considered by the subcommittee.
Mr. Komarek explained for Councilor Tierney that an issue in a lateral from the house to the
sewer around a canal or lake could be either the City's or the homeowner's responsibility.
Generally speaking, it was historically the City's responsibility at the point where the lateral from
the home came through the seawall and out to its connection to a trunk sewer. It was the
homeowner's responsibility in a street situation from their house to the edge of the right-of-way.
Mayor Hoffman commented it was a difference between a canal which was private and a street
which was public.
Mr. Komarek responded to Mayor Hoffman that if they had a $90.5 million project and $60 million
had been borrowed against it; $30 million would be needed to finish LOIS. There was $4.5 to $5
million contingency to make sure the project was completed, but this did not contemplate a delay to
the project, which would be over and above that $4.5 million. He was concerned they would spend
$90 million to abate overflows in the lake only to have their small systems break and overflow into
the lake.
Councilor Tierney clarified that this situation should return in a separate study session once staff
had a better handle on the magnitude of the project.
Ms. Euler clarified for Councilor Olson that on August 3, 2010 they would only be discussing
authorization, structure and type. The decision of the amount to be borrowed and the extra scope
could wait.
Councilor Jordan summarized that Council agreed to full faith and credit with an authorization at
$40 million and the structure of bonds as proposed. Mayor Hoffman received consensus by nods
of heads.
City Council Special Meeting Minutes Page 9 of 12
July 27, 2010
3.5 Direction on Code amendment related to accessory structures and water dependent
uses to occur within the Osw go Lake setbacks (Ord. 2556/LU 08-0052A)
City Attorney David Powell presented a summary of the Code amendment and its background.
On July 7, 2010, Council heard a presentation that included the Planning Commission's
recommendation for limits within the Oswego Lake 25 -ft setback, which currently mirrored the
existing backyard setback standards for most properties in the city. Various opinions on the
setback recommendations were heard and the Council made recommendations. He reviewed the
subsequent meetings and discussions on the topic.
Draft Ordinance 2556 responded to the suggestion to allow the Residential Infill Design (RID)
exception standards above the recommended basis and then putting a cap on RID to the extent
that the Planning Commission's original recommendation would have limited development. Bob
Barnum, who represented the Palisades Neighborhood Association on the lakefront, believed the
draft ordinance represented an acceptable compromise. The Lake Oswego Corporation Design
Review Committee also offered a recommendation that nearly paralleled the current draft. An
overview of those with differing opinions on the issue was presented.
The draft ordinance took the base standards, had the RID opportunity tweaked to make it clear it
applied to those standards, and capped it with the Planning Commission's standards. The only
change to the base Lake Corporation standards were modifications by the Design Review
Committee to specify a pool would be allowed in addition to dock, deck, spa and Jacuzzi, and that
the maximum square footage for boathouse footprints would be 506 sq ft instead of 500 sq ft.
Council had asked that staff propose a draft ordinance that included the Lake Oswego Corporation
recommended table for limitations as Council tentatively did on July 6, 2010. This was under Item 2
on the first page. Council also requested Staff tweak the RID exception ordinance, which was on
pages 2 and 3, to make it clear that those standards that limited structures within the Lake Oswego
setback were subject to that setback. Staff was also asked to put a limitation of the Planning
Commission's standards, and this was noted in iii on the bottom of page 2 of 4.
Staff recommended that Council request that the proposed draft ordinance with modifications be
presented on August 3, 2010 for adoption.
In response to several people who believed the City should take a longer look at this, the options
were somewhat limited in terms of time. If Council did not want to meet on August 17, an
ordinance adopted on August 3, 2010 needed to be on file by midnight today with the City
Recorder's Office. If Council wanted to wait, they would go back to the status quo, which was
basically defaulting to the private covenants and enforcement rights of the Lake Oswego
Corporation with regard to setback. Another option was to adopt the draft ordinance with the
knowledge it would not be forever necessarily, although once something was adopted, Council
went onto the next agenda item in practice. Certainly staff and the Lake Corporation would
recommend that in the long-term, Council look at lakefront zoning more comprehensively, but that
was a longer project.
Mr. Powell responded to Councilor Tierney that if the proposed draft ordinance was published,
there would not be a public hearing at Council's next meeting unless they wanted one. The public
hearing had already been held on the issue
Mr. Powell clarified for Councilor Olson that in regards to page 3 of Ms. Frisbee's staff report, the
Planning Commission version did not require side or rear yard setback for accessories and made
an exemption for it. The regulations proposed by the Lake Oswego Corporation that were
tentatively adopted by Council did not pick up that exception. The 3 -ft setback on the side yards
would be retained, although the setbacks would still be subject to either RID or a Class 1 Variance.
Unless Council directed that be put back in if the proposed draft ordinance was adopted, Council
would need to add that back on as an exception.
City Council Special Meeting Minutes Page 10 of 12
July 27, 2010
Councilor Olson and Mayor Hoffman asked if this whole issue was because Bob Barnum wanted
to build a pool. Councilor Olson noted Lake Corporation Manager Jeff Ward's comments in the
packet about the draw down not being the issue.
Jon Gustafson, Planning Commissioner, stated he was not particularly comfortable with this. He
believed that making a generalization, such as "most boathouses" was great for everybody who
had de facto property on Lake Corporation property and the Lake Corporation could set all the
rules. Lake Corporation did not need the City's permission about what they could regulate on their
land. For lake residents that did not have the benefit of Lake Corporation land to use as their own,
this became an issue. The City should not try to craft their Code to match what a private
corporation wanted on their land and could change their mind and make whatever regulations they
wanted anytime. One thing misleading about the Planning Commission recommendation was
"requires no side or rear yard setbacks for accessory structures." This just referred to the special
Lake Oswego setback; the base zone setbacks would still be there. There were still some base
zone setbacks that applied whether a backyard was water, an abutting property or an alley.
Deborah Andreades stated Ordinance 2556 Council received in the last hearing stated "none"
under yard setback, and that applied to, "the following uses and structures within the Oswego Lake
setback, accessory structures and water dependent structures and uses that meet the following
standards" It did not specify boathouse, but only said accessory structures, no setbacks.
Ms. Andreades stated in response to Councilor Olson that the impetus for this issue, stated that
the Planning Commission received testimony from Lake Corporation members Bob Barnum and
Skip O'Neil, and written testimony from Jeff Ward.
Mr. Gustafson responded to Councilor Jordan that Lake Corporation did initiate the issue, stating
that homeowners on the lake would want to work on their property on projects abutting the water
during the lake draw down. Docks and seawalls really would not be an issue. The concern was
boathouses, which would be affected by Council's decision. Ideally, there would be consistency
and fairness between what people could do when their boathouse was on their own property and
what they could do when it was on Lake Corporation property.
Councilor Tierney stated if the impetus was the lake draw down and this was an opportunity to
work in the area, it made sense. Council was getting mixed messages. If the first set of standards
was not complied with, one could not get through a residential infill process in the amount of time
the lake was down. If there was an impetus to move forward to capture the opportunity when the
lake was down, if this was published and in the intervening time seek the Lake Corporation's
formal input on this ordinance, they could move forward in August. Mr. McIntyre related that Mr.
Ward would say that the last email was the Lake Corporation's position.
Ms. Andreades clarified that the original amendments that the Planning Commission developed
were part of the housekeeping Code amendments, so they were always there. The Lake
Corporation asked that the amendments be taken out of policy and move them to what was
considered policy light and expedite them. Mr. Powell confirmed that was a Lake Corporation
request, not just Mr. Barnum.
Councilor Moncrieff concurred with Councilor Tierney that the lake drawdown was the impetus for
expediting the issue and separating it from the bundle. Having set Code would be better than a
RID process if one wanted to rebuild a boathouse during the drawdown. It made sense to adopt a
clear set of Code.
Councilor Jordan stated this opportunity, while adding another layer to the complex Code, did
inform a lot of people who were not aware of the Lake Corporation requirements. If part of their
property was on the Lake Corporation property, they get a mixed message. She was willing to
move this forward and request a formal acceptance or comment from the Lake Corporation. The
Code project discussed earlier would help address the issue.
Mr. Powell clarified for Councilor Olson that the ordinance allowed the Lake Corporation to build
a boathouse, the only building they were interested in, other than amenities like a pool, barbeque,
City Council Special Meeting Minutes Page 11 of 12
July 27, 2010
Jacuzzi, etc. The Planning Commission recommendation was to accessory structures of any kind
within certain limitations. The new version of the ordinance took that out and would only allow
boathouses as far as buildings were concerned. Mayor Hoffman added the height would be
limited to 13.5 ft.
Mr. Powell indicated to Mayor Hoffman that this would have the side yard setbacks, but they
would be waiveable pursuant to RID or a Class 1 variance, which would be easier to get. Mayor
Hoffman was concerned about conflicts between neighbors.
Mr. Powell confirmed for Councilor Olson that the Lake Corporation design approval process
would still apply if the structure touched the water in any way or was on the Lake Corporation's
parcel. Generally, the deed restrictions on virtually all residential properties around the lake stated
if it was a water related structure, it was deferred to the Lake Corporation's design review authority.
Some properties around the lake that were achieved through the Schucart Estate as opposed to
the old Oregon Iron and Steel conveyances that did not have those on there, but those were few
and far between.
Mr. Powell confirmed for Councilor Olson that he recommended the presented ordinance rather
than doing nothing, in which case it basically defaulted to the private corporation regulation. If
Council wanted to have some standard and liked the idea of not having any accessory structures
other than boathouses and recreation related things, and wanted some kind of a relief valve, this
would work. The Lake Corporation or others could always return and ask Council to adjust it. The
matter could be revisited in a couple months, but then there was the draw down issue. The
proposed ordinance would address the matter for now.
Mr. Powell confirmed for Mayor Hoffman that Lake Corporation's Design Review Committee
agreed with the proposed draft ordinance, but they also did not see any urgency.
Councilor Olson clarified that the Lake Corporation preferred Council did nothing, slowed down,
talked to everybody and waited. She suggested this issue be revisited if Council ever got around to
doing the lakefront zone, maybe as part of the Comprehensive Plan update. She hoped the
ordinance did not have unintended consequences.
Mayor Hoffman confirmed the proposed draft ordinance was tentatively approved and would be
brought back for approval on August 3, 2010.
4. ADJOURNMENT
Mayor Hoffman adjourned the meeting at 9:31 p.m
Respectfully submitted,
Robyn Christie
City Recorder
APPROVED BY THE CITY COUNCIL:
E
City Council Special Meeting Minutes Page 12 of 12
July 27, 2010