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HomeMy WebLinkAboutApproved Minutes - 2009-09-22 SpecialCITY COUNCIL SPECIAL MEETING MINUTES September 22, 2009 a« Mayor Jack Hoffman called the special City Council meeting to order at 6:34 p.m. on September 22, 2009, in the City Council Chambers, 380 A Avenue. Present: Mayor Hoffman, Councilors Jordan, Hennagin, Johnson (6:39), Olson, Moncrieff, and Tierney. Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Guy Graham, Public Works Director; Erica Rooney, Assistant City Engineer 3. STUDY SESSION 3.1 Metro Update — Councilor Carlotta Collette (no written report) Metro Councilor Collette discussed the Making the Greatest Place project, which Metro has been working on for the last three years. She noted the key elements of a regional transportation plan, an urban growth report, and the urban/rural reserves process. She described Chief Operating Officer (COO) Jordan's report as the place where those elements came together. She discussed the three principal reasons why Metro has undertaken the Making the Greatest Place project. She noted that Metro was the guardian of the UGB with a State -mandated responsibility to make sure that the region had sufficient land within the UGB for citizens and jobs both now and in the future. She described the real role of the UGB as protecting the regions' farmlands, forests, and natural resources, which keeping a tight UGB enabled Metro to do. She described keeping a tight UGB as investing in the local, existing communities, maintaining and improving what already existed, and making the neighborhoods and cities on the inside better. She contrasted this with spending the region's limited funds outside the UGB to extend infrastructure beyond the existing communities. She indicated that the third element was protecting jobs and building downtown and regional centers for job creation and expansion, as well as making sure that the region had jobs close to where people lived. She acknowledged that there were many ways to accomplish these goals. She described the COO's report as the staffs best analysis of how to move forward. She mentioned the upcoming public process through which the Metro Council would hear input from its constituents before weighing in on the report itself. She indicated to Mayor Hoffman that the Metro Council has already approved pieces of the report, such as the regional transportation plan, a freight plan, and a high capacity transit plan, although none of it was final. She mentioned an additional key piece of the urban/rural reserves process, which was also not final, as the CORE 4 has not yet made its recommendation. Ken Ray, Metro Communications, stated that he represented Chief Operating Officer Michael Jordan. He directed the Council to the 36 -page summary of the report, and noted that the details behind the summary were available on CDs or at the Metro website. He reviewed the report recommendations listed on pp. 14-15, which fell into three main categories. He explained that the first general category recommendations focused on how to build a new greater regional investment strategy as a means of making the most of the region's limited land and financial resources through encouraging more private development and by concentrating on City Council Special Meeting Minutes Page 1 of 12 September 22, 2009 existing resources and revitalizing dilapidated or underutilized sites to generate employment and residential opportunities inside the UGB. He indicated that the new regional transportation plan fell under this category. He explained that this regional transportation plan focused more on what kinds of communities the region wanted to result from the transportation investments it made. It also dealt with the new climate change issues. He described the second category as recommendations focusing on job creation and development activities within the UGB, and focusing on protecting the UGB to the greatest extent possible. He spoke of focusing more growth inside the UGB. He noted that this strategy helped protect the valuable farm and forestland critical to the region's quality of life and economy, as well as allowing the region to focus its limited resources on the existing communities instead of spreading them out in new areas currently without much infrastructure. He noted that there was a set of recommendations dealing with the UGB expansion, as protecting the UGB did not mean that Metro would never move the UGB. Instead, Metro's intent was, if it had to move the UGB, to do so in a way that complemented the growth and development already occurring inside the UGB. He spoke of completing the planning, identifying who would pay for the infrastructure, and deciding who would govern the area before moving the UGB. He pointed out that this strategy came out of lessons learned from Metro's previous strategy of doing the planning after moving the UGB, which left unresolved issues. He noted the COO's general recommendations on urban and rural reserves, which included setting aside employment and residential lands in a range of 15,000 to 29,000 acres throughout the region for possible UGB expansion over the next 40 to 50 years. He acknowledged that that was significantly less acreage than the counties have requested collectively. He mentioned that the Reserve Steering Committee has not yet made its recommendations, nor has Metro and the three counties yet had the broader policy discussion. He mentioned accommodating more growth within the UGB through local zoning strategies and other local investment strategies. He noted that the Urban Growth Report referenced in the COO's report indicated a need to expand the UGB in 2010 unless the region took steps to provide more capacity over the next 20 years within the existing UGB. He commented that next year would be a long conversation between Metro and the local governments on finding ways to close the capacity gap and to minimize the need for expanding the UGB. If they were not successful, then the Metro Council would consider expanding the UGB into urban reserves. He discussed the third category of recommendations regarding accountability and performance measures to use in evaluating how well the strategies were working for investing the region's resources. He indicated that these performance measures were tied closely to a set of six outcomes for the region, which Metro felt defined what a great community was (p. 9), and which the Metro Council adopted in 2008. He read the six outcomes, which described building vibrant, walkable communities, providing safe and reliable multi -modal transportation choices, taking a leadership role regarding climate change actions, taking a leadership role in protecting clean air and water, and sharing the benefits and burdens of growth equitability around the region. He reviewed the schedule of upcoming public hearings/open houses to obtain feedback regarding the COD's report. He reviewed the list of outcome decisions coming before the Metro Council this year (p. 32), including adopting the Regional Transportation Plan, accepting the Urban Growth Report, and coming to agreement with the counties regarding the designation of urban and rural reserves. He indicated that next year Metro would formally designate the urban reserves through Regional Framework Plan amendments, following a public hearing process, while the Counties would amend their Comprehensive Plans to adopt the rural reserves. Councilor H nnagin pointed out that, based on Metro's strategy of local jurisdictions working to take in additional d nsity in order to minimize the UGB expansion, if a jurisdiction wanted to City Council Special Meeting Minutes Page 2 of 12 September 22, 2009 maintain its existing density, then it could sit on its current zoning and force Metro to expand the UGB. He wondered how Metro would protect the UGB if cities did so. Mr. Ray indicated that Metro staff's best analysis found that the market was not likely to respond as much as Metro would like to see it respond to local governments wanting to increase density within the UGB. Even so, Metro would work with the local governments to do what they could to encourage taking advantage of their existing zoning, much of which was currently underutilized, and helping to direct the market to invest in certain areas with certain types of developments that would bring more capacity inside the UGB. He reiterated that the more they could increase the capacity within the UGB, the less they would need to expand the UGB. Mr. Ray indicated to Mayor Hoffman that the COD's report currently recommended expanding the UGB in 2010 but did not provide a specific acreage number for that expansion. Councilor Jordan commented that the information in the report came out of the input Metro took from local jurisdictions and service districts at various public forums regarding communities' aspirations, visions, and redevelopment strategies. She noted that, even so, it did not match up with the expectations of some areas regarding the size of their reserves because it took the viewpoint of how much a jurisdiction could do within the area that it already had, as opposed to what a community's expectations and aspirations were for growing beyond the UGB. She observed that, while those involved might say that they wanted to hold the UGB as tightly as possible and use the land within the UGB, when push came to shove for the possibility of obtaining more land, then a community's interest became getting more land. Councilor Collette concurred with Councilor Jordan's comments. She indicated that the long process at MPAC and JPACT gave the Metro Council a strong sense from the communities of where they were willing to make the needed future investments. She pointed out that, since the creation of the UGB in 1979, 95% of development in the region has taken place inside that original 1979 boundary. She indicated that certain cities in the region were now starting to grow, citing Hillsboro as an example of a community seeing considerable growth due to the regional investment in the light rail system. She explained that one of Metro's big tools in its limited resources was the light rail and transit money and transportation money. She indicated that Metro staff was recommending focusing the region's money where the region could also build communities, rather than simply extending transportation projects willy-nilly and not linking them to building communities. She reiterated that the report reflected what the Metro Council heard from the other elected leaders in the region, the neighborhoods, and the business community. Councilor Tierney observed that this process would be a tremendous challenge because Metro had to get it right. He asked what tools Metro had in place to assess whether it was getting the outcomes right, and what tools it had in place if they got it wrong. Councilor Collette indicated that that was the third section of the strategy, on which Metro was working. Mr. Ray explained that Metro staff was working on developing some comprehensive, measurable performance outcomes for the region in terms of measuring how well the region's investments and policies for generating certain types of growth outcomes were working. He said that he did not have specifics at this point, but the Regional Transportation Plan had a comprehensive set of performance measures on transportation investments that tied into federal and state transportation dollars by meeting certain greenhouse gas reduction goals. Councilor Tierney commented that, in his short tenure on the Council, he has come to realize that Metro had a lot of power and authority over the City Council, given the amount of time that the Council spent on issues that came down to 'because Metro said so.' He referenced Lake Oswego's current debate over sensitive lands regulations. He mentioned that his research has not found anything assessing the outcomes of Metro's sensitive lands regulations since they have been in place, and what the expectations were going forward. He asked what the outcomes were and how could a jurisdiction determine whether it has been successful in achieving them. City Council Special Meeting Minutes Page 3 of 12 September 22, 2009 Councilor Coll tte mentioned the monitoring systems that Metro has in place, especially for environmental issues. These included an auditor's report on environmental issues and a report on Title 13. She commented that Metro was simply the enforcer of State land use regulations, and not necessarily the genesis of those regulations. She stated that Metro had monitoring in place for all of the major environmental pieces. She mentioned the new photo technology available to Metro, which provided detailed imagery regarding tree cover, a major indicator of the environmental health of the community. She commented that Metro has not done a good job of keeping the local jurisdictions informed on how successful it has been in protecting the region's natural resources. She pointed out that they were setting a new model regarding sustainability and prosperity. Oregon was a national leader, visited by people from all over the world who wanted to see how the region was accomplishing what it was accomplishing. She mentioned an example of the decrease in vehicle miles traveled, even though the population was increasing. She argued that they could not expect to accommodate a growing population with jobs and a transportation system and achieve sustainability unless all the pieces were in place, including the natural resources piece. She held that all the pieces worked together to make this the Greatest Place. She agreed that it was not an easy job trying to figure out how to get this many people living successfully in vibrant cities and neighborhoods. She stated that she had no doubt that they could do it but it would take everyone engaging on a heart level, as well as on the political level. Mayor Hoffman mentioned that Lake Oswego was receiving mixed messages regarding Stafford. Mr. Ray said that the COO's report recommended some of the area around the Wankers Corners/1-205 interchange for employment lands in urban reserves, but without a specific acreage number. Councilor Collette referenced Chapter 3 under Urban/Rural Reserves as possibly recommending more land in Stafford for urban reserves than the County has recommended. She noted that Metro's intent was to bring in sufficient land to create a complete community. 3.2 Hamlet Presentation (no written report) Jay Minor, Hamlet Board Chair, reviewed the background of hamlets and villages, which were a new concept in Oregon that tried to fill in a void left by the CPOs. He said that Clackamas County allowed Stafford, Molino, and Beavercreek to form hamlets. He mentioned the Government Camp Villages along the Mt. Hood highway. He recalled that the Stafford Hamlet formed out of controversy, as some had wanted a Village with its taxing authority, instead of a Hamlet with its strictly advisory capacity to the County Commission. He mentioned this area's contentious battles in the past and the use of the Clackamas County Dispute and Mediation process. He held that forming the political entity of the Hamlet provided a foundation for working with the three surrounding cities and the county to end the battles. He noted that the Stafford Triangle was once again in the middle of the reserves debate. He described the set up of the Hamlet as a political entity with a 10 -member board. He noted that their bylaws mandated determining the vision and trying to work together. He mentioned that the demographics of their area contained many small, older neighborhoods as well as larger acreage landowners. He mentioned that, while they had no taxing authority, they did raise $20,000 last year from the residents to pay for writing the vision statement and for outside facilitation. He described the process that the Hamlet used in determining its values statement over the past 18 months. He directed the Council's attention to the handout listing the Hamlet's values and vision statement. He noted that they had 87% buy in on the values and vision statement. He reviewed the values, which included the Stafford character, a desirable place to live, balance and fairness, the Tualatin River, thoughtful change, a strong community, and the legal rights of property owners. He indicated that they were committed to making this work. City Council Special Meeting Minutes Page 4 of 12 September 22, 2009 He commented that the EFU designation of 1200 acres in the middle of the Triangle had the unintended consequence of keeping everything open. He explained that the minimum acreage requirement on which to build a home has crept up from 20 acres in 1979 to 80 acres today. He pointed out that many large land parcels purchased for investment return were lying fallow because all land in the EFU zone received an automatic farm deferral, which made the costs of holding land out there next to nothing. He mentioned an additional value of their connection to each other, the surrounding communities, and their resources. He commented that the vision they developed, following their values statement work, was something that the community agreed upon and was proud of. Scott Richman, Vision Committee Chairman, recalled that they did some mapping work with Clackamas County because the area was told that it would be included in the next UGB expansion, and that it had better get ready. He mentioned the common assumption that, given its location surrounded by urbanization, somebody should be doing something with the Stafford Triangle, as it was prime for development. He pointed out that, in all the discussions over the years about developing the Stafford Triangle, no one actually researched how much developable land was in the Triangle. He described the process they went through in identifying the various types of land uses in the Triangle. He noted that the Stafford Triangle had the largest unprotected block of Class A upland wildlife habitat in the region. He indicated that, once one took out the already developed land, the undevelopable land, and the natural resource areas, there was not much developable acreage left in the Triangle. He said that the bulk of the developable land was down along Borland Road, north of 1-205 and south of the Tualatin River, and along Johnson Road. Other than that, developable land was patchy throughout the Triangle. He discussed the Hamlet's visioning process, which involved many community meetings. He reviewed the resulting six points of their vision statement. He mentioned infrastructure needs, ground water, clustering, develop the Borland Road area first, freeing up the EFU land for development, and not redeveloping the previously developed neighborhoods. He noted that the existing infrastructure was inadequate for any kind of development. He indicated that amount of ground water in the Triangle varied by location, with some areas not having sufficient ground water to service a development. He explained what the Hamlet meant by clustering, using Ashdown Woods as an example of putting houses on smaller lots and leaving open space around them for wildlife habitat, agriculture, and public enjoyment. He mentioned not developing wildlife habitat areas or steeply sloped areas. He indicated to Mayor Hoffman that many residents felt that the EFU land was locked up because they could not develop below 80 acres and because ground water availability varied considerably from location to location. He mentioned the landowners' feeling that if this became a private park for other people to enjoy, then Metro should either buy the land or let the owners develop it. He noted the strong feeling in the community that this situation was not fair. He reiterated that if the regulations locked up the land, then either it should be developed or released for some density greater than one house for every 80 acres. Mr. Minor referenced a handout showing a preliminary GIS quantitative map updated with the latest Metro 63 -acre purchase. He noted the outlines of the Borland area, which had a couple hundred acres of developable land. He indicated that the 3900 acres of the Triangle translated to 1300 acres of developable land. Councilor Jordan mentioned a new type of zoning under consideration for lands next to urban areas that would allow small farms, equestrian uses, vineyards, etc. Mr. Minor indicated that the Hamlet has discussed that zoning concept with the County Commissioner Lehan. He said that his personal vision for the area supported that kind of zoning, given that Stafford had conflicted agricultural land. He spoke of doing a new master plan for the area that clustered houses City Council Special Meeting Minutes Page 5 of 12 September 22, 2009 surrounded by open space, and provided incentives to lease out the open space areas for farming, equestrian activities, athletic fields, etc. Mr. Minor held that, should the Triangle end up as undesignated lands, then it was important that the Hamlet and the three cities form a formal partnership in order to plan the area. He noted that, while West Linn called the Triangle its backyard, it has not been willing to look at it over the years. He contrasted this with Lake Oswego's pursuit of an opportunity in the area over the last 15 years. He referenced a handout showing the areas targeted by Metro for open space purchases. He mentioned that for the past eight years, he has been trying to get a pathway from West Linn to Lake Oswego finished. He said that the Three Rivers Land Conservancy has taken the area from the Farr property on and could use any help that the City could give it. Councilor Tierney asked how much more the residents should be able to do in the EFU land. Mr. Minor said that his personal opinion was that they should zone it rural residential with a 5 -acre minimum under a new master plan. He indicated that if they rezoned 1,000 acres to a 5 -acre density and took out the existing homes that would leave sufficient land for something less than 100 homes. He commented that he doubted that there would be much push back from the development community. He confirmed to Councilor Olson that West Linn was building a new elementary school inside the UGB on Rosemont. Mayor Hoffman recessed the meeting for a break. He reconvened the meeting. 3.3 Street Maintenance Fee/Pathways Mr. Graham introduced Erica Rooney, Assistant City Engineer. He thanked Ms. Rooney and Crystal Shum, Project Engineer for putting together the staff report. He gave a PowerPoint presentation updating the Council on the street fund and street program, presenting capital funding options and strategies, and discussing the status of pathways and funding options He presented a slide showing an overview of the street fund with its $4.3 million budget this fiscal year. He indicated to Councilor Tierney that a `lane mile' referred to a mile of lane, but not a mile of street. One mile of a two-lane road had two lane miles. He indicated to Mayor Hoffman that the franchise fees allocated to the street fund were from PGE and not the other franchise holders. Mr. McIntyre indicated to the Mayor that the intergovernmental transfers were funds from the State and federal governments, involving the State gas tax and other vehicle -related fees, as well as the federal money coming for Kerr and McNary Parkways. Mr. McIntyre indicated to Councilor Hennagin that Allied Waste paid 5% of its gross revenues in franchise fees. He clarified that staff changed the method of dealing with franchise fees by consolidating them into the general fund, as opposed to calling them out separately as was done in the past. Councilor Jordan commented that she thought that the State had regulations restricting the use of franchise fees. Mr. McIntyre indicated that staff would confirm the allowed use of franchise fees. Mr. Graham indicated his understanding that State law allowed the cities to do whatever they wanted to do with the franchise fees, although the original intention might have been to use the fees for roadways. Mr. Powell noted that the telecommunication companies have been trying for years to get the legislature to limit the amount of franchise fees to the actual costs of using the right-of-way, but they have been unsuccessful in Oregon. He noted the Qwest litigation's confirmation of the cities' right to charge franchise fees for the rental value use of the public interest by a private entity. Mr. Graham presented a summary of the programs funded by the street fund, including operations, ongoing maintenance, and street engineering. He indicated to Councilor Olson that staff was in the process of clarifying the City's policy regarding street trees. Mr. McIntyre City Council Special Meeting Minutes Page 6 of 12 September 22, 2009 mentioned that the City used street fund monies to deal with street trees when the trees pushed up the sidewalks and presented liability issues. He emphasized that staff was very careful in limiting expenses on things like street trees because there was not enough money in the fund to meet all the City's needs. Mr. Graham confirmed to Councilor Moncrieff that the City Code did say that the adjacent property owner had the responsibility for pruning street trees and cleaning up debris in the right-of- way. However, there was a City Manager policy from several years ago that amended that understanding to some degree. He agreed with Mr. McIntyre that street trees were another policy discussion issue for the Council. He presented a break out of the street fund revenues from the budget document. He noted that the State revenues have dropped off over the last several years, although the projections for next year projected that people would buy more gas as the price dropped. He mentioned the possibility that the legislature might increase some fees and the gas tax in order to raise additional revenues. He presented a series of slides illustrating the street maintenance fee, which has been flat for the past five years. He mentioned that no one on staff remembered what a general fund transfer of $1.5 million from ODOT in 2004/2005 had been for. He noted the $300,000 from economic stimulus money to fund the McNary and Kerr Parkway projects. Councilor Jordan speculated that the ODOT money might have been for the railroad crossing work on Bryant Road, which occurred around that time. Mr. McIntyre indicated to Mayor Hoffman that the money from the Bridgeport Village supplement for sidewalks was sitting unspent in reserves. Mr. Graham presented a pie chart showing the allocation of the $4.3 million for this fiscal year. He noted the large chunk for capital outlay. Mr. McIntyre discussed the graph comparing the capital outlay from the street fund and the street maintenance fund revenues over the past five years. He explained that the reason why the City spent so little on street maintenance this past year was because it spent most of the money allocated for the biennial budget in the first year. Mr. Graham presented a graphic illustrating the erosion of the City's buying power with a flat street maintenance fee against the rising costs of construction. He showed a chart listing the overall condition of the roads in Lake Oswego using the four condition categories of good, satisfactory, fair, and poor, which were based on the pavement condition index (PCI). He noted that, with the street maintenance fee, the City has been able to increase the percentage of good roads and maintain the percentage of fair roads, but the number of satisfactory roads has dropped and the number of poor roads has increased. He indicated that the system wide PCI average was 68, which was less than the Council's goal of 70. He stated to Mayor Hoffman that the system wide average did include the roads within the City's USB that were still in the county. He said that he continued the past practice of including those roads, as the City would inherit them upon annexation. He indicated to the Mayor that staff could separate out the Lake Oswego roads from the non -Lake Oswego roads, and show how Lake Oswego tax dollars paid for the city roads. He agreed that the City spent no tax dollars on county roads. Councilor Jordan recalled that the previous Council had expressed a similar concern, and reduced the PCI goal to 70 from 80 because the PCI included the poor county roads. Mayor Hoffman commented that he thought it would be useful to know what the condition of the roads within the USB were, separate from the City roads, as part of informing an annexation decision. Ms. Rooney indicated that staff could provide that information for the upcoming annexation discussion. She noted that taking the USB roads out of the picture would increase the PCI average by only one or two points. City Council Special Meeting Minutes Page 7 of 12 September 22, 2009 Councilor Ti rn y observed that separating the roads out was not to improve the PCI average but rather to obtain a better picture of the City's responsibility, and how the revenues correlated to the expenses. The City had no responsibility for areas outside the city limits. He compared it to Lake Oswego putting time and resources into neighborhood associations with 8% Lake Oswego residents and 92% county residents who did not intend to annex into the city. Councilor Jordan commented that this information would be important to have in light of a possible new county or region wide transportation revenue source. It would help determine what the dollar amount needed to be in order to maintain those roads. Mr. Graham indicated to Councilor Tierney that staff could break out the information for Council. Mayor Hoffman commented that the information would also help in the Metro discussion about maximizing growth within the region. An infusion of Metro money to improve a poor road in the USB, such as Atwater, might encourage the unincorporated residents to annex. Mr. Graham presented the national report card on infrastructure from the American Society of Civil Engineers. Roads received a D minus. He noted that he would rate Lake Oswego's roads higher than a D minus. He pointed out the $2.2 trillion dollars that the country needed to invest in its infrastructure over the next five years. He showed photo slides of roads to illustrate what the PCI looked like for a good, a satisfactory, a fair, and a poor road. He reviewed a graph showing PCI trends based on funding. He pointed out that the PCI would drop while the deferred maintenance backlog increased. He indicated that if the Council doubled the funding for the pavement preservation program, then the City could arrest the decline in pavement condition and keep the backlog at $10 million. Tripling the funding would increase the PCI from 70 to 80 in 10 years and eliminate the maintenance backlog. He reviewed potential options for addressing pavement conditions. He mentioned a goal of achieving a sustainable level in order to maintain the City's current status. He noted the options of reducing the PCI to below 70, supplementing street funding with general fund money, increasing the street maintenance fee and indexing it annually for inflation, and a one-time bond (GO or revenue). Mr. McIntyre indicated to Councilor Hennagin that the City could fund a revenue bond from the street maintenance fee by bonding against future revenues. He said that that would be a lower recommended approach, as the City would have to spend its street maintenance fee on debt service instead of on ongoing road maintenance. Mr. McIntyre reminded the Council that the previous Council authorized staff to adjust the street maintenance fee for inflation only one time. He indicated that the street maintenance fee was now frozen at $1.2 million plus 6.6% with the City's buying power continuing to erode. He noted that the question was how the Council wanted staff to come back in November/December during the master fees schedule discussion. Councilor Tierney asked staff if he gave them $10, how they would spend it within the context of the capital improvements program and the strategic asset management program so that the City got the most for its money. Mr. McIntyre indicated that that was a policy question for the Council on infrastructure priorities. He noted that the engineers could identify where the best additional expenditure would be on a particular piece of infrastructure. Mr. Graham pointed out that, in terms of the strategic asset management plan, streets were further along because the City knew what the pavement condition and remaining life of the roads were. He indicated that they did not have that information for the other utilities, and any recommendations were informed guesses at best. Mr. McIntyre observed, in light of the national report card of D minus, that Lake Oswego had a system wide average of a 68 PCI. Councilor Tierney spoke to integrating the other capital and infrastructure assets into the conversation in order to look at streets within the context of all the City's needs. He noted that the increased gas tax money promised by the State next year became Option 5. Mr. Mclntyr City Council Special Meeting Minutes Page 8 of 12 September 22, 2009 indicated to Councilor Olson that staff did not take the proposed additional gas tax money into account. Mayor Hoffman indicated to Councilor Olson that, before the street maintenance fee, the City paid for streets out of the gas tax, the general fund, and a GO bond for streets. Councilor Olson agreed with Councilor Tierney that they should not look at the streets in isolation. She spoke of including it in the Council's preliminary goal setting discussions and its budget process. She commented that the option of increasing the general fund monies was a matter of setting priorities. She gave an example of spending part of the $900,000 in the last budget process differently. She spoke to deciding how to use general fund money in the context of all the City's needs. She advocated for Mr. Graham's recommendation that the City start to set aside money now to replace and maintain its existing assets. She pointed out that the City built pathways and set aside nothing to maintain or replace them, and now it needed to fix them all. Mr. Graham indicated that historically the City has funded pathways outside of the public right-of- way out of the general fund. He mentioned a 2003 bond issue that included money to build pathways and sidewalks. He said that funding for pathways inside the public right-of-way came from gas tax revenues and the street fund. The City could fund Sidewalks outside the right-of-way from the street maintenance fee. He noted that the current CIP document identified over 30 unfunded pathway projects, representing a need of over $10 million. He reviewed the potential funding sources for pathways. He mentioned reallocating general fund dollars to pathways, increasing street maintenance funds to pathways, and looking for alternative funding sources, such as bike licenses, local improvement districts, or federal and state grants. He asked for Council suggestions for other ways to find money for the pathway projects. He asked for Council direction on what it wanted staff to do regarding funding pathways. He agreed with the Councilor that the Council should consider setting aside funds for the ongoing operations and maintenance of these facilities, including a rehabilitation fund. He pointed out that their society has not taken this approach, and the country now had a D minus in its infrastructure. Councilor Moncrieff complimented Mr. Graham on the four -point test for the use of general funds for pavement preservation as outlined on p. 12. She spoke to looking at the comparatives on the last page with respect to the City's ranking in the region on its street maintenance fee amount. She noted that Lake Oswego was in the middle of the nearby cities. She mentioned the Metro report (p. 5), which showed that Oregon ranked last in auto taxes collected compared to other Western states. She concurred with Mr. Graham's suggestion in the report to prioritize pathways first for inclusion in the five year CIP. She referenced an article she read in the Parks & Rec magazine today about how Salt Lake City had a complete streets policy. She encouraged staff to evaluate street improvement projects in terms of whether they could fit a bike lane on an existing road, even by just repainting the lines. Mr. Graham spoke of including pathways in the City's Transportation System Plan, which staff hoped to update using a TGM grant. He agreed with considering multi -modal transportation usage while developing their motor transportation facilities. He concurred with looking for leveraging opportunities in street projects to build in multi -modal opportunities. Councilor Olson wondered whether the City should explore collecting the higher franchise fee from PGE, as noted earlier by Councilor Tierney that the City was collecting only 3.5% of a possible 5% fee. She observed that the graph showing the gas tax revenues has not gone down significantly over the years. Mr. Graham concurred that the dollar amount has not gone down appreciably but reiterated that the cost of materials has increased and eroded the City's buying power. City Council Special Meeting Minutes Page 9 of 12 September 22, 2009 Mr. Graham indicated to Councilor Tierney that he could not make a guesstimate on the dollar amount needed for pathway maintenance, as he did not know how many miles of pathway the City had. Councilor Jordan pointed out that the City had different types of pathways, many of which were not linked. She argued for creating linkages between existing pathways before building new pathways. She spoke of looking at the overall picture of connectivity in bringing bicyclists and pedestrians from one area to another area. Councilor Jordan spoke of the upcoming conversation among the jurisdictions about the possibility that ODOT might turn State Street over to the local jurisdictions, and provide some dollars with the transfer. She mentioned the conversation at Metro and the local jurisdictions about new funds dedicated to transportation from taxes voted on region -wide that would be similar to the library district: what Metro collected in one county would be spent in that county. She commented that there were larger things happening because the need for transportation dollars was so great that no one community could generate sufficient money to take care of it on its own. Councilor Johnson concurred with the earlier point about looking at street maintenance needs in the larger context of asset management and the general fund budget. She spoke to discussing it during the Council's goal setting process. She referenced Mr. McIntyre's earlier point about the street maintenance fee as an independent funding source that the City needed to manage properly She emphasized the need to index the fee permanently as a minimum Council action. She asked the question of whether the City should catch the index up to where it should be, had the City indexed the rate originally, or should the Council make up the difference from the general fund. Mayor Hoffman agreed with indexing the fee. He suggested considering the inclusion of sidewalks and pathways, as the City had responsibility for those items. He wondered what other jurisdictions were doing. Mr. Graham reported on his conversation with Craig Prosser at Tigard. The Tigard City Council endorsed the staff recommendation to increase their street maintenance revenues to $2.5 million with an additional $300,000 for sidewalk/landscape maintenance within the right-of-way. Mayor Hoffman commented that cities were recognizing that pathways and sidewalks were part of a sustainable city and part of the walkable city outcome identified by Metro. He noted that it was difficult to walk along Kruse Way due to the poor condition of the pathway. Councilor Hennagin spoke to staff telling the Council which walkways needed repair, as repairing pathways might take priority over building new pathways. He agreed that the City should maintain the pathways it already had, especially from a safety standpoint. Ms. Rooney indicated to Councilor Olson that Tigard raised their street maintenance fee last week to $3.73 with the expectation of it reaching $6.06 by 2011. She reviewed the increases enacted by Oregon City and West Linn. She noted that Lake Oswego was still at $4 a month. Councilor Moncrieff asked staff to return with a proposal for a street maintenance fee indexed for inflation that showed what rates the City needed to charge in order to maintain its current level, or to improve it. Mayor Hoffman recalled an analysis that showed that deferring maintenance cost more in the long run. For every dollar spent in slurry, they saved $25 in reconstruction costs. Ms. Rooney indicated to Councilor Jordan that the 68 PCI included the resurfacing of the streets following the sewer construction. Councilor Jordan pointed out that the report therefore did not show what the City was buying with the street maintenance fee alone but included leveraging other funds. Mr. Graham indicated that staff made an effort to look at how to leverage other funds in improving streets. Mr. McIntyre clarified to Councilor Olson that the talk about doubling the fee referred to investing more in the capital outlay for the street itself (such as more asphalt), as opposed to paying for beautification and ongoing maintenance. He noted that the street fund included more revenue sources than simply the street maintenance fee. City Council Special Meeting Minutes Page 10 of 12 September 22, 2009 Ms. Rooney indicated to Councilor Jordan that the City could use state funds on transportation improvements and maintenance. Mr. McIntyre said that staff would confirm whether the City could use State funds for maintenance. Mayor Hoffman spoke of having a conversation about adding on an increment to the street maintenance fee for pathways and pathway maintenance. Mr. Graham indicated that he would find the data regarding the number of pathway miles the City had and estimate a dollar amount needed per year to maintain the paths. He confirmed to the Mayor that this was tied to the asset management program, the first step of which was to develop an asset registry, followed by a condition assessment. Mr. McIntyre referenced Councilor Tierney's earlier question about how to target the $10. He reminded the Council that he had told them during the strategic asset management presentation that the City did not have sufficient staff resources to develop the program or the plans. He recalled the Council's affirmation that this was the direction to go in. He indicated that to the extent that he could, he would reallocate staff resources to focus on this. He explained that the reason why staff did not look at the full picture first was because they would not have the full picture for many more years. In the meantime, since they had a clear picture on the street system, focusing on this asset at this time made sense. He indicated that he got Councilor Tierney's message loud and clear that the Councilor, as a taxpayer and ratepayer, wanted to make sure that the street maintenance fee went towards the right investment. He referenced Councilor Olson's question regarding the franchise fee. He recalled that, as part of the previous Council discussion of franchise fees around the furnace restoration, staff found that there was room in the City's legal authority to adjust a franchise fee. He mentioned that other cities charged themselves a franchise fee, which Lake Oswego did not do, by charging the utility to pay back the general fund. He suggested discussing these topics during goal setting. He observed that, however the Council chose to get the revenue, it ended up costing a ratepayer more to live in this community than before the Council enacted the fee. He indicated that it was a policy question of where the Council wanted to have the fees reflected and where it wanted to spend the monies. He recalled that staff told the Council during the CIP presentation that they would give the Council their expert opinion because that was what the Council had hired them for, but he reiterated that it was still a policy decision for the Council. He confirmed to Mayor Hoffman that staff would provide the Council with the information on the pathways. Councilor Hennagin mentioned his known concerns regarding indexing and how indexing was internally inflationary in and of itself, and created more inflation. Councilor Johnson reiterated that she supported indexing the rate. Mr. Graham noted that another option was to increase the street maintenance fee annually, as the Council did its other utility rates, based on the capital needs and services provided. Councilor Jordan mentioned that Tigard had taken a different approach of estimating how much money they would need for the next five years and setting the rate to increase annually in order to meet that goal. Mr. McIntyre indicated to Councilor Moncrieff that the hotel/motel tax was not a revenue source for streets, as the City has allocated it for the next three years to pay for the furnace restoration. In addition, it was not part of the general fund because those revenues were restricted and tied to tourism. He mentioned a conversation going on around whether pathways could be considered as attracting tourists to a walkable city. He concurred with Councilor Hennagin that HRAB would next ask to use the hotel/motel tax revenue for the Iron Heritage trail. However, it was up to the Council to prioritize the use of that revenue. Councilor Ti rney asked what known information staff could bring back on the capital elements prior to developing a sophisticated asset management plan. He held that the Council needed to City Council Special Meeting Minutes Page 11 of 12 September 22, 2009 have that information before discussing a component of the plan, which, in this case, would be street maintenance. Mr. Mclntyr indicated that staff would provide snapshots for the two big projects -- finishing LOIS and moving ahead with the water partnership with Tigard — as well as the Clean Streams plan. He acknowledged the difficulty of prioritizing a clean stream against good roads. Councilor Tierney complimented staff on the excellent report that provided the foundation for a good discussion this evening. 4. ADJOURNMENT Mayor Hoffman adjourned the meeting at 9:03 p.m. Respectfully submitted, Robyn Christie City Recorder APPROVED BY THE CITY COUNCIL: Hoffman, City Council Special Meeting Minutes Page 12 of 12 September 22, 2009