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HomeMy WebLinkAboutApproved Minutes - 2010-12-07 PMCITY COUNCIL REGULAR MEETING MINUTES December 7, 2010 Mayor Jack Hoffman called the regular City Council meeting to order at 6:37 p.m. on December 7, 2010, in the City Council Chambers, 380 A Avenue. Present: Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, Jordan, and Vizzini. Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Joel Komarek, LOIS Project Director; Shawn Cross, Asst Finance Director; Denise Frisbee, Director of Planning and Building Services; Kim Gilmer, Parks & Recreation Director; Shawn Cross, Asst Finance Director; Debra Andreades, Senior Planner; Ursula Euler, Finance Director 3. PRESENTATIONS 3.1 Unsung Hero Awards Councilor Vizzini reviewed the Unsung Hero Awards nomination and selection process. He presented an award to Paul Sleeper and congratulated him. He noted that Mr. Sleeper volunteered at the Adult Community Center's Computer Learning Lab, teaching classes and keeping the Mac computer system up and running. He noted that Kay Kerr nominated him. He presented an award to Dale Cleland and congratulated him. He indicated that Mr. Cleland has served as the volunteer director and manager of the volunteer Lake Oswego Millennium Band since its inception in the fall of 1999. He noted that Cindy Glazier nominated him. He recognized Marylou Colver, nominated by Bonnie Hirshberger, for her stories about the history of Lake Oswego, which she researched and wrote as part of the Centennial Celebration. He presented the award to Erin O'Rourke-Meadors, who accepted it on behalf of Ms. Colver. Ms. O'Rourke-Meadors expressed Ms. Colver's regrets for not being present tonight. She mentioned that Centennial Snippets had been Ms. Colver's idea, and that they were working on an annual issue for Historic Preservation Month in May. Mayor Hoffman thanked the three Unsung Heroes and all nominees for the work that they did for the community. 4. CITIZEN COMMENT • Ben Brewer, 17400 Schalit Way Mr. Brewer spoke in support of a new tennis center. He indicated that he has played tennis at the Lake Oswego Tennis Center for 14 years, beginning at age 4. He mentioned that last year he was the number one player on the Lakeridge Varsity Tennis Team and went to the State playoffs. He described tennis as his passion, good exercise, and good for the brain, as well his means of learning sportsmanlike conduct. He reported that the Dairy Farmers of America honored the 2010 Lakeridge Boys Tennis Team for having the highest combined GPA of 3.86 of any 6A tennis team in the state. He argued that the community sorely needed a new tennis center due to the weather and the need to play tennis indoors nine months out of the year. He observed that court time was non-existent City Council Regular Meeting Minutes Page 1 of 21 December 7, 2010 at the tennis center. He mentioned playing tennis with his family and his intention to play tennis his whole life. He asked the Council to build a larger indoor tennis facility to allow everyone the opportunity to play tennis year round. • Margaret Anderson, 515 North Shore Road Ms. Anderson spoke in support of a new tennis center. She indicated that, while she has played tennis all her adult life, she began playing competitively 23 years ago after she retired as an educator. She described how tennis exercised not only her body but also her brain. She showed photographs of the Pacific Northwest Section 80 team, on which she played at the Intersectional Team competition last November. She advocated for building a larger tennis facility, since there were many in Lake Oswego who enjoyed playing this sport of a lifetime but could not get courts at the current facility, including herself. She pointed out that if the Council facilitated the construction of a new facility, the City could build it in two years. She asked the Council to do what it could to keep Lake Oswegans young and playing tennis all year long. Mayor Hoffman asked those in the audience in support of Ms. Anderson to raise their hands • Amy Waterbury, Lake Forest Neighborhood Assn Board representative Ms. Waterbury addressed the Waluga Reservoir No.2. She read the first sentence of a resolution signed by the Lake Forest and Waluga Neighborhood Association Boards respectfully asking the Council "to delay the approval of the capital plan for the proposed Waluga Reservoir No.2 until questions about capacity and height, which could affect placement and cost, have been sufficiently addressed." She noted that adding a second reservoir tank to the already existing tank at this location equated to over a football field's worth of concrete tank in their neighborhood. She stated that the surrounding neighbors opposed the current design based on size, height, capacity, and location. She reviewed several key design questions regarding whether the City could store some capacity elsewhere, thus reducing the size and height of the facility. She mentioned that neighbors felt that the City was using this reservoir as a dumping ground for as much capacity as possible in disregard of the neighborhood character. She recalled the active participation of the neighborhood in attending the many meetings, which she described as not necessarily effective. She indicated that the neighbors did not feel that they have been heard, noting that there were unanswered questions still remaining after seven months. She mentioned the neighborhoods' appreciation of the diligence of Councilors Tierney and Olson in asking important questions of the Water Partnership Team. She discussed the issues surrounding the question of whether the City could store some of the reservoir capacity elsewhere, such as at the Tenth Avenue tank, currently proposed for decommissioning. She suggested maintaining the status quo for that reservoir, as the Tenth Avenue neighbors would see nothing different from what they had now. Doing so would reduce the impact on the Lake Forest neighborhood. She mentioned that staff did present this alternative to the Oversight Committee last night late in the meeting, but she felt that the option, which seemed acceptable to the two Councilors on the Committee, warranted more consideration time. She mentioned the second option of building a reservoir in Tigard. She asked why a 3.5 million gallon tank was needed at this time and whether the 40 foot height was justified. She indicated that the Water Partnership Team justified the height based on unverified water pressure issues in the Waluga neighborhood. She cited the lack of time that the Oversight Committee had to consider these options and the unanswered questions as the Boards' reasons for asking the Council to postpone approval of the Waluga Reservoir No.2 design. City Council Regular Meeting Minutes Page 2 of 21 December 7, 2010 • Kay Kerr, 4 Gershwin Court Ms. K rr asked why the no left turn sign was still up at 4th Street and A Avenue, given that the construction across the street has finished. Mayor Hoffman directed her to Mr. McIntyre for the answer. • Skip Ormsby, 170 SW Birdshill Road, Portland, Clackamas County Mr. Ormsby argued that, based on the Lake Oswego to Portland Transit Project Draft Environmental Impact Statement and the Lake Oswego School District's announcement last night of its facilities reorganization plan, a perfect storm was brewing in Lake Oswego. He contended that encumbering the tax and fee base with the streetcar alternatives, Foothills, or the North Anchor was a financial disaster waiting to happen. He noted that the people would find out what was in the offing when they considered their assessor code areas in light of the urban renewal maps and the effect of school financing. He contended that Lake Oswego citizens would also discover that the streetcar ran three to four miles to the east of the population centers by Boones Ferry and Country Club Roads and that a good portion of everything west of Boones Ferry was not even in the Lake Oswego study area. He pointed out that the maps showed Mountain Park cut off from the East End of Lake Oswego. He mentioned that he found it disturbing that there were no buses running down Country Club to Kerr Parkway and out to the Sylvania campus. He expressed his concern that Birdshill was not invited to the Mayor's meeting on Saturday. He mentioned the four years he spent in getting Birdshill recognized jointly by Lake Oswego and Clackamas County. Mayor Hoffman apologized to Mr. Ormsby for his apparent non -invitation to the Mayor's Forum, although Mr. Ormsby attended it anyway. He explained that the City used an incorrect e-mail list, which did not include four neighborhood associations. He indicated that staff has corrected the list and that Mr. Ormsby would receive notification of the next Mayor's Meeting with the neighborhood chairs in February. He expressed his appreciation for Mr. Ormsby's input and participation. • Jeff Gage, 3080 Westview Circle Mr. Gage addressed Resolution 10-65 on the Consent Agenda, concerning the statewide ban on plastic bags. He explained that he had been President of Gage Industries, the largest plastics manufacturer in Oregon until it went out of business three years ago due to the downfall in the heavy truck market. He said that he had been actively involved in energy conservation and recycling issues since the mid-1980s. He directed the Council to the paper he provided, asking that the members peruse it before voting on this resolution. He commented that, while the promotion of reusable bags was a good element in this proposed ban, the promotion of paper bags over plastic bags was not. He pointed out that people felt a little guilty about using plastics because they have been educated to believe that plastics were bad. He cited that as one reason why he educated himself about energy, products manufacturing, and products disposal. He indicated that his paper provided evidence to correct some of the misleading comments made by Brock Howell from Environment Oregon at his recent presentation to the Council. He stated that plastic bags were extremely efficient energywise, with it taking five to seven times as much energy to make a paper bag than it did to make a plastic bag. He commented that it took 84 times as much energy to make a paper bag as it did to make a recycled plastic bag. He mentioned that extrusion, a process used at Gage Industries, was the same process used to make plastic bags. He noted that the average paper mill used 20 times as much energy per employee as Gage Industries had in making effectively similar products. He conceded that plastic bags in the waste stream were bad. He mentioned that he and his father had been instrumental in getting the first automatic plastic bottle sorting system in the U.S. located City Council Regular Meeting Minutes Page 3 of 21 December 7, 2010 in Oregon, which became a foundation in allowing plastic bottle curbside recycling statewide. He commented that Gage Industries never made plastic bottles or plastic bags, but these products were better environmentally in more ways than frequently taught. He mentioned that he reused plastic bags as trash bags before putting them in the waste stream. He noted that paper bags had 10 times the volume of a plastic bag and took up more space in a landfill, as well as decomposing into methane gas in an anaerobic environment (which landfills were designed not to be). He commented that methane was considered to be 23 times worse for global warming than carbon dioxide. He commented that plastics in the ocean were a seriously bad situation. He cited an article in the August Scientific American issue asking where all the plastic was going, given that the ocean garbage patches were not growing. He directed the Council to his paper for his thoughts on that question. He expressed his hope that the Council could review his paper before rubber-stamping Environment Oregon's request. He mentioned that he would not be so sure that this issue was as bipartisan as some have claimed. John Surrett, 1685 Edgecliff Terrace, LONAC President Mr. Surrett presented the LONAC membership's request that the Council delay action on Ordinance 2560 at its December 13 meeting, and delay submitting the City's compliance package to Metro regarding the sensitive lands matter. He argued that many issues on the sensitive lands matter raised by Lake Oswego Stewards and other concerned citizens have not been adequately resolved and needed to be before the Council voted on the issue. He indicated that a quorum of voting members voted unanimously (with one abstention) at the LONAC December 4 meeting to present this request for a delay to the Council. • Jim Bolland, 804 Fifth Street, LONAC representative Mr. Bolland indicated that, at the LONAC December 4 meeting, the Waluga and Lake Forest neighborhoods requested LONAC's support of their request to delay the decision regarding the siting, sizing, and capacity for the proposed Waluga Water Reservoir No.2. He reported that LONAC voted unanimously to support that request, which Ms. Waterbury presented earlier. He recalled that during the discussion at a LONAC forum several months ago, which Councilor Tierney and Mr. Komarek attended, someone mentioned the possible decommissioning of the 10tH Street tank. He noted that the FAN/Forest Hills Chairperson, Marie Meneghin, indicated at the time that the City has not contacted her regarding that possibility. He reported that Ms. Meneghin indicated to him just now that the City still has not been contacted her regarding the decommissioning of that tank. He argued that these large decisions with such an impact on the neighbors and residents needed public input, specifically on the sizing and siting issues, before the Council moved forward with this portion of the larger project. He respectfully requested that the Council obtain that public input. • Gary Buford, 5 Camelot Court Mr. Buford noted for the record that he did not get mail delivery at his residence. He stated his opinion that the voters in Lake Oswego did not cast their votes on the basis of a popularity contest but rather on the basis of who was going to lead the city in the way that they thought it should be led, on financial/spending issues, and on personal respect of the rights of every citizen in Lake Oswego, including the respect of private property rights. He noted a quote from a Council member following the election: "The people have spoken." He expressed his hope that each Council member going forward to represent the citizenry in 2011 remembered the election. He expressed his appreciation to Councilor Hennagin for the time and effort he put into the Council position for four years, even though he did not agree with the way the Councilor voted on the issues that affected him. City Council Regular Meeting Minutes Page 4 of 21 D cember 7, 2010 He commented that through the balance of this year and into next year, issues would come to the Council, which the voters in November indicated that they wanted the Council to look at differently. He suggested that the Council do so. He cited the issues of private property rights with respect to sensitive lands, relocating City Hall to the West End Building (which he did not agree with), and the streetcar. He contended that they should know what the costs of the streetcar were going to be and who was going to pay those costs before the Council voted to go forward any further with the streetcar project. 5. REPORTS/RESOLUTIONS/UPDATES 5.1 Lake Oswego - Tigard Water Supply Partnership: Resolution 10-73, approving a Supply Facilities Capital Improvement Plan Mr. Komarek indicated that Resolution 10-73 represented the culmination of more than four years of significant effort and sound decision-making on the part of the prior and current City Councils of Lake Oswego and Tigard. He acknowledged the good work of the Councils, his colleagues on the Technical Committee, and the Oversight Committee members (Councilors Olson and Tierney). He mentioned that the program manager Brown & Caldwell has done a remarkable job in assisting the cities in defining this project. He noted the good work of the expert panel and the Citizen Sounding Board in helping staff understand treatment technologies. He gave a PowerPoint presentation. He described the Supply Facilities Capital Improvement Program as a foundational document that would guide their efforts going forward in permitting, value planning, design, future watershed planning, water rights, water management conservation planning, and the utility billing system. He noted that significant effort went into evaluating the existing facilities' condition and determining how to address the deficiencies in the supply system in order to provide sufficient capacity to meet the needs of the two cities over the next 50 to 60 years. He discussed facilities sizing (pp. 159-160). He emphasized that there were significant economies of scale realized in right sizing facilities today rather than implementing smaller incremental capacity expansions over time. He referenced the example in his report (p.160) explaining how the fixed costs of design, permitting, right-of-way, and construction did not vary with the pipe size because they had to do the same kind and amount of work for any pipe size. He reviewed the future risks avoided with right sizing today (p.160). He presented a graphic showing the Lake Oswego rates based upon the current program cost estimate of $230 million ($107 million to Lake Oswego). He pointed out that the difference in a residential bill in FY 2015/2016 between the current financial plan (no ozone) and the ozone option was $4.22. He discussed the ozone option (pp.160-161). He reviewed the business case evaluation of treatment technologies process that the Council authorized (p.161). He noted that the consensus of the expert panel and the Citizen Sounding Board was to include ozone along with conventional treatment at the expanded water treatment plant. He mentioned that ozone provided additional public health barriers to a number of contaminants and compounds (pp.160-161). He emphasized that the cost to a typical Lake Oswego household today for the ozone option was 17 cents per day. He recommended adoption of Resolution 10-73, which contained the Technical Committee's recommendation for a Supply Facilities Capital Improvement Program (pp. 171-187), as approved by the Oversight Committee and forwarded to the City Councils. He pointed out the summary list of facilities (p.159). He noted the recommendation in the program to size the Waluga Reservoir No.2 for 3.5 million gallons and to site it on the property that the City purchased for this purpose in the mid-1990s. • Council Questions At Councilor Ti rn y's request, Mr. Komar k reviewed the specifics of the value engineering process, scheduled for January 10 through January 14. He explained that an independent panel of City Council Regular Meeting Minutes Page 5 of 21 December 7, 2010 design and construction experts would review the project definition report and the decision basis to look for ways to construct the project more economically. Mr. Komarek indicated to Councilor Tierney that it would be fair to say that approval of the capital plan set the framework, but that framework was subject to change over the next many years. He explained that he expected the design and review process to be iterative, but they were early in the process and he could not say what changes might occur. At Councilor Hennagin's request, Mr. Komarek reviewed the range of alternatives that staff explored at Council's direction for siting the Waluga Reservoir No.2 (p.161). He referenced Table 1 summarizing staff's findings for each of the alternatives. He mentioned informing the Oversight Committee that all those alternative sites involved significant additional relocation costs. He presented staff's opinion, based upon the analysis, that relocating the reservoir to the 10th Street site had significant constructability, permitting, and land use hurdles. He noted that the IGA provided for Lake Oswego to bear the entire cost of siting this 3.5 mg reservoir at some location other than the Waluga property. He indicated that the range for the incremental additional construction costs only ran from $1.6 million to over $6 million. He mentioned that the associated design, permitting, and management costs could add another 20% to those figures. Councilor Olson asked if staff considered putting a reservoir in Tigard to store its 1.5 mg portion of the 3.5 mg Waluga Reservoir No.2 capacity. Mr. Komarek indicated that staff has not considered that option. He said that Tigard needed to draw water out of the Waluga Reservoir because the terminal location from the high service pump station would be at this site. He explained that the system needed these two reservoirs to work in tandem and to have the same floor elevation. He commented that staff would need to research thoroughly the operational issues, as well as the engineering and hydraulics of one reservoir at Waluga and one in Tigard. Jon Holland, Brown & Caldwell, observed that staff has not looked at the hydraulic and operational issues of this scenario, which could well be fatal flaws, because this scenario required building two reservoirs instead of only one. He pointed out that Lake Oswego needed a second reservoir at Waluga anyway for Lake Oswego's 2 mg of water. He reiterated that Lake Oswego would bear all the additional costs of building a second reservoir in Tigard, including land purchase. Councilor Olson recalled a question raised by a citizen at the Oversight Committee meeting about the potential for a major earthquake. She asked whether the existing reservoir would be upgraded to higher seismic standards, and whether the new reservoir would be built to withstand a 9 or 10 magnitude earthquake, as opposed to a 7 or 8 magnitude quake. Mr. Komarek indicated that staff has not discussed doing a site-specific risk analysis for the existing tank, but they could do so and do any hardening that might be needed. He recalled informing the Oversight Committee some time ago that they would build the new reservoir to the same seismic standard for critical structures, such as hospitals and defense facilities, which was beyond the current maximum code requirements. He indicated that in the structure design they would consider all the relevant factors involved in determining the impact of an earthquake on a building, but he could not say right now whether it would withstand a 9 magnitude quake. Councilor Jordan asked if staff saw the Clackamas River ever being as clean a watershed as Bull Run was right now so that the system would not need the ozonation to clear out the additional contaminants. Mr. Komarek observed that 'clean' was a relative term. He pointed out that the Clackamas watershed was highly urbanized in its lower section and had many federal, state, and private forestlands. He commented that he did not expect its management for recreational, timber, and agricultural interests, and, to a much lesser extent, municipal water supply, to change any time soon. He noted that those uses put significant pressure on the watershed in terms of maintaining water quality. Mr. Komarek discussed the known contaminants in the river, based on the U.S. Geological Survey's lengthy study done a number of years ago. He mentioned herbicides, pesticides, and City Council Regular Meeting Minutes Page 6 of 21 December 7, 2010 personal care products. He reviewed the benefits of ozone in providing an additional barrier to those contaminants, as well as in allowing a reduction in the amount of chlorine used at the water treatment plant. He explained that reducing chlorine also reduced the disinfection byproducts, currently regulated by the EPA as a carcinogen. He commented that ozone also addressed the taste and odor issues occasionally occurring on the river due to algae blooms, which were becoming more predominant with the urbanization of the watershed. He emphasized that, while ozone was not required today, it did provide significant benefit to the public at a very economical cost. Councilor Jordan moved Resolution 10-73, to approve a Supply Facilities Capital Improvement Program for the Lake Oswego -Tigard Water Supply Partnership. Councilor Moncrieff seconded the motion. Mayor Hoffman noted that the resolution included authorizing the Mayor to sign the second amendment to the Lake Oswego -Tigard IGA regarding water supply facilities design, construction, and operation. Councilor Olson asked how confident Mr. Komarek was in the cost estimates at present, and how much did he think they would vary following the value engineering and a more refined design. Mr. Komarek concurred that that was difficult to answer right now. He indicated that the staff cost estimate was in the midrange of a range of costs. Mr. Holland agreed that it was difficult to anticipate what the value engineering program might find. Mr. Holland confirmed to Councilor Olson that Lake Oswego's share could potentially change if the costs changed. He mentioned a plan to revise allocations and payment for facilities at each stage of the program as estimates improved. He noted the final 'truing up' at the end to insure that the allocation formulas were applied correctly and the dollars balanced out. Councilor Moncrieff thanked the Technical Committee, the Oversight Committee, the expert panel, and the Citizen Sounding Board for the time and effort each group put in to the study and careful consideration of the elements in the recommendation. She indicated that she thought they have done an excellent job in answering Council concerns in a timely manner. Councilor Tierney moved to amend the resolution to increase the construction contingency in Lake Oswego by $2 million, allowing for the continued investigation of the siting and reduction of the Waluga Reservoir. Councilor Olson seconded the motion. Councilors Jordan and Moncrieff accepted the motion as a friendly amendment to the main motion. Councilor Vizzini asked whether putting a larger contingency in the budget required an adjustment to the rate increase. Mr. Komarek answered that, technically, the answer was yes. However, given the 25 -year term of the bond, he did not expect adding $2 million to have a measurable effect. He summarized the Council's direction, as staff was to explore further options to potentially mitigate the impact to the neighborhood. Mr. Komarek confirmed to Councilor Vizzini that the $6 million cost in the range of costs for moving or reducing the Waluga Reservoir No.2 would not be marginal, in his opinion. He mentioned the option that staff presented to the Oversight Committee yesterday of moving the reservoir further north on the site, which had a construction only estimate of $1.6 million with the design and project management costs coming closer to $2 million. He noted that this $2 million was on top of the current estimate of $7.4 million for a total estimate of $9.4 million. Councilor Vizzini pointed out that this business partnership between the Cities of Lake Oswego and Tigard depended on both partners being on the same page as the project moved forward. He contended that it was incumbent on this Council and future Councils to continue to act in tandem with the City's partner and not to diverge from the plan unless they have fully vetted any proposed changes with Tigard. He described the decision made years ago to enter into this complicated City Council Regular Meeting Minutes Page 7 of 21 Dec mber 7, 2010 enterprise partnership as a substantial decision, which required constant communication back and forth to keep the partnership intact. He commented that he saw an opportunity here for the Council to make an investment decision on a system that was more resilient and responsive to the City's long-term needs than any other alternative. He recalled his research into large capital decisions by governing bodies, which found that governments tended to want to cut a deal with the future by low -balling a decision for the lowest possible cost in the near term and pushing actual costs into the future. He argued that all the committees involved in this decision have been wise to say, no, this was the best value proposition for the future of the City. He indicated his support of the proposal as brought forward. He held that this wise decision would well serve Lake Oswego for generations to come. Councilor Tierney indicated that other alternatives presented to the Oversight Committee were in the $2 million range for construction, design, and engineering, such as replacing the reservoir at 10th Street. He commented that the work done to date pointed to a reservoir at the Waluga location as proposed by staff. However, if staff came back with an alternative, he did not want a situation where the budget did not support that alternative. He explained that that was why he put the funds in contingency. He stated that he would not support incorporating the change into rates because his intent was to provide an opportunity for an alternative. Councilor Olson concurred with Councilor Tierney. She commented that she did not see $2 million as a large amount for moving the reservoir around on the Waluga site, given the soil instability that the Oversight Committee heard about yesterday. She said that she was more interested in exploring a .5 mg reservoir on the 10th Street site and reducing the Waluga Reservoir size. Councilor Hennagin pointed out that the diagram in the staff report did not show whether the sightlines from the ground would change with modifications to the reservoir. He indicated that he was hesitant to ask Lake Oswego citizens to incur $2 million more in cost if the sightlines were not substantially different. He said that he had difficulty supporting the amendment without that information. Councilor Jordan commented that putting extra money in the contingency seemed appropriate, given that the project was going into value engineering. She concurred that the additional money allowed the opportunity to implement an alternative for the Waluga facility that would achieve the desired result. Therefore, she supported the friendly amendment. Mayor Hoffman concurred. Councilor Vizzini asked if there was a cost impact beyond the $2 to $6 million range on the pumping requirements at the treatment plant of either changing the storage facility location or dividing the facility. Mr. Komarek confirmed that either scenario would change the hydraulics and require additional piping. He mentioned the possibility of needing to relocate an existing pump station on the 10th Street site, which was not included in the costs. Therefore, moving any portion of the volume to the 10th Street site would cost more than $2 million. Councilor Vizzini supported the amendment, citing the wisdom of having a healthy contingency at this stage of working out the details and allowing flexibility in the design. He emphasized the need of the final decision to be cognizant of the rate impacts beyond what the plan called for right now. He concurred that they should try to accommodate the citizen concerns but pointed out that there was a price point at which future and current ratepayers would find it impossible to move forward. Councilor Moncrieff indicated that she supported the friendly amendment, as she did not want to design engineer the facility. She stated that their primary common objectives were to have the best system operationally, to stay on schedule, and to be sensitive to the ratepayers. Mr. Komarek indicated to Councilor Olson that, while there were pipes currently going to the 10th Street site, he did not know if they were appropriately sized or not. He mentioned the additional impacts of moving a portion of the Waluga water storage to the 10th Street site, which were not City Council Regular Meeting Minutes Page 8 of 21 December 7, 2010 included in the recommended plan. These included decommissioning the existing tank, relocating the pump station, and disrupting the 10th Street neighborhood. He referenced Mr. Bolland's comment that the City has not discussed this scenario at all with the neighborhood. He indicated to Councilor Olson that staff did not include decommissioning the tank in the project, although they did include storage in a proposed new tank in the future. He indicated that it was a 1925 steel tank, seismically vulnerable, which staff thought was prudent to decommission at some point. Councilor Olson recalled Councilor Hennagin once asking whether they could build the facilities needed for the ozone treatment but not start the treatment in order to save money. Mr. Komarek clarified that the 17 cents represented the net present value of 25 years of the capital and operating costs of ozone. He mentioned staffs finding that building some infrastructure now and adding the treatment later actually cost more. Mr. Komarek acknowledged that they could build the ozone treatment infrastructure now and not operate it or operate it only seasonally. He argued that doing so meant that the system got only half the benefits half the time. He mentioned also that ozone systems were complex to operate and required staff training. Councilor Olson asked staff to provide information on what ozone treatment cost ratepayers on either a monthly or a daily basis as a comparison. Councilor Hennagin indicated that he would support the motion, even though he opposed the amendment. Ms. Christie re -read the motion: To adopt Resolution 10-73 with the friendly amendment to increase the contingency by $2 million to look further at Waluga Reservoir No.2. A roll call vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Moncrieff, Tierney, Jordan, and Vizzini voting `aye.' Councilor Olson voted 'no.' [6-1] 5.2 Water Partnership Update Mr. Komarek indicated that staff was continuing the permitting work begun a couple of months ago, including preparing for the alternatives analysis required for the joint permit application. He mentioned working with the Public Works Department on a Development Code text amendment for utilities in RP/RC areas, and working on a Gladstone text amendment for the intake structure in Gladstone. He reported that staff was reviewing the program definition report internally, which was the guidance document for design firms in proposing design packages next year. He indicated that this report documented the basis for all decisions made to date and established the standards required of all design firms in order to attain uniformity across all design packages. He indicated that qualification statements from interested firms were due next week, which staff would review and short list up to six firms for each design package. He mentioned staff's anticipation of issuing an RFP for the first design package in January, which was the water treatment plant design. He mentioned that Ms. Heisler and the Public Involvement Team have been busy working with the Robinwood neighbors and Maple Grove Plat property owners to develop a good neighbor plan since the water treatment plant was the first design package to come out. He indicated that the team was also working with the City's Utility Billing Department for assistance in public outreach regarding costs and rates. He noted the last milestone event on the schedule, the Tigard Council adopting the Supply Facilities Capital Improvement Program on December 14 (which the Lake Oswego Council adopted tonight). He mentioned the value engineering scheduled for January 10 to January 14, City Council Regular Meeting Minutes Page 9 of 21 December 7, 2010 2011. He indicated that people could contact the team through the website, Facebook, and Twitter. 5.3 Amendment of Public Improvement Contract for Lake Oswego Interceptor Sewer Mr. Komarek explained that this amendment expanded the scope of work in the City's contract with James W. Fowler Co. to include renewal, replacement, and remediation of the near shore sewers. He recalled that he had requested Council to increase its authorization to issue up to $40 million in full faith & credit obligation bonds by $5,000 in order to fund this project and to take advantage of the lake down phase and the qualified contractors and subcontractors already on site (p.189). He indicated that staff felt that the expanded scope of work was achievable in the limited time available (p.193). He requested the Council to authorize the City Manager to execute Change Order 18 and to add an additional $3,592,091.00 to the LOIS Lake Down scope of work to complete the near shore sewer work. Councilor Jordan recused herself, stating that her husband's law firm did work for Advanced American, one of the contractors on the project. Councilor Tierney asked if staff identified all the sewers potentially needing this work. Mr. Komarek indicated that, given that there was more work needed on these near shore sewers than they could hope to accomplish in the limited time available, staff strategically identified those areas that were the worst of the worst and provided the best opportunity to complete within the time frame available. He confirmed that there were more sewers out there to work on. Mr. Komarek mentioned that the condition assessment, inspection, and cleaning of all of the 20,000 feet of near shore sewers ringing the lake done as part of the Lake Down contract work would provide valuable information to the Public Works staff in planning future CIP projects. Councilor Moncrieff moved to approve an amendment to the public improvement contract with James W. Fowler, Co., (JWF) in the amount of $3,592,091 and authorize the City Manager to execute the relating Change Order No. 18. Councilor Hennagin seconded the motion. A voice vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, and Vizzini voting `aye.' Councilor Jordan recused herself. [6-0] 5.4 LOIS Update Mr. Komarek presented photographs of the project. He discussed the critical nature of Manhole 22 at the entrance to Half Moon Bay at the east end of the lake where all the system connections were made. He indicated that everything to the east of Manhole 22 was right -sized and being "CIPP'd" but not replaced. He commented that they needed to complete a lot of work by the end of the year in order to begin refilling the lake on January 15. He indicated that all the bypass systems were functional. He showed a photo of the bypass pipe that intercepted the flow at the Forest Hills easement manhole and routed it to lower Millennium Plaza Park, which allowed the contractor to work on an existing system connection in between those points. He mentioned that they beat their deadline to re -open Bryant Road, but they did have to continue the road closure at North Shore Bridge. He reported that ODOT informed staff yesterday that it wanted more paving work done at the manhole across from Millennium Plaza, which meant another lane closure on State Street next spring. He reported that Ms. Heisler and Mr. Selby continued their proactive public relations activities on a number of issues, including soil contamination, fish, bypass pumping and generator installations for the pumps adjac nt to homes. He mentioned another public relations issue of the seawall that collapsed when the contractor removed the manhole that was holding the seawall up. He indicated City Council Regular Meeting Minutes Page 10 of 21 December 7, 2010 that the City would work with the homeowner to repair it and share the costs. He said that near shore sewers were another major issue, as the contractor either had to get on top of the private decks built over those sewers or remove the decks to get to the sewers. He noted that lake down was behind schedule but the contractor has submitted a recovery plan, which included working weekends and holidays. He commented that he was optimistic that they would get back on schedule early in the new year. He indicated that the $94 million cost included the contract amendment amount approved by Council this evening. Councilor Hennagin mentioned watching the contractor put the fiber sock in at the manhole on 3rd Street. He congratulated staff on re -lining the main line in Lakewood Bay, which represented a considerable cost savings to the Lake Oswego citizens. Mr. Komarek acknowledged that that was a significant undertaking. He indicated that the length and curve of the pipeline necessitated the contractor cutting a section out of the existing interceptor in Lakewood Bay and doing the work in two sections. 5.5 Resolution 10-72, authorizing a funding appropriation for FY 10-11 to fund certain programs in the Planning and Building Department Mr. McIntyre explained that this was not a budget supplement according to the legal definition but rather a resolution transfer, which the Council could make as long as it was either within the fund or within the appropriation. He noted that within the General Fund, the City appropriated at the department level. He explained that Ms. Frisbee needed to adjust her budget to reflect certain new needs identified by either staff or the Council. He indicated that Ms. Frisbee went through her budget carefully and thoughtfully to identify what she could afford to absorb and sacrifice by making some tradeoffs in order to fund additional Council requests, including the Code audit. He explained that part of this was cleaning up the Code audit funding with a Council appropriation. Ms. Frisbee commented that, based on the Council discussion at the November 16 meeting, staff concluded that it would be better to wait on funding the more ambitious sensitive lands education and outreach program either during the watershed planning discussion scheduled for February or during the budget cycle. Therefore, she pared down the $100,000 request to $20,000 for education and outreach. She mentioned the other two parts of this request: $50,000 for the Code audit and $46,000 for the Boones Ferry contract (pp. 137-138). She indicated that the Planning Department budget had only small placeholder amounts for the first two items. She explained that refining the scope of the Boones Ferry project with the engineers yielded a $146,000 figure, instead of the $100,000 budget amount. Councilor Tierney asked if the changes to the General Fund structure gave the City more latitude to transfer within departments, and if there were funds available in other departments. Mr. McIntyre commented that it was likely that there would be end of the year funds available. Mr. McIntyre explained that he has been trying not to bring forward budget transfers during the year but rather wait until the end of the year and pool the extra money from the various departments to clean up any individual department overages that way. He reminded the Council that if it was asking staff to move forward with these projects, these projects would cost a certain amount of money, which the Council needed to appropriate. He stated that staff would continue to monitor carefully all the funds. He noted that any funds left over went into the General Fund ending fund balance. Councilor Tierney asked what the impact would be if Council chose not to approve these requests at this time. Mr. McIntyre indicated that Ms. Frisbee would overspend her budget in the hope of under spending in another department budget offsetting her costs at the end of the year. He noted that Council could also direct staff not to do the projects. He explained that the approach at the time of a Council commitment to a project, other than resolution transfers, was for staff to City Council Regular Meeting Minutes Page 11 of 21 December 7, 2010 ask for funds at the completion of the project. However, Council could reasonably question staff at that time about doing a project for which staff had had no appropriation. This presented a conflict for staff because the Council had directed staff to move ahead with that project. He indicated that in the future, he hoped that when Council directed implementation of a new service or a new project that was not funded, and yet asked staff to fund it, staff would bring back clean up legislation at the end of the year that allowed staff to close and balance the books. He gave the example of moving $50,000 leftover in the Fire Department to make up $50,000 in Building & Planning. He commented that doing so without incident would be ideal, but he did not necessarily count on that. Ms. Frisbee indicated to Councilor Olson that the sensitive lands education and outreach appropriation did not include any additional FTEs. She said that it included developing materials, the public engagement plan, and product approach. She noted the $5,000 to increase the partnership with the Columbia Land Trust and Friends of Tryon Creek. Councilor Olson commented that she was supportive of the Code audit, noting that she sat on the Code Audit subcommittee. She expressed her disappointment that the City did not go out to bid for the contract, mentioning that she has said the same thing in the past. Ms. Frisbee explained that, having gone through an extensive interview and contracting procedure on the first round of the code audit, and having identified two very good firms, staff thought that it did not make sense to slow the process down and go out to bid again, especially since the contract rules allowed not going out to bid for contracts under $100,000. She mentioned that Clarion performed beyond staff's expectations and brought the advantage of a national perspective to the table. Councilor Olson agreed that Clarion did top notch work, but, given that the two phases were very different, she would like to have seen bids. Mayor Hoffman expressed his hope that the next Council would seriously consider an on staff arborist. He cited his meeting with the neighborhood chairs last Saturday, at which four chairs expressed concern about the tree code, trees, and the lack of an on staff arborist. Councilor Tierney commented that his issue was that these were all lofty goals but the City could not afford to do all of them. Therefore, the Council needed to make choices. He indicated that his preferred choice would have been to instruct staff to find the funding within the existing $60 million City operating budget and to resolve it at the end of the year, rather than taking it out of contingency as provided in the resolution. Councilor Moncrieff moved Resolution 10-72, authorizing a funding appropriation for FY 10/11 to fund programs within the Planning and Building Department. Councilor Jordan seconded the motion. A voice vote was taken, and the motion passed with Mayor Hoffman, Councilors Hennagin, Moncrieff, Jordan, and Vizzini voting `aye.' Councilors Olson and Tierney voted 'no.' [5-2] 5.6 Resolution 10-75, authorizing a funding appropriation for FY 10 -11 to fund park natural area restoration activities Ms. Gilmer directed the Council to her staff report (pp. 141-143) with its four options detailing the commitment that Council would need to make once it started on the path of removing invasive species from park properties She pointed out that a one year effort would not be successful in accomplishing the goal. She reviewed the four options for restoring the City's natural areas in five years: 100% of the properties, 75%, 50%, or targeting high priority sites. She referenced the work staff did with MIG to determine the high priority sites (p.142-143). She noted that they had sufficient staff to manage hiring a contractor for Options 3 and 4, but not for Options 1 and 2. She recommended Option 4, which would address the high priority sites (p.154) within a five-year period. She described it as a more manageable amount of money. City Council Regular Meeting Minutes Page 12 of 21 December 7, 2010 Ms. Gilmer confirmed to Mayor Hoffman that this resolution was her response to the Council's direction to come back with a program that would be part of the Sensitive Lands Resolution 10-51. Councilor Hennagin asked how staff arrived at the cost figures to eradicate invasive species. Ms. Gilmer indicated that staff researched the practices used by different contractors and agencies and picked the middle of the road practice. She described both an aggressive approach with multiple sprayings ($300/acre) and native plantings ($4800/acre) that would eradicate invasive species on a heavily infested site in three years, and a more passive approach with one spraying ($300/acre) and no native plantings. She indicated that staff followed the Metro practice of spraying in the winter, spot spraying in the spring, and restoration native plantings as needed the following year. She mentioned their assumption that it would take four to five years to restore a poor property and progressively less time on better condition properties. She noted another assumption that, after restoring the sites to a healthy condition, the City would need to continue monitoring and remove new infestations every year because the biggest problems of ivy, blackberries, English holly, and clematis were both grown in landscapes or growing wild and spread by birds. She pointed out that the ongoing annual costs dramatically declined after site restoration to an annual cost of $28,000 to $30,000. She mentioned the assumption in that 20 -year estimate of spending $2400 an acre on restoration plantings. She explained that they could not know how many plantings were needed until after spraying. She indicated to Councilor Hennagin that the high priority sites listed in Option 4 were not the most heavily infested sites but rather larger sites with some sort of relationship to the watershed. She reviewed the good, fair, and poor health high priority sites selected (p.154). Ms. Gilmer confirmed to Councilor Jordan that, if the Council did not want to fund this proposal out of contingency, then staff would have to figure out in the next budget cycle what program or service not to provide in lieu of providing this program. She confirmed that committing to only one year of the proposal was a waste of the $70,000. She confirmed to Mayor Hoffman that, under this proposal, the Council committed to $150,000 over four years and to $600,000 over 20 years. She confirmed that her recommendation was that, if the Council could not commit to 20 years of property restoration and invasive species removal, then it should not start the program. Councilor Olson contended that this kind of commitment and work should be part of the City's total Metro Title 3 compliance program. She recalled that she and Councilor Tierney had asked for $250,000 during the last budget cycle for exactly this kind of program but the remainder of the Council had not supported that request. She stated that, even though doing this work has been a pet project of hers, she could not support funding it outside the budget process. She argued that if they funded this proposal, then something else in the current year budget needed to go. She thanked Ms. Gilmer for the excellent report with its detail and formatting. She described it as the best data the Council has received on this topic to date, which would serve as a foundation in making a long-term commitment during the budget process. She mentioned that using chemical spraying to remove invasive species concerned her greatly. She expressed her preference for hand pulling over spot spraying. Ms. Gilmer indicated that, although the consensus of those staff talked to was that all mechanical removal was almost impossible, it did become a possible choice once the general spraying brought the problem under control and they reached the spot spraying stage. She pointed out that the challenge at Lake Oswego was the lack of a volunteer coordinator, which meant that volunteer efforts to do that mechanical removal would be limited. Councilor Olson mentioned her hope that the education and outreach proposed by Ms. Frisbee would build interest in citizens volunteering to help the City maintain the public natural areas. Ms. Gilm r commented that that was a great goal. City Council Regular Meeting Minutes Page 13 of 21 December 7, 2010 Councilor Moncri ff indicated that she shared Councilor Olson's concerns about chemical spraying, particularly in watersheds and high quality natural areas. She said that she would also appreciate staff looking into hand pulling, as the idea of spraying chemicals in the water improving a watershed's ecological health was counterintuitive. Ms. Gilmer indicated to Councilor Moncrieff that staff no longer had funds to continue spraying at Cook's Butte, and ceased that work in its third year. She said that she could provide Council with more information on sprays approved for aquatic use. She mentioned that the sprays used by the Portland BES in riparian corridors met the highest standards for approval by the National Marine Fisheries. Councilor Tierney indicated that this excellent report met his expectations spot on. He contended that the City had a responsibility to maintain the properties it owned. He held that the City should have incorporated maintenance and invasive species removal from the time of purchase, similar to parks maintenance. He argued that maintenance was a fundamental service that the City needed to provide for its parks and open spaces in order to be the example to its citizens that the Sensitive Lands resolution called for. He contended that they had sufficient funds available within the existing budget to fund the $70,000 of Option 4, although he thought they should start with Option 3. He recalled that staff informed the Council that there was a low probability that the City would spend all the Street Fund money. He suggested transferring $70,000 of General Fund money out of the Street Fund to this proposal, and not out of contingency. Mr. McIntyre clarified that staff did move monies from the General Fund contingency into the Street Fund to cover costs from last year in anticipation of closing the books with a deficit. However, staff did not close the books with a deficit, and the Council could move the money back. He indicated that he wanted to talk with the City Attorney about making it clear that it related to General Fund monies, because the Street Maintenance Fee could not fund non -Street Fund activities. He concurred that re -allocating those funds would solve this year's problem, although staff could use the money next year to fund more street projects. Mayor Hoffman observed that the street advocates would want to save the money for next year. Councilor Hennagin commented that he thought this matter was best left to goal setting and the upcoming budget process, as opposed to revising budgets for this fiscal year and starting a 20 - year commitment on a piecemeal basis. He suggested delaying this proposal for six months. Councilor Olson indicated that she did not recall the transaction to which Mr. McIntyre was referring. Ms. Euler commented that she did not recall the specific transaction either, although she did recall having to balance the Street Fund. Mayor Hoffman concurred with Councilor Hennagin that it was difficult to start moving money around on the fly without understanding the consequences and priorities. Mayor Hoffman stated that he was uncomfortable with moving outside the staff recommendation. He suggested either approving the recommended budget request or waiting until next year for more analysis and discussion of the tradeoffs involved. Mr. McIntyre indicated to Councilor Olson that her statement that the City ended the year with a surplus in the Street Fund, which included General Fund money that staff had transferred into the Street Fund, was a fair statement. He confirmed that using the General Fund money now would not take it from the Street Maintenance Fee. Councilor Tierney commented that he saw an inconsistency in the logic that the Council could not take General Fund money from the Street Fund but it could take it from contingency. He pointed out that taking the money from contingency overspent the City revenues received this year. He cited the Council passing the mid -year budget transfer out of contingency for Sensitive Lands and the Code audit, noting that the Sensitive Lands was a multi-year ongoing program. City Council Regular Meeting Minutes Page 14 of 21 D cember 7, 2010 Councilor Jordan concurred with Councilor Tierney that the City (or any entity in the region) did not set aside maintenance funds when purchasing natural open spaces. She commented that that always bothered her because open space and natural areas needed care as much as parks did. She indicated that she would support moving forward in the future with protecting their natural resource areas, but preferably not out of contingency. She asked staff to explore other financing options, such as Councilor Tierney suggested. Mayor Hoffman said that he too would like to see different options. He asked Ms. Frisbee if this proposal needed to be part of the City's compliance report to Metro. Ms. Frisbee indicated that, while staff had not intended originally to include it, it would help the report by showing commitment by the City. Councilor Olson pointed out that postponing this for six months meant that the City missed this winter's spraying window. Ms. Gilmer indicated that she would check to see how effective a fall spraying would be. The Council agreed by a nod of heads to direct staff to bring this back in January. Mayor Hoffman recessed the meeting at 9:13 p.m. for a break. He reconvened the meeting at 9:23 p.m. 6. PUBLIC HEARINGS 6.1 Resolution 10-70, adopting a supplemental budget resolution for the fiscal year commencing July 1, 2010 by adopting a supplemental budget, approving resources/requirements, and making appropriations STAFF REPORT Mr. Cross explained that this budget supplement was to obtain the spending authority for the FEMA grant in order to move forward with the Lake Corporation dam project. He noted that the Council already approved the project in Resolution 10-54. PUBLIC TESTIMONY Mayor Hoffman reviewed the testimony time limits. He opened the hearing to public testimony. Seeing none, he closed the public hearing. COUNCIL DISCUSSION Councilor Tierney moved to adopt Resolution 10-70. Councilor Hennagin seconded the motion. Councilor Tierney indicated that he would support this budget supplement because it was neutral with respect to the City. The City was simply the conduit for the FEMA money going to the dam project. Mr. Powell indicated to Councilor Jordan that she should recuse herself because Advanced American was one of the contractors for the Lake Corporation. A voice vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, and Vizzini voting `aye.' Councilor Jordan recused herself. [6-0] 6.2 Ordinance 2562, an ordinance of the Lake Oswego City Council amending Chapter 50 of the Lake Oswego Community Development Code regarding the definition of "congregate housing" in LOC 50.02.005, clarifying the qualification criteria for occupancy, and adopting findings LU 10-0041-1749 City Council Regular Meeting Minutes Page 15 of 21 December 7, 2010 Mr. Pow II reviewed the standard land use hearing procedures and testimony tim limits. He asked if any Council member had a conflict of interest to declare. There were none. There were no challenges. STAFF REPORT Ms. Andreades recalled that the Council upheld the Development Review Commission's approval of the 2007 Northwest Housing Alternatives application for 45 units of senior congregate care housing, which the Waluga Neighborhood Association had appealed. Of the several issues appealed to LUBA, the only one that LUBA did not uphold in the City's favor was the City's definition of congregate housing. She indicated that LUBA found that the `due to' clause in the definition required a connection between life function disability and age (p.88) She mentioned the Council's direction at its work session that staff work with the Planning Commission to consider an amendment that did not require the connection between life function disability and age (p.89). She directed the Council to her memo to the Planning Commission outlining the other types of housing in City Code besides congregate care housing and the staff conclusion (p.103-105). She reported that the Planning Commission discussed making the definition clearer by separating age and life function disability and by using language on age -restricted housing similar to the Federal Fair Housing Act and to language on disability similar to the American Disabilities Act. She noted the proposed definition on p.91, which staff believed achieved the Council's objective. PUBLIC TESTIMONY Mayor Hoffman opened the hearing to public testimony. Seeing none, he closed the public hearing. COUNCIL DISCUSSION Councilor Vizzini thanked staff for finding a solution to this problem. Councilor Hennagin moved adoption of Ordinance 2562. Councilor Vizzini seconded the motion. A voice vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, Jordan, and Vizzini voting `aye.' [7-0] 6.3 Ordinance 2556 A, an ordinance of the Lake Oswego City Council amending LOC Chapter 50 (Community Development Code), to allow common wall boathouses to be constructed on abutting lots in the Oswego Lake Setback, and adopting findings LU 08-0052A-1751 Mr. Powell noted that the criteria and procedures for this hearing were identical to the previous hearing. He did not re -read them, as there was no request by the public to do so. He asked if any Council member had a conflict of interest to declare. There was none. There were no challenges. STAFF REPORT Ms. Andreades explained that this amendment related to a different Code section than the amendments that Council adopted in August regarding uses allowed in the Oswego Lake Setback. She indicated that the Lake Corporation requested consideration of not allowing side yard setbacks for boathouses, which would produce a common wall boathouse currently prohibited in Section 50.08.050. She emphasized that this amendment applied only to boathouses and not to accessory structures in general. She noted the ordinance on p. 119. City Council Regular Meeting Minutes Page 16 of 21 December 7, 2010 PUBLIC TESTIMONY Mayor Hoffman opened the hearing to public testimony. Seeing none, he closed the public hearing. QUESTIONS OF STAFF Ms. Andreades confirmed to Councilor Olson that the three points under Section 50.08.050 on p.116 referred to accessory structures. She indicated that staff sought to amend the third point only, as it related to boathouses only. Mr. Powell clarified that the ordinance referred only to accessory structures in R-7.5 through R-15 zones, which was the only place in the Code with a restriction on abutting property lines/common wall accessory structures. He indicated that removing it for boathouses in the Oswego Lake setback would affect only that aspect of the standards that the Council adopted for the setback. COUNCIL DISCUSSION Councilor Jordan moved Ordinance 2556-A. Councilor Moncrieff seconded the motion. A voice vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, Jordan, and Vizzini voting 'aye.' [7-0 7. CONSENT AGENDA Mayor Hoffman pulled Item 7.2.1 at the request of Councilors Olson and Hennagin. Councilor Jordan moved the Consent Agenda, pulling Item 7.2.1. Councilor Hennagin seconded the motion. A voice vote was taken, and the motionap ssed with Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, Jordan, and Vizzini voting 'aye.' [7-0 7.1 REPORTS 7.1.1 Multiple Site Landscape Service Contract Action: Award the Multiple Site Landscape Service contract in the amount of $211,500 to TruGreen Landcare LLC to provide landscape maintenance to city -owned properties 7.1.2 Declaration of the Vote Action: Accept Declaration of the Vote 7.2 RESOLUTIONS 7.2.1 Resolution 10-65, supporting statewide plastic bag regulation Action: This item was pulled for further discussion. 7.3 APPROVAL OF MINUTES 7.3.1 July 27, 2010, special meeting 7.3.2 September 14, 2010, special meeting 7.3.3 September 21, 2010, regular meeting 7.3.4 October 5, 2010, regular meeting Action: Approve minutes as written END CONSENT AGENDA 8 ITEMS REMOVED FROM THE CONSENT AGENDA 8.1 R solution 10-65, upporting statewid pla tic bag regulation City Council Regular Meeting Minutes Page 17 of 21 Decemb r 7, 2010 Councilor Moncrieff moved to adopt R solution 10-65. Councilor Jordan second d th motion. Councilor Olson indicated that her initial concern focused on a sentence in the resolution, stating that the City might consider its own regulations if the State did not enact regulations on plastic bags. She pointed out that the intent of the Grocery Association and Senator Atkinson had been to establish a uniform statewide strategy, rather than a piecemeal jurisdiction -by -jurisdiction approach. She cited Ms. Millhauser's letter indicating the preference for a uniform approach to the plastic bag issue, as that provided easier implementation for the retailers across the state. She indicated that, while it was likely that the State would pass the legislation, she still preferred not having that language in the resolution. She mentioned that she would also like to review the information that Mr. Gage provided. Councilor Hennagin mentioned that the information he had had prior to tonight was that the carbon footprint to create plastic bags and paper bags was relatively equal. He commented that he also thought that paper bags manufacturing would be economically beneficial to Oregon with its timber industry and paper mills providing jobs. He wondered, in light of Mr. Gage's information that it saved energy to manufacture plastic bags, whether supporting this resolution and statewide action was promoting sustainability. Councilor Olson concurred. Councilor Moncrieff reported that the Sustainability Advisory Board supported this resolution. She noted that Mr. Gage did indicate that Gage Industries did not make plastic bags. She referenced the presentation by Mr. Howell from Environment Oregon to the Sustainability Advisory Board, in which he stated that plastic bags were made in California while paper bags were made in Oregon. She argued that paper bags were better for the local Oregon economy. She referenced an e-mail received this afternoon from Amanda Dalton, the local advocate for the Northwest Grocery Association, urging Council to support the resolution with its current language. She stated that she would support the resolution. Councilor Tierney commented that, as he had no expertise on plastic versus paper, he would either abstain or vote no. He remarked that, given the many issues raised in association with the resolution, it no longer appeared to be straightforward and simple. He indicated that, if it was no longer straightforward, then he did not think that they should take it into the Council's purview. Councilor Jordan remarked that the availability of free reusable bags showed that there has been a movement statewide in this direction. She indicated that she thought it likely that the State legislature would pass the regulations. She commented that the resolution language did not compel the Council to pass local regulations, but rather it allowed Council to consider doing so. She said that she would support the resolution. Mayor Hoffman concurred with Councilor Moncrieff. He commented that it was not a paper bag versus plastic bag discussion but rather a question of whether one embraced sustainability and brought one's own bag. He said that he would support the resolution. Councilor Hennagin indicated that the information provided from the Sustainability Advisory Board and the Grocery Association recommendation resolved his initial reticence in favor of the resolution. A roll call vote was taken, and the motion passed with Mayor Hoffman, Councilors Hennagin, Moncrieff, Jordan, and Vizzini voting 'aye.' Councilor Olson voted 'no.' Councilor Tierney abstained. [5-1-1] 9. INFORMATION FROM THE COUNCIL 9.1 Councilor Information City Council Regular Meeting Minutes Page 18 of 21 December 7, 2010 9.2 Reports of Council Committees, Organizational Commute s, and Intergov rnm ntal Committ es Councilor Olson mentioned that she would bring forward a budget request from the Water Providers Consortium in January. 10. REPORTS OF OFFICERS 10.1 City Manager 10.1.1 5 -Year Financial Forecast Mr. McIntyre indicated that this was the first of many opportunities to discuss the City's five-year financial forecast. Tonight staff hoped to lay groundwork for the Council. He commented that having a constantly rolling five-year plan was a smart thing to do in figuring out how to sustain the level and quality of services that the City provided with mechanisms in place that avoided anything dramatic. He said that his office and the Finance Department have looked carefully and thoughtfully at this forecast. He spoke of serious financial discipline and painting a picture that showed the City moving forward for the next five years and maintaining its level of services. He confirmed to Mayor Hoffman that staff would schedule a study session in January to walk through the different charts and columns. Ms. Euler indicated that this financial plan attempted to pool the General Fund, as opposed to planning for each individual department's budget, because it was a five-year forecast. She explained that looking at the big picture first helped, after which one could drill down into more detail if so desired. She discussed the revenue and expenditure drivers behind creating the forecast. She indicated that the attachment to the staff report listed the drivers with big impacts (pp. 5-10) and how varying those drivers impacted the bottom line (p.5). She explained that making a distinction between continuing and non -continuing (one-time) revenues and expenditures was staff's attempt to move a small government closer to a more business -like approach. She indicated that businesses did not use a beginning fund balance as part of the resources balancing the requirements in a budget. She pointed out that, through prudent financial management and/or policy decisions, the City could change a one-time revenue or expenditure into a continuing revenue or expenditure. She gave an example of setting aside funds for capital projects and future equipment replacement annually for future large one-time expenditures. She commented that, while Lake Oswego was better off than many other cities, they still needed to prepare for challenges facing the City, such as capital projects and equipment replacement. Mr. McIntyre reviewed the spreadsheet showing five years of history (actuals) and five years of projections (pp.6-10). He pointed out that the concept of looking at projections was the same as looking in the rearview mirror driving forward: one looked at what one did in the past and considered how it affected the future. He noted that staff took a conservative approach to the growth in assessed value in reducing the formerly robust growth rate (the amount beyond the assessor's 3% increase in value) to .25% gradually increasing to .5% over the five years. He commented that there were many assumptions embedded in the spreadsheet cells. He gave an example of the big jump in the current year for intergovernmental costs, which reflected the library district monies. He stated that he endorsed Ms. Euler's very conservative approach as the right way to look at a five-year financial forecast. He concurred that Lake Oswego was healthier than most cities, while noting that the flip side for the City was the expense driver of people and the cost of living adjustments (COLA). He pointed out that, as wages increased, the City's existing revenue stream could not sustain the expense. He raised the question of how to manage wages, which related to working with the City's labor City Council Regular Meeting Minutes Page 19 of 21 December 7, 2010 groups. He reiterated that staff's assumption was that the Council had an interest in maintaining the quality and level of services that the City presently delivered. Ms. Euler discussed the assumptions behind several of the variables. She pointed out that PERS was not a choice as much as it was an obligation. She indicated that staff included a 4% increase in PERS in the benefits line after two years, per the PERS staff information on what was likely to happen. In reference to COLA, she observed that the City's proportion of expenditures in personnel services was large, given its number of employees. Therefore, even small percentages compounded quickly. She commented that health insurance was likely to increase, although staff had little information on that. She noted the double-digit increase in the first year with smaller increases in later years, reflecting a blended rate of City and employee contributions. She mentioned the 2.2% inflation rate in materials and services under other expenditures, which she based on an average Philadelphia Federal Reserve consensus. She indicated that the percentage could go up or down, yet it was not as impactful as COLA and health benefits. • Council Questions Councilor Hennagin referenced the lines at the bottom of the chart. He asked whether the dollar amount from the prior year fund balance was needed in order to achieve the surplus/deficit from continuing operations dollar amount (p.6). He noted the example of $581,000 surplus in 2012 and $1,555,000 deficit in the fund balance. Ms. Euler explained that the surplus/deficit number represented continuing revenues minus continuing expenditures, but did not include one-time revenues or capital spending. She clarified that the fund balance line figure was the dollar amount after spending the planned CIP funds. She explained that the chart followed a linear pattern top to bottom, beginning with continuing revenues, then one-time revenues, followed by continuing expenditures, then one-time expenditures. She indicated that the third line at the bottom gave the constraint requirement of 14% in contingency and 16% in fund balance, which needed to read `yes' across the board. Councilor Hennagin commented that, assuming that staff has predicted the future accurately, there would be a lot of pressure on the Council for either annexation, new development, or other sources of income. Councilor Tierney mentioned another option of reduction of expenditures. Councilor Vizzini applauded staff for the clarity of the layout and the use of color type to indicate the different drivers and scenarios. He suggested coloring the lines for continuing revenues, continuing expenditures, and the balance to make them stand out to the eye. He commented that the only thing missing was the general inflator. He mentioned the concern moving forward that they could see either inflation or deflation as they climbed out of the recession. Therefore, it would be worthwhile to have that information to see the impacts on the overall fund. He concurred with the aggregate level approach as a way of focusing the mind on macro issues, but noted that, ultimately in the budget process, they needed to be able to drill down into the priorities and performance achieved for the investment on a program level. He commented that a combination of this forecast and staff monitoring funds, as discussed during the supplementals item earlier this evening, might allow for mid -year shifts in appropriations. He spoke of putting the savings captured in programs into contingency or the fund balance, which would allow for new realities to surface unexpectedly. He described these tools and the LOpedia as excellent improvements that would help make the Council more literate about the City's finances. M . Euler pointed out a line item that she included for the variable of potential departmental savings. Ms. Eul r indicated to Councilor Tiern y that this report included only one-time capital expenditures. She acknowledged the possibility of other kinds of one-time expenditures. She City Council Regular Meeting Minutes Page 20 of 21 December 7, 2010 clarified that the forecast beyond 2011 took out the one-time expenditure for the Parks & Rec study. She said that they took one-time items out of the budget on both the revenue and expenditure sides for the forecast. Councilor Tierney commented that this was an excellent and important report. He commented that, if he had had this information, there were decisions that he has made in the past that he would not have made. Councilor Jordan also expressed her appreciation for the report. She commented that the difference in the Finance Department in the last 18 months was incredible. She asked staff to provide information on how Lake Oswego's charter requirements of 14% and 16% compared to what other cities did. She suggested continuing to look at how the City could get more control over personnel costs, as those were their greatest expenditure. She argued that the one thing that the City could control was the wages paid to its employees. She pointed out that the costs of health care and pension benefits, which the City could not control, had more impact on the City without being able to manage those costs than paying employees a fair wage for the value of their work. Councilor Olson thanked Mr. McIntyre, Ms. Euler, and her staff for this forecast report. She asked to spend more time on this helpful decision-making tool before going into the next budget cycle. 10.1.2 Review of Council Schedule 10.1.3 Review of Council Digest 10.2 City Attorney 11. ADJOURNMENT Mayor Hoffman adjourned the meeting at 10:16 p.m. Respectfully submitted, I APPROVED BY THE CITY COUNCIL: ON February 15, 2011 7--L k D. Hom , Mayor City Council Regular Meeting Minutes Page 21 of 21 December 7, 2010