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2002-800-Minutes for Meeting April 10,2002 Recorded 4/26/20021130 N.W. Harriman St., Bend, Oregon 97701-1947 (541) 388-6570 • Fax (541) 388-4752 www.deschutes.org MINUTES OF MEETING Toni R. won Dennis R. Luke Mike Daly DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, APRIL 10, 2002 Commissioners' Hearing Room - Administration Building 1130 NW Harriman St., Bend Present were Commissioners Tom De Wolf and Dennis R. Luke; Commissioner Michael M. Daly was contacted by telephone, and was on speakerphone for the entire meeting. Also present were George Read, Kevin Harrison, Damian Syrnyk and Chris Schmoyer of Community Development; Mike Maier, County Administrator; Tom Blust and George Kolb, Road Department; Gary Smith, Mental Health Department; and Jenny Scanlon, Commissioners' Office. In addition, attending were Media Representatives Barney Lerten of bendnet.com; Mike Cronin of the Bulletin; and R. L. Garrigus of KSJJRadio; and approximately twenty other citizens. 1. Before the Board was Citizen Input. No citizen input was offered. Commissioner Dennis Luke indicated he would like to add two items to the end of the agenda. LUKE: I move that we consider legal options regarding the Oregon Youth Authority's notice of cancellation of the Community Youth Investment Program (CYIP). DEWOLF: Second. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 1 of 24 Pages Quality Services Performed with Pride VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. LUKE: I move that we discuss and consider a decision regarding the Duke Energy option agreement for county -owned land. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. ADDITION B. Before the Board was Consideration of Signature of Amendment #1 to Contract #101115 between the State of Oregon and Deschutes County, Reducing State Funding for Intensive Treatment Services and Family Sexual Abuse Treatment Services. Gary Smith indicated this is a reduction in the contract funding. All counties have been affected at about a 2% reduction level, but because of the timing it affects Deschutes County in excess of 2% and over two fiscal years. He said this unfortunately will cause a budget reduction and reduced services to clients. LUKE: Move approval of this amendment. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. 2. Before the Board was Consideration of Signature of Resolution 2002-029, regarding Sponsorship of Electronic Commerce Status for the Redmond Enterprise Zone. Mike Daly indicated he had spoken with Bob Quitmeier of the City of Redmond on this issue, and has had his questions answered. LUKE: Move approval of this resolution. DALY: Second. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 2 of 24 Pages VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes NO. 3. Before the Board was the Reading of a Proclamation Declaring April 21 through 27 Crime Victims' Rights Week in Deschutes County. Chair DeWolf read the Proclamation to the audience. Commissioner Luke observed that there are some very good people who volunteer in this type of work in Deschutes County. LUKE: Move approval of this proclamation. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. 4. Before the Board was Consideration of Signature of Resolution No. 2002- 022, Accepting a Petition to Vacate a Frontage Utility Easement near Mt. Washington Drive/Westridge Drive; and Consideration of Signature of Order No. 2002-055, Vacating Said Easement. George Kolb indicated the vacation is contingent upon review and approval of the documents by the City of Bend and utility companies, and that the Resolution should be accepted at this time, but not the Order. He will advise when the proper review and approval of the other parties have been completed. LUKE: Move approval of Resolution No. 2002-022. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. 5. Before the Board was Consideration of Approval of a Byrne Grant Application for Funding to Support a Coordinated System Response to Juvenile Domestic Violence Issues. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 3 of 24 Pages Kelley Jacobs said that Legal Counsel is reviewing the documents, and the final documents should be ready for the Board to consider at the April 22 Board meeting. 6. Before the Board was a Discussion of a Decision on the Adoption of Amendments to Title 18 to Address House Bill 3326 (Regarding Certain Land Divisions in the Exclusive Farm Use Zone). KEVIN HARRISON: This hearing was continued from April 8. The purpose of the meeting today is to give staff direction on how to proceed with the amendments to the EFU zone and agricultural section of the comprehensive plan to address House Bill 3326. To recap, there are four basic questions before the Board. 1) The number of new non-farm parcels that could be created off of irrigated land. The Planning Commission's recommendation was one on the small farm parcels, and two on the large farm parcels. Eighty acres is the break point. 2) Five -acre minimum lot size for land division on dry land between forty and eighty acres in size. 3) The inclusion of the emergency clause on the adopting ordinance. 4) The consideration of the appropriate date for the prohibition of series partitions; 1992 as is currently contained in the ordinance, or 2001 as contained in the House Bill. LUKE: I move that the emergency clause be a part of the adoption of the ordinance. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. LUKE: I move that the series partition date be changed to July 1, 2001 in order to conform to State statute. DEWOLF: Second. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 4 of 24 Pages VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. DALY: I believe that the minimum lot size should not be restricted to five acres. We should allow whatever State law allows. A dry five -acre parcel is actually too large to adequately care for it, and most would grow up in weeds. I feel in this case the smaller the parcel, the better. DEWOLF: The other issue is irrigated and non -irrigated, and how many parcels would be allowed. The Planning Commission recommended one on irrigated parcels under eighty acres, and two on irrigated parcels over eighty acres. HARRISION: State law would allow up to two for any parcel that is larger than the County's minimum lot size. DALY: I'm in favor of going with whatever State law allows. LUKE: I have one other thing. There was a discussion about a parcel having to be dry forever in order to be considered dry now. I suggested that perhaps the parcel should have to be dry for ten years. I'm going to propose for discussion that a parcel would have to be dry for five years, and the water rights have to be gone for at least five years. Then there is a definition in place. DALY: I'm in favor of that. I don't know why we'd have to wait five years; if the water rights were transferred off, it would be more or less dry. LUKE: Not necessarily; you could transfer them back. If you transferred them off for five years, I think you're probably going to leave them off. DALY: It might be hard to transfer them back. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 5 of 24 Pages LUKE: You could do so if you had moved them to another piece of your property. DALY: That's true. HARRISON: We provided a memo on this earlier. In terms of administration, this is really not a problem for us. However, in that memo I put forth a position that this notion that properties could remove their irrigation water rights and qualify for a land division under the non -irrigated division section, has been challenged by both DLCD and 1,000 Friends of Oregon. DLCD faxed me a memo that they do not read the Administrative Rule in the same way. They think that once irrigated, always irrigated. We have a fax today from Kate Kimball of 1,000 Friends of Oregon who gave essentially the same position. There is dispute about the definition of irrigated in the Administrative Rule. I don't know that this has any bearing. DEWOLF: Are we going to go back to Genesis when the whole world was covered with water? LUKE: To me, this takes this away from an interpretation by the Hearings Officer or someone else. If LCDC doesn't like the five years, they can challenge it. And if 1,000 Friends doesn't like it, they can challenge it. So you're not here picking on an application; instead you're fighting a County rule. One of the reasons I'd like to see that in there is so we have a point, and there isn't a lot of leeway on it. It's either dry land for five years or it's not. DEWOLF: After all, this is all arbitrary. If you say, "once irrigated, always irrigated", how far back are we going to go? We haven't even been a county for 100 years, and we've had irrigation districts for longer than that. LAURIE CRAGHEAD: The arguments by DLCD and 1,000 Friends are that the OAR says "established water rights". If they can prove an established water right, that's what you have, even if it has been sold off. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 6 of 24 Pages That's their argument, but it hasn't gone to court or addressed by the legislature. That is an opinion of a state agency that is non -elected and has no authority, and sits in on the Administrative Rule process. They can be overruled by both the courts and the legislature. CRAGHEAD: It could, because this is a new bill. DEWOLF: It sounds like we just simply disagree with them. LUKE: I would move that a piece of ground be considered dry if it has been without irrigation water rights for five years. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. DEWOLF: I tend to want to go along with the Planning Commission, with the five -acre minimum and with the one lot on less than eighty acres on irrigated land. I don't necessarily disagree with you, Mike; my feeling is that the Planning Commission has been through a lot of hearings, as have we, and this was a compromise position that they came up with, and it is a more conservative approach. If this ends up a year from now that we need to revisit it and modify it, I'm happy to reconsider it. But it's hard to allow everything and pull back from that at a later date. It's a lot easier to add to it. My vote today will be to go along with the Planning Commission's recommendation on both of these items. LUKE: There's one thing that I've looked at, Mike and Tom, is the non -irrigated. The minimum lot size under eighty acres will be five acres, and that is not consistent with the greater than eighty acres. They have no minimum lot size on greater than eighty acres, which makes no sense. Both of these parcels are still out there. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 7 of 24 Pages LUKE: My argument is that if you are going to leave the five -acre minimum on the less than forty -acre parcel that is broken off, then you should be consistent; the other one should be five acres, too. Otherwise you could have a two -acre piece here directly across the street from one with a minimum of five acres, and that makes no sense to me. DALY: Our local representatives have spent many years trying to get some kind of a bill through the legislature that would give us some options on this side of the mountains. We finally got one through, and I think we ought to approve whatever state law allows. At least it gives us the flexibility to do what we can. DEWOLF: I would suggest that we take these as separate items. I&IJ114 With all land use laws, the problem is that they apply to every county in the state. That's what local counties are supposed to do, try to adapt those rules to their own circumstances. I will go with the irrigated. LUKE: I move that we accept the Planning Commission's recommendation on irrigated land. This is that on pieces less than eighty acres there will be a minimum lot size plus one other parcel; and on pieces greater than eighty acres, you will have a minimum lot size for the remainder piece and two parcels. DEWOLF: Are you defining the minimum lot size? LUKE: No. On irrigated, the piece that is left has to meet the minimum lot size. DEWOLF: I second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 8 of 24 Pages LUKE: The minimum lot size on non -irrigated land, greater than forty acres and less than eighty acres, is five acres as recommended by the Planning Commission. For consistency, I would move that the minimum lot size of the new pieces that are created on those parcels greater than eighty acres would also be five acres. That's my motion. DEWOLF: Would you like to comment on that, Kevin? HARRISON: Certainly we can administer that. It's an idea that has come late to the discussion. It was not discussed before the Planning Commission. LUKE: Let me ask you this. In this county, you could have a forty -acre piece of dry land, and if they want to break it up, you're requiring those new lots be a minimum of five acres. Then you could jump across the street where there might be a ninety -acre piece of dry land with no minimum lot size. So the people across the street would have different requirements on them. To me that makes no sense. HARRISON: Certainly that could happen. You could have a different kind of land use pattern on each side of the street based on the size of the parcels, if both are dry. DEWOLF: I'll second that motion. DALY: It's better than what we had, so I'll agree with it. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. LUKE: I move that we accept the Planning Commission's recommendation regarding non -irrigated land as amended with a minimum lot size for the created piece. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 9 of 24 Pages HARRISON: I want to be clear on what you want. I've got the inclusion of the emergency clause, and the use of the July 2001 cut-off date for series partitions. Also, non- irrigated means that there have been no water rights on the property for the previous five years. We have a five -acre minimum lot size for all newly created pieces, non -irrigated and irrigated. LUKE: No, just non -irrigated. HARRISON: If the parent parcel is totally dry, then you've got a five -acre minimum lot size between forty and eighty acres; over eighty we've got an eighty and fives. LUKE: The motion was that we would be consistent on non -irrigated land. That between forty and eighty acres, we accept the Planning Commission's recommendation of five acres. On greater than eighty non -irrigated, we've made them five -acre minimums. HARRISON: You have to have a remainder of eighty acres. And anything beyond that which is broken off has to be five acres. DEWOLF: So if you have eighty-four, you can't divide, depending upon the zoning. HARRISON: Now, on the irrigated land, the parent piece that you leave behind has to have the irrigated minimum lot size, and any piece that you break off has to be five acres. LUKE: No. There's no minimum lot size on those, at your recommendation and that of the Planning Commission. There will be people who say that we are opening up all of Deschutes County for building. There are a lot of restrictions in place, even with these changes; they still have to meet all the other criteria for siting a house. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 10 of 24 Pages 7. Before the Board was Discussion of a Decision on CDD File Nos. PA-99-5/ZC- 99-3 (Sisters School District) and PA-99-4/ZC-99-1 (Barclay Meadows Business Park) as Remanded by LUBA regarding Specific Transportation Issues. Chris Schmoyer gave a brief overview of the issue. Chair DeWolf stated that he had received a letter from the applicant requesting a decision at this time; and that he assumes this means the record is closed. Laurie Craghead indicated that this was all right since it is the applicant's option to waive their rebuttal time if they wish. Chair DeWolf closed the hearing at this time. LUKE: I have a statement to read. (A copy is attached as Exhibit A) LUKE: Move approval. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. Laurie Craghead added that this could still be appealed to LUBA, and the opponents have 21 days to do so. 8. Before the Board was Consideration of a Continuance of an Appeal on Appeal No. A-01-18/File No. LR -99-49, an Appeal of the Hearings Officer's Decision on a Lot of Record Verification (Rastovich Property). Commissioner DeWolf indicated this would be continued to May 22, 2002, at the request of the applicant. 9. Before the Board was a Public Hearing on the Vance Annexation into Howell's Hilltop Acres Special Road District; and Consideration of Signature of Order No. 2002-049. Laurie Craghead explained this involves one owner's request for annexation. She said she didn't include a memo from Paul Blikstad of Community Development that confirms the applicant has complied with the appropriate ORS and land use regulations; and a certificate from the Clerk that verifies the signature. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 11 of 24 Pages Chair De Wolf then opened the public hearing. WESLEY VANCE: I'm the owner of the property, and I approve of the annexation. TOM PILLING: I'm the president of the District, and I'm happy to see this taking place. The process has been congenial and orderly. Being no further testimony offered, Chair De Wolf then closed the hearing. LUKE: I move approval of Order No. 2002-049. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. 10. Before the Board was a Decision on an Appeal of the Hearings Officer's Decision on File No. CU-01-83/SP-01-52, Denying a Conditional Use Permit and Site Plan for a Commercial Activity in Conjunction with a Farm Use in a MUA-10 Zone (Applicant. Brian) Kevin Harrison indicated this is a continuation of the March 18 hearing. The record has been closed, and the Board can render its oral decision at this time regarding this appeal. At this time, Kevin Harrison Read written the written testimony of Commissioner Daly. (A copy is attached as Exhibit B.) Laurie Craghead confirmed with Commissioner Daly via the speakerphone that this was indeed his testimony. She further stated that his site plan review document was not filed on a timely basis, and cannot be included in the record. However, she did say that everything in his written testimony was already in the record and there is no violation in that regard. At this time, Commissioner Luke read a statement regarding this decision. (A copy is attached as Exhibit C.) There was a brief discussion about the different elements of the decision; Ms. Craghead said these could be detailed in the findings. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 12 of 24 Pages LUKE: I move that we reject the appeal. DEWOLF: I second. I agree with what Commissioner Luke read. VOTE: LUKE: Yes. DALY: NO. DEWOLF: Chair votes yes. Before the Board was Consideration of Approval of the Consent Agenda. LUKE: Move approval of the Consent Agenda. DEWOLF: Second. VOTE: LUKE: DALY: DEWOLF CONSENT AGENDA Yes. Yes. Chair votes yes. 11. Signature of Order No. 2002-059, Authorizing the Sale of Unbuildable Excess County Land (located in Deschutes River Woods) to Private Parties 12. Signature of Order No. 2002-058, Prohibiting Motor Vehicle Parking on Certain County -owned Property 13. Signature of Order No. 2002-051, Transferring Cash among Various Funds as Budgeted in the Deschutes County Fiscal Year 2001-2002 Budget, and Directing Entries 14. Signature of Order No. 2002-028, Appropriating New Grant Funds from the State of Oregon for Mental Health Services (for Fiscal Year 2001-2002) CONVENED AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 15. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District in the Amount of $1,482.76. LUKE: Move approval, subject to review. DEWOLF: Second. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 13 of 24 Pages VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. CONVENED AS THE GOVERNING BODY OF THE EXTENSION/4-11 COUNTY SERVICE DISTRICT 16. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District in the Amounts of $434.06 and $13,137.33 (Construction Fund). LUKE: Move approval, subject to review. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. RECONVENED AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 17. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for Deschutes County in the Amount of $351,123.20. LUKE: Move approval, subject to review. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. 18. ADDITIONS TO THE AGENDA A. Before the Board was Consideration of Signature of Letters Appointing Individuals to the Commission on Children & Families as Follows: ShanRae Hawkins and Tammy Baney (effective immediately); and Amy Trenz and Jacque Cramer (effective January 1, 2003). Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 14 of 24 Pages Commissioner Luke stated that he took part in the interview process, and that these are very fine candidates, as were the ones who were not selected. He said he wishes there were more positions available. LUKE: Move approval. DEWOLF: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. C. Before the Board was Consideration of Signature of a Memorandum of Understanding between the Central Oregon Community Action Agency Network and Deschutes County (in Reference to the State Department of Environmental Quality SWPRG Agreement No. 095-02), Regarding the "Feed the Need Program". DEWOLF: Move approval. LUKE: Second. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. D. Before the Board was Consideration of Legal Options Regarding the Cancellation of the Contract on CYIP. DEWOLF: As a bit of background, Rick Isham and I went to Salem to meet with Karen Olsen, Assistant Director of Business Services of the Oregon Youth Authority, and Linda Gilbert, Budget Analyst for the Department of Administrative Services. We had a fairly cordial and frank conversation about our position and their positions. We then met yesterday in executive session to discuss options. No decisions were made; today we will speak publicly about where we're going from here. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 15 of 24 Pages RICK ISHAM: On April 1 we received a notice from OYA which gave 90 days' notice of cancellation of Deschutes County's Community Youth Investment Program and the Juvenile Center. The program had been developed pursuant to special legislation, and it is in its third biennium. The effect of the letter was to terminate the funding under an existing contract for the second year of the current biennium, which would be July 1, 2002 through June 30, 2003. This is a period of time that is under contract between the Oregon Youth Authority and Deschutes County. In other words, they are terminating an existing contract. As Tom indicated, we did meet with representatives of the Oregon Youth Authority and the Department of Administrative Services to discuss the receipt of the letter, which we received on Monday. We met with them on Thursday. We had several questions for them, and felt a face-to-face meeting would be appropriate. One of those questions was why OYA did not choose to handle the cut in the allotment as approved by the Governor in a different way. Their position was that because of the selective reduction of the funding for this program, they had no option but to give the notice. DEWOLF: Their position is that the Governor targeted this specific program with the exact amount of dollars that have been allocated for this program. I sympathize with their position; we've got legislation and a contract that directs them to do this, and a Governor directing them not to do this. ISHAM: The representative from the Department of Administrative Services, Linda Gilbert, is actually the budget analyst who works on the Oregon Youth Authority's budget. It raises two separate issues. The first issue is the Administrative Rule, which was adopted as an emergency rule, so it constitutes a temporary rule, and is valid for a period not to exceed 180 days. Without further action, the Rule would be extinguished by the passage of time. We are now listed on the service list of affected parties, so if there are further actions on that Administrative Rule we would receive notice. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 16 of 24 Pages DEWOLF: At the end of those 180 days, if this emergency Rule goes away, then does the contract again become valid? ISHAM: No. OYA notice is independent of the Administrative Rule, although that is the basis for them giving notice. There will be additional proceedings that at some point, if necessary, will be instituted. At this time, I believe nothing is happening. This may have to wait until after special sessions are completed. These are what they call targeted reductions. Up to1982, targeted reductions in the allotments to state agencies was not allowed. In 1982, Attorney General Frohnmeyer's changed the interpretation of the 1951 law regarding reductions in allotments, allowing targeted reductions. It is pretty clear that this is the authority that was used by the Governor and the Department of Administrative Services to make the targeted reductions. DEWOLF: If this is allowed to stand, what's the point of having a legislature, if the Governor can undo what they put into place? ISHAM: The Attorney General's opinion refers to two situations that exist in Deschutes County's situation. One is that selective reductions would not be allowed for existing contracts. The opinion made reference to another law in Chapter 291 ORS, which says that allotments for existing contracts shall not be reduced. This was not referenced in the Administrative Rule that made the targeted reduction. Whether that was considered, we don't know. We can only read what was in the Administrative Rule. It is not referenced whether DAS and the Governor's Office was aware that there is an existing contract. Certainly OYA was aware of that, because the notice that they gave was specific to the intergovernmental agreement that provides the funding for the CYIP program. DEWOLF: They all are certainly aware now. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 17 of 24 Pages ISHAM: The other exception under the Frohnmeyer opinion is that the Executive Department may not make a targeted reduction for a program that is mandated by the legislature. The law under which Deschutes County entered into the intergovernmental agreement for the CYIP program did mandate that the state agencies shall cooperate with the County and negotiate with them in good faith to transfer the services from the State to the County. Those are very strong words of mandate from the legislature. It did not appear, at least from what we could determine, that the issue of the mandated program was addressed in the OAR that made the targeted reductions. LUKE: By terminating the program, is the Oregon Youth Authority in effect taking it back to the State agency? ISHAM: Correct. The way the legislation is written is that it is truly a transfer of services from a state agency to Deschutes County. So Deschutes County in essence is providing those services that but for the legislation and the contract would have been provided by the State of Oregon. When a program is moved from one entity to another, the employees of the program are required to be transferred, correct? ISHAM: Yes. The law on the transfer of governmental functions is very clear. Mike Maier negotiated with the State last year for the transfer of support enforcement employees under a transfer of services action. MIKE MAIER: This has been done a number of times. ISHAM: It's the same as the library service district transfers. The law requires the transfers pursuant to a written agreement. We raised this with the OYA, and it was clear they would not discuss this. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 18 of 24 Pages ISF AM: I told them we would make a proposal regarding a transfer. We have twelve employees funded in part or in whole by funds under the contract with OYA. It's unlikely that all of those would be transfer employees, but there could be six or seven employees who are eligible for transfer. The OYA said they had not considered this; and the DAS said it was discussed. The two agencies are not both aware of this at the same level. The OYA spent some time explaining their problems; at a minimum, targeted reductions reduces sixteen discretionary beds in the system, and an additional sixteen for a total of thirty-two. Regarding the pending appeal, I have been in touch with John DeLorenzo, who is lead counsel for the challenge. I explained the situation to him, and with the Board's approval will provide him with information relating to our contract. He is going to evaluate these materials in light of the existing litigation. I am also getting copies of the existing litigation. There are several reasons for litigation; one is that the deficit is not $80 million, it is $10 million, and part of that is based on the fact that $70 million that is being called a deficit is actually money that was set aside for future uses. So this is a creation of a deficit by taking cash that would otherwise be available and making it not available. The other issue goes directly to the heart of this, which is whether you can make targeted reductions. The targeted reduction in the OYA budget is this contract. The alternative is that if they are across the board cuts, it is something less than one percent of an agency's budget. That would have a different effect on different agencies depending upon how much general fund money is in their budget. DEWOLF: That is one of things brought up by OYA, that under present circumstances there budget is being reduced by $835,000 or close to that. If it was an across the board cut, they would lose more like $3 million from their whole budget. This specific target actually harms them less than what an across the board cut would. ISHAM: One of the things that we discussed with Mr. DeLorenzo was that the current appeal does not deal with the issue of a contracted program. They are looking at it more of a general sense in terms of the manner in which the targeted cuts were proposed. The evaluation of the difference between Deschutes County's issues and the issues that are pending is really yet to come. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 19 of 24 Pages ISHAM: At this point, I think what we would like to do, with the Board's approval, is to go ahead and submit our materials to Mr. DeLorenzo. We would also like to evaluate independently the case that is on file; and come back to the Board to make a decision whether to attempt to join that suit or file a brief with our issues. Possibly a third option would be to look at independently challenging the Administrative Rule, because of the nature of the mandated legislation and the contract. Subsequently we would evaluate whether it would be appropriate to have that independent case joined with the pending case. My sense would be that our issues are significantly different than those that are pending. To join the existing case, which may go directly to the Supreme Court for a decision, with the issue of the contract and the mandated legislation not being a part of it, would be a concern to some of those parties. I think the State of Oregon would not want to deal with those in present litigation. DEWOLF: Timing -wise, it sounds like we could work diligently on this and make a decision how to proceed within a week or so. ISHAM: I agree. Mike Reynolds, the Solicitor General for the State, and John DeLorenzo will likely discuss this. It has been suggested that because of the pending evaluations of the CYIP program, we could await those evaluation returns and then have OYA evaluate whether there is just cause to give us notice. This would be much more acceptable to Deschutes County, because then it would be ninety days' notice after July 1. DEWOLF: Our contention is that what they are using as just cause is a self-created crisis on their part, specifically targeting this program, and taking its funding away, and OYA cancels the program because they have no funding. That is an artificially created crisis on their part. In fact, if we get the evaluations in June and they say the program doesn't work, that could be considered just cause. But if in fact the evaluations say this program is working, and is working better than alternatives that are out there, then we as a state ought to be looking at this program and ways to replicate it elsewhere. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 20 of 24 Pages DEWOLF: Cutting right to the chase, my goal is - and I believe I'm speaking for us as a County - is to get OYA to honor its contract, and to get the Governor's Office to acknowledge the need to honor this contract, and to do it quickly. We've got employees at risk, so hopefully we can get some resolution to this before the end of April. It is certainly my hope that we can have the communication between the various parties and not have to wait for court proceedings to take place. LUKE: Anytime you consider suing the State of Oregon, it's a serious issue. If we were just a line item, that's the chance you take. But we have a contract in place. We have made significant investments and commitments based upon that contract and its funding. LUKE: I move that Legal Counsel be authorized to meet with Mr. DeLorenzo and others as necessary to explore the different options and to discuss the eventual resolution of this matter. DEWOLF: Second. DEWOLF: We are walking a fine line here. We don't want to create enemies at the State level; but by the same token, we need to protect the interests of Deschutes County, and do what we believe to be the legal and the right thing. LUKE: Any decision we make will of course be made in a public forum. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. E. Before the Board was a Decision regarding the Option Agreement from Duke Energy regarding County -owned Property. DALY: I am not in favor of this proposal as written; it was kind of a work in progress, and was not signed. Since I have been ill, I have had no time to do an investigation. The biggest concern I have is that Duke Energy hasn't come back to us with information in response to the questions that Tom had. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 21 of 24 Pages DALY: If they ever expect to put a plant in this area, they need to educate the public about who they are and what they do. Obviously the public and none of us have any idea of what these plants consist of, whether they are environmentally friendly, how big they are, what kind of pollution they might generate, and so on. LUKE: My comments are going to be on the proposal that is before us, because that's all we have. This is not a reflection on them or their plant, since I don't know much about them. It should not be a reflection on the type of power plant they want to put here, because I don't know kind of power plant they want to put here. These are my concerns. 1) We are being asked to sell a piece of property that may not close escrow for five years, and it would be sold at today's appraisal. Anyone who owns property or who has tried to buy property in this County knows that those land values and prices may rise in five years, and in five years could rise substantially. I don't think that's a good business deal. 2) During those five years, Duke Energy could assign their option to anyone they want. That means that we would not have an option to look at that buyer and whether that buyer may or may not be someone who would be friendly to Deschutes County. 3) We have been asked to provide all necessary easements that they or their assignees might need at no additional cost to them. 4) We would have to provide at no additional cost to them all services to the property. 5) We would be required at no additional cost to them an enterprise zone tax exemption at the maximum terms permitted by law; and we aren't the ones who even do that. That comes from the City of Redmond. 6) As requested by Duke or their assignee, we would have to help them with all kinds of special treatments, from taxes to permits, at no additional cost to them and no additional revenue or reimbursement to the County. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 22 of 24 Pages 7) Finally, I have a problem with the fact that whether the sale would go through or not would depend upon action by the Commissioners, approving them or testifying on their behalf, and I feel that is a conflict of interest. It's not a personal conflict of interest, but a conflict of interest as a County Commissioner. For these reasons, I'm going to vote not to accept the proposal from Duke Energy on this piece of property. DEWOLF: I approached this from a little different perspective. (At this time, Chair DeWolf read his prepared statement, a copy of which is attached as Exhibit D) Chair DeWolf explained that some citizens were worried that perhaps the Commissioners did not know public sentiment about this proposal. He then a displayed a stack of letters and e-mails received from the public, showing the Commissioners had received lots ofpublic input. LUKE: I received a lot of e-mails and letters that pointed out the power would go to California. Power goes both ways, depending on the needs of the area at a given time. Tourists won't come here if you don't have adequate power. Even a gas furnace in a house requires power. We're lucky there is enough water behind our dams - but there is a power shortage. Conservation is great for saving electricity, but it doesn't produce electricity. Growth demands new power. The State and its citizens can't stick your head in the ground on this issue. DEWOLF: I did a lot of research, and learned some fascinating things about the nine -state power grid. Oregon doesn't provide enough energy the needs of its citizens. One third of our needs are provided by coal-fired plants, which means that people in Wyoming or Montana or some other place are paying for the costs of our energy usage. The reality is, all people need to be aware of energy usage. My decision is not a reflection on Duke Energy or the technology they use, as it is much more economical and cleaner than coal -burning plants. LUKE: I move to decline the offer from Duke Energy. DEWOLF: Second. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 23 of 24 Pages VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. DEWOLF: I move that we remove this property from the County's for sale inventory at this time, and propose we have a summit with the cities within Deschutes County to come to some conclusion on how we, as a county, wish to develop industrial land. LUKE: I believe we need to have these discussions, and second the motion. VOTE: LUKE: Yes. DALY: Yes. DEWOLF: Chair votes yes. Being no further items brought before the Board, Chair De Wolf adjourned the meeting at 11:30 a.m. DATED this 10th Day of April 2002 for the Deschutes County Board of Commissioners. ATTEST: tEa- U -u Recording Secretary is ael M. Daly, Co missioner Exhibits: A - Commissioner Luke's statement regarding Barclay Meadows/Sisters School District decision. B - Commissioner Daly's statement regarding an Appeal of the Hearings Officer's decision (Brian). C - Commissioner Luke's statement regarding an Appeal of the Hearings Officer's decision (Brian). D - Commissioner DeWolfs statement on a decision regarding the option proposal received from Duke Energy Company. Minutes of Board of Commissioners' Meeting Wednesday, April 10, 2002 Page 24 of 24 Pages Barclay Meadows Findings Drafted for Commissioner Luke 1. The applicants have met their burden of proof regarding compliance with OAR 660-012-0060 (2)(c). 2. The applicants' oral and written responses to the issued raised by Howard Paine, representing ARLUDeCO are persuasive. 3. The Board decision prior to the appeal to LUBA found that these applications were consistent with the performance standards applicable. Those determinations were not overturned by LUBA, and, therefore, remain as findings of the Board. 4. The draft decisions submitted by the applicants on Monday, April 8, sufficiently address the issues that were of concern to LUBA in the remand order and, therefore, should be adopted as this Board's findings. Decision of Deschutes County Commissioner Mike Daly Applicant /Property Owner: Gary Brian PO Box 9068 Bend, OR 97701 Request: Applicant is requesting conditional use and site plan approval to establish a commercial activity in conjunction with a farm use on a parcel in the MUA — 10 zone. Decision Date: April 10, 2002 The hearings officer's decision based on the hearing held November 6, 2001 found that the applicant did not meet his burden of proving his current activity on the subject property constituted a farm use. She felt that the patch of bearded iris looked like a large flower bed or vegetable garden found on similar residences in the area. She found that since the applicant did not sell these irises currently, it did not constitute a current farming activity. I do not agree. The additional evidence received into the record on this iris crop since this hearing clearly shows that this is a very valuable cash crop, one that is started on a small scale and doubles or quadruples as the years go by. The mere fact he does not sell these iris at the present time in no way diminishes the potential value of this crop in the future. The hearings officer lists four components of a paragraph taken from DCC 18.128, which must be present in order to qualify as a commercial activity in conjunction with a farm use: 1. There must be a farm use occurring on the subject property. I find there is a farm use occurring on the property as listed in the above paragraphs. 2. The proposed commercial activity must be associated with that farm use. A landscaping business is clearly associated with a farm that grows products mostly used as landscaping in the community. Iris plants, and proposed trees and shrubs certainly fall into that category. Harvesting these plants and shrubs from this property and sold into the community through a landscaping business would certainly qualify. 3. The proposed commercial activity must consist of one or more of the following: using, processing, storing or marketing farm products. And 4. The farm products must be produced in Deschutes County or an adjoining county. I don't think there is any question that at some point in time or the near future, the applicant will be marketing his iris crop or portions of it as the market dictates. The mere fact that none have been marketed so far does not take away from the fact the crop is in the ground and has value now and in the future as a farm product. 3 Page -2- The same applies for the north portion of the property, which is planted in grass and is irrigated. This grass has value each year whether it is cut for hay, pastured with cattle or simply cut and let lay to add organic matter to the soil for his future tree and shrub beds the applicant is contemplating. COMPOSTING ON SITE: There has been considerable testimony from the neighbors about the large compost pile on the property. Apparently this is the biggest complaint the neighbors have about the applicant and I feel with out this issue, we would not be here today. Clearly the applicant in the past has not been a very good neighbor and should have paid more attention to their concerns about the dust and other problems associated with this pile. A decision on whether composting on this scale with materials being brought in from off of the site is one that needs further discussion at another time. I do feel that composting materials originating from on site would be an allowed use in this zone provided the DEQ rules and regulations are followed. FINDINGS: I find the hearings officer erred in that she found the applicants current activity does not constitute a farm use. The iris plants on the property are being cultivated and cared for in a reasonable manner for future sales. The fact that none have been sold so far is not enough to disqualify the farm use. The next issue is whether or not the applied for conditional use fits the requirement "THE COMMERCIAL ACTIVITY SHALL BE ASSOCIATED WITH A FARM USE OCCURRING ON THE PARCEL WHERE THE COMMERCIAL USE IS PROPOSED." The applicant's proposed use would not normally fit in with most usual farming operations. If the applicant was raising hay for animal feed or pasturing animals on irrigated pasture and this type of farming operation was the only thing he was doing on the parcel, then the conditional use applied for would not fit at all. However, in this case, the farm products the applicant is raising, the iris plants, and the proposed other uses in his plan, trees and shrubs on the northern part of the property is definitely a farm product that is associated with the landscape business. If the applicant proceeds with his long-term plan and utilizes the farm property to grow these types of products then the prime way to market these products would be through a landscape business. I also find that these types of crops are much more likely to make a profit than the standard pasture and hay uses which are more the norm in Deschutes County. Very few small acreage parcels in Deschutes County can generate enough profit to even make a house payment. Most of not all are subsidized by other income. In the applicants case I would encourage his proposed use of the land. Page -3- I will vote to allow the applicants conditional use and site plan approval to establish a commercial activity in conjunction with farm use on a parcel in the MUA —10 zone subject to the following conditions of approval. COMPOSTING: The existing raw compost pile be ground up and moved to an area as far away from the neighbors on site as possible. That the grinding operation be conducted with the current supervision of applicable DEQ Rules and regulations and this operation to be completed within 60 days of this approval. No additional off site material to be brought on site for composting without an additional land use approval. Composting of materials originating on site would be allowed with the required DEQ permits. 2. EQUIPMENT: It is clear that the same type of equipment that the applicant is using in his landscape business will be needed in his farming operation. The applicant proposes to build two 24' X 60' barns on the property to house some of this equipment to shield it from view of the neighboring properties. The applicant needs to get these barns built before the end of the year to comply with this requirement and meet the 30' height limit in the MUA-10 zone. 3. Applicant to comply with Hearings Officers conditions of approval on pages 10 and 11, Sections B, C, D, E, F, G, H, I, & J. I make this decision based on the fact that this is a unique situation. The applicant's plan proposes to grow crops used in the landscape industry, and then market these products using his existing landscape business. I feel that the types of crops he is proposing have the best chance of making a profit on a small acreage farming operation. The time has long since past where Deschutes County small farm parcels can make a profit on the grass hay and pasture uses that are typical for this area. Most of not all of these uses are supplemented by other income sources. The applicant's proposed plan has the best chance of producing the income needed to make a profit and to discourage this opportunity by not allowing the conditional use would be counter productive and maybe discourage other persons interested in doing something similar on similar pieces of property. I think we need to encourage this type of thinking rather than discourage it. Michael M. Daly Deschutes County Commissioner FLI Site Visit: Gary Brian Property 21170 Young Ave. Bend, Oregon Deschutes County Commissioner Mike Daly Date 3-25-02, 3:25 PM On the above listed date, I drove out to the property listed above and observed the following. The property seems to be well maintained. The house located on the south boundary of the property next to Young Ave. is surrounded by lawn and is well maintained In front of the house and on both sides of the driveway was the bearded iris patch, also well maintained. It was obvious to me that this iris patch was much more than a flower garden. Near the center of the property was a barn or outbuilding with a Case 580C tractor, loader with some type of cultivating equipment on the back. There was a 1 -ton truck with sideboards parked near the barn. There was very little if any other equipment parked on the site other than a few trailers parked near the barn. Also toward the center of the property was a very large pile of material to be processed into mulch. Along side of the large pile was a much smaller pile of material apparently already ground up. The north part of the property appeared to be permanent pasture that was probably irrigated at one time of the other. There were other piles of miscellaneous irrigation pipe, some wheelbarrows and other miscellaneous hand tools and equipment. I did not enter the property as both gates were closed and no one was there. The entire property gave the appearance of being well cared for and neat. BRIAN FINDINGS DRAFTED FOR COMMISSIONER LUKE 1. I disagree with the Hearings Officer's findings that the applicant's planting and growing of irises is not a farm use. Therefore, the Board should find that the applicant's iris growing activity fits the definition of a Farm Use in DCC 18.04.410 because it is the current employment of the land for the primary purpose of obtaining a profit in money by a horticultural use. 2. The Board should, however, uphold the Hearings Officer's denial of the application because I find that the landscaping business is not a commercial activity in conjunction with an agricultural use. The agricultural use on the land is only incidental to the commercial use which is the landscaping business and not visa versa as required by the law. Commercial activities not in conjunction with a farm use are not uses allowed in the MUA-10 zone. The landscaping business does not enhance the farming enterprises of the local agricultural community surrounding the subject property and is only tangentially related to the farm use. 3. This case is different than the Schilling (CU -96-42) case cited by the applicant. That case involved a wholesale nursery that grew most of its products grown on site. That is very different from a commercial landscaping business where the work is almost exclusively off-site. 4. My findings regarding this issue are supported by my observation of the subject property on which I counted approximately 30 vehicles. I do not believe that the majority of those vehicles are personal or used for the on-site farm use. I believe most of those are used off-site for the commercial use and any use for on-site farming activities is incidental. 5. As for the compost piles, after having viewed the piles, I find it difficult to believe the accuracy of the applicant's numbers regarding the percentage of materials produced on-site for the compost and amount of compost to be used on-site. Thus, I believe the compost is largely used for the unpermitted commercial use rather than as a farm use or commercial activity in conjunction with an agricultural use. As with the landscape business, any agricultural use of the compost is incidental as opposed to the composting being incidental to or primarily used an agricultural use. 6. In her April 1 submittal, the applicant's attorney asks the Board if any component of the applicant's operation can be made suitable for the site and compatible with the area through the imposition of conditions of approval. To answer that question, the use must first be found to be consistent with the County's land use regulations. Since I find that both the landscaping business and the composting activity are unpermitted commercial activities, the Board does not need to make any further findings on this question. 7. Regarding possible commercial activities on other properties in the vicinity and whether or not this proposal is compatible with those uses, those properties are not before us. Additionally, no evidence was presented regarding the legal status of those other alleged activities. 8. As for the other questions asked by the applicant in the Notice of Appeal and the April 1 submittal, I believe the applicant is asking for a declaratory ruling for which the applicant has not applied and that the Board should refrain from making any further findings in the current case regarding those questions. /a r Statement Regarding Duke Energy Option Agreement Proposal Deschutes County Commissioner Tom DeWolf April 10, 2002 The decision about whether to grant an Option to purchase county -owned land to Duke Energy rests with the Board of County Commissioners' conclusion about what is in the public's best interest. Over the past month, I have consulted with David Stewart -Smith, Director of the Energy Facilities Siting Council in Oregon, and with Dennis Dougherty, Umatilla County Commissioner where both gas-fired and coal-fired power generation facilities are located. I met with Greg Cook, General Manager of the Hermiston Generating Plant who gave me a tour of the PG&E facility there. I consulted with Deschutes County Assessor Scot Langton. I've also received a great deal of input from the public. My decision is based on what I believe is our collective long-range vision for Deschutes County in the future. The U.S. Forest Service and the Bureau of Land Management own 75% of Deschutes County's land. Visitors come here to hike, fish, golf, ski, raft, swim, ride horses, climb Smith Rock and a host of other outdoor activities. The key attractions that define Deschutes County are our natural beauty, clean air, clean water, recreational opportunities, our vast forest, high desert open spaces and our scenic views. I believe additional heavy industrial businesses are incompatible with what Deschutes County has become. Duke Energy's proposal does not offer the best use for this, or other industrial property in Deschutes County. I compared long-term employment opportunities at a gas- fired power plant with other potential uses on 125 acres. This is premium property. On the same acreage, businesses can locate that could employ many more people. For economic development reasons, there are better options for this property. If I were a Commissioner in Umatilla or Jefferson County, I may have come to a different conclusion regarding this proposal. But I am a Commissioner in Deschutes County. We have different needs, different priorities, and a different future. This decision is critical to the future direction of Deschutes County. Our natural beauty, recreational opportunities and the types of businesses that operate here define us. I will not support attracting heavy industrial businesses to Deschutes County. I oppose granting the Option Agreement to Duke Energy. I call upon the City Councils of Bend, Redmond and Sisters to join the Board of County Commissioners in a summit to discuss the future of additional heavy industrial businesses in Deschutes County. It is my hope that we can arrive at a common vision that will be supported by the majority of our citizens and elected officials alike I also support the temporary cancellation of efforts to sell this 125 -acre parcel of land until such a summit takes place. I have placed a complete explanation of my position in this matter on my website at www.tomdewolf.M. &�1 L) fog -7 I ,r 4 An Explanation of My Position Regarding the Duke Energy Option Agreement By Deschutes County Commissioner Tom DeWolf April 10, 2002 Oregon does not produce enough energy to supply its own needs. Oregon has been a significant importer of energy since the Trojan nuclear plant shut down. We are part of the interconnected western grid. A portion of Oregon's power has been generated in Wyoming from coal-fired power plants, fueled by strip mines, since 1955. One could claim that Oregon is foisting coal burners and strip mines on Wyoming to avoid having power plants here. Over the past decade, Deschutes County is among the top 2%2 % fastest-growing counties in America. America's population will double every 35-40 years. Our consumption of energy has dramatically increased in the recent past. I am reminded of the comic strip character Pogo, who said, "I have seen the enemy and he is us." Introduction On March 11, 2002, Deschutes County's Board of County Commissioners (BOCC) was presented with a proposed Option Agreement from Duke Energy North America, LLC to purchase 125 acres of land owned by Deschutes County. Since that date, I have studied Duke Energy's proposal as well as the co -generation of electricity and the long-term impacts such a facility would have in Deschutes County. The decision about whether to grant an Option to purchase county -owned land to Duke Energy rests with the BOCC's conclusion about what is in the public's best interest. If the BOCC were to grant the Option, Duke Energy would have the choice whether the local jurisdiction (Redmond and/or Deschutes County) or Oregon's Energy Facilities Siting Council (EFSC) would handle the land use decisions. I have consulted with David Stewart -Smith, Director of the EFSC in Oregon, and with Dennis Dougherty, Umatilla County Commissioner where both gas-fired and coal- fired power generation facilities are located. I met with Greg Cook, General Manager of the Hermiston Generating Plant and was given a tour of the PG&E facility there. I consulted with Deschutes County Assessor Scot Langton and also spoke with other knowledgeable people who asked that their names not be used. I will respect their request. I gathered additional information via the Internet and I have been provided a wide variety of information from local citizens in Deschutes County. Background Oregon's energy comes from a variety of sources. 50% is hydroelectric power from the Bonneville Dam and the dams of PP&L and PG&E. 33% of Oregon's energy comes from coal-fired plants (nationally, 50% of the energy in the U.S. is derived from coal-fired power plants), including the Boardman plant and the PG&E share of coal in Montana, and the PP&L share of coal in Washington, Utah and Wyoming. 8% comes from natural gas-fired power plants. The remaining power comes from a smattering of wind, and other co -generation plants and so forth. Oregon is part of the western electrical grid that also includes the states of Washington, California, Montana, Idaho, Wyoming, Utah, Colorado and Nevada. be. b zQ -� Today, new plants are built for the competitive marketplace. Electric companies don't build them for their own customers anymore. This is new within the last 15 years. Power generation companies sell electricity to the highest bidder. Power for California One charge that has been claimed repeatedly by opponents is that Duke Energy would be creating power solely for California. This is inaccurate. Some power in Oregon goes to California. Some power in California comes to Oregon. This is a major benefit to Oregon and California and the other states of the western grid. Peak usage in the Northwest is during the winter, when we need energy for warmth. The southern states in the grid have their peak during the summer, when they need energy for air conditioning. This arrangement keeps both regions from having to build even more plants. Umatilla County Site Visit In Umatilla County, I visited two natural gas facilities in Hermiston. One has been operating for over five years. One is under construction. I saw another gas-fired plant near Hermiston and a coal-fired plant in Boardman. Umatilla County has used enterprise zones, offering five years of relief from property taxes as an incentive for energy companies to locate there. Companies proposing new plants in Umatilla County must now voluntarily agree to financial commitments of approximately 25% of their tax savings to be contributed to the local community. Environmental, social and economic impacts are the key issues. Umatilla County has four plants within a 35 -mile radius. One 500 megawatt plant results in significant water consumption, the construction of towers for transmission lines, air shed impacts, smoke stacks, lights, steam plumes, fog on the roads in winter that freezes and creates hazardous driving conditions and other impacts. During construction, there are lots of good paying jobs. In the long run, these plants create limited, but well -paying jobs. The Hermiston Generating Plant employs 24 people with an annual payroll of $1.5 million. But it is the increase in the property tax -base that is the key benefit in Umatilla County. A 550 -megawatt plant enters the tax roles at approximately $220 million in value. This is about 2/3 of actual value, which is how the State of Oregon assesses these plants. Wind and gas power are both assessed this way. A costibenefit analysis is important to determine the balance between positive and negative impacts. For example, if the power generation plant uses water that would otherwise go to farmers, you're losing farming jobs as well as the jobs for people who have jobs because of the farmers' products. Hermiston Generating Plant Greg Cook, General Manager of the Hermiston Generating Plant has worked in the Power Generation Industry for twenty years. He has worked in both coal-fired and gas-fired plants. Mr. Cook explained how the Hermiston plant works and how power generation works in general. On the day of my visit, the plant was running at "full output" capacity. On an annual basis, this plant runs at an average of 92% of "full output" capacity. This PG&E plant is a 475 -megawatt cogeneration facility. One megawatt of energy provides electricity for an average of 1,000 residential, four -person households. Over the past 5-10 years, the vast majority of new plants constructed have been gas-fired due to their efficiency, space requirements and environmental concerns. The Hermiston plant I toured is sited on approximately two acres of land. An average coal- fired plant takes upwards of ninety acres of land and produces half the power. An air- cooled plant requires substantially more land and expense than a water-cooled plant. Water is piped from the Columbia River at the rate of approximately 2400 gallons per minute, or approximately 3,000,000 gallons per day. The water is used for cooling. Approximately 90% of the water evaporates into steam. Steam is used by the Lamb - Weston food processing plant nearby, or is discharged into the air. Natural gas is piped approximately five miles from the pipeline to the plant. The exhaust stacks are 220' in height, emitting exhaust that is 300 degrees in temperature. The products of combustion that are emitted include nitrogen oxides and other particulate matter. All emissions are well below state and federal guidelines and far below the emission levels of older fossil -fuel plants. According to Deschutes County Assessor Scot Langton, if a new plant were to enter the tax roles with an assessed valuation of $220 million, assuming no local tax breaks, it would bring in approximately $4 million in new property taxes for all affected taxing districts in Deschutes County. Our current total is approximately $120 million in taxes collected, so this would be an increase of approximately 3.3% to the total tax base in Deschutes County. For comparison, Umatilla County's total taxes for 2001-02 are under $49 million. Jefferson County's total taxes for the current year are under $16 million dollars. In Umatilla County, 24% of the total assessed value is in utilities. In Deschutes County, 3% of the total assessed value is in utilities. Duke Energy Some opponents of the Duke Energy proposal have grossly exaggerated the potential negative impacts of a gas-fired power plant in the Redmond area. These types of facilities have no different impact than many other heavy industrial uses, assuming they meet air quality standards and water mitigation requirements. Credible people have told me that Duke Energy is one of the top-notch energy companies in the country and that they are one of the major "blue chip" companies that many communities are looking for to bolster economic development. I've also been told the opposite, with credible people seriously questioning Duke's reputation and business practices. Ultimately, Duke Energy's reputation and business practices were not a factor in my decision. The Option Agreement This decision regarding the Option Agreement is the strongest opportunity Deschutes County has to impact the siting of a power plant and to make clear our position as other companies look at Deschutes County for future potential power plants or other heavy industrial uses. If Deschutes County grants an Option to Duke Energy, the EFSC will most likely handle land use decisions and most decision-making will be made at the state and federal levels. This Option Agreement proposal is the only completely local decision that I anticipate the BOCC making. In my years on the Bend City Council and the Deschutes County Commission, I have consistently opposed offering tax incentives to bring companies into Central Oregon. Duke Energy has requested Deschutes County's cooperation "in obtaining an Enterprise Zone exception with respect to the Property for the maximum term permitted by applicable law." Duke Energy also requests that Deschutes County "agree to not assess or levy any type of utility tax, assessment or similar charge..." and that we assist them with "tax abatements" and "business incentives." I do not support these requests. I am also opposed to locking in a purchase price at today's value and freezing it through a purchase option for five years. These issues could be negotiated, but ultimately did not play a significant role in my decision. I site them here to indicate the position I will take with any similar future proposals related to heavy industry. First Conclusion My decision is based on what I believe is our collective long-range vision for Deschutes County in the future. The U.S. Forest Service and the Bureau of Land Management own 75% of Deschutes County's land. Visitors come here to hike, fish, golf, ski, raft, swim, ride horses, climb Smith Rock and a host of other outdoor activities. The key attractions that define Deschutes County are our natural beauty, clean air, clean water, recreational opportunities, our vast forest, high desert open spaces and our scenic views. According to the C. O. Visitors Association, it is the people who first visited here on vacation who own most businesses that relocate here. If we shift our emphasis toward attracting additional heavy industry, I believe we will ultimately compromise the very reason people love Deschutes County so much. I believe additional heavy industrial businesses are incompatible with what Deschutes County has become. I want to be clear that I will also oppose wind -generated power facilities if they would compromise our scenic views. Depending on their location, a multitude of 275' windmills would be far more devastating to our views than two 220' exhaust stacks at a gas-fired plant or the golf nets at the north end of Bend. Deschutes County has worked long and hard to create and enforce height restrictions on structures and cell towers for this very reason. We continue to seek appropriate ways to site cell towers and other tall structures so they blend in with our landscape and don't compromise our natural beauty. Though many tout the benefits of Oregon's hydroelectric power generation, I am also thankful that Deschutes County is not the home to the many hydroelectric dams that were proposed in the 1980's on the Deschutes River. I am pleased for the same reasons I now oppose the Duke Energy proposal. Deschutes County's economy is defined and driven by tourism, recreation and destination resorts. These have a persistent impact on Deschutes County's ability to provide services, but they are the backbone upon which our economy has thrived as we have experienced the gradual disappearance of the logging industry over the past twenty years. Through them, we have attracted light industry, manufacturing, computer technology, communications and a wide variety of other industries. We must be diligent in protecting and enhancing those things that define Deschutes County and contribute to the economic diversity we now benefit from. I am also concerned about the potential impact on our water supply. I understand that proposed new uses for significant amounts of water are required to be mitigated by putting an equal amount of water back into the system. An unknown factor is the amount of sewage effluent Redmond or Bend may provide to such a plant to reduce the need for water from the aquifer. This alone could reduce or eliminate water concerns. But without P - _b S-6�-7 having a detailed proposal to react to, there is nothing to add beyond noting my serious concerns. Second Conclusion Duke Energy's proposal does not offer the best use for this, or other industrial property in Deschutes County. I compared long-term employment opportunities at a gas- fired power plant with other potential uses on 125 acres. This is premium property. On the same acreage, businesses can locate that could employ many more people. For economic development reasons, there are better options for this property. Deschutes County is quite different from Umatilla and Jefferson counties. A new power plant may potentially impact Deschutes County's taxes by 3° o or so. The same plant would represent an almost 10% increase in Umatilla County and over 25% increase in Jefferson County. Umatilla County doesn't have nearly the opportunities that Deschutes County has to grow their tax base. These are complex issues. Different counties have far different needs. A new energy facility may add approximately $220 million in new assessed value to a county's tax base. To offer some perspective, Deschutes County added $550 million in new construction to the tax base in 2001. Deschutes County already grows our tax base at more than double what a new energy facility would do. This is far different than in Umatilla or Jefferson counties. I believe that as Oregon continues to grow and consume energy, we will need to identify the most cost-effective and environmentally friendly ways to provide that energy. We must find ways to conserve energy and reduce our reliance on generated power. Finally... I encourage the opponents who have communicated with me to tour a gas-fired energy plant. These plants are a vast improvement over the technology of thirty years ago. Based on my admittedly limited knowledge and research, I much prefer gas-fired technology to coal or nuclear technologies. I support the research that will find even safer and cleaner alternatives to provide energy in the future. If I were a Commissioner in Umatilla or Jefferson County, I may have come to a different conclusion regarding this proposal. But I am a Commissioner in Deschutes County. We have different needs, different priorities, and a different future. Some may charge that my position is hypocritical, in that I recognize the need for creating and importing energy and don't believe the negative impacts of a gas-fired generating plant are as significant as opponents claim, yet I don't approve of siting such a plant in Deschutes County. Some may charge that this is a classic case of "NIMBY" (Not In My Back Yard). I reject the argument. Different places are appropriate for different types of businesses. Deschutes County must confront the very real impacts that 13,000 tourists per day, 365 days per year, have on our roads, emergency services, air quality and so on. Other counties face other challenges. This decision is critical to the future direction of Deschutes County. Our natural beauty, recreational opportunities and the types of businesses that operate here define us. I will not support attracting heavy industrial businesses to Deschutes County. I oppose granting the Option Agreement to Duke Energy. C �(_ b & 6 -F I call upon the City Councils of Bend, Redmond and Sisters to join the Board of County Commissioners in a summit to discuss the future of additional heavy industrial businesses in Deschutes County. It is my hope that we can arrive at a common vision that will be supported by our citizens and elected officials. I support the temporary cancellation of the efforts to sell this 125 -acre parcel of land until such a summit takes place. The complete text is available online at www.tomdewolf.or