2003-1346-Ordinance No. 2003-033 Recorded 10/24/2003REVIEWED
LEGAL COUNSEL
REVIEWED
Dlael�
CODE REVIEW COMMITTEE
DESCHUTES COUNTY OFFICIAL RECORDS
U X003-l3�E
NANCY BLANKENSHIP, COUNTY CLERK
COMMISSIONERS' JOURNAL
10/24/2043 03:02:27 PM
IIIIIIIII IIIIIIIIIIIII
IIIIIIIII
2003-1348
Recording Stamp Only
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
An Ordinance Amending Title 11, the Deschutes
County Owned Land and Property Ordinance, of
the Deschutes County Code, and Declaring an
Emergency
* ORDINANCE NO. 2003-033
*
WHEREAS, the Transferable Development Review Committee has convened five times during 2003 to
review the provisions of DCC 11.12 and the implementation of the Transferable Development Credit Program;
and
WHEREAS, the Transferable Development Credit Review Committee has determined that DCC 11.12
should be amended to simplify the procedures for requesting eligibility verification, selling development rights
and administering the program; and
WHEREAS, the Transferable Development Credit Review Committee recommends that DCC 11.12 be
amended to allow a property owner to make a request for a determination of eligibility to participate without a
written request, and to allow the County to directly purchase TDCs without entering an option to purchase
agreement; and
WHEREAS, County Counsel has advised the Board of County Commissioners that the provisions of
DCC 11.12.044, establishing a Board -appointed Transferable Development Review Committee, could cause a
potential conflict of interest for committee members under ORS 244.020, and a code amendment to make the
Transferable Development Review Committee an advisory committee to staff would eliminate the potential
conflict of interest; and
WHEREAS, the Transferable Development Review Committee has submitted a report, dated October 8,
2003, to the Board of County Commissioners as required under DCC 11.12.040(B), and attached as Exhibit `B",
and recommends that the Board of County Commissioners adopt the changes contained in Exhibit "A" to
Ordinance 2003-033; and
WHEREAS, the Board has considered the recommendations of County Counsel and the Transferable
Development Review Committee, now, therefore,
THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, ORDAINS
as follows:
Section 1. AMENDMENT. DCC 11.12. is amended to read as described in Exhibit "A," attached
hereto and by this reference incorporated herein, with new language underlined and language to be deleted in
st•rilfethfough.
PAGE 1 OF 2 - ORDINANCE NO. 2003-033 (10/22/2003)
Section 2. FINDNGS. The Board of Commissioners adopts as its findings in support of this
amendment the Transferable Development Review Committee Report dated October 8, 2003, attached hereto
and incorporated by reference herein as Exhibit "B."
Section 3. EMERGENCY. This Ordinance being necessary for the immediate preservation of the
public peace, health and safety, an emergency is declared to exist, and this Ordinance takes effect on its passage.
r -d �''l �"��
DATED this day of C./ � WA-, 52003.
BOARD OF COUNTY COMMISSIONERS
OF DESC ES COUNTY, OREGON
DENNIS R. LUKE, hair
I
TOM DEWOLF, Commissioner
VA
d
Date of l" Reading: c9P qday of eh 2003.
Date of 2°d Reading day ofl;K'it _ , 2003.
Record of Adoption Vote
Commissioner Yes No Abstained Excused
Dennis R. Luke 1/
Tom DeWolf t/
Michael M. Daly
Effective date: qday of V2003.
ATTEST:
Recording Secretary
PAGE 2 OF 2 - ORDINANCE NO. 2003-033 (10/22/2003)
0:4:il:
Chapter 11.12. TRANSFERABLE DEVELOPMENT CREDIT PROGRAM
11.12.010. Definitions.
11.12.020. TDC transactions.
11.12.030. TDC sending area eligibility criteria.
11.12.040. TDC review eommitteeTDC Advisory Committee
11.12.010. Definitions.
As used in DCC 11. 12, the following words and phrases shall mean as set forth in DCC 11.12.010.
"Bargain and Sale Deed" means the legal instrument that conveys transferable development credits
from a lot or parcel of land in a sending area to a tract of land in a receiving area.
"Restrictive Covenant" means a legal instrument which places restrictions on future development
on a lot or parcel of land in a sending area.
"Development Interest" means the right to construct a dwelling and an on-site sewage disposal
system on a lot or parcel.
"High Priority Deer Migration Corridor Area" means the area mapped in 2000 by the Oregon
Department of Fish and Wildlife which shows the area of priority protection for migrating mule
deer within a larger migration corridor acknowledged under statewide planning Goal 5. A copy of
this map is on file with the Community Development Department.
"Net developable acre" means the acreage in a tract of land in a receiving area calculated by
subtracting t he a creage r eserved f or c ollector r oad r ight-of-way a nd c ommunity p arks a nd o pen
space from the gross acreage of a subject tract.
"Option Agreement" means the legal contract allowing the County to buy TDCs from a willing
seller at a given price until the contract expires.
"P=vli ainai=y-Title Company Report" means a report showing the condition of title before a TDC
transaction is completed, verifying title to and encumbrances on the property
"Receiving area" means the area designated by the County where transferable development credits
are required in order to purchase and develop a tract of land.
Credits"
means the
applieation feEluesting the County to vefif�, the numbef of TDCs feeegnized for- a send'
"Sales Agreement" means the legal contract acknowledging the sale of TDCs from a willing seller
to a willing buyer with specified provisions to complete the transaction.
"Sending Area" means the area designated by the County in which transferable development credits
may be sold in exchange for a permanent restrictive covenant eenseF alien e .v,o„*
"Transferable Development Credit" (TDC) means the credit given for a severable development
interest in specified real property.
(Ord. 2002-010 § 1, 2002)
PAGE 1 of 5 — EXHIBIT "A" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "A"
11.12.020. TDC transactions.
A. TDCs may be conveyed to any person or legal entity.
B. Sale of TDCs from the Sending Area. The following procedures shall be followed when a
property owner desires to sell TDCs from an eligible lot or parcel in the Sending Area to
Deschutes County:
1. A property owner (Seller) shall request that the County verify whether the subject
property is eligible for a TDC and if eligible, the number of TDCs for which the
property is eligible. submit to the Community Development DepaFtment a eepy of th-e
real pr-epeFty deed that eenveyed the pr-epeFty to the Seller a*d a re"est, on a 93FM
pfepafed by the County, for- ver-ifieation of the number- of T-DC=s for- whieh the subjee
pr-epefty is eligible
2. The County shall send written verification to the Seller of the number of TDCs for
which the subject property is eligible based on the criteria in DCC 11.12.030.
Verification of TDC eligibility may be in the form of a letter, an Option Agreement, or
a Bargain and Sale Deed. If verification is by letter, the Seller can request verbally or
in writing, that the County initiate either an Option Agreement or Bargain and Sale
Deed upon mutual agreement of the County and Seller.
3. If the County and Seller agree to an Option Agreement, the County shall prepare the
Option Agreement to be signed by the Seller(s). The County shall record the Option
Agreement and transfer funds to the Seller.After- fter- eipt of the Tetter of V 'fi, '�
theSellef is eligible for- at least one T--DE-and desifes-teinitiate TDC smote th
sale.Geunt�,, the Seller- shall send a writ4en request to the County to initiate the
4. If the County decides to exercise an option or complete the direct purchase of a TDC,
the County shall order a report from a title company verifying title to and
encumbrances on the property. In order to be deemed satisfactory, the title company
report must show:
4-a. That the subject property is free of restrictions or encumbrances which would
prevent the severance of a development interest; or
2b. If such a restriction or encumbrance exists, the beneficiary or holder of the
restriction or encumbrances consents to the severance.Aftef feeeipt ffom the Sellef
of to initiate a said ofT-Ws if te County gooses to initiate the sale,the
County.
n'c3
County shall or -def a Wehminafy Title Repeft.
5.6. When the pry—title company report is deemed satisfactory by the County
pursuant to DCC 11.12.020(E), the County shall prepare a Bargain and Sale Deed and
a Restrictive Covenant, both of which shall be signed by the Seller(s) and the County.
The County shall record the documents; and, at the time of recording, shall initiate the
transfer of funds to the seller.a nd Sel'.ef skull entef inte a Sales ^ gfoo ent
prepared by the County indieating the final tfansaefi
7. The Geunty shall prepare a Bar -gain and Sale Deed and a Restfietive Covenant whie
the Seller must sir prierte-any tFans=er ends. Beth ci�vorcryb deems + " d a
m�-�rnrll n-ou
by the County after- the transfef of fundrs-.
C. The following procedures shall be followed if a property owner desires to sell TDCs from an
eligible lot or parcel in the Sending Area to an individual or entity ("Buyer") other than
Deschutes County:
PAGE 2 of 5 — EXHIBIT "A" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "A"
1. A property owner (Seller) shall request that the County verify the eligibility of the
subject property as well as the number of TDCs for which such property may be
eligible.A Seller- shall felley�, t#epreeedufes in D.G11. 12.020(B)(1) and (2
2. The County shall send written verification to the Seller of the number of TDCs for
which the subject property is eligible based on the criteria in DCC 11.12.030. The
Seller and Buyer- shall enter- inte a written sales tFmsaetien on a feFm prepared by th
County and submit the eempleted fef:m to the Ceufft�-
3.— Upon receipt of the verification of eligibility, and in order to initiate the sale of a TDC,
the Seller and Buyer shall sign a Sales Agreement and submit the completed agreement
to the County.
4. The Seller shall submit a current TDC Prep""•*~" Title title company report to the
County. The title company report shall be in a form satisfactory to the County.
5. The Seller shall resolve any issues with title to the satisfaction of the County pursuant
to DCC 11. 12.020 (B) (4) (F+prior to proceeding with the TDC sale.
6. When the title is deemed satisfactory by the County:
a. The Seller and er• shall sign and record a Bargain and Sale Deed prepared by
the County; and
b. The Seller and the County shall sign and record a Restrictive Covenant prepared by
the County. The Seller shall record the signed Restrictive Covenant and Bargain
and Sale Deed.
c. Payment from the Buyer to the Seller shall occur at the time of Recording of the
Bargain and Sale Deed and the Restrictive Covenant.
d. Failure to record a Restrictive Covenant and Bargain and Sale deed in a form
approved by the County shall result in the ineligibility of the TDC for transfer to
the Receiving Area.
D. Transfer of TDCs to the Receiving Area. Prior to the development of any lot in the Receiving
Area, TDCs shall be transferred by a Sales Agreement and a Bargain and Sale deed, prepared
by the County, to a tract or lot meeting the following criteria within the receiving area:
1. The tract or lot shall be located within the La Pine Neighborhood Planning Area in the
La Pine Urban Unincorporated Community and be zoned Residential General or
Residential Center. The TDC receiving area is identified on a map prepared and
maintained by the Community Development Department.
2. TDCs shall be transferred to a lot or tract based on the net developable acres at a rate
approved by Board of County Commissioner Resolution. by the County at the fate of
5.5 T-DGs per- net developable affe te ", tr-a� of land sold in th -,a whieh
is zoned Residential G i or -•a lC +
3. The Board may by Resolution adjust the number of TDCs required per acre or alter the
factors for which TDCs are required in the receiving area.
E. Pfelifnifiai=y Title RepeFt. To be deemed satisfaetei-y a pfeliminai=), title fepfft IMUSt show:
or enetimbfmees eensents to the
EF. TDC Transaction Records. The Community Development Department shall maintain a record
when TDCs are:
1. Verified on eligible lots;
2. Sold from eligible lots; and
3. Transferred to the sending area.
PAGE 3 of 5 — EXHIBIT "A" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "A"
FES. Non -Residential Uses. Where permitted under DCC 18.61.050, non-residential uses in the
receiving area do not require TDCs.
GH. Right to Develop. If an owner of a lot or parcel of land eligible for a TDC chooses not to
participate in the TDC program, the owner shall not be restricted from developing said lot or
parcel in accordance with the applicable zoning standards in DCC Title 18, and any other
applicable regulations, rules or standards.
(Ord. 2002-010 § 1, 2002)
11.12.030. TDC sending area eligibility criteria.
A. A lot or parcel that meets the following criteria is eligible to receive a Transferable
Development Credit. The lot or parcel shall:
1. Be located within the TDC "sending area" identified on a map prepared and maintained
by the Community Development Department;
2. Be no greater than two acres in area;
3. Has received prior approval for a site evaluation or an installed septic system that has
expired or is no longer valid; or
4. Be capable of being served by an on-site sewage disposal system that meets current
Oregon Department of Environmental Quality standards, as demonstrated by a
satisfactory feasibility evaluation for an on-site sewage disposal system or when the lot
or parcel is shown as being eligible for such system on the TDC sending area map; and
54. Not be developed with an existing dwelling ef afl existing sewage disposal system, or if
developed with an existing sewage disposal system, the landowner shall disable said
system.
B. TDCs shall be assigned to an eligible lot or parcel that meets the criteria in DCC 11.12.010(A),
as follows:
1. An eligible lot or parcel shall receive one TDC.
2. An e ligible lot o r p arcel 1 ocated in the H igh P riority Deer M igration C orridor A rea
shall receive an additional one-half TDC.
3. The Board of County Commissioners may by Resolution revise the number of TDCs
assigned or the factors for which TDCs are assigned to eligible lots or parcels in the
sending area.
(Ord. 2002-010 § 1, 2002)
11.12.040. TDC Advisory review Ceommittee.
A. Purpose. The TDC #lieu= Advisory Committee is an advisory committee whose purpose is to
assist staff in implementing the TDC program and to recommend to staff and the Bea f e f
r,...„ty r,..v.wA-as� the means to accomplish the goals of Regional Problem Solving insofar
as the transfer of development credits from the sending area to the receiving area are concerned.
B. Duties.
to -the -Beard. In ,.,..,doeting its feviewThe committee will advise staff shed in evaluateing
the TDC program for record keeping accuracy, determine if program goals are being met,
consider whether any changes to the TDC allocation criteria in the sending area or TDC
requirements in the receiving area are advisable, or if any other revisions to the program are
warranted. The committee may assist the County in determining which TDC options to
exercise.
C. Committee member terms. Committee members shall will be selected by staff be appointees
the Beafd. based on the knowledge and expertise that each member may contribute to the
development of the TDC Program. One-half the initial members shall beappointedserve for
PAGE 4 of 5 — EXHIBIT "A" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "A"
one year and one-half shall serve be-appeinted for two years. Thereafter, members shall serve
two-year terms. Members may be requested to serve additional
terms. Staff shall report the membership of the TDC Advisory C ommittee to the Board of
County Commissioners on an annual basis.
D. Committee members. The TDC Advisory Review Committee may shall include a
representative from each of the following organizations, agencies or professions:
1. The International Society of Appraisers or an Oregon State Certified Appraiser;
2. A firm established for the purpose of real estate development or the representation of
development interests;
3. An individual with recognized expertise in hydrology or ground water;
4. An individual with recognized expertise in big game wildlife management;
5. The Community Solutions Team for Central Oregon;
6. An individual who resides in the designated sending area;
7. A member of the La Pine Community Action Team;
8. The Deschutes County Community Development Department Director or designee as
an ex officio member.
9. Staff The Board may aftpein select additional members as it deems appropriate.
10. The Deschutes County Community Development Department Director or designee as
an ex officio member.
(Ord. 2003-033 § 1, 2003; Ord. 2002-010 § 1, 2002)
PAGE 5 of 5 — EXHIBIT "A" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "B"
Transferable Development Credit Review Committee
October 8, 2003 Report to the
Deschutes County Board of County Commissioners
The Transferable Development Credit Review Committee has convened five times
(February, March, May, June and September) during 2003. The purpose of the
Committee is to assist staff in implementing the Transferable Development Credit (TDC)
Program and recommend to staff and the Board of County Commissioners the means to
accomplish the goals of Regional Problem Solving insofar as the transfer of
development credits from the "sending" area to the La Pine Neighborhood Planning
("receiving") Area.
Over the course of the past seven months, the Committee has considered the need for
changes to the Transferable Development Credit (TDC) Program and has the following
recommendations:
Committee Recommendations for Board Action:
1. Amend the TDC code as proposed in Exhibit A.
2. Adopt a resolution (Exhibit B) to change the number of TDCs required in the
receiving area from 5.5 to 4.6 per net developable acre.
Below is a summary of the reasons for each of these recommendations as well as a
discussion of other program issues that have been considered by the Committee.
1. Operational Criteria — As the TDC program has evolved, staff and the Committee
have become aware that the program could be operated more efficiently by allowing
a less formal process than what is called for in the TDC code. For example, the
code requires a property owner to "submit a written request (on a form prepared by
the County) for verification of the number of TDCs for which the subject property is
eligible, along with a copy of the real property deed that conveyed the property to the
property owner. In practice, the County has responded to verbal requests for a
determination of TDC eligibility, and has paid a title company to provide proof of
ownership and a clear title.
Another discrepancy exists between the code and current practice with regard to the
direct purchase of TDCs without first entering into an Option Agreement. The code
does not address the process for the direct purchase of TDCs even though the
County has been doing so in order to encourage more property owners to participate
in the TDC program.
Attachment "A" shows the changes recommended by the TDC Review Committee in
order to ensure that there are no discrepancies between the code and the current
practices that have evolved with the TDC Program.
2. Reconstitution of the Transferable Development Review Committee - To eliminate
potential conflict of interest. After some discussion between staff and County Legal
Counsel, it was noted that Committee members may have a potential conflict of
interest for purposes of making recommendations to the Board of County
PAGE 1 of 4 — EXHIBIT "B" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "B"
Commissioners because of the particular interests each member represents.
Ironically, the people the staff needs advice from are also the one's who could
have potential conflicts.
To resolve this problem, at the recommendation of the County Legal Counsel, the
Board requested that the TDC code be amended to have the committee serve in
an advisory capacity to staff, thereby eliminating the need to declare conflicts.
Don't put this in. You may do this in practice. To put it down on paper means that
the conflict still exists and staff is just the conduit for the conflict. When you advise
the Board, you can say that the committee recommended it to the staff but you'll
need to add that the staff reviewed it and is making the recommendation to the
Board The Committee's recommended changes are shown in Attachment "A."
3. Changes to the TDC Calculation Formula — The original assumptions used for the
development of the TDC program are no longer valid in light of preliminary findings
from the USGS Study of groundwater quality in South Deschutes County.
Although there are many goals that the TDC program is intended to accomplish,
the reduction of groundwater pollution was the most urgent. At the inception of the
program it was believed that nitrate pollution could be reduced below the required
level of 7 milligrams per liter if the development of approximately 1,700 lots in the
"sending area" could be redirected to an area with sewer facilities (the "receiving"
area). The formula that was adopted at that time to achieve this redirection of
development resulted in the need for 5.5 TDCs per net developable acre to be
transferred from the sending to the receiving area.
From the preliminary study findings, we now know that the redirection of
development through the TDC program will have minimal impact on the
groundwater pollution problem. Instead, the study demonstrates that experimental
septic systems are far more effective than TDCs at reducing groundwater pollution
and, in fact, can actually reverse the problem over time. As a result, the
Department of Environmental Quality (DEQ) is in the process of revising its rules to
allow counties to approve the installation of these experimental systems.
Currently, local governments can not approve such installations. This rule change
is anticipated to take effect early in 2004. DEQ is also considering an additional
rule change that would re uire the installation of experimental systems when
placing new systems or replacing failing systems in certain geographic areas of the
state, in this case, South Deschutes County. It is hoped this change will be in
effect by late 2004.
Committee members believe that the most effective use of TDCs for the reduction
of groundwater contamination would be to use them as pollution control credits to
encourage the installation of experimental systems once the DEQ rule change
allowing such systems takes effect. Until that time, the Committee recommends
that the TDC program focus on accomplishing the remaining TDC goals as stated
in the Comprehensive Plan of:
• keeping the community rural in character,
• reducing wildfire hazards,
• protecting wildlife habitat,
• reducing potential development in floodplains, wetland and mule deer
migration corridors, and
PAGE 2 of 4 — EXHIBIT "B" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "B"
• creating a new neighborhood, primarily residential in character that
provides service efficiently, and sustains economic development.
The Committee agreed that the County needs to acquire enough TDCs to build the
first phase of the Neighborhood Planning Area and continue to assure that there
are sufficient TDCs so that the potential development of the neighborhood is not
stalled. In order to accomplish this, they are recommending a revised formula that
takes into consideration the new data from the USGS Study, as well as revised
information about the number of net developable acres and estimated units that will
be built in the receiving area.
Since we now know that transferring 1,700 lots from the sending to the receiving
area will not significantly improve groundwater quality, and since any redirection of
development from the sending area to the receiving area would help accomplish
the remaining goals, the Committee recommends that the Board adopt a new TDC
rate based on an assumption that the number of TDCs from the sending area
should be equivalent to the estimated number of units in the neighborhood. This
would essentially be a one to one exchange: Every participating lot in the sending
area would create the TDC needed to build on a lot in the receiving area (although
some sending area lots are worth 1.5 TDCs if they are in priority deer migration
corridors).
Based on the Draft Pahlisch Plan, the estimated units have been reduced from
1,698 to approximately 1,200. Thus, the calculation for the average number of
TDCs per net developable acre would be established by dividing the total
estimated units for the entire Neighborhood Planning Area by the estimated net
developable acres for the Neighborhood Planning Area based on the current
Pahlisch model. This results in an average of 4.6 TDCs per net developable acres
(1,200 units / 258 net developable acres = 4.6 TDCs).
Since the County already has 117.5 TDCs, this change would ensure that Pahlisch
Homes will be able to complete development of Phase 1 of the Neighborhood
Planning Area (23.14 net developable acres (Phase 1) x 4.6 TDCs = 106 total
TDCs). This would likely carry us through until rule changes are in place with the
DEQ, and allow sufficient time to determine how TDCs could be used as pollution
control credits, as well as allowing staff time to solicit additional TDCs from multiple
lot owners.
4. Other Issues - The Committee agreed with staff's recommendation to make
another effort to purchase TDCs from multiple lot owners. However, the
Committee is concerned that the $3,000 price being offered to property
owners for TDCs is too low and as a result, the County probably will not get
enough TDCs to complete additional phases of the La Pine Neighborhood
Planning Area. On the other hand, a high cost for TDCs in the receiving area
means that the land may become too expensive for a developer. The
Committee will continue to discuss how the TDCs can be used in the future
as pollution control credits if the DEQ rule change takes effect.
Another consideration suggested by the committee is to look at the possibility
of assigning more TDCs per lot in the sending area in addition to adjusting
PAGE 3 of 4 — EXHIBIT "B" To ORDINANCE No. 2003-033 (10/22/03)
EXHIBIT "B"
the price of the TDCs downward. The result would be a higher price given to
property owners for giving up their development right, and a lower TDC price
per net developable acre in the receiving area that the developer has to pay.
PAGE 4 of 4 — EXHIBIT "B" To ORDINANCE No. 2003-033 (10/22/03)