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2010-2598-Minutes for Meeting April 19,2010 Recorded 5/4/2010COUNTY NANCYUBLANKENSHIP,F000NTY CLERKS COMMISSIONERS' JOURNAL 0510412010 10;13;44 AM 111111111111111111111111111 III 2010-2388 Do not remove this page from original document. Deschutes County Clerk Certificate Page If this instrument is being re-recorded, please complete the following statement, in accordance with ORS 205.244: Re-recorded at the request of [give reason] previously recorded in Book _ or as Fee Number and Page to correct Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.orp, MINUTES OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS MONDAY, APRIL 19, 2010 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend Present were Commissioners Dennis R. Luke, Alan Unger and Tammy Baney. Also present were Dave Kanner, County Administrator; Erik Kropp, Deputy County Administrator; Laurie Craghead, County Counsel; Tom Anderson, Nick Lelack, Paul Blikstad, Peter Russell, George Read and Peter Gutowsky, Community Development; and approximately twenty other citizens, including Hillary Borrud of the Bulletin and other representatives of the media. Chair Luke opened the meeting at 10: 03 a. m. 1. Before the Board was Citizen Input. John Russell, the Asset Manager for the Department of State Lands, said the State is interested in several parcels. They own section 11 outside of Bend, which he hopes will be within the urban growth boundary soon. The also own 945 acres south and are working on their property on Cline Buttes with Thornburgh Resort. Commissioner Unger requested that, as they move into the future, perhaps the State can provide a general plan for each and detail how the County can be supportive or provide input. Mr. Russell said that the State reviewed the asset management plan for Central Oregon recently, analyzing all properties and putting on paper what might be done with those properties. They will be meeting internally all summer and will start a public process with governments and stakeholders in the fall. They hope to get the plan to the State Land Board for final adoption in June 2011. It is an 18-month process, and they did something similar for Harney County and the Steens Mountain area. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 1 of 13 Pages He added that there are three managers: one for eastern Oregon, one for western Oregon, and his position at large. His position focuses on enhancing the value of common school fund properties and repositioning the portfolio. 2. Before the Board were Deliberations and Consideration of First Reading of Ordinance No. 2010-007, Adding 19th Street to the Deschutes County Transportation System Plan Map. Commissioner Luke asked if a road is shown on the TSP, does that mean it will be built. Peter Russell replied that a timeline would be developed. All are dependent on funding. There is also an additional land use process with the conditional use permit. A road can't be considered for development unless it is on the TSP map. TSP alignment generally shows planning division locations, based on engineering studies and the scale of the map. Commissioner Unger stated he would like to decide, vote, and move on. (He referred to an oversized TSP map generated by the County). He said that when you have high growth, most of the time you get behind with the traffic issues. You have to keep up or keep ahead of it. All main transportation routes are now located on the west side of Highway 97. All of them converge in the same general area, around Cooley Road and Empire, and they are already compromised. There needs to be alternatives where growth is happening. ODOT has already said that certain Redmond land can't be rezoned because of traffic impacts at Yew Avenue. One solution is to have another way to get to Highway 97 from that area. Redmond is concerned about its economic development future. T-Mobile agreed to variable shift changes to handle this, or they would not have been allowed to build. There needs to be an eastside arterial, and Deschutes Market Road already has about 5,000 cars a day on it. Work has gone on for ten years to help Redmond and the area, and this is the solution that the collaborative group came up with. Using this route would mean the lowest cost, with primarily EFU and BLM land involved. Commissioner Baney said she has not been a part of the process. She agrees that job creation is huge and transportation improvements are needed, but feels there is not have enough information in this record to lead her to believe this is what needs to be done. It appears the County is the one having to pay for this also. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 2 of 13 Pages If it is for job creation for the cities and it helps out the DSL, there has to be more done to show that it is critical and this is where it needs to be, and adds the capacity that will be needed. She is also concerned about the private property that this impacts. Commissioner Luke said that the Sunriver interchange project was frustrating, as they could not take into account that Caldera Resort was going to be built because there was no land use application, even though everyone knew it was coming. There is no land use application for Juniper Ridge, or for the DSL land located south of the Fairgrounds, but they know it will be done eventually. The City of Bend has talked about dumping Juniper Ridge onto Deschutes Market road because they can't go to Highway 97. There is no application, but they will do it eventually. A sports park also wants to come into the area. This is not a road for today, but for the future. 19th St. will go to Quarry, which is not that far from Deschutes Junction. There will be an overpass there eventually. It won't happen for a while because no one has the money to go forward yet, but nothing continues if it is not on the TSP. He has no problem putting it on the TSP, after which time partners can be sought and other work can be done. Discussions stop if it is not on the TSP. When you consider all of the discussions of different groups, often they are looking at their own little piece without considering impacts to others. . Widening Highway 97 will work until you get to the cities, but then it is a problem with bottlenecks. In the next 15 or 20 or more years, there needs to be an alternative. Commissioner Baney stated that if it goes on the TSP, more money will be spent on this." She asked if anything be spent on alternative ideas. Peter Russell explained that if 19th Street does not change and DSL wants to develop its land, they'd have to go through a zone change. The County can comment on mitigating impacts at that time. Similarly, the City of Bend would have to do the same for Juniper Ridge, as it is EFU land. The same steps would occur if 19th Street is moved; another Goal 3 exception process would have to take place. Federal land would have to reopen their documents as well. This is what BLM wanted for an alignment, and is the result of years of discussions. Even if the County and cities wanted to put the road somewhere else, the federal government doesn't have to open up the information again. This minimizes the amount of federal land impacted. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 3 of 13 Pages Commissioner Baney asked about taking the road just to Quarry. Mr. Russell replied that staff does not agree with this idea. The County has control of the timeline. Bringing ODOT into the process does not make it go any faster. The Quarry interchange would cost about $30 million and likely would not make a lot of difference to someone who is already traveling on Highway 97. Tom Blust added that ODOT went through a separate planning process for south Redmond, independent of the function of 19th Street. The Quarry interchange is already on the TSP, and could be part of a solution, but would be very expensive, as it would be crossing the railroad tracks and would have a wider footprint. Commissioner Luke stated that Highway 97 is a corridor and does not operate separately for each city. The Redmond reroute was a priority project for all three cities because that was a bottleneck on the highway for traffic and for freight, and was critical for economic development. It has to be viewed as a transportation corridor. Commissioner Baney said that she understands that this is not a capacity issue per ODOT. Commissioner Luke stated that the County owns property near the airport, and it cannot be developed because of impacts to Highway 97. If Deschutes Market Road is improved and traffic from Juniper Ridge could get there, it would allow for that development. ODOT may say that a parallel road does not take traffic off Highway 97, but that is because it is hard to tell what the future impact is. Mr. Russell said they refer to links and nodes. Links are travel lanes, which are not at capacity. The nodes are the interchanges, and most have operational problems. Commissioner Unger said that there are four cities that need to work together with the County to create mobility. Sometimes it is hard to do because of land use laws. Cities, not the rural county, are where economic development occurs and that's where most of the growth is. They may not be able to spend money outside the UGB. They all need to come to this together and create solutions to common problems. Commissioner Baney feels that there is a lack of partnership. It is cost prohibitive for any agency, but the County should not have to take care of the internal infrastructure. She would rather see more of a partnership. She thinks that although this has been discussed for years, not everyone is on board regarding the cost aspect. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 4 of 13 Pages Commissioner Luke said all this does is add the road to the plan. Everything done to this point is theory, and no one will step up until is it real. That has to be done before land use hearings and looking for funding. It won't be built today. The land use processes still have to occur. He agrees that it should not be paid for by just the County. Commissioner Unger stated that the DSL land will not move forward for development, since without a transportation solution, nothing will move forward. Commissioner Baney does not want to develop a project until it is all properly set up. Commissioner Unger said that there has been a lot of planning and discussion prior to now, and this is the time to take action. He added that the rural versus urban issue is always a challenge. Everyone is affected by that. The impact happens. People move further out because the land changes too much. The people already living where these people relocate to are affected by that change. Utilities, infrastructure and other things affecting livability have to progress as well. Commissioner Luke said this also solves some problems for Bend as well. People want businesses to come. The County cannot relocate businesses but the cities have to. He would hope through the pubic hearings process, clarification can be made. Putting this on the TSP allows for further discussion. Commissioner Luke stated that two people had signed cards to speak, but testimony can't be taken at this time as the hearing had been closed previously. UNGER: Move first reading of the Ordinance. LUKE: Second. VOTE: BANEY: No. (Split vote) UNGER: Yes. LUKE: Chair votes yes. The second reading and consideration of adoption will take place on May 3, 2010. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 5 of 13 Pages 3. Before the Board was a Public Hearing (Continued from April 5, 2010) on Ordinance No. 2010-001, Amending the Comprehensive Plan to Adopt Destination Resort Remapping Goals and Policies. and 4. Before the Board was a Public Hearing (Continued from April 5, 2010) on Ordinance No. 2010-002, Adding Development Procedures to Adopt Destination Resort Mapping Amendment Procedures (Matrix). Chair Luke said that testimony on both Ordinances can be combined to make it easier for the public. Peter Gutowsky gave a brief overview of the item. The case file has been entered into the record, and written testimony received since April 5 has also been included. Paul Dewey wanted assurance that his March 1 testimony is included, and it is. The Board also asked staff to produce a matrix showing recommendations, which has been done. Staff's recommendation matches that of the Planning Commission's February recommendation. Kay Knott of Sisters submitted a letter supporting the recommendation of the Planning Commission. (A copy of her letter is attached for reference, and was also signed by her husband, Leonard Knott.) Merry Ann Moore of Sisters testified for the Sierra Club, Juniper branch. She wanted to make sure that 2008 documents are included regarding a text amendment involving a cluster development conversion. The position of the DLCD at that time was that it was a violation of Goal 8. Matt Cyrus said that in regard to DLCD's opinion, he has conversations with them, and they were concerned because the housing units were already there. They are now comfortable with ideas of how the criteria can be met. The facts are different between mapping, siting and a previous text amendment. The previous discussions are no longer relevant or appropriate at this point. He asked the Commissioners to support the Planning Commission's recommendation. He doest not see why a site can not be improved if all of the resort amenities are in place or feasible. A quasi-resort might be a good subdivision standard, and that would eliminate a lot of issues regarding tourism. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 6 of 13 Pages Cluster developments were included because they have a lot of merit. There are four of them, all of which have open space. They would be natural to convert since they already meet the open space requirements. They only lack recreational amenities and lodging. Whether it was developed with that in mind does not matter. The open space already exceeds requirements, and the original plan was laid out over twenty years ago. It has the same amenities as existing resorts. This just finishes what was started. Criteria and siting still have to be met. They are different, mapping does not automatically mean siting. They wanted to avoid Measure 49 implications, and destination resort mapping or removal from that map may trigger a Measure 49 impact. (He submitted a letter from legislative counsel who worked on Measure 49 issues) He said that this would help finish what was started in 1992. The current map that was adopted then showed that agricultural lands were not excluded from the map, just simply deferred. No determination was made, awaiting Phase II of the mapping process. Agricultural lands that are not otherwise excluded by statute are missing, such as irrigation or non-contiguous. Just having a water right does not mean it is good for growing things other than sagebrush. If a new resort is required to site outside of irrigated lands, they will still have to buy up acreage and let it dry out to the determinant of all, so they could have the water rights they need. Developing within irrigated lands has a lower impact. As resort models are examined, golf courses may not be something used in the future. Nationally, the demand for golf courses is down. He suggested that the County should be more flexible with siting to allow some new things that have not yet been presented. Commissioner Luke said that recreation amenities are needed, but not necessarily golf courses. Mr. Cyrus stated that agri-tourism might be a good way to go. This can only be done if agricultural lands are part of it. It has been said that the County's Ordinance may not meet State statute. He would like to see the County's version match the State version to keep things simple. Nick Lelack asked if the letter from legislative counsel was received by the Board. Commissioner Luke said that it will be part of the record. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 7 of 13 Pages Lyn Mattei of Bend testified that in regard to viable family farming, this could dovetail into changes to allow small destination resorts that make small farms more viable. She toured a farm with the Extension Service and found there is a continuing need to address the sustainability and viability of small family farms. Possible changes in the tax code or in other ways may help farmers to pay themselves more money for their work. Another concern is a way to define what an internship is on a farm, to specify criteria so that the intern is not just a farm laborer, and can live on the farm during while working. Under existing tax codes and other regulations, it is hard for small farms to be sustainable. This is relevant, as it could dovetail with destination resorts. She is not saying that all of the changes to be made need to be under the guise of a destination resort. They are related, though. She is concerned and feels that the only way that mapping will stop is to do an economic analysis of the impacts and benefits of a destination resort. She was happy to read an article in the Bulletin that talked about this. If the County does study this, it would seem logical and prudent to continue the mapping process to obtain additional economic information. If the County does so, she would recommend that an environmental study also be included regarding wildlife habitat, riparian areas, and so on. This and some additional funding would also allow the wildlife working groups to map out a new wildlife study. This would help the County apply the information to its destination resort mapping criteria. She reminded the Board that the Interagency Wildlife Study exists in response to a request from Deschutes County to get up-to-date wildlife information for the County's comprehensive plan update. Regarding Goal 8, under recreational planning, this is not in the record. It must comply with Goal 8 per State law. There are siting requirements regarding high-value crop areas within three miles. It is not in the criteria to include adjacent counties. Commissioner Luke said that the law says that they have to be three miles back from the County line already. Ms. Mattei stated that Goal 8 has provisions for small destination resorts of 20 acres or more. Lodging and other improvements are to be included. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 8 of 13 Pages Peter Gutowsky stated that this process deals with large destination resorts, and small destination resorts are not a part of these Ordinances. Under State law, small resorts can only be sited on non-resource lands. There is a group addressing small destination resorts at this time, and it is also being addressed as part of the comprehensive plan update. Commissioner Baney noted that she feels that Ms. Mattei's information is important, but it might not be relevant to what is being discussed today. Ms. Mattei said that she plans to attend as many meetings of the work group as possible. They need to discuss what is and isn't working in the County. The State group has almost complete consensus that large destination resorts are not working. The County has a way to coordinate with some of the groups. She asked the Board to slow down, and open the discussion to sustainable farming and other things. Pam Hardy, on behalf of Thousand Friends of Oregon, submitted written testimony. She asked the Board to look at their original vision. People don't envision Deschutes County as a sea of sagebrush subdivisions. It needs to be primarily open space. She asked them to be especially conservative regarding the economic development benefits of large destination resorts. A cluster development only make sense if it is primarily a residential development, and that is not the purpose of a destination resort. The Board should keep those out of the destination resort designation. Christen Brown, the current Chair of the Planning Commission, spoke for himself and not as a representative of the Commission. He said that the issues addressed by the Planning Commission relate to 1992's Ordinance 001, referring to irrigated lands. A lot has changed since then. This Code is out of date. He voted to remove portions of the section, as the group felt it was inappropriate to use what is not up to date. Mr. Brown said that if water is placed back in stream, it is technically not irrigated land anymore. This does not work. It is out of date and does not apply to current regulations. The County avoided the problem in 1992 with this. Commissioner Luke stated that instead of irrigated, it still held a water right. It used to be `use it or lose it'. Mr. Brown said that they tried in 1992, but did not finish the job. Furthermore, there is no really quality soil in the area. A lot of people are looking at this problem daily. The most appropriate question is whether land is suitable for farming only, and most of it isn't. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 9 of 13 Pages Subdivision rules were brought forward to the Planning Commission last July regarding what should be included in the mapping process. The Planning Commission made the right decision Subdivisions of some kind should still be allowed to be included- so-called paper subdivisions, and cluster subdivision. There needs to be an accurate representation of what should be in the destination resort map. Citizens don't want their rights taken away, and to do so is problematic. Pam Mitchell testified that the County should not remove blanket destination resort overlays on property. If it now has that designation, it should not be removed. There should be respect for private property rights, and normally protecting this right should not fall on the shoulders of the owners. People say that destination resorts burden streets and schools, but she disagrees. If you do a proper study, it will be found that most destination resorts create very few negative impacts. Some people feel that all farmland that is farmland should. remain so, but it often has a negative value to the farmers. And it is an injustice for the County to burden those property owners further. If it is not making money, they should not be forced to continue that boneless. She encouraged careful consideration of the situation. Peter Gutowsky stated that the entire legislative history of destination resorts is in the record for review. He said that there probably would not be any new information submitted. The February recommendation from the Planning Commission was to loosen the criteria. The Board needs to determine policy regarding eligibility. Discussion took place at this time regarding whether to allow more testimony and, if so, when to close testimony. BANEY: Move that oral testimony was closed, with the written record left open for submissions until 10:00 a.m. on May 24, 2010, at which time deliberations might begin. In the meantime, the Board will have a work session with staff to discuss any issues that need clarification. UNGER: Second. VOTE: BANEY: Yes. UNGER: Yes. LUKE: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 10 of 13 Pages BANEY: Move approval of the Consent Agenda. UNGER: Second. VOTE: BANEY: Yes. UNGER: Yes. LUKE: Chair votes yes. Consent Agenda Items 5. Approval of Minutes: Business Meeting: April 14 . Work Sessions: April 14 CONVENED AS THE GOVERNING BODY OF THE 911 COUNTY SERVICE DISTRICT 6. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the 911 County Service District. No action was taken, as the amounts are not yet available. CONVENED AS THE GOVERNING BODY OF THE EXTENSION AND 4-H COUNTY SERVICE DISTRICT 7. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District. No action was taken, as the amounts are not yet available. RECONVENED AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 8. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for Deschutes County. No action was taken, as the amounts are not yet available. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 11 of 13 Pages 9. ADDITION TO THE AGENDA. Before the Board was Continuation of a Public Hearing on an Appeal of the Hearings Officer's Denial of a Wireless Telecommunications Facility in the Surface Mining Zone. Chair Luke opened the hearing, which was continued from March 15. Paul Blikstad gave an overview of the item. Laurie Craghead said that it was continued to today and testimony should be taken. It could be continued again to be able to take further testimony. Notice is not required to be sent out. Kevin Martin, representing the application, said he is prepared to do a full presentation at this time. He submitted additional information a week ago, but since the Board has not received these documents for review, he has no problem allowing more time for preparation. He will extend the deadline. Commissioner Luke said that this does not happen often; normally they get the information well ahead of time. Commissioner Unger stated he has some specific questions about the map and would like to talk with staff about it. He wants to know why they chose the location and whether two towers instead of one would be appropriate. Commissioner Unger asked if this afternoon would be appropriate. Commissioner Luke said that he would like to allow more time for the public to know about the change, so the hearing was continued to Wednesday, May 5 at 10:00 a.m. Citizen Kathy Giles of Redmond commented that she wants to hear what is said and wants an opportunity to comment afterwards. Being no further items addressed, the meeting adjourned at 12:15 p.m. Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 12 of 13 Pages DATED this 19t" Day of April 2010 for the Deschutes County Board of Commissioners. ATTEST: Recording Secretary Dennis R. Luke, Chair dkm- O.In Alan Unger, Vice Chair Tammy Baney, Commi Toner Minutes of Board of Commissioners' Business Meeting Monday, April 19, 2010 Page 13 of 13 Pages Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org BUSINESS MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., MONDAY, APRIL 19, 2010 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend 1. CITIZEN INPUT This is the time provided for individuals wishing to address the Board, at the Board's discretion, regarding issues that are not already on the agenda. Citizens who wish to speak should sign up prior to the beginning of the meeting on the sign-up cards provided. Please use the microphone and also state your name and address at the time the Board calls on you to spear PLEASE NOTE: Citizen input regarding matters that are or have been the subject of a public hearing will NOT be included in the record of that hearing. 2. DELIBERATIONS and Consideration of First Reading of Ordinance No. 2010-007, Adding 19'' Street to the Deschutes County Transportation System Plan Map (Staff Report; Letters of Support and Opposition) - Peter Russell, Community Development 3. A PUBLIC HEARING (Continued from April 5, 2010) on Ordinance No. 2010-001, Amending the Comprehensive Plan to Adopt Destination Resort Remapping Goals and Policies - Peter Gutowsky, Community Development 4. A PUBLIC HEARING (Continued from April 5, 2010) on Ordinance No. 2010-002, Adding Development Procedures to Adopt Destination Resort .Mapping Amendment Procedures (Matrix) - Peter Gutowsky, Community Development CONSENT AGENDA 5. Approval of Minutes: • Business Meeting: April 14 • Work Sessions: April 14 Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 1 of 7 Pages CONVENE AS THE GOVERNING BODY OF THE 911 COUNTY SERVICE DISTRICT 6. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the 911 County Service District CONVENE AS THE GOVERNING BODY OF THE EXTENSION AND 4-H COUNTY SERVICE DISTRICT 7. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District RECONVENE AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 8. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for Deschutes County 9. ADDITIONS TO THE AGENDA Deschutes County meeting locations are wheelchair accessible. Deschutes County provides reasonable accommodations for persons with disabilities. For deaf, hearing impaired or speech disabled, dial 7-1-1 to access the state transfer relay service for TTY. Please call (541) 388-6571 regarding alternative formats or for further information. (Please note: Meeting dates and times are subject to change. All meetings take place in the Board of Commissioners' meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. If you have questions regarding a meeting, please call 388-6572) Monday, April 19 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 2 of 7 Pages Wednesday, April 21 11:30 a.m. Redmond Economic Development Luncheon Eagle Crest, Redmond 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday. April 22 11:00 a.m. Quarterly Meeting with the Commission on Children & Families Monday, April 26 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Tuesday, April 27 11:30 a.m. League of Women Voters' Forum Wednesday, April 28 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) 5:00 p.m. Candidate Forum - La Pine Senior Center Monday, MU 3 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) 3:30 p.m. Regular Meeting of LPSCC (Local Public Safety Coordinating Council) Wednesday, May 5 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, May 6 10:30 a.m. Tour of Work Center and Jail 6:00 p.m. Volunteer of the Year Event - Bend Senior Center Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 3 of 7 Pages Wednesday, May 12 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, May 13 7:00 a.m. Regular Meeting with the City of Redmond Council, Redmond City Hall Monday, May 17 9:00 a.m. Budget Committee Meeting and Department Budget Presentations (all day) Tuesday, May 18 9:00 a.m. Budget Committee Meeting and Department Budget Presentations (all day) Wednesday, May 19 9:00 a.m. Budget Committee Meeting and Department Budget Presentations (all day) Thursday, May 20 9:00 a.m. Budget Committee Meeting and Department Budget Presentations (all day) Monday, May 24 10:00 a.m. Board of Commissioners' Meeting 12:00 noon Regular Meeting with Department Directors 1:30 p.m. Administrative Work Session - could include executive session(s) Wednesday, May 26 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session could include executive session(s) Monday, May 31 Memorial Day - Most County offices will be closed Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 4 of 7 Pages Wednesday, June 2 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, June 3 10:00 a.m. Quarterly Meeting with the District Attorney 11:00 a.m. Quarterly Meeting with Community Development 1:30 p.m. Quarterly Meeting with the Road Department 2:30 p.m. Quarterly Meeting with Solid Waste Monday, June 7 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Wednesday. June 9 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, June 10 11:00 a.m. Quarterly Update with Health and Human Services Monday, June 14 through Wednesday, June 16 8:00 - 5:00 Association of Oregon Counties Spring Conference (Riverhouse) Wednesday, June 16 11:00 a.m. Youth Challenge Graduation - Fairgrounds 2:00 p.m. Administrative Work Session - could include executive session(s) Thursday, June 17 10:00 a.m. Quarterly Update with Community Justice Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 5 of 7 Pages Monday, June 21 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Tuesday, June 23 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, June 24 9:00 a.m. Quarterly Meeting with the Fair & Expo Department 11:00 a.m. Quarterly Meeting with the Commission on Children & Families 2:00 p.m. Quarterly Meeting with the Sheriff Monday, June 28 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Wednesday. June 30 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursday, July 1 8:00 a.m. Meeting with Sisters City Council, Sisters City Hall Monday, July 5 Independence Day Observed - Most County offices will be closed Wednesday, July 7 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 6 of 7 Pages Thursday, Jules 7:00 a.m. Regular Meeting with Redmond City Council - Redmond Council Chambers Wednesday, July 14 10:00 a.m. Board of Commissioners' Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Deschutes County meeting locations are wheelchair accessible. Deschutes County provides reasonable accommodations for persons with disabilities. For deaf, hearing impaired or speech disabled, dial 7-1-1 to access the state transfer relay service for TTY. Please call (541) 388-6571 regarding alternative formats or for further information. Board of Commissioners' Business Meeting Agenda Monday, April 19, 2010 Page 7 of 7 Pages LS Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.ora ADDITION TO BUSINESS MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., WEDNESDAY, APRIL 19 2010 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend CONTINUATION of a Public Hearing on an Appeal of the Hearings Officer's Denial of a Wireless Telecommunications Facility in the Surface Mining Zone - Paul Blikstad, Community Development ,-fee o ~ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: y Name -J O Jf 5 -e- Date: Address k- Phone #s S o 3- Qt t 4- ..5 2, 9 1 E-mail address ► n ~ e In Favor Neutral/Undecided 1-1 Opposed Submitting written documents as part of testimony? F] Yep ❑ No If so, please give a copy to the Recording Secretary for the record. G~Jses c~L 0 2{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: p Q Date: 4/19 ! o Name Address G t rc~ Phone #s 5"1 e r 3 g I ,ire CL~ y ?7S E-mail address / kn , -TT e~ *7~ l ► k, tn FV1 LVJ In Favor F] Neutral Undecided ~ Opposed Submitting written documents as part of testimony? 1Z Yes F] No If so, please give a copy to the Recording Secretary for the record. S u°~G BOARD OF COMMISSIONERS' MEETING '4 ~ " REQUEST TO SPEAK Agenda Item of Interest: 19~~ Sod Date: Name Address 2~ to IV c C~ Phone #s ,S-ql 3 ! 3 E-mail address F-1 In Favor ❑ Neutral/Undecided Opposed Submitting written documents as part of testimony? ❑ Yes FA] No If so, please give a copy to the Recording Secretary for the record. G~~-rES c4 Agenda Item of Interest: C_ Name REQUEST TO SPEAK f Date: Address BOARD OF COMMISSIONERS' MEETING 0 Phone #s j- E-mail address ❑ In Favor Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes ❑ No If so, please give a copy to the Recording Secretary for the record. A 2{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: C,_~,tA ha;t . Date: LI ` C9.- Name Address 7 Phone #s Cr E-mail address "3 L n In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? Yes ❑ No If so, please give a copy to the Recording Secretary f r record. cES moo' o Z BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: ~M ,2 ~ Date: Name Ann M oo~ Address ~'1-- S; Phone#s E-mail address ❑ In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? es ❑ No If so, please give a copy to the Recording Secretary for the record. G~~'fE7S o z~ BOARD OF COMMISSIONERS" MEETING REQUEST TO SPEAK Agenda Item of Interest: _ IN e Sn r I s Date: JD Name -Qhl Address 1666 'art-~~ - S Phone #s E-mail address 0 In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes Q No If so, please give a copy to the Recording Secretary for the record. cz' ~ f ~L/• 1 F; / CA G o `2{ BOARD OF COMMISSIONERS' MEETING O REQUEST TO SPEAK Z y Agenda Item of Interest: ~ /2 Date: Name L- Address / / / 1. eeoi i 7~ J Phone #s '5'-L-y E-mail address X'/l/i ❑ In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes ❑--NO If so, please give a copy to the Recording Secretary for the record. / o < BOARD OF COMMSSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: 2s'+~ Date: _ ~~1l O Name Address l uti 00 Dtp r.ov` , L` tA, _A q Phone #s 5Q i C w- r~"ZZ 1 } E-mail address c fi F~ ❑ In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ayes ❑ No If so, please give a copy to the Recording Secretary for the record. c BOARD OF COMMISSIONERS' MEETING Y REQUEST TO SPEAK Agenda Item of Interest: Date: Name Co ~ vt A&A- .er,,..,► xA Address Phone #s Vic' E-mail address '~z ❑ In Favor Neutral./Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes N] No If so, please give a copy to the Recording Secretary for the record. Go z{ BOARD OF COMMSSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Date: Name 'T~r ~ ) - -a \J Address L-1f :3 .-3 4 / L->,C Phone #s d a E-mail address ❑ In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes ❑ No If so, please give a copy to the Recording Secretary for the record. 0 2~ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: ~ e4y'e'4-111 Date: Name 4C Address ✓'r Q Q_/1 r 6 Phone #s 5 0 3 _`1 ~ 6 -519 E-mail address i o e ❑ In Favor F-] Neutral/Undecided F-1 Opposed Submitting written documents as part of tiny? F1 Yes F-I No If so, please give a copy to the Recording Socretary for the record. U~v-s e0 o cJi{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: R Q ry. o bbi -h Date: 4/19 ho g Name Address r -s c-, /5 Phone #s 51~. g - 3 q '7 7S °3l E-mail address / t'n 7--r tv &0- x-74 l1 I. . h FV7 LAI)IJ In Favor NeutraULJndecided ❑ Opposed Submitting written documents as part of testimony? 1Z Yes F~ No If so, please give a copy to the Recording Secretary for the record. S aG BOARD OF COMMISSIONERS' MEETING ~ tJ REQUEST TO SPEAK Agenda Item of Interest: Date: Name 'j & Address 2 c G~ Cell- A Phone #s 57q/ 3 5s / 3 2? E-mail address In Favor Neutral/Undecided ~A Opposed Submitting written documents as part of testimony? F-] Yes X No If so, please give a copy to the Recardiag Secretary for the record. 0 Agenda Item of Interest: C_ Name Address BOARD OF COMMISSIONERS' MEETING - Q REQUEST TO SPEAK Date: Phone #s E-mail address In Favor Neutral/Undecided F-1 Opposed Submitting written documents as part of testimony? F]Yes F] No If so, please give a copy to the Recording Secretary for the record. a BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: n mac; TA-&^ Date: C9,- Name Address 0 7 Phone #s s``f ! -Sy ~ - 3 `f I ! E-mail address 42& "3 1 n In Favor ❑ NeutraWndecided ❑ Opposed Submitting written documents as pert of testimony? Yes ❑ No If so, please give a copy to the Recording Secretary f r t record. Q BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Date: Name A nn M Do r--,c- b °I Z~ S rt l~S t~ ~1-~- Address Phone #s ~7~ Z~ E-mail address ❑ In Favor ❑ NeuftWndecided ❑ Opposed Submitting written documents as part of testimony? es ❑ No If so, please give a copy to the Recording Secretary for the record. a z{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Re SO r I s Date: 10 Name - Mao ryS Address 1(P 9~ a^P- l e S 7 Phone #s E-mail address In Favor ❑ Neutral/Undecided ❑ Opposed LaJ Submitting written documents as part of testimony? ❑ Yes E No If so, please give a copy to the Recording Secretary for the record. o " Z{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Date: ? Name c J/ / Vj 14 77- e / Address A / Phone #s "L-/ 3 / -I- (--I / l y E-mail address /1, do ❑ In Favor ❑ Neutral/Undecided _ Opposed Submitting written documents as part of testimony? ❑ Yes ❑"No If so, please give a copy to the Recording Secretary for the record. Z~ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: -~)-t y Date: 14 10111o Name -'1' Address C1 Phone #s E-mail address e,&&A 15 C7 ❑ In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as part of testimony? ayes ❑ No If so, please give a copy to the Recording Secretary for the record. I BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Date: Name 1n t/1 e~~►n_ ..r,,..~ .r~ Address Phone #s E-mail address IV ❑ In Favor Neutral Undecided ❑ Opposed Submitting written documents as part of testimony? ❑ Yes No If so, please give a copy to the Recording Secretary for the record. AM { BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest: Date: Name- Address _Ldl I S ~Z_ ~f „2i~ 2 Phone #s 54/ sy~ 9 Z.,_"'a.ga E-mail address 1-1 In Favor F] Neutral/Undecided 1-1 Opposed Submitting written documents as part of testimony? F]Yes F-] No If so, please give a copy to the Recording Secretary for the record. KEVWN I MARTIN • Telecommunication FacNW SMV • Land Use and Regulatory Analysis 2495 NW 121st POW& • Portland OR 97229-4774 Office: 503-469-0234 • Fax: 503-469-0174 • e-mal k97xgQad.com 14 April 2010 SUBJECT: CU-09-60 Appeal Materials On January 15, 2010 the Deschutes County Hearings Officer denied a Conditional use application (CU-09-60) for a 60-foot wireless communications tower located at 67585 Cline Falls Road, Redmond, Tax Lot 15 12 4700. The Hearings Officer concluded that the applicant met all of the approval criteria except one. The single instance that the Hearings Officer concluded the applicant did not meet a criterion is summarized on page of the decision: Accordingly I find the applicant has failed to deemonstrate that a wireless telecommunications facility cormsting of two towers on RR-10 zoned land within the desired service area would not be suitable or aww1able for the siting of AT&T's proposed BD57 Facility. The following documentation will demonstrate that two towers on RR-10 zoned land within the desired service area will not provide suitable coverage to replace the proposed AT&T BD57 facility on North Cline Butte, Exhibit A Exhibit A shows the existing / planned Verizon Wireless network without the North Cline Butte site. (The original coverage plots submitted with CU-09-60 were from AT&T. However, Verizon is also interested in locating on the proposed tower. The AT&T and Verizon Wireless existing / planned networks for the area are nearly identical. Since Verizon Wireless provided a radio frequency alternative sites analysis before AT&T, we are proceeding using the Verizon plots.) In Exhibit A, red represents a strong signal that will provide excellent service within buildings as well as inside vehicles. orange represents signal strength that will provide good coverage inside vehicles and in buildings. The signal strength represented by yellow represents signal strength that will provide good coverage inside vehicles, but less reliable coverage in buildings. The signal strength represented by green is weak and will provide marginal in-vehicle coverage and no in- building coverage. Gray indicates no usable signal. The proposed coverage area from the North Cline Butte site is outlined by the red line. In summary, there is a :significant lack of good signal coverage in the area along highway 126 and rural areas north and west of the Cline Buttes site, as noted by the extensive presence of green and ray rather than red, orange and yellow. Kevin J. Martin Page 2 Exhibit B Exhibit B shows the zoning for the proposed coverage area. The extent of "good" coverage provided by existing / planned sites is shown by the yellow dashed line. The proposed coverage area is shown by the red line. Exhibit C Exhibit C shows the exception area zoning (RR 10 and MUA) in the proposed coverage area outlined in red. Exhibit D Exhibit D shows the two potential exception areas identified by the applicant that could provide two tower sites to replace the one site on North Cline Butte. The first site, labeled A, is located at the eastern edge of the proposed service area and is centered at the intersection of Oak Lane and 101st Street. The area has numerous homes and the Juniper trees in area are approximately 40 feet tall. Chapter 128.128.340(B)(3) of the CCD states: 3. The facility is sited using treed vegetation, and topography to the maximum extent practicable to screen the facility from view of nearby residences. Since tree cover in the area is 40 feet or less, a tower higher than 50 feet would likely not be approved. The second site, labeled B, is located at the western edge of the service area centered at the intersection of Holmes Road and Fadjur Lane. The area has numerous homes and the Juniper trees in area are approximately 30.40 feet tats. Chapter 128.128.340(B)(3) of the CCD states: 3. The facility is sited using trees, vegetation, and topography to the maximum extent practicable to screen the facility from view of nearby residences Since tree cover in the area is 40 feet or less, a tower higher than 50 feet would likely not be approved. 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Kulongoski, Governor February 28, 2008 Department of Land Conservation and Development Central Oregon Regional Office 888 NW Hill Sheet, Suite 3 Bend, OR 97701-2942 Rural Regional Representative (541) 318-2890 Urban Regional Representative (541) 318-2899 Community Service Specialist (541) 318-8193 Fax (541) 318-8361 Web Address: http://www.oregon.gov/LCD Peter Gutowsky Deschutes County Community Development Department 117 NW Lafayette Bend, Oregon SUBJECT: Proposed Text Amendment Local File TA 07-01 Dear Peter. Thank you for the opportunity to comment on the proposed code amendment to allow existing cluster developments approved prior to 1992 to convert to destination resorts. We have reviewed the proposed text amendment, along with the additional information provided by the applicant and staff, and agree with you that conversion of an existing subdivision or cluster development (where the lots have already been sold) to a destination resort would not be consistent with Goal 8 and ORS 197.445. We believe that the recent decision by the Oregon Court of Appeals in Annunziata Gould v. Deschutes County and Thornburgh Resort, made it clear that overnight lodging accommodations must be constructed prior to the sale of the residential lots. This standard cannot be met if the conversion involves residential lots or parcels that have already sold. Please enter this letter into the record of these proceedings. Feel free to contact me at 541-318-8193 if you have questions. Sin ely, Doug Wth#ter Community Services Specialist cc: Mara Ulloa (DLCD File 001-08) 3 3 DLCD Notice of Denial/Withdrawal THIS FORM MUST BE MAILED TO DLCD WITHIN 5 WORKING DAYS AFTER THE FINAL DECISION PER ORS 197.610, OAR CHAPTER 660 - DIVISION 18 Jurisdiction: Deschutes County Local file number: TA 07-7 Date of Withdrawal/Denial: 11/24/2008 Date Mailed: 11/24/2008 Date original Notice of Proposed Amendment (Form 1) was mailed to DLCD: 1/8/2008 ❑ Comprehensive Plan Text Amendment ® Land Use Regulation Amendment ❑ New Land Use Regulation ❑ Comprehensive Plan Map Amendment ❑ Zoning Map Amendment ❑ Other: Summarize the proposed amendment. (Write a brief description of the proposed amendment) The proposal pertains to a text amendment to Deschutes County destination resort requirements. The amendments apply specifically to cluster development, approved prior to 1992, that convert to a destination resort (DCC) 18.113.025 (A) and (B)). The Proposal was: ® Denied ❑ Withdrawn Briefly state reason for Denial or Withdrawal: The Deschutes County Board of Commissioners denied the text amendment. Reasons expressed by the Board included the concerns of the text amendment setting a precedent and that there remained other land-use processes available to the applicant. Local Contact: Peter Gutowsky Address: 117 NW Lafayette City: Bend Zip: 97701- Phone: (541) 385-1709 Extension: Fax Number: 541-385-1764 E-mail Address: peterg@co.deschutes.or.us Please send this form to the following address: ATTENTION: PLAN AMENDMENT SPECIALIST DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT 635 CAPITOL STREET NE, SUITE 150 SALEM, OREGON 97301-2540 DLCD file No. September 22, 2008 Representative George Gilman 3695 Dodson Drive Medford OR 97504 Re: Ballot Measure 49 and Destination Resort Mapping Dear Representative Gilman: You asked whether removal of private real property from the destination resort map in a county's comprehensive plan gives rise to a legal basis for compensation under state Ballot Measure 49 (2007) or otherwise. Specifically, you referred to county Ballot Measure 7-47, a local initiative that was approved by Crook County voters in May 2008. ANSWER Yes, an amendment to the county's comprehensive plan that removes private real property from a map of lands eligible for destination resort siting is a land use regulation that restricts a residential use of the property and provides a legal basis for a claim for compensation under ORS 195.305 and 195.310 if the amendment reduces the value of the property and is adopted after January 1, 2007. However, Measure 7-47 is a merely advisory measure. In order to modify the comprehensive plan, the governing body of the county must take action. DISCUSSION Destination resorts are authorized pursuant to ORS 197.435 to 197.467.1 A destination resort consists of a combination of facilities including visitor-oriented accommodations, developed recreational facilities, open space and individually owned homes, lots or units, often developed in a rural area zoned for farm or forest use. A county may, but is not required to, establish a map of lands within the county that are "eligible for destination resort siting" as part of its comprehensive plan? In the specific statutes governing nonfarm uses in an exclusive farm use zone, destination resorts are explicitly identified as conditional uses rather than outright permitted uses.3 We conclude that, under the statutory scheme generally, destination resorts are a conditional use. A county may amend its map of lands eligible for destination resort siting during periodic review of the comprehensive plan or, not more than once every 30 months, by a post-acknowledgment amendment to the comprehensive plan.4 1 In fact, a destination resort may be established under statewide land use planning Goal 8 by taking exception to certain other goals. The statutes were enacted to create a less complicated and drawn out process. See Foland v. Jackson County, 311 Or. 167,173-175 (1991). z ORS 197.455. 3 ORS 215.213 (2) and 215.283 (2). 4 ORS 197.455 (2). kAoprr\09\Ic1304 bhc.doc Representative George Gilman September 22, 2008 Page 2 Measure 7-47, a local initiative that was approved by Crook County voters in May 2008, asked the question: Shall Crook County remove the Destination Resort eligibility overlay map from its comprehensive plan, thus preventing approval of more resorts? We note, however, that comprehensive planning, though adopted by legislative action of the governing body of a city or county, is not the kind of legislative action that can be the subject of the initiative or referendum power reserved to the people.5 Therefore, the Crook County election result does not have the effect of removing the destination resort map from the Crook County comprehensive plan; it is advisory only. Crook County had not previously provided for post- acknowledgment amendments to its destination resort map pursuant to ORS 197.455 (2)6; however, the governing body of Crook County has taken action in a first step to possible implementation of Measure 7-47 by amending its comprehensive plan to allow post- acknowledgment amendments to its destination resort map. Based on the date of the Crook County election, state Ballot Measure 37 (2004), as amended in 2007 by Measure 49, provides the legal basis upon which a property owner might make a claim for compensation. The permanent sections of Measure 49 are codified as ORS 195.300 to 195.336 and further references in this opinion will be made to the statutes. A property owner is entitled to receive compensation for a claim made under ORS 195.305 and 195.310 if, after January 1, 2007, "a public entity enacts one or more land use regulations that restrict the residential use of private real property or a farming or forest practice and that reduce the fair market value of the property." Though "residential use" is not defined for purposes of ORS 195.300 to 195.336, we conclude, on balance, that a destination resort is a "residential use" within the common legal meaning of the term in the context of land use planning and zoning and as the term is used in ORS 195.305. An amendment to a comprehensive plan that removes the map of lands eligible for destination resort siting is a land use regulation that restricts residential use. If that restriction of residential use results in a reduction of the value of the property, the property owner is entitled to compensation.' Our conclusion is based on the manner in which the statutes are constructed and is not free from doubt. 5 For purposes of the initiative and referendum powers, Oregon courts distinguish between a legislative action, which can be initiated or referred, and an administrative action, which cannot be initiated or referred. Foster v. Clark, 309 Or. 464, 472 (1990). A particular action of a governing body is administrative and not legislative if it does not make new policy but merely carries out policies contained in a scheme that constitutes a complete legislative plan. Lane Transit District v. Lane County, 327 Or. 161, 167-168 (1998). For purposes of comprehensive planning and the initiative and referendum powers, state law and statewide land use planning goals constitute the complete legislative plan and the work of the local governing body in developing a comprehensive plan carries out the policies in the scheme. 6 Map amendments may be made during periodic review of a comprehensive plan pursuant to ORS 197.628 to 197.650. We note that restriction of conditional uses can provide the legal basis for a claim for compensation. While a request for a conditional use will not be approved automatically, a land use regulation that prevents the possibility entirely constitutes a restriction. The conditionality, however, certainly raises a justiciable issue about the degree to which the restriction reduces the value of the property. Likewise, several other issues affecting private property mapped as eligible for destination resort siting may affect the degree to which property is reduced in value by a removal of the property from the map. For example, large open spaces are required for development of a destination resort. The necessity to cobble together a large number of small-acreage tracts under common ownership may prevent a particular property owner from establishing a substantial change in value of that owner's property. k:\oprr\09\k 1304 bhc.doc Representative George Gilman September 22, 2008 Page 3 We noted above that a destination resort consists of a combination of facilities including visitor-oriented accommodations, developed recreational facilities, open space and individually owned homes, lots or units. Because the open space and developed recreational facilities appear to be ancillary, we focus on the overnight lodging units and the individually owned homes, lots or units. In the context of land use planning and zoning, transient lodging is a typical commercial use of property. Likewise, individually owned homes, lots and units are a typical residential use. In authorizing the development of a destination resort, the statutes condition establishment of the individually owned homes, lots and units on the prior or guaranteed development of the transient lodging. ORS 197.445 (4)(a) provides, for a resort in western Oregon, that "[a] total of 150 units of overnight lodging must be provided" and at least 75 of those units "must be constructed or guaranteed through surety bonding or equivalent financial assurance prior to the closure of sale of individual lots or units." (Emphasis added.) Likewise, for eastern Oregon, though the timing of construction or guarantee of the overnight lodging units is different, the requirement for overnight lodging in ORS 197.445 (4)(b) is presented as a condition precedent to the approval of the individual lots or units. Similarly, the number of individual lots or units authorized is based on the number of overnight lodging units provided. That is, the number of individual lots or units may not exceed two units for each permanent unit of overnight lodging in western Oregon and 2-1/2 units for each permanent unit of overnight lodging in eastern Oregon.' A destination resort is intended to be a self=contained development, by which we mean either that community sewers and water facilities are provided on-site and limited to meet the needs of the development or that the costs related to service extension from a public sewer or water system are met by the development 9 However, with the exception of facilities specifically required by the statutes to support the development, industrial facilities are expressly prohibited and commercial facilities are expressly limited to those "types and levels necessary to meet the needs of visitors to the development." 0 In establishing a destination resort, there is no practical way under the statutory scheme to separate the development of the commercial facilities from the residential facilities. Because the establishment of commercial facilities is authorized primarily as a condition precedent to the establishment of the residential facilities, we conclude that the purpose of the destination resort statutes is to establish a residential use. Commercial uses are limited to those uses required as a condition precedent to establishment of the residential uses and those uses required to meet the needs of visitors to the resort. Therefore, a restriction of a property owner's ability to qualify for destination resort siting, if enacted after January 1, 2007, may provide a legal basis for a claim for compensation under ORS 195.305 and 195.310. The opinions written by the Legislative Counsel and the staff of the Legislative Counsel's office are prepared solely for the purpose of assisting members of the Legislative Assembly in the development and consideration of legislative matters. In performing their duties, the Legislative Counsel and the members of the staff of the Legislative Counsel's office have no authority to provide legal advice to any other person, group or entity. For this reason, this opinion should not be considered or used as legal advice by any person other than legislators in the conduct of legislative business. Public bodies and their officers and employees should seek and rely upon the advice and opinion of the Attorney General, district attorney, county counsel, s ORS 197.445 (4)(a)(D) and (b)(E). 9 ORS 197.435 (6). 10 ORS 197.445 (5). k:\oprr\09Vc1304 bhc.doc Representative George Gilman September 22, 2008 Page 4 city attorney or other retained counsel. Constituents and other private persons and entities should seek and rely upon the advice and opinion of private counsel. Very truly yours, By DEXTER A. JOHNSON Legislative Counsel B. Harrison Conley Senior Deputy Legislative Counsel k:\oprr\09\Jcl304 bhc.doc + i i i i A-e I j Y _ z7- e' oe Lof 7 (a d~ "1 14 l M. Kay Knott 68308 Cloverdale Rd. Sisters, OR 97759 April 19, 2010 Deschutes County Board of County Commissioners Deschutes Service Center 1300 NW Wall Street Bend, OR 97701 SUBJECT: Destination Resort Mapping I encourage the County Commissioners to adopt the destination resort remapping proposal submitted by the Planning Commission. This proposal has been developed as a result of many hours of thought, evaluation and listening to public testimony. The plan is a proposal to identify areas considered to be most appropriate for resort siting. It is not a plan approving resorts for siting in any specific location. Ultimately resorts should be approved or disapproved based on their individual plan and situation. On the other hand mapping decisions should be based solely on evaluating the appropriateness of the area for a potential resort and nothing else. Deschutes County is highly reliant on tourism and has implemented policies to "protect the area, preserving its esthetic values to encourage tourism and maintain the rural lifestyle". Some of these policies perfectly demonstrate the "law of unintended consequences" by impacting negatively on some industries ability to make a living by leading to increased costs, reduced income and restricted ability to use their property in the most effective manner. Agriculture production is a perfect example of an industry so impacted. That being the case, it's important for the county's benefit that the county provide other and diverse opportunities for these businesses to continue to exist, if not in agriculture, then in other business opportunities, providing jobs for citizens and revenue for the county. In view of the diminished capacity to produce economically, it makes more sense to allow for much broader uses on agricultural lands such as events, dude ranches, etc. to preserve the agricultural sense and feel of the area while allowing more creative methods of subsidizing these operations. Thank you for the opportunity to testify. Marilyn K. Knott Pagel of 2 Peter Gutowsky From: Nick Lelack Sent: Friday, April 16, 2010 3:17 PM To: Peter Gutowsky Subject: FW: Destination Resort Mapping Nick Lelack, AICP, Planning Director Deschutes County Community Development Dept. 117 NW Lafayette, Bend, OR 97701 Office: 541.385.1708 / Cell: 541.678.3866 / Fax: 541.385.1764 www.deschutes.org/cdd From: Bonnie Baker Sent: Friday, April 16, 2010 3:16 PM To: Nick Lelack Subject: FW: Destination Resort Mapping FYI From: Leonard Knott [mailto:lknottl@earthlink.net] Sent: Friday, April 16, 2010 2:53 PM To: Board Subject: Destination Resort Mapping April 16, 2010 Board of County Commissioners Deschutes County OR I strongly urge you to approve the issue currently before the Board of County Commissioners concerning the mapping of destination resorts in Deschutes County. It strikes me that opponents of the retention of the Cyrus property in the destination resort map are confusing, either innocently or perhaps purposely, the mapping function with the siting function. Knowing as you do that including a property in the mapping is a far cry from granting approval for the actual siting of a given property, it is incomprehensible to me that the county would consider discounting a property from the county's plan that otherwise meets state-wide criteria for siting. The Oregon legislature has made it clear that tourism and the need to provide year-round destination resort accommodations to attract visitors and encourage them to stay longer is desirable to provide jobs for Oregonians (see ORS 197.440 (1) and (2)). It seems to me it would be self-defeating for county government not to take advantage of this invitation to provide for the well-being of its citizens by denying them the advantages of well-planned development as well as the economic benefits that go with such development. I suggest we keep in mind that mapping/siting is not a two-way street. ORS 197.455 provides that the mapping function comes first. In other words, a destination resort must be sited on lands mapped as eligible for destination resort siting. No Mapping = No Siting. Now is not the time to be exclusionary and get caught up in the minutiae of what criteria 4/19/2010 Page 2 of 2 must be satisfied in order to gain final approval for the siting of a resort. Deschutes County is especially blessed with its natural wonders, which serve as a magnet to draw people from all over to enjoy these wonders. The opportunity to benefit from such far-flung outside attention far outweighs any impact of destination resorts on historic income sources in Deschutes County, such as forestry (which no longer exists as a commercial enterprise) and agriculture (which consists almost exclusively of non-commercial hobby farms and a far cry from meeting the definition contained in ORS 197.435(2) of "high value crop area" as containing commercial farm land producing crops or products with a minimum gross value of $1,000 per acre). Summarily, it seems to me to be a win-win for the county to take an inclusionary stance when determining which properties to include in the county's destination resort map. Let's save the arguments for the time when meaningful discussion can determine which properties can, and should; receive favorable consideration for development into destination resorts. Sincerely, LEONARD J KNOTT 68308 Cloverdale Rd Sisters 97759 541-548-3419 4/19/2010 Date: April 5th, 2010 To: Nick Lelack, Peter Gutowsky, Deschutes County Planning Dept. Deschutes County Planning Commission Deschutes County Board of County Commissioners From: Darek Staab, Trout Unlimited Subject: Regarding Destination Resort Remapping On behalf of the Upper Deschutes Home Rivers Initiative and Trout Unlimited, thank you for your time and interest in comprehensive planning, clearly documenting legal destination resorts, and our comments in this letter. We are an organization with over 400 local Chapter members. Together, as Chapter and Initiative, we are in the process of creating a new stewardship program to care for our regional land and water. Together with our partners, we are trying to conserve our unique rivers, fish, and wildlife, but we need the Board of County Commissioners and Planning Commission to also step up and care for the natural resources we all share. We are closely tracking the comprehensive planning process and work of the Deschutes County Planning Commission, and we are worried about the current direction and lack of balanced perspectives. I hope the newly appointed Planning Commissioner will help provide greater balance with such a biased Planning Commission. There just seems to be too many personal goals and agendas in the Commission, as was shared in this weekend's Bulletin, and the strategy to further increase destination resorts beyond the law to benefit individuals. Thank you for taking the time to consider our state and local statutes and how they guide future resort development in our County. As we all know, our population has grown too quickly in the last 10 years, and we now have more resorts than any other county in Oregon, and a high unemployment rate linked with our reliance on growth, resorts, and building. This rapid growth and the natural resources sacrificed for that growth has lead to the decline in our native fisheries, the dangerous warming of our streams and rivers, and a loss in our open space and natural areas that draw people to our region. We should support our current neighborhoods, tax payers, and state guidelines, and remove properties that are not eligible for resort development. I commend your goal for this process, which was to clean up the resort map, and produce a map that truly reflects where resorts may be built according to existing statutes, and have clear and objective mapping criteria. As you consider the Planning Commissions strategy, please listen to these 3 key messages: We need to move beyond encouraging more destination resorts and focus on caring for our land and water, and encourage visitors to use our existing resorts and other lodging and services. Our economy and natural resources are limited, and it is better to care for what we have at this time instead of out growing beyond what we can provide and losing the reason that people used to come. Please consider the resources and money Deschutes County has spent over the years trying to settle disputes over zoning rules, text amendments and variances related to destination resorts. We need a clear Destination Resorts map which meets state laws and is easy to interpret. This resort map process has not incorporated new research on current fish and wildlife habitat conditions and needs. For example, the Whychus Creek watershed should be excluded from the resort map, because water rights on this crucial waterway for reintroduced threatened steelhead are already far oversubscribed. Thank you for considering our views. It is time to push for quality stewardship of our existing local businesses, and the water and land that supports those businesses. By stretching the rules to allow another growth spurt of destination resorts, we will risk losing the fish, wildlife and scenery that brings our visitors to the region. I hope you will focus on conserving the natural amenities which have drawn people to our beautiful region and carefully guide growth and development which meets state laws and local statutes. Thank you for your time and acknowledgement of these comments. Sincerely, Darek Staab Resident of Deschutes County and Manager of the Upper Deschutes Home Rivers Initiative Trout Unlimited Peter Gutowsk From: Dennis McGregor [mcgregor.dennis@gmail.com] Sent: Tuesday, April 06, 2010 10:02 AM To: Peter Gutowsky Subject: Aspen Lakes Peter, As I write this, the Cyrus family is working furiously with chainsaws and backhoes on their controversial proposed destination resort property. The only living things left in their wake are large trees. They started out clearing a two-hundred foot wide "fire-protection" strip around it's border (with public funding?), but are now deep into the interior, far from the view of the public eye. I realize that it is their land and they can clear it if they choose. But , it seems that their activity is directly connected to their persistent belief that they will prevail against every legal decision made so far. I am one of many who are sick of special interest groups eroding the democratic process in this country. More than ever we are looking to elected officials to represent the views of the majority. Please put an end to this sham. Keith Cyrus is using the system for the benefit of his family, against the will of the majority. Enough time has been spent on this issue. Hundreds of acres of prime wildlife habitat are being destroyed over one family's dreams of wealth. I don't think the Cyrus family would continue if they didn't some how think it was going to "all work out" in the end. Please help them understand that they need to find alternative uses for this property, before they destroy it all. Sincerely, Dennis McGregor 69335 Green Ridge Lp 1 Peter Gutowsky From: Wendy Holzman [wendomere@gmail.com] Sent: Tuesday, April 06, 2010 10:50 PM To: Tammy Baney; Dennis Luke; Peter Gutowsky; Nick Lelack Subject: Board of County Commissioners Public Hearing Monday April 5, 2010 Dear Commissioners Baney, Luke and Unger, After attending Monday's Public Hearing on the proposed Deschutes County Destination Resort Re-Mapping I was left with several impressions. To keep this short, I thought many of the comments were very concise and thoughtful, and in particular I thought Charlie Ringo made some very pertinent points. If I came away with one thought, it's that we need a Destination Resort Map that is legally defensible and that is realistic in terms of what lands can actually be sited, as opposed to just mapped. We need a resort map that includes only lands which meet current state and local statutes and development rules for resorts. This seems critical to me. In addition, quality of life for the residents of our county and sustainable growth, especially in terms of water and effects on wildlife, seem to be very important issues as well. I am not one to deny that tourism is a very big part of our local economy. But, if we don't maintain the quality of life that attracts people to our area, we will loose those same qualities that bring tourists as well. It is my belief that we need to be very mindful to not kill the goose that laid the golden egg. I have recently visited tourist areas in both California and Florida, and all I could think was that these areas were perfect examples of planning gone bad. That is that last thing we want people to think after visiting our amazing part of the world. Finally, in regard to the process, we need a Planning Commission that is well balanced, and can make decisions without regard to their own personal gain. Who can, as public servants, take into account the greater good of our community. I must also say that as the Chair for the Committee for Citizens Involvement in Sisters, although I am not representing this committee in my statement, I believe that public input is vital to this process and should be very carefully taken into account. And I applaud the Commissioners and our county planners for doing just that. Thank you for this opportunity to give written testimony on this crucial matter. Wendy Holzman 324 E Wapato Loop Sisters, OR 97759 1 Page 1 of 1 Peter Gutowsky From: Sher Buckner Sent: Thursday, April 08, 2010 5:18 PM To: Peter Gutowsky; Nick Lelack; Terri Hansen Payne; Peter Russell; Chris Brown; Ed Criss; Keith Cyrus; Merle Irvine; Richard Klyce; Todd Turner Subject: Aspen Lakes Destination Resort From: Iloydor@aol.com [mailto:lloydor@aol.com] Sent: Thursday, April 08, 2010 4:50 PM To: Planning Commission Subject: Aspen Lakes Destination Resort I would like to express my support for the conversion of Aspen Lakes to a destination resort. Since the area is already developed the negative impact on the area is greatly exaggerated. The positive impact, on the other hand, is the creation of construction jobs, employment of resort staff, and an additional influx of tourist dollars for years to come. With little industry and few job opportunities in the Sisters area, especially in these difficult economic times, the creation of additional employment will benefit far more people than it will inconvenience. In addition to an increase in employment, we should not overlook the benefits of an expanded tax base. Sincerely, Lloyd D. Morrell Sisters, Oregon 4/12/2010 Peter Gutowsky From: Nick Lelack Sent: Wednesday, April 07, 2010 10:05 AM To: Peter Gutowsky Subject: FW: DR remapping Ordinances 2010-001 and 2010-002 FYI - I did not see your name below. Nick Lelack, AICP, Planning Director Deschutes County Community Development Dept. 117 NW Lafayette, Bend, OR 97701 Office: 541.385.1708 / Cell: 541.678.3866 / Fax: 541.385.1764 www.deschutes.org/cdd -----Original Message----- From: Nunzie [mailto:nunzie@pacifier.com] Sent: Wednesday, April 07, 2010 9:28 AM To: Tammy Baney; Alan Unger; Dennis Luke Cc: Nick Lelack Subject: DR remapping Ordinances 2010-001 and 2010-002 Kindly enter the following into the record on DR remapping re: Ordinances 2010-001 and 2010-002 DR remapping process & criteria Legal Notice of Trustee Sale: Bulletin page E4 April 5, 2010 bottom of columns 7-9 DRR Lot 8 is a 199 year leased landholding now with a partial unbuilt home that has been noticed for foreclosure. Deschtues County should not be creating new DR criteria that would further allow DDR to morph into a DR. DRR is already in the map. http://recorcii.ngs.co.deschutes.or.us/Templmages/591885308973.pdf recording year 2006 document number 054056 http://recordings.co.deschutes.or.us/Templmages/59188530891319.pdf recording yr 2007 document number 5223 read page 2 item 3 is the intent to convert the lease to fee owned in the future? http://recordings.co.deschutes.or.us/Templmages/59188530891435.pdf recording yr 2008 document number 00819 As a property owner in Deschtues River Ranch, I object to any criteria that would legitimize Deschutes River Ranch becoming a destination resort now or in the future. This subdivision should remain a subdivision. No destination resort should be on leased lands. Nunzie Gould Peter Gutowsky From: Nunzie [nunzie@pacifier.com] Sent: Monday, April 12, 2010 3:12 PM To: Peter Gutowsky; Nick Lelack; Tammy Baney; Dennis Luke; Alan Unger Subject: Re: DR remapping Ordinances 2010-001 and 2010-002 Attachments: 11_Gould.pdf; ATT241951.txt 11-Gould.pdf (4 ATT241951.txt (66 MB) B) Hello: Apologies for the links not opening as I had hoped. Here is how to access the documents I reference in my original email: First go to: http://recordings.co.deschutes.or.us/searchdisclaimer.asp (but if this doesn't open, go to http://recordings.co.deschutes.or.us ) accept at bottom of disclaimer then type in: Year and document number for each document , then double click on View Document Image, from which you can then print each document. recording year 2006 document number 054056 recording year 2007 document number 5223 recording year 2008 document number 00819 I also note a typographic error in line 7 of my original email below: DDR should read DRR which abbreviates for Deschutes River Ranch. Thank you for your attention and consideration. Nuns i E- Gould 541-420-3325 On Apr 8, 2010, at 4:18 PM, Peter Gutowsky wrote: Nur e, i abi: to open the links cited in your emai.t below. other note, t tt,, mony you entered on Monday is now in the record. It is a--ached with this erna:iI. > > Pet E)r Gut owsky, AICP Principal Planner I?escl~utos County Corrnnunl ty Development Department > 117 NW Lafayette Fen~t, UR 97701 > ptA 041) 385-1709 fax# 91)385-1769 > 0 > Web: www.co.deschutes.or.us/cdd > ---Original Message----- . Fr-:n: Ni: k 1Le1ack > Sent: Wednesday, April 07, 2010 10:05 AM > To: Peter Gutowsky > Subject: FW: DR remapping Ordinances 2010-001 and 2010-002 > FYI - I did not see your name below. > 1 > > > > > Nick Lelack, AICP, Planning Director Deschutes County Community Development Dept. 117 NW Lafayette, Bend, OR 97701 Office: 541.385.1708 / Cell: 541.678.3866 / Fax: 541.385.1764 www.deschutes.org/cdd Original Message----- From: Nunzi_e [maiIto: nunzieepacifier.com] Sent: Wednesday, April 07, 2010 9:28 AM To: Tammy Baney; Alan Unger; Dennis Luke Cc: Nick Lelack Subject: DR remapping Ordinances 2010-001 and 2010-002 Kindly enter the following into the record on DR remapping re: Ordinances 2010-001 and 2010-002 D]< Lemapping process criteria Legal Notice of Trustee Sale: Bulletin page E4 April 5, 2010 bottom of columns 7-9 DRR Lot 8 is a 199 year leased landholding now with a partial unbuilt home that has been noticed for foreclosure. Deschtues County should not be creating new DR criteria that would further allow DDR to morph into a DR. DRR is already in the map. http://recordings.co.deschutes.or.us/Teniplmages/591885308973.pdf recording year 2006 document number 054056 http://recordings.co.deschutes.or.us/TernpImages/59188530891319.pdf recording yr 2007 document number 5223 read page 2 item 3 is the intent to convert the lease to fee owned in the future? http://recordings.co.deschutes.or.us/Templmages/59188530891435.pdf recording yr 2008 document number 00819 As a property owner in Deschtues River Ranch, I object to any criteria that would legitimize Deschutes River Ranch becoming a destination resort now or in the future. This subdivision should remain a subdivision. No destination resort should be on leased lands. Nunzie Gould <11 Gould.pdf> 2 MEMORANDUM OF GROUND LEASE RECORDING REQUESTED BY AND WHEN RECORDED, MAIL TO Deschutes River Ranch Group, LLC 20210 Swalley Road Bend, OR 97701 Attn: Gary Blake SEND TAX STATEMENTS TO: COUNTY OFFICIAL NANCYUBLANKENSHIP,COUNTY CLERKDS 2006-54056 IIIIIIIIIII IN 1111111111111111111111111111111 111 $66,00 00485283200800340560080084 08I07I2006 03:03:37 PM D-LE Cnt=1 Stn=1 BECKEY $40.00 $11.00 $10.00 $5.00 Jay D. Jaeger PO Box 819 Santa Barbara, CA 93102 Attn: MEMORANDUM OF GROUND LEASE THIS MEMORANDUM OF GROUND LEASE (this "Memorandum") is made and entered into this 2 day of August , 2006, by and between DESCHUTES RIVER RANCH GROUP, LLC, whose present address is 20210 Swalley Road, Bend, OR 97701 ("Landlord") and JAY D. JAEGER, whose present address is PO Box 819, Santa Barbara, CA 93102 ("Tenant"), with reference to the following facts: A. Landlord is the owner of that certain real property located in Deschutes County, Oregon, and more particularly described on Exhibit A attached hereto (the "Property"). B. Pursuant to that certain unrecorded Ground Lease dated August 2 , 2006 (the "Lease"), Landlord has leased the Property to Tenant, and Tenant has leased the Property from Landlord. C. The parties to the lease are desirous of placing their interests therein as a matter ofrecord. NOW, THEREFORE, in consideration of the mutual covenants herein contained and contained in the Lease, the parties agree as follows: 1. Term. The term of the Lease (the "Term") is one-hundred-ninety-nine years (199), commencing on , 2006 and expiring on 2205, subject, however, to such rights of renewal as may be contained in Section 2. 2. Renewal Term. At the expiration date of the Tenn (as the same may be extended from time to time) the Lease Term shall automatically be extended for three (3) successive periods of ninety-nine (99) years each, unless both parties to the Lease sign a lease termination After recording, return to ArneriTitle 15 OREGON AVENUE, BEND not later than thirty (30) days prior to the then current expiration date and record a memorandum thereof in the Official Records of Deschutes County, Oregon. This Memorandum is for informational purposes only and nothing contained herein shall be deemed to in any way modify or otherwise affect any of the teens and conditions of the Lease, the terms of which are incorporated herein by reference. This instrument is merely a memorandum of the Lease and is subject to all of the terms, provisions and conditions of the Lease. In the event of any inconsistency between the terms of the Lease and this instrument, the terms of the Lease shall prevail. IN WITNESS WHEREOF, the parties hereto have executed this Memorandum on the day and year first above written. Tenant: Na e: J D. a er Name: Landlord: orb, STATE OF ) )ss. County of / The foregoing instru ent was ack owledged before me on this •y day of da~;~_ 200~(,by ~L Piy' U P. C. RUSSEL Notary Public for Of-et e, comm. 16616 Q w NOTARYPUBUC CALIFORNIA My Commission Expires: O SANTA BARBARA COUNTY COMM EXPIRES MAY 25, 2010 STATE OF OREGON ) )ss. County of S ) oing in t ment was acknowledged before me on this' day of Th~c fore t _t 20O~bY COQ of Deschutes River Ranch Group, +C, an OFFICIAL SEAL TERRIAUSBROOKS NOTARY PUBLIC- OREGON COM14ISSION NO, 380427 STATE OF OREGON ) )ss. County of S ) If o the company. Notary Public for Oregon My Commission Expires: , 1 S • d d Th foregoing instrument was acknowledged before me on thisl day of 2001 by ~ , t of Deschutes River Ranch Group, LL an Oregon limited liabi I company, on behalf f the compan U FI AL SEAL Notary Public for Oregon TEP;-T ALISDROOKS p My Commission Expires: NOTk ; PUBLIC-OREGON COMMISSION NO, 380427 My COMMISSION EXPIRES JUN 19 2008 FXHIBIT "A" DESCHUTES RIVER RANCH ESTATE LOT 8 DESCRIPTION May 10, 2005 A tract of land in the southwest one-quarter of Section 16, Township 16 South, Range 12 East, Willamette Meridian, Deschutes County, Oregon, the said tract being more particularly described as follows: Commencing at the southwest corner of said Section 16, from which corner the southeast corner of the southwest one-quarter of said Section 16 bears N.89056'1 1"E., 2633.08 feet; thence N.28050'41"E., 857.62 feet to the True Point of Beginning of the tract herein described; thence N.32016'21"VV., 33.80 feet; thence N.29018'26"E., 472.96 feet; thence S.89047'26"E., 51.01 feet; thence S.22009'52"E., 90.75 feet; thence S.11036'56"E., 198.02 feet; thence S.00012'34"W., 126.72 feet; thence S.36°54'58"W., 93.55 feet; thence N.89°47'26"W., 150.00 feet; thence N.73052'01"W., 137.34 feet to the True Point of Beginning. Contains 2.50 acres, more or less. Submitted for Recordation By and Return to Loan Number 6092169512 FL9-700-01-01, JACKSONVILLE POST BANK OF AMERICA BLDG 700, FILE RECEIPT DEPT. 9000 SOUTHSIDE BLVD. JACKSONVILLE, FL 32256 SPACE ABOVE THIS LINE FOR RECORDER'S LISE- CONSENT TO ENCUMBRANCE OF LEASE AND AMENDMENT TO LEASE JAY D. JAEGER is Lessee ("Lessee") under an Agreement of Lease (the "Lease"), dated , with as Lessor ("Lessor") recorded or a Memorandum of which was recorded on , ~ - "j- in Book 2- r>-lo Page 5gO56 , Official Instrument No. of Official Records of DESCHUTES County, state of OREGON pertaining to the property described in Exhibit "A" hereto (the "Leased Property"). 1. Lessor (a) consents to Lessee's encumbrance of Lessee's leasehold interest in the Leased Property (the "Leasehold") by mortgage, deed of trust or security deed (the "Security Instrument") in favor of BANK OF AMERICA, N.A. ("Encumbrancer") to secure a note in the principal sum of $ 805,000.00 , and other obligations set forth in the Security Instrument which is recorded concurrently herewith in the Official Records of DESCHUTES County, state of OREGON , and (b) agrees that the terms hereof shall govern over any provision inconsistent herewith in the Lease. Pays 1 of 4 -BA042U 97osf ELECTRONIC LASER FORMS, INC. - 1800027-0545 TM C042 08/01/06 6:01 PM 6092169512 t 2. Lessor affirms that as of the date of this Consent, the Lease is in full force and effect and no default or ground for termination thereof exists. 3. An assignment of the Lease of one of the below listed types, made in connection with the Security Instrument, may be made without the consent of Lessor: (a) Assignment by judicial or non-judicial foreclosure, subject to applicable law, under the Security Instrument, or assignment in lieu of foreclosure; and (b) Assignment by Encumbrancer, after having obtained an assignment described in (a) above. Any Lease transferee under the provisions of this paragraph 3 shall be liable to perform the obligations of Lessee under the Lease only so long as the transferee holds title to the Leasehold. Any subsequent transfer of the Leasehold may be made only with such written consent of Lessor and subject to the conditions relating thereto as are set forth in the Lease. 4. Lessor may not terminate the Lease because of any default or breach thereunder on the part of Lessee if Encumbrancer, or the trustee under the deed of trust, if applicable, within 90 days after service of written notice on Encumbrancer by Lessor of Lessor's intention so to terminate: (a) Cures the default or breach if it can be cured by the payment or expenditure of money provided to be paid under the terms of the Lease, or if the default or breach is not so curable, commences, or causes the trustee under the deed of trust to commence, if applicable, and thereafter pursues to completion, steps and proceedings to foreclose on the Leasehold covered by the Security Instrument; and (b) Keeps and performs all of the covenants and conditions of the Lease requiring the payment or expenditure of money by Lessee until such time as the leasehold is sold upon foreclosure pursuant to the Security Instrument, or is released or reconveyed thereunder, or is transferred upon judicial foreclosure or by an assignment in lieu of foreclosure. 5. Any notice to Encumbrancer provided for in the preceding paragraph may be given concurrently with or after the notice of default to Lessee, as provided in the Lease. 6. Notwithstanding any Lease provision to the contrary, policies of fire and extended coverage insurance shall be carried by Lessee covering the building or buildings constructed on the Leasehold premises with loss payable clause to Encumbrancer, and any disposition of the proceeds thereof in case of loss shall be subject to the rights of the Encumbrancer as provided in the Security Instrument. -BA042U (9709) Pa9• 2 of 4 M C042 08/01/06 6:01 PM 6092169512 7. Any and all eminent domain or condemnation awards or damages shall first be applied in payment of the then outstanding balance, if any, of the loan made to Lessee by Encumbrancer and the balance of the awards and damages, if any, shall be paid to Lessor and Lessee, as their interests may appear. 8. The Lease may be amended, or may be terminated by any party other than as provided in paragraph 5 hereof, only with the prior written consent of Encumbrancer. 9. Lessor hereby waives the right to obtain, for any liability of Lessee that arises, accrues, or is the subject of legal action while the Security Instrument is in existence, a lien on any equipment or furnishings of Lessee that may constitute a part of the Leasehold improvements. 10. The terms hereof shall inure to the benefit of and be binding upon the parties, their successors and assigns. 11. Lessor is aware of, and consents to, the terms and purposes of the note secured by the Security Instrument, and any extensions or renewals thereof. 12. To the extent that this document gives additional rights to Encumbrancer, the Lease is hereby amended and modified for the benefit of Encumbrancer only. 13. Except as provided herein, the Lease shall remain in full force and effect as originally written. MBA042U (9709) Gaga 3 of 4 C042 08/01/06 6:01 PM 6092169512 1 LESSOR: Deschutes River Morton, Manager (Attach Acknowledgments) -BA042U (9709) Pa9o 4 of 4 C042 08/01/06 6:01 PM 6092169512 V a to Date Date 106 Date Date Date Date In this Consent the singular number includes the plural, whenever the context so requires. MEMORANDUM OF AMENDED AND RESTATED GROUND LEASE RECORDING REQUESTED BY AND WHEN RECORDED, MAIL TO: Deschutes River Ranch Group, LLC 20210 Swalley Road Bend, OR 97701 Attn: Garv Blake SEND TAX STATEMENTS TO: COUNTY NANCYUBLANKENSHIP,FCOUNTY CLERKS 2001.05223 111111111111111111 $51,00 005Z42d7Z0070008ZZ300"30050 0112612007 11;37;15 AM D-LE Cn!■1 St,n_1 BN $25.00 $11.00 $10.00 $5.00 Jay D. Jaeger 1j PO Box 819 Santa Barbara, CA 93102 Attn: MEMORANDUM OF AMENDED AND RESTATED GROUND LEASE THIS MEMORANDUM OF GROUND LEASE (this "Memorandum") is made and entered into this ' Xday of December, 2006, by and between DESCHUTES RivEtt RANCH GROUP, LLC, whose present address is 20210 Swalley Road, Bend, OR 97701 ("Landlord") and JAY D. JAEGER, whose present address is P.O. Box 819, Santa Barbara, CA 93102 ("Tenant"), with reference to the following facts: A. Landlord is the owner of that certain real property located in Deschutes County, Oregon, and more particularly described on Exhibit A attached hereto (the "Land" B. Pursuant to that certain unrecorded Amended and Restated Ground Lease dated August 2, 2006 (the "Lease"), Landlord has leased the Property to Tenant, and Tenant has leased the Land from Landlord. C. The parties to the Lease are desirous of placing their interests therein as a matter of record. D. The Lease amends and restates in its entirety the prior lease entered into on August 2, 2006, a memorandum of which was recorded in the Real Property Records of Deschutes County, Oregon at 2006-54056, on August 7, 2006. NOW, THEREFORE, in consideration of the mutual covenants herein contained and contained in the Lease, the parties agree as follows: 1. Term. The term of the Lease (the "Term") is one-hundred-ninety-nine years (199), commencing on December 2006 and expiring on December Lz, 2205 subject, however, to such rights of renewal as may be contained in Section 2. Recorded by AmeriTltle as an accommodation only. No liability jr, acceptr°e fn, thn condition of title or tot mu validity, sufficiency, or effect of this document. Arn--dtitle DRR Estate Lot R Amended & Restated Memorandum of Ground [.ease BEND .5 C'~r.EO 2. Renewal Term. At the expiration date of the Term (as the same may be extended from time to time) the Lease Term shall automatically be extended for eight (8) successive periods of ninety-nine (99) years each, unless both parties to the Lease sign a lease termination not later than thirty (30) days prior to the then current expiration date and record a memorandum thereof in the Official Records of Deschutes County, Oregon. 3. Conveyance of Property. As provided in Section 2.4 of the Lease, the parties intend that Tenant's use of the Land be as close to fee ownership as is reasonably practicable. If Landlord could convey fee title to the Land to Tenant as of the date of this Lease, it would. Accordingly, the parties agree that if during the Term of this Lease (including any extensions thereof) Oregon law ever permits Landlord to convey fee simple title to the Land and all improvements thereon to Tenant as one complete, separate legal lot, Landlord (including its successors and assigns) covenants, at no cost to itself, to do so; provided, however, Tenant is not then in material default under the Lease. This Memorandum is for informational purposes only and nothing contained herein shall be deemed to in any way modify or otherwise affect any of the terms and conditions of the Lease, the terms of which are incorporated herein by reference. This instrument is merely a memorandum of the Lease and is subject to all of the terms, provisions and conditions of the Lease. In the event of any inconsistency between the terms of the Lease and this instrument, the terms of the Lease shall prevail. IN WITNESS WHEREOF, the parties hereto have executed this Memorandum on the day and year first above written. Tenant: Landlord: Managing Member 2 DRR Estate Lot 8 Amended & Restated Memorandum of Ground Lease Name: Gi lake Managing Member 7 STATE OF OREGON ) )ss. County of Iea)4 s ) OFFICIAL SEAL DEBRA L DE HART i NOTARY PUBLIC- OREGON COMMISSION NO. 380401 MY W MISSION EXPIRES JAN. 12.2008 The foregoing instrument was acknowledged before me on this~jthday of December 2006 by Jay D Jaeger. STATE OF OREGON ) )SS. County ofzffw~ ) Notary Public for Oregon My Commission Expires:alll~ OFFICIAL SEAL DEBRA L DE HART NOTARY PUBLIC- OREGON COMMISSION NO- 38"81 MY COMMISSION EXPIRES JAN. 12, 2009 The foregoing instrument was acknowledged before me on thisjj day of December 2006 by Gary Blake, the Managing Member of Deschutes River Ranch Group, LLC, an Oregon limited liability company, on behalf of the company. Notary Public for Oregon My Commission Expires:;Ta~_,. q aV STATE OF OREGON ) )ss. County ofi}~ ) OFFICIAL SEAL DEBRA L DE HART NOTARY PUBLIC- OREGON COMMISSION NO. 388481 MY COMMISSION EXPIRES JAN. 12, 2009 The foregoing instrument was acknowledged before me on this day of December 2006 by Craig Morton, the Managing Member of Deschutes River Ranch Group, LLC, an Oregon limited liability company, on behalf of the company. Notary Public for Oregon My Commission Expires: W 3 DRR Estate Lot 8 Amended & Restated Memorandum of Ground Lease Exhibit A to Memorandum of Ground Lease Legal Description [to be attached] DRR Estate Lot 8 Amended & Restated Memorandum of Ground Lease DESCHUTES RIVER RANCH ESTATE LOT 8 DESCRIPTION May 10, 2005 A tract of land in the southwest one-quarter of Section 16, Township 16 South, Range 12 East, Willamette Meridian, Deschutes County, Oregon, the said tract being more particularly described as follows: Commencing at the southwest corner of said Section 16, from which corner the southeast corner of the southwest one-quarter of said Section 16 bears N.89056'1 1"E., 2633.08 feet; thence N.28050'41"E., 857.62 feet to the True Point of Beginning of the tract herein described; thence N.32016'21"W., 33.80 feet; thence N.29018'26"E., 472.96 feet; thence S.89047'26"E., 51.01 feet; thence S.22009'52"E., 90.75 feet; thence S.11°36'56"E., 198.02 feet; thence S.00012'34"W., 126.72 feet; thence S.36054'58"W., 93.55 feet; thence N.89047'26"W., 150.00 feet; thence N.73°52'01 "W., 137.34 feet to the True Point of Beginning. Contains 2.50 acres, more or less. DESCHUTES NANCY COUNTY CLERKDS 1008 00819 111111111111111IIIIIIIIIIIIII III $146,00 'IIII~IIIIIIIIIII L'U --1(n (p 1 - I Q9 ~Or1 S S @05919176200800@08190240248 After Recording Return To: M-DT Cnt=1 Stn=1 ON 01/01/1008 03:41,36 PM Bank of America, N.A. $120.00 $11.00 $10.00 $5.00 ATTN: Construction 9000 Southside Blvd., Ste. 700 Jacksonville, FL 32256 Prepared By: Robertson & Anschutz 10333 Richmond Avenue, Suite 550 Houston, TX 77042 LINE OF CREDIT DEED OF TRUST Loan No- 656768541 THIS DOCUMENT CONSTITUTES A FIXTURE FILING IN ACCORDANCE WITH O RS 7984020(6) THAT SHALL HAVE AN EFFECTIVE PERIOD UNTIL THIS DEED OF TRUST IS RECONVEYED OR SATISFIED OF RECORD OR ITS EFFECTIVENESS OTHERWISE TERMINATES AS TO THE REAL PROPERTY. DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) "Security Instrument" means this document, which is dated January 02, 2008, together with all Riders to this document. (B) "Borrower" is Jay D. Jaeger, a married man. Borrower is the trustor under this Security Instrument. (C) "Lender" is Bank of America, N.A.. Lender is a National Association organized and existing under the laws of the United States of America. Lender's address is P.O. Box 9000, Getzville, NY 14068-9000. Lender is the beneficiary under this Security Instrument. (D) "Trustee" is First American Title. (E) "Note" means the promissory note signed by Borrower and dated January 02, 2008. The Note states that Borrowerowes Lender Two Million Four Hundred Eighty-Three Thousand Dollars (U.S. $2,483,000.00 ) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than February 01, 2039. (F) "Property" means the property that is described below under the heading "Transfer of Rights in the Property." (G) "Loan" means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest. (H) "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower [check box as applicable): [X] Adjustable Rate Rider [X] Planned Unit Development Rider [X] Construction Loan Rider [X] Second Home Rider (1) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non- appealable judicial opinions. (J) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (K) "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (L) "Escrow Items" means those items that are described in Section 3. (M) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (1) damage to, or destruction of, the Property; (ii) condemnation or other taking of' all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page I of 12 Pages) (R&A) RA0213480 - si3000.or - Rev. 05/08/2006 PI9ST AMERICAN TITLE ij SURANCE COMPANY OF ORE" 17.0 BOX 323 L;tF_Ng; OR 97709 (N) "Mortgage Insurance" means insurance protecting Lend eragainstthe nonpayment of, or default on, the Loan. (O) "Periodic Payment" means the regularly scheduled amount due for (I) principal and interest under the Note, plus (ii) any amounts under Section 3 of this Security Instrument. (P) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. §2601 et seq.) and its implementing regulation, Regulation X (24 C.F.R. Part 3500), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA" refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan" under RESPA. (Q) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (1) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County of Deschutes: See Exhibit "A" attached hereto and made a part hereof for all purposes which currently has the address of 20450 Arrowhead Drive, Bend, OR 97701 ("Property Address") TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of'record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations byjurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order, (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 2 of 13 Pages) (R&A) RA0213480 - si3000 or - Rev. 05/08/2006 making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments. 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees, and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required under this Section 3. Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 3 of 13 Pages) (R&A) RA0213480 - si3000.or - Rev. 05/08/2006 RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one- time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any part icular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment, All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If' Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 4 of 13 Pages) (R&A) RA0213480 - si3000.or - Rev_ 05/08/2006 shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due. 6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control. 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections ofthe Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 5 of 13 Pages) (R&A) RA0213480 - si3000 or - Rev. 05/08/2006 Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments ifMortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance." Further: (a) Any such agreements will not affect the amou nts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has - if any - with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 6 of 13 Pages) (R&A) RA0213480 - si3000Or - Rev 05/08/2006 required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value ofthe Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or jr, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbea rance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower of in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of Lender. OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 7 of 13 Pages) (R&A) RA0213480 - si3000.or - Rev 05/08/2006 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest of other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender, (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) OREGON--Single Family--Fannie Mae/Freddie Mae UNIFORM INSTRUMENT Form 3038 1/01 (Page 8 of 13 Pages) (R&A) RA0213480 - si3000 or - Rev 05/08/3006 entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements- (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order-, (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of thejurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action. remedial action, or removal action, as defined in Environmental Law- and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of I lazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products). Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely OREGON--Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 9 of 13 Pages) (R&A) RA0213480 - si3000.or - Rev 05/08/2006 affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on lender for an Environmental Cleanup. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence. If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall give notice of sale in the manner prescribed by Applicable Law to Borrower and to other persons prescribed by Applicable Law. After the time required by Applicable Law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terns designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale. Trustee shall deliver to the pu rchaser Trustee's deed conveying the Property without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it. 23. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled to it. Such person or persons shall pay any recordation costs. Lender may charge such person or persons a fee for reconveying the Property, but only ifthe fee is paid to a third party (such as the Trustee) for services rendered and the charging of the fee is permitted under Applicable Law. 24. Substitute Trustee. Lender may from time to time remove Trustee and appoint a Successor trustee to any "Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon Trustee herein and by Applicable Law. 25. Attorneys' Fees. As used in this Security Instrument and in the Note, attorneys' fees shall include those awarded by an appellate court. 26. Protective Advances. This Security Instrument secures any advances Lender, at its discretion, may make under Section 9 of this Security Instrument to protect Lender's interest in the Property and rights under this Security Instrument. 27. Required Evidence ol'Property Insurance. WARNING Unless you provide us with evidence of the insurance coverage as required by our contract or loan agreement, we may purchase insurance at your expense to protect our interest. This insurance may, but need not, also protect your interest. If the collateral becomes damaged, the coverage we purchase may, not pay any claim you make or any claim made against OREGON--Single Family--Fannie Mae/Freddie Mae UNIFORM INSTRUMENT Form 3038 1/01 (Page 10 of 13 Pages) (R&A) RA0213480 - si3000 or - Rev 05/08/2006 you. You may later cancel this coverage by providing evidence that you have obtained property coverage elsewhere. You are responsible far the cost of any insurance purchased by us. The cost of this insurance may be added to your contract or loan balance. If the cost is added to your contract or loan balance, the interest rate on the underlying contract or loan will apply to this added amount. The effective date of coverage may be the date your prior coverage lapsed or the date you failed to provide proof of coverage. The coverage we purchase may be considerably more expensive than insurance you can obtain on your own and may not satisfy any need for property damage coverage or any mandatory liability insurance requirements imposed by Applicable Law. OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page I I of 13 Pages) (R&A) RA0213480 - si3000.or - Rev. 05/08/2006 BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Jay D. (Seal) -Borrower OREGON--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3038 1/01 (Page 12 of 13 Pages) (R&A) RA0213480 - si3000.or - Rev 05/08/2006 aY2~_ County OF ilt~, _1 / On this day of-J personally appeared the above named Jay D. Jaeger and acknowledged the foregoing in rument to be his / her/their voluntary act and deed. Before Me Notary Public P. C. RUSSELL V COMM. #1661609 P 1(JlC55r~(L _ N ~ NOTARY PUBLIC -CALIFO -CALIFORNIA Name and title SANTA BARBARA COUNTY Q COMM, EXPIRES MAY 25, 2010 My commission expires: OREGON--Single Family--Fannie Mac/Freddie Mac UNIFORM Form 3U38 1/01 (Page (R&A) RA0213480 - 0000 or - Rev 05/08/2006 ADJUSTABLE RATE RIDER (I Year LIBOR Index - Rate Caps) (Assumable after Initial Period) Loan No.: 6856768541 THIS ADJUSTABLE RATE RIDER is made this Second day of January, 2008, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Adjustable Rate Note to Bank of America, N.A. (the "Lender") of the same date and covering the property described in the Security Instrument and located at: 20450 Arrowhead Drive Bend, OR 97701 [Property Address] THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE BORROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest rate of 7.500%. The Note provides for changes in the interest rate and the monthly payments as follows: 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The initial interest rate I will pay may change on the First day of February, 2013, and may change on that day every 12th month thereafter. Each date on which my interest rate could change is called a "Change Date." (B) The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the one- year London Interbank Offered Rate ("LIBOR") which is the average of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market, as published in The Watl Srreer.Journal. The most recent Index figure available as of the date 45 days before each Change Date is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index which is based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Two and One Quarter percentage points ( 2.250'%" ) to the Current Index. The Note Holder will then round the result of this addition to the next highest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount ofthe monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D) Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 12.500% or less than 2.500%. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than Two percentage points from the rate of interest I have been paying for the preceding 12 months. My interest rate will never be greater than 12.500%. (E) Effective Date of Changes MULTISTATE ADJUSTABLE RATE RIDER-1 Year LIBOR Index (Assumable after Initial period)--Single Family--Freddie Mac Modified Instrument 13.-ti5411(10102) F"rm3198 1/01 (K&A) RA0213480 -rd354.bax - Rev. 11123/2005 (Page I of3 pages) Loan No.: 6856768541 My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER 1. UNTIL BORROWER'S INITIAL INTERESTRATE CHANGES UNDERTHE TERMSSTATED IN SECTION A ABOVE, UNIFORM COVENANT 18 OF THE SECURITY INSTRUMENT SHALL BE IN EFFECT AS FOLLOWS: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contractor escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 2. AFTER BORROWER'S INITIAL INTEREST RATE CHANG ES UNDER THE TERMS STATED IN SECTION A ABOVE, UNIFORM COVENANT 18 OFTHE SECURITY INSTRUMENT DESCRIBED IN SECTION B1 ABOVE SHALL THEN CEASE TO BE IN EFFECT, AND THE PROVISIONS OF UNIFORM COVENANT 18 OF THE SECURITY INSTRUMENT SHALL BE AMENDED TO READ AS FOLLOWS: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contractor escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. MULTISTATE ADJUSTABLE RATER I DER A Year LIBOR Index (Assumable after Initial Period)--Single Family--Freddie Mac Modified Instrument BA354R(10102) Form 319H 1/01 (R&A) RAD213480 - rd354.bax - Rev. 11/238005 (Page 2 of 3 pages) MULTISTATE ADJUSTABLE. RATE RIDER-1 Year LIBOR Index (Assumable after Initial Period)--Single Family--Freddic Mar Modified Instrument BA354R(10102) Form 3198 1/01 (R&A) RA0213480 - rd354.bax - Rev. 11123/2005 1Paac 3 of3 uaues) Loan No.: 6856768541 PLANNED UNIT DEVELOPMENT RIDER THIS PLANNED UNIT DEVELOPMENT RIDER is made this Second day of January, 2008, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Bank of America, N.A. (the "Lender") of the same date and covering the Property described in the Security Instrument and located at: 20450 Arrowhead Drive Bend, OR 97701 [Property Address] The Property includes, but is not limited to, a parcel of land improved with a dwelling, together with other such parcels and certain common areas and facilities, as described in The Covenants, Conditions and Restrictions applicable to subject property (the "Declaration"). The Property is a part of a planned unit development known as Deschutes River Ranch (the "PUD"). The Property also includes Borrower's interest in the homeowners association or equivalent entity owning or managing the common areas and facilities of the PUD (the "Owners Association") and the uses, benefits and proceeds of Borrower's interest. PUD COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. PUD Obligations. Borrower shall perform all of Borrower's obligations under the PUD's Constituent Documents. The "Constituent Documents" are the (i) Declaration; (ii) articles of incorporation, trust instrument or any equivalent document which creates the Owners Association; and (iii) any by-laws or other rules or regulations of the Owners Association. Borrower shall promptly pay, when due, all dues and assessments imposed pursuant to the Constituent Documents. B. Property Insurance. So long as the Owners Association maintains, with a generally accepted insurance carrier, a "master" or "blanket" policy insuring the Property which is satisfactory to Lender and which provides insurance coverage in the amounts (including deductible levels), for the periods, and against loss by fire, hazards included within the term "extended coverage," and any other hazards, including, but not limited to, earthquakes and floods, for which Lender requires insurance, then: (i) Lender waives the provision in Section 3 for the Periodic Payment to Lender of the yearly premium installments for property insurance on the Property; and (ii) Borrower's obligation under Section 5 to maintain property insurance coverage on the Property is deemed satisfied to the extent that the required coverage is provided by the Owners Association policy. What Lender requires as a condition of this waiver can change during the term of the loan. Borrower shall give Lender prompt notice of any lapse in required property insurance coverage provided by the master or blanket policy. In the event of a distribution ofproperty insurance proceeds in lieu of restoration or repair following a loss to the Property, or to common areas and facilities of the PUD, any proceeds payable to Borrower are hereby assigned and shall be paid to Lender. Lender shall apply the proceeds to the sums secured by the Security instrument, whether or not then due, with the excess, if any, paid to Borrower. C. Public Liability Insurance. Borrower shall take such actions as maybe reasonable to insure that the Owners Association maintains a public liability insurance policy acceptable in form, amount, and extent of coverage to Lender. D. Condemnation. The proceeds of any award or claim for damages, direct or consequential, payable to Borrower in connection with any condemnation or other taking of all or any part of the Property or the common areas and facilities of the PUD, or for any conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. Such proceeds shall be applied by Lender to the sums secured by the Security Instrument as provided in Section 11. E. Lender's Prior Consent. Borrower shall not, except after notice to Lender and with Lender's prior written consent, either partition or subdivide the Property or consent to: (i) the abandonment or termination of the PUD, except for abandonment or termination required by law in the case of substantial destruction by fire or other casualty or in the case ofa taking by condemnation or eminent domain; (ii) any amendment to any provision of the "Constituent Documents" if the provision is for the express benefit of Lender; (iii) termination of professional management and assumption of self-management of the Owners Association; or (iv) any action which would have the effect of rendering the public liability insurance coverage maintained by the Owners Association unacceptable to Lender. MULTISTATE PUD RIDER--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3150 1/01 (Page I of 3 pages) (R&A) RA0213480 - rd3150 mIs - Rev. 08/16/2005 Loan No.: 6856768541 F. Remedies. If Borrower does not pay PUD dues and assessments when due, then Lender may pay them. Any amounts disbursed by Lender under this paragraph F shall become additional debt of Borrower secured by the Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lender to Borrower requesting payment. BY SIGNING BELOW, Borrower accepts a grees to the terms and covenants contained in this PUD Rider. A-,-, 't, Jay (Seal) -Borrower Loan No.: 6856768541 SECOND HOME RIDER THIS SECOND HOMER I DER is made this Second day of January, 2008, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower," whether there are one or more persons undersigned) to secure Borrower's Note to Bank of America, N.A. (the "Lender") of the same date and covering the Property described in the Security Instrument (the "Property"), which is located at: 20450 Arrowhead Drive Bend, OR 97701 [Properly Address] In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that Sections 6 and 8 of the Security Instrument are deleted and are replaced by the following: 6. Occupancy. Borrower shall occupy, and shall only use, the Property as Borrower's second home. Borrower shall keep the Property available for Borrower's exclusive use and enjoyment at all times, and shall not subject the Property to any timesharing or other shared ownership arrangement or to any rental pool or agreement that requires Borrower either to rent the Property or give a management firm or any other person any control over the occupancy or use of the Property. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's second home. MULTISTATE SECOND HOME RIDER-Single Family--Fannie Mae/F-ddie Mee UNIFORM INSTRUMENT Form 3890 1/01 (Page I of 2 page) (R&A) RA0213480 - rd3890.mis - Rev, 08/10/2000 MliL I ISI ATE SECOND HOMF: RIDER--Single Family--Fannie Mac/Freddie Mac UNIFORM Funn 3890 1/01 (Page 2 of 2 pnge) (R&..%) RA0213480-rd3890.mis-Rev 08/16/2005 Loan No.: 6856768541 CONSTRUCTION LOAN RIDER TO SECURITY INSTRUMENT THIS CONSTRUCTION LOAN RIDER TO SECURITY INSTRUMENT is made this Second day of January, 2008, and amends the Mortgage, Deed ofTrust or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note (the "Note") to Bank of America, N.A. (the "Lender") of the same date and covering the property described in the Security Instrument (the "Property") and located at: 20450 Arrowhead Drive, Bend, OR 97701. ADDITIONAL COVENANTS In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: Terms defined in the Note shall have the same meaning in this Security Instrument. A. INCORPORATION OF RESIDENTIAL CONSTRUCTION LOAN AGREEMENT Lenderand Borrower entered into a Residential Construction Loan Agreement (the "Agreement") ofeven date herewith. The Agreement is incorporated herein by reference. A default under the terms of the Agreement shall constitute a default under the terms of the Security Instrument. B. CONSTRUCTION MORTGAGE The Security Instrument is securing the obligation for the cost of construction of certain improvements on the Property. The Security Instrument is a "Construction Mortgage" under the Uniform Commercial Code as adopted and applied in the state where the Property is situated. It is understood and agreed that funds to be advanced under the Note are to be used in the construction of certain improvements on the Property in accordance with the Agreement. C. FUTURE ADVANCES / MAXIMUM PRINCIPAL AMOUNT The Security Instrument is given to secure future obligations under the Note. The face amount of obligations evidenced by the Note and secured hereunder is $2,483,000.00 and the maximum principal amount, including present as well as future advances evidenced by the Note, which Lender shall be obligated to advance at any one time shall not exceed the face amount of the Note; provided however, the said maximum amount may be increased by such additional amounts as may be advanced by Lender pursuant to the Security Instrument and all such additional amounts shall be deemed necessary expenditures for the protection of the security in accordance with and to the extent allowed by applicable law. D. MATURITY DATE The maturity date of the credit agreement secured by this line ofcredit instrument, exclusive ofany option to renew or extend such maturity date, is February 01, 2039. E. WAIVER OF CERTAIN NOTICES DURING CONSTRUCTION Notwithstanding the 30 day written notice and right to cure provisions contained in Section 22 of the Security Instrument, prior to the Rollover Date (or agreed written extension thereof), the Borrower, as well as all sureties, guarantors and endorsers of said Note severally waive all notices, demands, presentments for payment, notices ofnon-payment, notices of intention to accelerate the maturity, notices of acceleration, notices of dishonor, protest and notice of protest, diligence in collecting or bringing suit as to the Note and as to each, every and all installments thereof and all obligations thereunder and against any party thereto and to the application of any payment on said obligation, or as an offset thereto, and agree to all extensions, renewals, partial payments, substitutions or evidence of indebtedness and the taking, release or substitution of all or any part of the herein described security or the release of any party liable thereon with or without notice before or after maturity. F. SECURITY AGREEMENT Without limiting any of the provisions of the Security Instrument, Borrower, as Debtor (and being referred to in this paragraph as "Debtor," whether one or more), expressly GRANTS unto Lender, as Secured Party (and being referred to in this paragraph as "Secured Party," whether one or more), a security interest in the following described property (including both those now and those hereafter existing). The definition of Property is hereby expanded to include- (R&A) RA0213480 - RdConstSIOR.bax Rev. 11/03/2005 Page I Loan No.: 6856768541 (1) All fixtures, furnishings, equipment, building material and machinery now or hereafter located in, on, or used or intended to be used in connection with the Property, including without limitation: doors, partitions; window and floor coverings; apparatus, material, or equipment for supplying, holding, or distributing heating, cooling, electricity, gas, water, air, and lighting; security, access control, and fire prevention and extinguishing apparatus, material, or equipment; bathroom and kitchen fixtures; cabinetry; and landscaping. (2) All proceeds or sums payable in lieu of or as compensation for the loss of or damage to the Property and the Fixtures and Personal Property, and all rights in and to all present and future fire and hazard insurance policies. (3) All proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking, in whole or in part, of the Property, or for conveyance in lieu thereof. G. DEFAULT Covenants contained in Section Nos. 18, 19, and 22 of the Security instrument are hereby suspended during the continuance of this Rider only, and the following substituted in lieu thereof: In the event any of the following events or conditions occur or exist, each such event or condition shall be a default hereunder entitling Lender to declare the entire indebtedness hereby secured immediately due and payable: (1) Any lien, inferior or superior to the lien of this Security Instrument, is created, permitted or filed against the Property, or any portion thereof, without Lender's prior written consent, except current ad valorem taxes which are not then due and payable. (2) The sale, assignment or other transfer, voluntarily or involuntarily, of all or a part of Borrower's ownership interest in the Property, or any portion thereof, directly or indirectly, is made without Lender's prior written consent. (3) Borrower fails to comply with the terms and conditions of the Note, the Security Instrument or the Loan Agreement. Upon default, Lender, at its option, may require immediate payment in full of all sums secured by the Security Instrument without demand and may invoke the power of sale and any other remedies permitted by applicable law. I lowever, this option to require immediate payment in full shall not be exercised if such exercise is prohibited by applicable law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in the Security Instrument including, but not limited to, reasonable attorney's fees, whether or not such fees are incurred in connection with litigation, and if incurred.in connection with litigation, such fees shall include fees, expenses, and costs as are incurred at trial and on appeal or discretionary review and costs of title evidence. Upon the termination of the provisions of this Rider as set forth below, Covenants contained in Section Nos. 18, 19, and 22 of the Security Instrument shall be reinstated so that they shall then be in full force and effect. H. AGREEMEN IVOREGON LAW Under Oregon law, most agreements, promises and commitments made by us after October 3, 1989, concerning loans and other credit extensions which are not for personal, family or household purposes or secured solely by the borrower's residence must be in writing, express consideration and be signed by us to be enforceable. 1. TERMINATION OF CONSTRUCTION LOAN RIDER AND CREDIT LINE So long as Borrower is not in default under the terms of the Note, the Agreement, or the Security Instrument, and so long as Borrower has completed the improvements described in the Agreement, this Rider shall terminate on the Rollover Date as defined in the Construction Loan Rider to Note, and the credit line shall thereafter no longer be in effect. (R&A) RA0213480- RdConsISIOR.bax Rev. 11103/2005 Page 2 Debtar`s~. ailing Address: 940 Channel Drive Montecito, CA 93108 A TRACT OF LAND IN THE SOUTHWEST ONE-QUARTER OF SECTION 16, TOWNSHIP 16 SOUTH, RANGE 12 EAST, WILLAMETTE MERIDIAN, DESCHUTES COUNTY, OREGON, THE SAID TRACT BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 16, FROM WHICH CORNER THE SOUTHEAST CORNER OF THE SOUTHWEST ONE-QUARTER OF SAID SECTION 16 BEARS NORTH 89056'11" EAST, 2633.08 FEET; THENCE NORTH 28050'41" EAST, 857.62 FEET TO THE TRUE POINT OF BEGINNING OF THE TRACT HEREIN DESCRIBED; THENCE NORTH 32116'21" WEST, 33.80 FEET; THENCE NORTH 29018'26" EAST, 472.96 FEET; THENCE SOUTH 89047'26" EAST, 51.01 FEET; THENCE SOUTH 22°09'52" EAST, 90.75 FEET; THENCE SOUTH 11°36'56" East, 198.02 FEET; THENCE SOUTH 00°12'34" WEST, 126.72 FEET; THENCE SOUTH 36°54'58" WEST, 93.55 FEET; THENCE NORTH 89°47'26" WEST, 150.00 FEET; THENCE NORTH 73052'01" WEST, 137.34 FEET TO THE TRUE POINT OF BEGINNING. (ALSO KNOWN AS ESTATE LOT 8 OF DESCHUTES RIVER RANCH) (R&, A) RAO11180 C\ IIIbjI % rt 1 "30 '004' This legal description was created prior to January 1, 2008. A LEASEHOLD ESTATE, CREATED BY THAT CERTAIN LEASE DATED AUGUST 2, 2006, BY AND BETWEEN DESCHUTES RIVER RANCH GROUP, LLC, AS LESSOR AND JAY D JAEGER, AS LESSEE, A MEMORANDUM OF WHICH WAS RECORDED AUGUST 07, 2006 AS INSTRUMENT NO, 2006-54056, AND A MEMORANDUM OF AMENDED AND RESTATED GROUND LEASE WAS RECORDED JANUARY 26, 2007 AS INSTRUMENT NO. 2007- 5223, IN AND TO THE FOLLOWING DESCRIBED PROPERTY: