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2014-166-Minutes for Meeting February 05,2014 Recorded 3/17/2014 DESCHUTES COUNTY CLERK W mks mks NANCY COMMISSIONERS' JOURNAL 03/17/2014 08;27;53 AM !LI1Il11111111lU111lUlU 1 - Do not remove this page from original document. Deschutes Count y Clerk Certificate Page xA,,,,,,E. ,0 0 Aiii.„. (... co ,,,,, „ .., _, 0 oceilk ,,,_ „..,..,.... Uv sc L pDeschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 , (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, FEBRUARY 5, 2014 Commissioners'Hearing Room-Administration Building- 1300 NW Wall St.,Bend Present were Commissioners Tammy Baney, Anthony DeBone and Alan Unger. Also present were Tom Anderson, County Administrator; Erik Kropp, Deputy County Administrator; Laurie Craghead, County Counsel; and,for a portion of the meeting, Nick Lelack and Paul Blikstad, Community Development; Ed Keith, County Forester; Chris Doty, Road Department; Susan Ross, Property & Facilities; and approximately forty other citizens, including media representative Kandra Kent of KTVZ TV. Chair Baney opened the meeting at 10:00 a.m. 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT None was offered. 3. Before the Board was Consideration of Board Signature of Order No. 2014-003, Updating the Deschutes County Weed List. Ed Keith said the Weed Advisory Board examines this list each year, and this year there are some recommended changes, including adding some aquatic weeds new to the area. Commissioner DeBone said that these are invasive weeds that are a problem to native plants and agriculture. DEBONE: Move signature. UNGER: Second. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 1 of 32 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 4. Before the Board was a Public Hearing, and Consideration of First and Second Readings by Title Only, and Adoption by Emergency of Ordinance No. 2014-002, Adopting Deschutes County Code Chapter 8.35, Weed Control. Chair Baney opened the public hearing at this time. Mr. Keith explained the background of this item, which recognizes State statutes regarding the spread and treatment of noxious weeds. There have been updates to local Code over the years as statute changed. What was left out was a final step for the Weed Inspector to be able to take, which is issuing citations if other means don't work. The County has to change Code to give the Weed Inspector this capability, which is already in State statute. Noxious weeds cause environmental harm or economic damage and need to be addressed. The enforcement approach is to work with people who have a weed problem on their property. Education comes first, seeking voluntary compliance. As complaints come in, a courtesy letter is sent out to let the property owner know there is a problem, followed by a visit to explain what needs to be done and offer a cost-share option for the work. The Sheriff's work crews can also help if the people are not able to handle the work themselves. The last resort is issuing a citation if someone refuses to take any action. The County strives for voluntary compliance through education and assistance. Eradication of weeds can take a long time, so his goal is to see forward progress. He expects people to work with him in this regard. The Weed Board's comments are part of the record as well. Three are strongly in favor, four opposed it initially, but one of them now understands they don't automatically issue citations, and the others have been advised assistance is available in many cases. The language was previously in the form of an Order, which is now being added as part of the Ordinance changes. Laurie Craghead said the emphasis is on compliance rather than penalty. Most of this is being done already, but this would add enforcement capability if nothing else works. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 2 of 32 Commissioner DeBone stated this is a backstop, the final step in the process. The rest has already been in place for a long time. Mr. Keith said that a landowner who does not want to do anything could be addressed with this change. Ms. Craghead added that enforcement previously was to notify State Agriculture or report it to the District Attorney. This change keeps the process at the local level. No one can enter the property without a warrant or the permission of the property owner, under due process. This language was added to the Code. The emergency adoption clause is to make sure the Weed Inspector can start work before the growing season. Otherwise, it would take several months before it would be effective, when it is too late to address the problem this year. The Board could shorten the effective date if desired. Chair Baney asked how often this might happen. Mr. Keith said in his experience it would be quite rare. Last summer, all complied to some extent and showed some progress. He talked with his counterpart in Klamath County where they already have this law in place, who sends out about 120 letters a year. Out of those, five might receive an initial citation, and most of those are dismissed when the property owner takes appropriate action. Chair Baney stated that there is a long list of people wishing to testify, so asked. that they limit their comments to two minutes. William Kuhn said there are numerous restrictions in place on his property. He is a member of the Soil & Water Conservation District and notified members of this potential change. Comments came back that this is hypocritical to have the Director of the Road Department being the weed control person. This is what the Ordinance says. He thinks this needs to be outside of the Road Department. Roads are one of the greatest causes of the spread of weeds. There was concern about selective enforcement, meaning that one party might deal with the situation while another won't, and how that might seem like it is unequally administered. They are dealing with how to send out notices and. asking for compliance without saying how to comply. He knows of some instances where people just use a weed whacker or a leaf blower, which spreads the problem. This needs to be sensible. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 3 of 32 Whitney Lowe of Sisters commended these efforts since this is a spreading problem. She wants them to educate people on this issue. In the past, some efforts in weed eradication were limited. There needs to be a broader scale of educational options other than using poisons. They need forward movement. and people are trying to work on this, with certified weed free fields but limited control of adjacent properties. Elise Wolf of Sisters is in favor of this change. In reality it will involve few properties. Those are probably from complaints from neighborhoods. Code enforcement is a problem with the County overall. It is a good idea and can save money in the long run, by not having to take someone to court. This problem on properties property costs $123 billion a year. Property is lost to fire and other reasons due to this situation. Under section A, she would like to see a control plan of action. She will submit her comments in writing. She said she used the County's cost-share plan. She got $200 to get rid of weeds and plant native plants. She had goats eat the weeds and they were done quickly. The weeds were then gone, as 80 to 90% of the seed heads die in the goat. The following summer the goats came back for two days. In three years, the weeds were gone. The goat issue was a problem at some point, but goats work. Cattle and sheep make it worse. Joshua Gatling of Deschutes River Woods stated he was worried about small acreages, although he understand the agricultural impacts. In the southern part of the County, a lot of properties are not agricultural or near waterways. He is worried that those owners will be negatively impacted by this concept. It is complaint-based and a lot of people don't understand what they need to do. It is a lot to ask of people. He is concerned about selective enforcement or interaction. He is troubled about the amount of guidance and feels there should be a minimum acreage size, to separate the small acreages from those which have a big financial investment. It won't be punitive based, but he thinks that there needs to be more information on handling residential type lots. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 4 of 32 Cheryl Howard said she handled the "Let's Pull Together" events over the past eleven years, recently as Chair, and a member of the Weed Board. These have been very successful. Their focus is on education of the public. The event works collaboratively with cities, counties, the BLM, the USFS and other groups to get the word out. The impacts are tremendous. Most of the general public does not know what a noxious weed is, but they can identify it after these events. They ask about properties where there is no owner and nothing is being done. The general public wants to know if these weeds get into the forests. This is one more tool and can be properly utilized. The community has been very positive about addressing this. Robert Marheine, Chair of the Weed Board, stated that there are a tremendous number of non-native species, and some very negative on the economy, ecology and environment. They can cost millions to treat. The ecological impact is huge, and these weeds can permanently change large tracts of land and. waterways. This results in lost wages and reduced land values. The commitment should be to do all we can to treat the problems. The key is this includes everyone. They cannot be based on political boundaries or parcel sizes. They need to manage lands to promote a healthy environment, one that is resistant to noxious weeds. This is done through education, prevention and control. The emphasis is always education of landowners. They offer assistance when needed, always seeking voluntary compliance. Complaints about weeds generate a visit, and information is given on weeds and what can be done, and typically people do the right thing. This is a win-win for the County, landowner and environment. A fine would be the last resort. The addition of the ordinance is a valuable tool for this. It is comparable to ordinances in neighboring counties. They need to continue this valuable work. (He provided a handout.) John Huddle, president of the Citizens Action Group in the La Pine area, said he is speaking for the group. They are opposed to the emergency clause. The ordinance does not mirror statute entirely and could negatively impact property owners. It first defines noxious weeds, those that are injurious to public health. There is potential to add things to the list in the future. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 5 of 32 Second, regarding an agricultural issue, saying that instead of sweeping and. cleaning, they need to pressure wash. He is not sure what that would do to the square baler. This could be onerous on small properties with hay. Another significant issue is that state law says service, while this says post, in the language regarding mailings. There is potential that someone who is not around won't know about the post. In the language about mailing, it should not be a post by itself. If you can't serve by registered mail or personal service, you need to address it another way. Another serious concern is that state law says within two to twenty days, and this shortens that to ten days. He feels there need to be some changes or tweaking of the ordinance. Walter Norris decided not to testify. Julie Craig is the Code Enforcement person with the City of Bend, and supports this ordinance. She explained their enforcement program, which has been on the books for a long time, but the resources to enforce it were not there until last year. They can now combat this growing problem. They have a philosophy of voluntary compliance, an ongoing long-term process, with a citation a last resort. A violation in the City is a class A civil infraction with a maximum fine of$800 per day per lot. Their standard operating procedure is to issue a notice of violation, and give ten days to comply or contact the City for an action plan. It requires owners to have a weed vegetation management plan. If this does not happen, then they issue a citation. They have not gotten to the fine stage yet, and sent out well over 1,000 letters over the past years and citied six owners. They all ended up complying and are working with the City. This is just another tool in the box. Codes are only as effective as enforcement when needed. She supports this and wants them to work together as a team. She is also a technical advisor on the Weed Board. Matt Cyrus of the Farm Bureau said he applauds these efforts. The Road Department spread weeds long ago, but now it is more understood. General traffic spread weeds from one property to another. This is a great tool to protect farmers and others, and he appreciates what the City is doing. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 6 of 32 His observation is that public entities are a problem. The parkway is one obvious issue. He feels more attention should be given to public properties, including Forest Service lands. Dennis Krakow stated he echoes this regarding public lands. There should be a program for people who have property adjacent to public lands.. He would like to see a citation as a first step, but enforcement held off. A suspended citation could be a stronger first step. He is confused regarding how they visit a site if they need a court order to go onto the property. He said the person from Deschutes River Woods talked about individual lots. However, all those lots together make large parcels and should be treated like any others. He lives in a similar type development and constantly has to pull his neighbor's weeds. He doesn't know if a complainant is anonymous so they can maintain relationships. He hopes the postings are put in a way where neighbors can see them, on the street. They need to know they are all in this together. Christina Veverka is a botanist with the USFS and a Weed Board member. She is in favor, and explained that from being a member of a natural resource program, she knows the vegetation program here is well respected and well known throughout the state. This is because of the emphasis on public outreach and education. This is not the case with some other weed management programs. Klamath County uses very little public outreach, and sends out a lot of letters instead. This is a different approach. She respect this program for the emphasis on public education. People should be aware that education is first and foremost, and enforcement is only utilized as a last resort. It is a needed step for the few who don't care. Most will be compliant. The weed manager can't do much without it and it is a valuable ordinance. This is not a radical step. At least fifteen other counties have an ordinance with enforcement actions. This will help in the continuing fight against invasive weeds here. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 7 of 32 Brenda Pace of the Weed Advisory Board stated that when they first talked about enforcement and citations, several years ago, she did a survey of counties with weed districts. Enforcement is seldom used once people know it is possible.. Among the fifteen counties with districts and fourteen that have enforcement capabilities, some of whom have been around for decades, of those that can fine or lien, ten counties had done none. They got that much cooperation. Fines were rarely collected in three counties. Only two counties cover this with the Sheriff, which is expensive. Overall the ordinance is effective in helping to control these weeds. Ronald Radabaugh said he is active in getting rid of weeds, and appears to be educating people to do this with his tax dollars. He feels 70% don't have the initiative or skills. The ordinance and a law that goes after them is all that will work. You start with carrots, education and initiative. If this does not do it, they should be fined. They are at that point now. He sprays some areas if they can't be cut. He has done this in Deschutes, Crook and Klamath counties. This cuts down biennial weeds and get rid of them, as they will be gone in two or three years. Perennials need to be dealt with annually. The area between properties and roads is the responsibility of the property owner, since it just a right of way. The same thing applies along irrigation ditches. People think others will take care of it. They have to change that attitude through education. However, he thinks ten years of education is not giving enough return for his dollar investment, so they should be doing citations. Kim Campbell of Sisters asked about the classification of citation. Laurie Craghead said it is a Class A violation. Ms. Campbell said the issue is separation of authority. She does not want one more situation where someone has to fight a county bureaucracy. The Sheriff has the authority to issue citations and he thinks this should be where this is handled Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 8 of 32 The Sheriff is required to handle all law violations in the county, and those against state law. This is where the authority should lie. She hates to see a situation where a bureaucracy leader has authority. They should separate these powers. The Sheriff is accountable to people by vote, so will be careful about how this is done. The next group might have a different criteria and need to be accountable to people. She agrees that public entities are a violator, and an example is Smith Rock State Park, with has a huge problem with poison hemlock and knapweed. She has had to stop people from eating it. It is all government land. The County needs to take care of their issues and the State theirs, along with having the public take care of theirs. She wants this to be considered, and make sure they stick with the verbiage of State law and not vary from it. The State went through legislative process with elected people and what they say is defendable. Tony Aceti said they need code enforcement, but it takes a village. He believes is it a property owner responsibility. As Matt Cyrus said, the road system is a distribution factor. He can attest to this, as what happened when an overpass went through his property. He has to go out and control the knapweed. Road improvements do bring in traffic and weeds. The road systems contribute and something should be considered for properties around the roads. K. J. Phillips said she represents herself and some absentee owners of property in southern Deschutes County. Her response equals 62% of the owners associated with her subdivision, Deschutes River Recreation Homesites, so she feels 1,230 people oppose this. They are for weed control, but this is a weed, plant and vegetation management ordinance. They are changing from what they have done and are incorporating the County to assess and use this to control weeds on public property. Going after them is a good term. As a native Oregonian and a member of a pioneer family, she dealt with these types of regulations through Polk County at her farm, and in Benton County. People pack into the wilderness and are careful. In their area, there was a dump site started through the Forester, and she has pictures of this debris, which included landscape materials from a lot of places. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 9 of 32 She urged the Board to vote against this today and come back with something that adheres to the real ordinance. She heard about this issue from someone in Polk County. They spray there and you can't go on the property afterwards. A couple of complaints a month is not enough to do this. The County is drawing on a few citizens, and absentee owners have to travel to testify. It is hidden in the agenda that this is a hearing. This needs to be re-thought and go through a normal hearing process. Commissioner DeBone said the Road Department was mentioned. He understands the concept of disturbing ground or putting in new roads. Ed Keith noted that there is an expectation that the County follow the ordinance as well. Chris Doty said the transportation system in general is a conduit, and spreads seeds. Deschutes County has put a lot of effort into roadside management. They don't run around spreading seeds but try to handle this. They use best management practices and try to be responsive. They are aware of their role and ownership in new road projects. Commissioner Unger asked about `serve' versus `post'. Ms. Craghead said when you cannot serve, you post. This is the same language that is found in statute. Commissioner Unger asked about the ten versus twenty days. Ms. Craghead stated that statute says no more than twenty days and not less than two. The Weed Board wanted a shorter time frame, as twenty days is a lot of time for weeds to propagate here. Chair Baney asked about the reference to public health. Ms. Craghead noted that it is "human health" per statute, and "public health" per the ordinance. Commissioner Unger asked about separation of power, the weed manager and the Sheriff. Mr. Keith said that the vegetation manager used to work under the Road Department, but the desire was to split out those duties. The Road Department has maintained vegetation management along roads, but there is a separation now, and he does not work directly for the Road Department. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 10 of 32 The Board can say if they want the Sheriff to enforce this, and ask him to do so. However, it is time-consuming, and if they except success starting with education and cost sharing options, there will not be continuity with landowners if the Sheriff has to start out cold doing this. There is likely already a history with the landowner regarding weed issues. Commissioner DeBone stated he never thought of it that way. The Weed Control Inspector was designated the Road Director, but the County Administrator can delegate this to whomever. This person works for the Board, not the Road Department. Ms. Craghead said that the original creation of the ordinance in 2002 has not been changed; it is already a district and the Road Director was appointed as Weed Inspector at that time. It was a starting point. Others can be designated to do this. If the Board wishes, the ordinance can be changed so the County Administrator can handle the appointment. Chair Baney noted that 78% of the lands in the County are public lands. She asked how well other agencies comply, and how well Deschutes County is doing. Mr. Keith said there is work to do on the County-owned land. They acquire properties through tax foreclosure and trades, and inherit problems with them. The process is to alert the property manager and Road Department, and contract out if needed to treat property. It does get treated, and he just toured an area in La Pine that had been disturbed by earthwork, which will be treated in the spring. Regarding public lands, he understands that there is no jurisdiction over State, city and federal lands. They have a good relationship and two members of the Weed Board are from the USFS, and one from Bend Park & Recreation. They realize the responsibility. They try to affect positive change, but everyone needs to work together. Ms. Craghead stated there is the issue of taxes. With a Weed Control District, the Board could seek a local option levy for weed control purposes. This would have to happen by vote of the people. This ordinance simply maintains status quo with an option to enforce. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 11 of 32 Mr. Keith stated that there were multiple comments regarding methods. He left some information on the table regarding the cost share program, and how to promote an integrated vegetation management approach through pulling, spraying and grazing. The landowner has a choice. This does not dictate the method. Ms. Craghead stated that pressure washing was added. The Weed Board wanted this option to properly clean farm equipment. Regarding the plants list, these are all on the state list and the County adopted the information from that. Mr. Keith said that pressure washing addresses the fact that equipment used on sites is moved to other sites. Brushing does not get it all. Pressure washing may be more effective and is a more successful way to do this. Regarding the weed list, the County list does not have to mirror the State's. The Department of Agriculture notices new or emerging weeds. The County can add the locally important ones from the Department of Agriculture list that are not necessarily on the State list. Ms. Craghead commended the Weed Board, who took this work seriously and dedicated a lot of time to do it. Their recommendations were given a lot of thought. This follows statute except for a few things that are more suitable to this area. Commissioner Unger asked about complaints remaining anonymous. Ms. Craghead replied that while an investigation is ongoing, it can be kept anonymous, but not after the case is closed. Commissioner DeBone asked again about cleaning machinery before moving it. Ms. Craghead said this is in the State law. Mr. Keith noted that this applies only if it is moved from one property to another. People may not know they have weeds on it. A single knapweed can produce thousands of seeds that can be in caged-on mud. Prevention is by far the cheapest and most effective way to deal with weeds, rather than treating after it is spread. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 12 of 32 Commissioner DeBone asked if there is an inspection process. Pressure washing in a far field may not be practical. He is surprised he had not heard about this. Mr. Keith said that it is challenging. They did not make up this section; it is something carried over from State law and has been there since 2002. Commissioner Unger said there is a standard to help with controlling weeds. Enforcement and daily operations are something else. Some will be difficult to enforce. This is part of the education piece. Chair Baney added that personal ownership of the problem is important. Ms. Craghead advised the Board that there was no requirement for a public hearing on this ordinance, but the Board had asked for public input so it was noticed as a hearing and conducted as such. The Board closed the hearing to oral testimony. They kept the written record open for a week, until 5:00 p.m. on Wednesday, February 12. There will be a work session to address the details before this is on another business meeting agenda The group took a short break at 11:30 a.m. 5. Before the Board was Consideration of Approval of Document No. 2014- 045, a Notice of Intent to Award Fuels Treatment Services Retainer Contracts from the Qualified Pool. Mr. Keith explained the process, which is consistent with previous years. The pool allows for one formal process and contractors are then on the list so they can solicit final bids. This allows the County to enter into a retainer agreement with the contractors. DEBONE: Move signature of Document No. 2014-045. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 13 of 32 6. Before the Board was Consideration of Chair Signature of Document No. 2014-046, an Intergovernmental Agreement with the Oregon Department of Transportation regarding the Allocation of 2013-15 Special Transportation Funds. UNGER: Move Chair signature. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 7. Before the Board was Consideration of Chair Signature of Document No. 2014-049, a Change Order to Contract with Apex Companies to Include Additional Environmental Consulting in the Scope of Work Related to the "Demo Landfill" in Bend and the "Redmond Shooting Range" in Redmond. UNGER: Move Chair signature. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 8. Before the Board was a De Novo Public Hearing on an Application for a Plan Amendment and Zone Change from Exclusive Farm Use to Multiple Use Agricultural for Approximately 171 Acres Adjacent to Butler Market Road. This item was addressed after item #5. Chair Baney read the opening statement at this time. (A copy is attached for reference.) Regarding ex-parte contacts, prior hearing observations, biases and conflicts of interest, Commissioner DeBone said that he previously had lunch with Steve Hultberg, who mentioned that the Newland issue would be coming up, but they did not discuss it at length. Commissioners Unger and Baney said they had nothing to disclose. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 14 of 32 There were no challenges from the audience. The hearing was opened. Paul Blikstad stated he brought the aerial photo used at the work session, showing Butler Market Road, Hamby and the area towards the Bend Airport. The complete record was made available at this time. There were some letters of opposition that are now a part of the record. The applicants submitted additional letters in response to letters and the decision. A PowerPoint presentation will be done by Mr. Hultberg and Liz Fancher. Mr. Blikstad added that this property consists primarily of class 6, 7 and 8 soils. The soils analysis was reviewed by LCDC as required. Since this involves agricultural designated land, the application requires a de novo hearing before the Board without the necessity of someone filing an appeal. The decision was made on October 4, 2013. It was denied, noting the appropriate unit of land for the predominate soils analysis should be parcel by parcel and not as a tract. The Sage West analysis was for the entire 171 acres as a tract of land under the same ownership and contiguous. There are nine tax lots but eight legal lots of record. The Hearings Officer felt that parcel by parcel was appropriate instead. OAR language says they need to look only to the soil within the lots, some of which have class 6 or better soils. The overall soils analysis was not considered, the tract as a whole. Three previous cases were quoted. The applicant was correct that these were not on a parcel by parcel basis, but based on the overall tract. The Hearings Officer found that even if the appropriate determinant is as a tract, the poor class 7 and 8 soils needed to be examined under the factors listed under OAR. (He referred to his staff report at this time.) As part of the original submittal there was an agricultural study and additional information regarding costs and profitability. The Hearings Officer did find that the application was in conformance with zoning standards. The applicant maintains that there is a change in circumstances since the property was last zoned. Chair Baney said that the Board will hear testimony, and can either keep the record open for oral or written testimony; or close the hearing and deliberate now or later. Staff says there are no time constraints and they are not subject to the 150-day timeframe. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 15 of 32 Steve Hultberg of Bend, representing the applicant, said he will give an overview and will be followed by Liz Fancher, attorney, and Roger Borine, a soils scientist. Mr. Hultberg then gave a PowerPoint presentation. He spoke about the burden of proof under the two County policies in the comprehensive plan, agriculture section. This allows changes as appropriate. To inventory land properly, they have to treat it otherwise if it does not fit the criteria, as non-resource land. A number of property owners have gone through this process. Fundamentally, they will demonstrate that this property does not qualify as agricultural land under State law and rule. If it does not fit, it can be rezoned. There is a two-part test — soils and suitability for farm use. The soils test shows it is not in classes 1 through 6. This demonstrates it is not feasible and does not qualify as agricultural land. Regarding de facto agricultural land soils, this process does not apply to their efforts. Concerns have been raised regarding all land being potentially rezoned. They would have to meet the soils part first. The second part of the test shows the predominate soils are classes 7 and 8. Soils are shallow, non-productive, sandy, infertile and not quality; as 67% of the soils are class 7 or worse. There is no question the soils are not suitable. The next test is suitability for farm use and whether you can employ the land for this primary purpose, including making a profit. The question is, would a reasonable farmer feel this can be profitable. Testimony at the Hearings Officer's stage from Mr. Hamby indicated there is a long history of this land losing money. To support this, they went through a detailed study of typical farming operations for this property. They concluded that there is no way to profitably farm it. They used a very conservative estimate in this study. Irrigation water will make things grow, but it can't be done profitably. They met the burden of proof, with evidence that the land does not qualify with agricultural land soils. The next issue is showing evidence that it can't be farmed profitably. There is nothing in the record contrary to this. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 16 of 32 Several issues were raised by the Hearings Officer. The first was soils. The Hearings Officer concluded that it was looked at lot by lot. If it was examined as a tract, they would have to look at all of it as a whole. The County can examine this on an individual basis, but State law says there is no lot by lot analysis required. The question is whether to look at separate lots or the entire tract. The results are the same either way. The key piece is the definition of agricultural land. The land in question is based on this language. The Hearings Office cited an administrative rule. However, Mr. Hultberg said that in his view it says that you have to look at the whole lot or parcel, and nothing bigger or smaller. So this does not apply in this case. Case law says you look at the whole. They can't carve out part and use it to examine the whole. One reason he is concerned with the Hearings Officer's approach is that it does not make practical sense. The lots are lines on a piece of paper, artificial lines that do not demarcate and can be changed. The Hearings Officer wanted a lot by lot soils analysis, so they did that as well. Most met the test. There are two parcels in the northwest corner that don't meet the same predominance test. Another map shows the tax lot basis, which meets the test with the same result. The reason the lot by lot analysis does not make sense is that they could move lot lines around, replat, etc. They could have done this differently but meet the test for the tract. The practical approach is a finding that the entire tract does not meet this. It is a simple finding that it does not meet standards in eight out of ten lots, and they could have adjusted the lots lines or consolidated them as well. They touched on the DSL application, in which 380 acres were approved to be rezoned about a year ago. They were subject to the two-part test for soils and feasibility. The DLCD gave them a free pass on this, and they did not get the normal treatment. The County did not require an evaluation with irrigation applied or a farm suitability analysis. It was concluded the land was not suitable for farming. There was no parcel by parcel soils test and no economic feasibility study done. The applicant has done all this with their properties. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 17 of 32 Newland was a participant in the DSL application to watch how law and code were applied. The primary concern was knowing what to expect in the process, which was an expectation of similar treatment. There was a different Hearings Officer and different treatment as well. This applicant deserves the same treatment as the DSL got. All said, they are not asking for special treatment. They have met all the questions. However, another applicant got different treatment and a different approach was used. The Newland property, even if irrigated, is class 7 or 8 soils primarily. There is no evidence that this property can be farmed profitably. They have met their burden of proof. Roger Borine, soils scientist, said he completed the soils survey and report. It is a technical document but does not stand alone, as it is supported by research and experience. There seems to be a lot of misunderstandings and disconnect regarding agricultural lands and suitability. He gave a history of the process. This is a simple area. Originally there were lava flows, blisters, ridges and rimrocks. Mt. Mazama spread ash throughout. Bend has sand-sized material distributed in the area. There are shallow soils at the high points and deeper soils at the low points. It was a dust bowl in the 1930's. The Soil Conservation District came about then, and the land capability classification system was created in the 1950's. The USDA agricultural handbook #210 was issued in 1961 and is the basis of the system used today. It categorizes soil mapping units. In the early 1970's, through Senate Bill 100, land use laws were created, with 19 goals. Agricultural was the third. Prior to that, everyone was scrambling to identify agricultural lands. They came to the Soil Conservation District for help, as this was found to be the best approach. Eight soil classes were created, and 1 through 6 are agricultural lands in eastern Oregon. To localize the national system, a guide was developed in the 1960's and 1970's. This was last revised in June 1977. This was frozen when land laws came into place, and the methodology has not changed. This is what was used in this project. Land capacity classifications were developed to help identify erosion issues. Otherwise it was a statewide decision. Minutes of Board of Commissioners' Business Meeting Wednesday,� Februar 5, 2014 Page 18 of 32 Soils surveys here and in adjacent states are assigned by this guide. It is a simple, one page guide with 8 categories and 12 criteria. After it is narrowed down, it has 3 criteria: soil depth, texture and the capacity to hold water. In the 1950's when this was developed, two inches of available water was found to be critical. That is key for this project. He referred to the soils survey and soils map. So much water needs to be held per inch of soil. Ten inches of soil will hold 1.2 inches of water. Any soil depth less than that holds less water. Evaporation is about 1/4 inch per day in the summer. The irrigation schedule is a 14-day passage over fills, so most water runs off With that, nutrients cannot be held in place since there is little organic matter. Also, low water capacity depletes the water level and plants die. Pasture grasses cannot grow throughout the season. Rangelands start in April or May, and the water is used up before the 14-day irrigation cycle or before seasonal rain. The average soil depth is 0 to 17 inches. Half the time, equipment will hit bedrock. Soils on this project are shallow, sandy, infertile and mostly a class 7 or 8. Irrigation water is documented as ground water recharge. It could instead be staying in the river. A House Bill in 2010 created a process to challenge soils surveys regarding agricultural lands. This requires a certified soils scientist. His report was submitted to them, and approved. Liz Fancher gave a PowerPoint presentation at this time. She discussed State law regarding land protected as agricultural land, and that land of a certain quality should be protected. The County's original decisions were based on incomplete information, which has been developed since then. NRCS mapping is different from Mr. Borine's study. The NRCS looks at the landscape level based on a few test plants. Mr. Bonne had holes dug to determine soil types; this was a very detailed analysis. He found that the soils expected by NRCS are in different proportions and the classifications vary widely. The agricultural lands definition for this area is predominately soils 1 through 6. Western Oregon is 1 through 4. This report was established as reliable. They are required to submit it to DLCD, who determined it was appropriate and can be used. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 19 of 32 Goal 3 says land in other classifications can also be considered as agricultural land. The Hearings Officer found that there were no adjacent lands requiring this. On two sides of the property are MUA-10 parcels, and a densely developed area at the southwest corner. There are churches across the road and MUA-10 to the south. The land to the southeast was changed to MUA-10 years ago. The soils there were found to be bad as well. They are trying to play catch-up with adjacent properties with similar soils. Part of the Hearings Officer's ruling indicated insufficient evidence and that he was not convinced the land is not suitable for farm use. This should take into consideration a lot of factors. Farm use is a part of the definition and the Shelley Wetherell case said if it looks green, it is agricultural land, regardless if the owner can make a profit. The Supreme Court disagreed, saying it needs to be profitable. In Central Oregon it is considered farmland if it has class 6 or better soils even if the owners can't make a profit. This Supreme Court ruling seems to apply only if soils are class 7 or 8 non-agricultural. There is evidence that this land has not been profitable for decades. The Hambys owned a dairy farm there and testified they divided it into parcels and. sold it because it was not profitable. If you observe farm activities in the area, it shows that most failed at making a profit. Allowing this property to change zoning won't change the face of agriculture in most of the County. Looking at the big picture, 83% of Deschutes County farms lose money, per the 2007 census of agriculture. People try but can't make money. This farm is at the bottom of the profitability scale. The question is whether a reasonable farmer feels this can be profitable. It is not, due to the predominate soils. Even the part with a majority of class 6 soils that look better was not considered agricultural by Mr. Hamby. Ms. Fancher went over the list of types of soils in the profitability pie. These make up the vast majority of agricultural lands here. Methods were not precise but reflected what was on the ground in farm use. The Hearings Officer agreed that attempts at profitability had failed. The Deschutes County comprehensive plan says the net is a negative. Agricultural activity in the area is generally not profitable. Mr. Hamby said it has not been profitable for the past fifty years. Other owners have said the same thing. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 20 of 32 The applicant got a farm budget analysis from a specialist, using an OSU agricultural budget template as the basis. Only a fraction of capital costs were deducted, over the useful life of the equipment. They used numbers more conservative than those used by the IRS. They spread this out over thirty years. Not even counting the irrigation system, it was still a loss. The budget did not include all the costs of farming, either. The January 2014 budget analysis was updated to respond to the Hearings Officer's concerns, and costs adjusted to show used equipment. Mr. Borine was involved to double-check the work being done. These costs are accurate. Mr. Borine stated that the Hearings Officer thought that $150,000 was a lot of money for the irrigation system. Mr. Borine did what a reasonable farmer would do, design a system that is efficient and will meet standards for quality and quantity. That design is in this document, and is simple and uses a pond. and a pump. That system new on the NRCS cost list is $175,000. When incorporating used equipment on site, the prices from Cascade Pump and Thompson Pump show the cost at $171,000. You could try to shop more, but the $150,000 estimate is more than accurate. This did not include fencing for livestock, cattle or horses, which are different types. Chair Baney asked if Mr. Borine typically helps set up irrigation systems. Mr. Borine replied that he does provide some work like this. He has helped farm planning for fencing and irrigation. Ms. Fancher said that they have findings of a farm budget analysis for horse boarding or training. Income could be $99,000 for that use, but there would be no pay for the horse trainer. If someone was paid, there would be a significantly greater loss. The logical conclusion is that farming there would not be profitable. This is corroborated in many ways. She said that regarding suitability factors, the Hearings Officer followed the wrong approach, analyzing the lots individually. That is not how it is done. They over-engineered the application and presented them individually, which was an error when it should have been done as a whole. Considering all the limitations and the good points of the land, farming is not the best use of this land since it is not profitable. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 21 of 32 Regarding soil fertility, expert evidence shows the soils are non-productive and infertile, with 67% being class 7 and 8. Fertilizing is not the answer. No reasonable farmer would incur this expense, and the average farm loses money every year. The farm budget analysis assumes fertilizing for livestock operations. Regarding suitability for grazing, the Hearings Officer thought it should include existing assets. Only a small percentage was deducted for the truck or other equipment. They took these concerns seriously and inventoried existing buildings and adjusted budgets, but it was still not profitable. They reduced the trailer/truck expense by making it used. It is basically the same using new or used equipment. They used the NRCS to estimate the cost of systems, and the numbers are conservative and defensible. The Hearings Officer found that the climate is challenging. The short season adds to the non-profitability. There is a five-month growing season, so they have to feed for seven months. Because of the low rainfall, they have to irrigate and it is costly. The County's comprehensive plan agrees with this. The Hearings Officer felt that climate alone would not dissuade farming. However, a farmer would not want to try it with this property unless they are farming for something other than a profit. The soils study is based on irrigation rights. Even with irrigation, most of the soil is class 7 or 8, with a limited ability to grow crops. The rest with irrigation is class 6. There are certain negative impacts of irrigating. This is inconsistent with Goal 6, quality of resources. They have to use pesticides and herbicides, with a high potential to pollute. There is a strong concern this is possible given the types of soil. Mr. Bonne added that the water has to go somewhere, and it is down if not absorbed by the soil and plants. They can't adjust a system to apply various levels of water over a big parcel. They can't go over it fast enough before it dries out. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 22 of 32 Ms. Fancher stated that this is consistent with Goal 5. This is the wrong property to irrigate. The water belongs on good farmland and can be made available to other properties over time. If it is not possible to take up the water rights, they can leave it in stream. It is leased in stream now because it is not good to try to use it. There is a lot of interest in protecting stream flow. In the event of a drought, water rights are assigned in priority, and this one takes it early. The Hearings Office felt that the rural residential development nearby could affect the use. Most of the Hearings Officer's concerns were addressed. Cattle grazing, blue grass seed and alfalfa hay production are acceptable, but not profitable. Ms. Fancher went over the value of the land and the costs to farm. This does not include even minimum wage for the farmer, or a place to live. There was no value assigned to the structures included. It was still a loss. Chair Baney asked about amending the soil; for instance, some are doing this with brewery waste. Because of the soils here and other elements, there is significant interest in this product for nutritional value. However, some are worried about the odor. She asked how they might factor this in. Mr. Borine said if it is from sewage sludge, there are some restrictions. Chair Baney stated they are spraying it on fields to increase the value outside the market. Mr. Borine said that as a liquid, it has high quality nutrients. It contains phosphorus, organic matter, and nitrogen, which is a factor. A concern would be monitoring it per DEQ rules and continuous soils testing, to make sure there is not a buildup of something that should not be in it, such as heavy metals. There are a lot of uses for byproducts. For instance, dairies have sewage lagoons but those have to be closely monitored. The hearing was then opened for public testimony. Chair Baney asked that people limit testimony to three minutes each. The Board wants to hear their comments and can continue the hearing if appropriate. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 23 of 32 Denora Coslett owns ten acres on the northeast corner of Butler Market Road. She is opposed to the project, and believes the applicant is going for a bigger development. They are being reined in by the City now, and these are absentee owners. She feels there needs to be more notice as well. Guy Hamby lives nearby on Butler Market Road. He is not here on behalf of the applicant. He has done soils tests as a layman. Large areas of the property have had the rocks removed. After his family lost most of the property due to the lack of profitability, the rock piles were removed to be able to do irrigation work, and soil was brought in. Some areas have shallow dirt. There can be fertilizer pollution due to the permeability of the soil. Most wells are 500 feet deep and three are three on the property. However, the water table is more shallow in some places, under thirty feet down. In regard to profitability, many people have tried to make a living there and failed. It is expensive to farm. It was marginally profitable years ago when labor was much cheaper. Rocks destroy equipment and generally it is too expensive to remove rocks on an ongoing basis. While it may appear to be prime agricultural land, it is not. It will now sit there and grow weeds. It should be used for something more suitable. Regarding brewery waste, the side problem to this is the odor. The neighbors have a major problem with this. Even with the right to farm laws, this is an issue. Ken Hadlock said he would present his comments in writing. Hilary Garrett had to leave but left written testimony. Tony Aceti said he has been a farmer with large farms in Oregon his whole life. He came to Central Oregon and bought property twenty years ago, thinking it would be better here. It was a mistake. He then tried to go commercial. He has no dog in this particular show, but sees this problem in Central Oregon all the time. The law says was it says, and if you meet that criteria, that is then the standard. You cannot intermingle. The climate and soils are poor and there are better uses for the water being used. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 24 of 32 Regarding this land, there is the Bend UGB on one side, MUA on another, and even if they took out parts of the land, a small piece would be comingled with urban uses. Is it feasible to have this? No. They will hear resistance from people who like having farm land next door. This is an ongoing conversation. People want to keep other people's land tied up for open space. They cannot hold private land. hostage for open space just because people like to look at it. They can buy the adjacent land if they want to leave it that way. Much of the County is already public lands. He feels in this situation they have met State law, followed the process, and should be allowed to proceed. Stuart Garrett said he is against the request. It is clear the applicant wants a bail-out. It is a large corporation and they want to put 1,000 homes there. They bought it in 2007 at a bad time. He does not see why the County should bail them out. A lot of people have suffered from the bad economy, and these folks don't need it. Soils seem to be the big issue. Mr. Bonne shot himself in the foot with his testimony. The lava here is consistent. Some ash soil is 12 to 24 inches deep. Look at the map south, west and east. It is used for agriculture. He thinks there is an opportunity for community-supported agriculture. A shallow water table is possible. He is able to garden on his own land. He would like to see another soils scientist refute some of the testimony. Seven of nine parcels are on farm deferral and there is COI water. This request violates the spirit and letter of land use planning. There is evidence in testimony that they have violated various goals. Republican Governor Tom McCall would have laughed at this. It is against everything they should stand for here. This company encourages sprawl, with impacts on roads and schools. He urged a no vote. He also said the Board should allow more time for the others to testify and not so much for the applicant. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014. Page 25 of 32 Paul Lipscomb said he went through whole package during the past two hours. He has a background in land use and legal matters. He was a Hearings Officer in Salem and Keizer, and a judge for twenty-two years. He has seen a lot of fancy legal footwork. The plain facts are that the DLCD, the Oregon Department of Agriculture and the Hearings Officer looked at this matter in detail and concluded it violates Goal 3 under the current legal standards. The Wetherell decision is the last one out. Profitability can be a consideration but is a relatively minor one. This distracts from the primary considerations. It seems odd that this applicant will say that 83% of farms are not profitable. This is the wrong test. Others feel the same. Even if property in this County is not profitable today, it used to be and may be again in the future. It loses this potential forever when it becomes urbanized. Goals 3 and 14 are in place for this reason. He suggested that this application violates Goal 14 under the DLCD and the Department of Agriculture. If it is rezoned to MUA, it will qualify for a conditional use as a cluster development. That is what they expect to see. Since the land is immediately outside the UGB, when it is brought in, that 65% open space can be redeveloped to city standards. There will be no ability then to impact how this is developed regarding water, sewer and roads, as the city will have to provide those. This violates Goal 14, allowing sprawl to benefit one developer. All should comply to the same laws and no exception should be made for this developer. Jeremiah Fender of Central Oregon Irrigation District provided information on the long-time water history on the tax lots corresponding with the yearly water application, since 2004. He also provided a map showing the area and irrigated lands. Steve Johnson, COID District Manager, said the dates on the sheet are significant. There are water rights on the majority of the parcels since the founding of the water district, at least 100 years. This is organized by quarter- quarters and not just this property. There has been a net change of five acres of water rights during that time. The chart shows the use of the water over the past decade. Lately, the majority is partially used or in stream. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 26 of 32 Going back to its original founding, the land is farm land. Decades ago potatoes were a farm crop, then alfalfa, and now seed crops and nurseries. People are involved in lifestyle farming, working the land and raising crops. It is not necessarily commercial, but is appropriate for farm deferral. If it was so tough, why would anyone do it. There are thousands of acres in farm use in the region. There is one clarification on page 3 of the Hearings Officer's decision, on a footnote. There is 104.75 acres of water on these parcels. He looks at this as a transition zone, with urban development nearby along with existing farm uses. The Planning Commission said this is a classic example of the area growing and having to manage transition, and this is not the time to make this kind of change. It is farmland and has been for 100 years. Liz Dickson, general legal counsel for COID, said she opposes this approval, and believes the land is symbolic of farmland here. Although it is not the most profitable, it has been used this way for 100 years. It should continue under Goals 3 and 14. The MUA-10 designation is intended for transition areas if land is not suitable for farming. This is the first candidate for urbanization. This land was mostly green before the last purchase. There has been significant discussion regarding technology, and the COID board has taken an interest in this. It preserves farm land. The profitability analysis is tricky. They looked at what is agricultural land and found that profitability should not be ruled out. It is a possible factor but should not be the applicant's entire case. The 2004 map speaks for itself She wants to see this land preserved. In regard to suitability factors, the idea of looking at all the lots makes sense. This has an effect on adjacent farmland. They have the same problem elsewhere, with marginal lands being farmed. Sometimes there is an incompatibility issue when they don't like farming next door. It is the status quo in this area, and it is important to consider the domino effect. This could set a significant precedence. If 87% of farms are not profitable, does this mean they should be converted. This factor cannot be used on this basis. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 27 of 32 Pamela Burry stated her biggest comment is in regard to the uniqueness of Central Oregon, and how people live, farm and sustain. Profitability is a variable. Most are not farmed for this reason alone. Many times people work outside the farmland. An organic farm can be very successful. They understand they have to look beyond mere profit. It is a way of life and people sacrifice to do it. It is a value and uniqueness in this area, to keep lands green and open and continue to try. Maybe they can't grow something, but they can do raised beds, hydroponics, nurseries and more. She wants to keep the value of farmland. The County is barely out of the recession. She does not want to see more land brought into the UGB and another boom, with too many properties like before. They need to tighten up development outside the UGB and watch families work this land. Jerry Norquist of Sisters is opposed to the conversion and urged a no vote. Oregon land use laws are the strongest in the country and continue to be attacked. A new farm bill recognizes the value of farm land. Experts can testify and good people can disagree. Regarding non-resource lands, an expert in agriculture indicates Oregon has 280 diverse crops. A lot of the land that had no value at one point is now high value agricultural, with grapes and other products. This is in comparison with Idaho, where there are just four major crops. The Board needs to send a message, that if you purchase this kind of land with the intent to change it, it is a bad investment. Farmland is part of the roots here. Sisters has 960 lots available, but a developer wants to create rural sprawl there. He assumes the City of Bend has a lot of vacant lots already, and he sees no reason to convert this land. Rural subdivisions don't grow food. Elise Wolf of Sisters said that as of 2009, a lot of rural residential exception areas exist. The County has more to consider than COID's comments. The comprehensive plan maintains the rural character of Deschutes County. The economy is based on this and its natural resources. As the area recovers from the bad economy, a larger number of people are coming here and bringing small businesses. This is an economic issue. The Board needs to protect natural. resources and follow the goal of preserving rural lands. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 28 of 32 Policy requires incorporating farm and housing reports. A key goal is to maintain a stable and compatible rural lifestyle. They are busy now but she is concerned about another recession, boom and bust, with transient workers coming here when it is busy. She thinks this could already be happening. The investors are at it again. By 2005 most builders were from elsewhere. It used to be the other way around. What happened was boom and bust. They can't just blame Wall Street. They need to consider the long-term impact of converting EFU land to urban. Whitney Lowe of Sisters stated this is a similar pattern, chipping away at land use laws to make up for the bad economy. There is a temptation to see what can be done to address this. The Board spent a lot of time hearing about the problems with this parcel and its ability to be profitable. It was purchased for $7 million in 2007 and they intended to build 1,000 homes. They bought it when it was zoned for farm use. She feels it is farmable and is opposed to a zone change. Gale Snyder asked if testimony would be continued to another date. Chair Baney said it is likely. Tygh Redfield, who lives off Goodrich Rd., Sisters, submitted written testimony and said he is opposed to the application. It is not the land that is responsible for production, but the owners' stewardship. Farmers are ingenious and can find many ways to make a profit. Ms. Craghead noted that a decade ago, the Lorenz case won on appeal, showing that a greenhouse was found to be a farm use. Chair Baney asked for rebuttal comments from the applicant. Mr. Hultberg said that they have not had an opportunity to review written comments, and would like to do rebuttal at a later date. The Board continued the hearing to March 12, 2014 and 10:00 a.m., at which time it will be open for all testimony. People can also submit comments in writing prior to that hearing. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 29 of 32 Before the Board was Consideration of Approval of the Consent Agenda. UNGER: Move approval. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Consent Agenda Items 9. Board Signature of Document No. 2014-002, an Amendment to an Agreement with Telecare Mental Health Services regarding a Six-month Extension 10. Approval of Economic Development Discretionary Grant Requests: • Leadership Redmond to Sponsor County Day - $600 • CERF's Annual Request (Center for Economic Research and Forecasting) — $1,500 • NeighborImpact for its Annual Homeless Count Program - $2,000 • OSU/Deschutes County Extension — Living on a Few Acres Conference (LOAFA) - $2,000 • High Desert Makers -- Tax Exempt Application - $1,500 (fundraising category) • NOVA —Volunteer of the Year Event - $1,500 • American Red Cross — Preparedness Pals - $1,000 • Sunriver Anglers — Educational. Brochure - $930 • Family Access Network — Luncheon for Children - $2,500 (fundraising category) • La Pine High School Junior ROTC - La Pine Veteran's Park - $600 11. Approval of Minutes: • Business Meeting: January 29, 2013 • Work Sessions: January 22 and 29, 2013 CONVENED AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 12. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District in the Amount of $11,862.78. DEBONE: Move approval, subject to review. UNGER: Second. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 30 of 32 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. CONVENED AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 13. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District in the Amount of$1,726.91. DEBONE: Move approval, subject to review. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. RECONVENED AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 14. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for Deschutes County in the Amount of$607,260.45. DEBONE: Move approval, subject to review. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 15. ADDITIONS TO THE AGENDA None were offered. Being no further items addressed, the meeting adjourned at 1:55 p.m. Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 31 of 32 DATED this 24p Day of / 2014 for the Deschutes County Board of Commissioners. (_W\ 77k v_._-. Tammy Baney', Chair Anthony P eBone, Vice Chair ATTEST: G^"' Alan Unger, Commis oner Recording Secretary Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 32 of 32 �TES � Co 0/ - 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., WEDNESDAY, FEBRUARY 5, 2014 Commissioners'Hearing Room-Administration Building- 1300 NW Wall St.,Bend 1. PLEDGE OF ALLEGIANCE 2. 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. Please complete a sign-up card(provided), and give the card to the Recording Secretary. Use the microphone and clearly state your name when the Board calls on you to speak PLEASE NOTE: Citizen input regarding matters that are or have been the subject of a public hearing will NOT be included in the official record of that hearing. 3. CONSIDERATION of Board Signature of Order No. 2014-003, Updating the Deschutes County Weed List —Ed Keith, County Forester Suggested Action: Move Board signature of Order No. 2014-003. 4. A PUBLIC HEARING, and Consideration of First and Second Readings by Title Only, and Adoption by Emergency of Ordinance No. 2014-002, Adopting Deschutes County Code Chapter 8.35, Weed Control —Laurie Craghead, County Counsel; Ed Keith, Forester Suggested Action: Open hearing and take testimony; move first and second readings by title only; move adoption by emergency of Ordinance No. 2014-002. 5. CONSIDERATION of Approval of Document No. 2014-045, a Notice of Intent to Award Fuels Treatment Services Retainer Contracts from the Qualified Pool —Ed Keith, Forester Suggested Action: Move Chair signature of Document No. 2014-045. Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 1 of 7 6. CONSIDERATION of Chair Signature of Document No. 2014-046, an Intergovernmental Agreement with the Oregon Department of Transportation regarding the Allocation of 2013-15 Special Transportation Funds --Judith Ure, Administration Suggested Action: Move Chair signature of Document No. 2014-046. 7. CONSIDERATION of Chair Signature of Document No. 2014-0419, a Change Order to Contract with Apex Companies to Include Additional Environmental Consulting in the Scope of Work Related to the "Demo Landfill" in Bend and the "Redmond Shooting Range" in Redmond—Susan Ross, Property & Facilities Suggested Action: Move Chair signature of Document No. 2014-049. 8. A DE NOVO PUBLIC HEARING on an Application for a Plan Amendment and Zone Change from Exclusive Farm Use to Multiple Use Agricultural for Approximately 171 Acres Adjacent to Butler Market Road--Paul Blikstad, Community Development Suggested Actions: Open hearing, take testimony, and close hearing if appropriate. CONSENT AGENDA 9. Board Signature of Document No. 2014-002, an Amendment to an Agreement with Telecare Mental Health Services regarding a Six-month Extension 10. Approval of Economic Development Discretionary Grant Requests: • Leadership Redmond to Sponsor County Day - $600 • CERF's Annual Request (Center for Economic Research and Forecasting) — $1,500 • Neighborlmpact for its Annual Homeless Count Program - $2,000 • OSU/Deschutes County Extension—Living on a Few Acres Conference (LOAFA) - $2,000 • High Desert Makers — Tax Exempt Application - $1,500 (fundraising category) • NOVA—Volunteer of the Year Event - $1,500 • American Red Cross — Preparedness Pals - $1,000 Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 2 of 7 • Sunriver Anglers — Educational Brochure - $930 • Family Access Network— Luncheon for Children - $2,500 (fundraising category) • La Pine High School Junior ROTC - La Pine Veteran's Park - $600 11. Approval of Minutes: • Business Meeting: January 28, 2013 • Work Sessions: January 22 and 29, 2013 CONVENE AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 12. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District CONVENE AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 13. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District RECONVENE AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 14. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for Deschutes County 15. ADDITIONS TO THE AGENDA Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible,please call(541) 388-6572,or send an e-mail to bonnic.bakerL)sdeschutes.org. Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 3 of 7 PLEASE NOTE: At any time during this meeting,an executive session could be called to address issues relating to ORS 192.660(2)(e),real property negotiations; ORS 192.660(2)(h),litigation; ORS 192.660(2)(d),labor negotiations;ORS 192.660(2)(b),personnel issues;or other executive session items. FUTURE MEETINGS: (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.) Tuesday, February 4 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, February 5 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) 7:30 a.m. Legislative Update(Conference Call) Thursday, February 6 9:00 a.m. Performance Management Meeting/Update—Property& Facilities (there) Tuesday, February 11 9:00 a.m. Performance Management Meeting/Update— Information Technology Wednesday, February 12 7:30 a.m. Legislative Update(Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, February 17 Most County offices will be closed to observe Presidents'Day Wednesday, February 19 7:30 a.m. Legislative Update(Conference Call) Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 4 of 7 Friday, February 21 5:30 p.m. Sisters Area Chamber of Commerce Mardi Gras Event—Five Pine Lodge Monday, February 24 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, February 25 1:00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, February 26 7:30 a.m. Legislative Update(Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Thursday, February 27 9:00 a.m. Performance Management Meeting/Update—Clerk's Office Friday, February 28 and Saturday, March 1 8:00—5:00 Interviews—Health Services Director candidates Monday, March 3 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, March 4 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, March 5 7:30 a.m. Legislative Update(Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 5 of 7 Tuesday, March 11 7:30 a.m. Real Estate Forecast Breakfast, at the Riverhouse 10:30 a.m. National Public Health Advisory Board Meeting— at Health Department 5:30 p.m. Joint Meeting with the City of Redmond Council, Redmond City Hall Wednesday, March 12 7:30 a.m. (tentative) Legislative Update (Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Monday, March 17 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, March 18 8:00 a.m. Performance Management Meeting/Update—Adult Parole & Probation(at P&P) Monday, March 24 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, March 25 1:00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, March 26 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Thursday, March 27 9:00 a.m. Performance Management Meeting/Update—Human Resources Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 6 of 7 Monday, March 31 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Tuesday, April 1 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, April 2 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session—could include executive session(s) Thursday, April 3 8:00 a.m. Joint Meeting with City of Sisters Council —Sisters City Hall 10:30 a.m. Performance Management Meeting/Update—Assessor's Office Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible,please call(541) 388-6572, or send an e-mail to bonnie.baker@deschutes.org. Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 7 of 7 .� TEs 4 0. BOARD OF COMMISSIONERS' MEETING -'" REQUEST TO SPEAK Agenda Item of Interest 4)G K CO(A ,AT Date Z z . Name ,' Address Phone#s E—mail address ;0,1(4w. c c s 1 -. 61 . -- In Favor \ 1 Neutral/Undecided Opposed Submitting written documents as part of testimony? 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Yes No TES Q gGt Q4i BOARD OF COMMISSIONERS' MEETING .x,Of,' -'" REQUEST TO SPEAK Agenda Item of Interest t() p.�, ). si /4,-°; Date Name , ,,,, ,-/.- r—, Address 7- 71,9 ,, ;),14,/ ,---;- 1 j "_.... t C..�' ‘,4it.)-0 2/ Phone #s -%O " 04/ E-mail address 6(,u,tv/ (&i /('9 , �1„„:, ,/ to, w Pik/ i In Favor Neutral/Undecided [ Opposed Submitting written documents as part of testimony? Yes J No JTES % 1".14(41,ei< BOARD OF COMMISSIONERS' MEETING �,-� REQUEST TO SPEAK Agenda Item of Interest -�d ,7.<A, - Date .. -/7 •20/ Name 01-e rh e t ✓1--1 Address e c .,4,-/,,-._s (7;34_, v�v. G c, ( V) ) r 1 Phone#s /7 '��(/) v e E-mail address r0/2(' r-7- -- MG if_h e i J4 --t D` ' O • cr' o. .(`‘ go In Favor Neutral/Undecided Opposed Submitting written documents as part of testimony? , Yes No Jp-ESL, r4 O BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest -# ,2 �� d�,_T L✓ ece ,<^- /7 Name J v 4/7 L dJ% Address / 4 l? , f, `L.r r 7 7 �" Phone #s E-mail address 3 0 /7,7 (2J )4 Sa o✓/, �,., In Favor Neutral/Undecided ©.---Opposed Submitting written documents as part of testimony? . -Yes No IOU 4 8,04-11‘," BOARD OF COMMISSIONERS' MEETING —�--,, REQUEST TO SPEAK Agenda Item of Interest IOU V Cate, 1 3 Weed Date :' Name �l �' ` V_. COr I C Address Phone#s cif( I 3cgg L� 1 E-mail address JC {0, t bf-.v` CA 0) (6C jO V.l C F-1 In Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? n Yes j No sus c ,� o w0° BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest We c Date 2--).5-1Zoiet Name �' "/=� A''/ .•.i . ✓ Address 7 E fir° I l 4c Phone #s = '- 7O E-mail address nIn Favor Neutral/Undecided Opposed Submitting written documents as part of testimony? H Yes H No rE8 - L BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda Item of Interest ll.i€,_.e Date - A> 1 Name ) 1/l.4 Address )Z' S �y-�• , crek r� . Phone #s E-mail address mH In Favor ( Neutral/Undecided n Opposed Submitting written documents as part of testimony? Yes prNo lifec BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ikko 2., ��'� � � Date �1/Lot,/ Name \) v■ c) 11\c A./(-y) Address (� c l .S. J (, V t../ C d. 'Pi -202 Phone#s ( f I) `/I 6' r 7 E-mail address 1( a' AIL v w c )) q ca4 ti,, f, '. r 0 riIn Favor U Neutral/Undecided U Opposed Submitting written documents as part of testimony? I I Yes r-4 No m, r I Z BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ti Q.. 'c (7-„,rik'Q Date t 1 s 1 Name L`1 Address ` '73 15Cur �� � c\e, •_s\ �.. 13 er\ ci c, Phone #s e51--k 1 -4 o - E-mail address L..vr----1\1(1. -, ,JS EXIn Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? Yes No ,' BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest C-x,_ca Date 31 �. Name )�r Address Gv 0-7,3e G�w pa Phone#s S'(4, 3 , p E-mail address 4`1v Qa ,e4), In Favor 0 Neutral/Undecided ❑ Opposed __Submitting written documents as pe imoey? Yeas ❑ No 0` '+ ,' BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda I -is of Interest Dade Name • 5 Address _ W, PILo l N Phone#s 5 /9 - 3 cJ E-mail address ❑ In Favor ❑ Neutral/Undecided E Opposed Submitting written documents as part o ' ony? ❑ Yes To 1 BOARDORCOMMISS HERS' MEETING REQUEST TO SPEAK Agenda Item of Interest �-t Date - s r /9 Name ,K5,,,_ A / Address CI c q Q 7--co 4,, du Phone#s •� E-mail address — ------- ❑ In Favor J} Neutral/Undesi d ❑ Opposed Submitting written documents II Pert of testi f Y ❑ No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest Gtr s Date g S( 7 i Name ,4c Address Phone#s E-mail address In Favor ❑ Neutral/Undecided ❑ Opposed Submitting written documents as peat of testimony? ❑ Yes ❑ No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest #2(3 Date Name f Address 146S-- q/ 7)7 - Phone#s E-mail address V� ❑ In Favor ❑ Neutral/Undecided Opposed Submitting written documents as part of testimony? ❑ Yes ❑ No Deschutes County Noxious Weed Program Summary The Deschutes County Weed board was formed in 1999. Its composition includes members of the public, city, state, and federal governments. They meet once a month from September through June. In 2002 a full time vegetation manager was hired to implement a noxious weed control strategy. An Integrated Weed Management Strategy was written and implementation has been ongoing. This strategy consists of three main approaches; Education, Prevention and Control. Each of these is summarized below: Education • Presentations on Integrated Weed Management. • Cost share program to help land owners with the cost of treating weeds. This program is funded by Federal grants. • Consultation and advice to landowners wanting to treat and restore their lands to a weed resistant plant community. • Numerous television, radio and newspaper interviews about noxious weeds. • Weed Wagon Educational Trailer. A mobile weed education trailer packed with brochures and information about weeds and weed management. • Annual weed awareness/weed pull event held in June. Prevention • Weed free forage program: local growers producing weed free forage in the county. This weed free certification means a higher price for their product. • Cooperative agreement with the Deschutes Basin Native Plant Seed Bank, which sells native seeds from the basin to landowners for restoration efforts. • Early detection and rapid response training. • Consultation and advice to landowners on how to prevent the establishment of noxious invasive species. Control • Treatment contracts with BPA to control target weeds along their right-of-ways • Treatment contract with the BLM, Forest Service, City of Bend and Bend Parks and Rec. for infestations on their lands. • Assisting ODA with bio-control treatments. • Consultation and advice to landowners on how to treat noxious weeds present on their property. • Seeding treatment areas around the County where weed control efforts have reduced the weed populations to a point where seeding can help establish a weed resistant plant community. • Assist the Irrigation Districts with weed management. • Numerous letters have been sent to land owners notifying them that their property contains listed weeds and that the land owners are responsible for control of them. Along with the notification is information about the different programs and resources available to assist the land owner with the problem. This includes the cost share program. The vast majority of these contacts result in a very positive outcome. The Deschutes County Vegetation Management Program has received both state and national recognition for its efforts in the battle with noxious and invasive plant species. This recognition is something that all of the residents of the County should feel ownership in and proud of. This program is on the cusp of becoming enormously effective, and there is always room for improvement. Official ordinance state that landowners are responsible for treating noxious weeds on their lands. If this ordinance is to be truly effective there needs to be enforcement. Man and our activities move a tremendous number of species around the world, many for our benefit, a few to our detriment. A few of these are having a tremendous negative impact on our economy, ecology, and our environment. History is full of horror stories of introductions gone awry. Once established these invaders cost millions just to treat. That's treatment, not control, not manage, or eradicate. The ecological impacts of invasive species both plant and animal are huge. These invaders have the potential to permanently change large tracts of land and waterways. These changes in the landscape can cost millions of dollars, not just in treatment cost but also in lost wages, lost productivity, lost opportunities, and reduced land values. Successfully treating infestations starts with a commitment. That commitment states we will do all we can to control and treat the problem. Everybody needs to participate in order for the treatments to be successful. The key is everybody. Weeds see no political boundaries. For treatments to be successful they cannot be stopped by political boundaries either. The goal of the Deschutes County Vegetation Management Program is to manage vegetation to promote a healthy plant community that is resistant to invasion by noxious weeds. To achieve this goal three strategies are used simultaneously; public education, prevention and control. The emphasis of the Weed Management Program has always been first and foremost to provide education to landowners with weed issues, offer assistance when it is needed, and hopefully achieve voluntary compliance through a landowner willing to work towards eradicating weeds over time. In Deschutes County complaints received from the public about "neighbors weeds" generate a site visit by the Vegetation Manager. Armed with educational brochures which include the impacts of these invaders, and information on the cost share program, the land owner usually does the right thing. Many times the land owner has better understanding on why the weeds need to be controlled, and how best to treat them. Now we have another recruit in the battle against weeds. It's a win win situation for the county, the land owner and the environment. However, there are those few situations where the landowner refuses to cooperate in any way. The county fine would then be used as a last resort to get the landowner to control the noxious weed problem on their property. The addition of a county weed ordinance would be a valuable and much needed tool for the Vegetation Management Program in combating invasive weeds within our county. This type of ordinance would be comparable to county ordinances already in place in within Oregon, including neighboring Klamath and Jefferson Counties. I request that the County Commissioners `adopt' this ordinance as part of the continuing effort to control noxious weeds in Deschutes County and preserve the beauty and economic viability of this area. Robert Marheine, Deschutes County Weed Board Chairman Weed Enforcement Status Oregon Counties Experience with Weed Ordinance-2010 Counties Interviewed-15 Gilliam Baker Sherman Marion Crook Malheur Harney Grant Klamath Umatilla Hood River Union Morrow Jefferson Wallowa Status Have ordinance-14 Have district-14 Have enforcement through district-13 Have enforcement through nuisance ordinance-1 District includes cities-6 Enforcements Methods Fines-11 Enter Property to Remove-9 Most require entry either with owner approval or approval from Commission Lien to pay for removal-9 District Tax-3 Cost Share-9 Revenue/Expense Collected Fine or Lien-None 10 Collected Fine or Lien-Rarely 3 Enforcement Program Expense-None-10 Sheriffs Office Expense-2 Comments on Enforcements Continued education is very important. Enforcement is a tool to make weed inspector more effective. Landowner seldom needs more than information of the potential violation. Good faith efforts should be recognized. Recommendations Would like to see disclosure of weed issue upon sale. Would like more interaction with zoning and building departments. First letter should include a specific time for compliance. Cities Bend-Working on new ordinance. Redmond-Has a fire ordinance for vegetation. Some council members interested in noxious weeds. Staff Interested. Sisters-Has weed ordinance but doesn't include requirement to not seed if noxious. Ed Keith From: judy rjmeredit @bendnet.com> Sent: Thursday,January 23, 2014 8:13 AM To: Ed Keith Subject: weed issue Dear Mr. Keith, I live in Deschutes County and have been a resident for 40 years. My neighborhood has problems with Spotted Knapweed. Some of us have voluntarily pulled weeds on empty lots and common property and have also tried to inform other residents of what to do, how to identify noxious weeds etc. What it comes down to perhaps is that some people don't act unless there is a penalty for inaction. There are 2 lots now that have heavy infestations and the seeds blow to other lots etc. I believe the proposal to levy fines is the next step and may be more effective for those who do not act by information and education alone. I encourage strong action before May,when it can start to be dry and knapweed already has a long taproot and is difficult to pull. I discourage the use of herbicides because the seeds continue to germinate for 7 or 8 years and the person just has to go out and pull the small ones each spring before any can go to seed. Please understand that I support the county proposal to levy fines. I believe that large tracts of cheat grass and knapweed choke out native species and that wildlife have less natural habitat.There are so many reasons to be strong about weed control. Thank you, Judy Meredith, imeredit @bendnet.com, 63460 Bridle Lane, Bend, Oregon, 97701 1 Ed Keith From: Terry Kerrigan <praetor @ykwc.net> Sent: Thursday, January 23, 2014 8:13 AM To: Ed Keith Subject: Weeds My wife and I support the fine process. We have written several times to "weed dept." concerning Nape weed growing throughout the city. Terrence and Janice Kerrigan 1 Ed Keith From: Gwenn Levine <gwenn97702 @hotmail.com> Sent: Thursday, January 23, 2014 8:34 AM To: Ed Keith Subject: Objection to the new weed ordinance! Importance: High "The new Weed Ordinance gives the County's weed inspector enforcement tools to prevent the growth of noxious weeds, and establishes a penalty fee of$2,000 for a landowner's failure to eradicate noxious weeds on their land." Dear Mr. Keith, As a native Oregonian I appreciate our beautiful lands as much as anyone. I fully understand the impact to our native species when noxious weeds are allowed to take over and smother the native species. However, to fine a landowner/homeowner$2,000 for failure to comply will not make a true difference. Those that can afford to pay the fine will do so over the cost of eradicating large lands and those who get fined will suffer undo hardship. As an example, Mrs. Smith, in her late 60's, has had 3 major back surgeries, lives alone, and has a monthly income of less than $600 a month. She is not able to perform the work or pay for the work to be done, yet alone pay a huge fine for not complying. The fine will not make Mrs. Smith do a better job, will it? It makes more sense to find a way to be supportive and help people get the job done - not punish them. I know people who have asked the County for help in removing weeds and did not get any assistance and in some cases not even as much as a call back. Most people want to do the right thing, they just don't have the knowledge, ability or the resources. Increasing or imposing a fine is not the solution! I encourage you to explore other solutions before being hasty with a fine that could destroy our most vulnerable citizens, financially and emotionally, rather than the weeds. Thank you for your time. Gwenn Levine 59687 Navajo Road Bend, OR 97702 (541) 410-0617 1 Ed Keith From: charles baughman big-bird @q.com> Sent: Thursday,January 23, 2014 9:23 AM To: Ed Keith Subject: WEEDS AND CHEMICALS Ed, I am wondering the method that will be used to eradicate weeds. Forcing people to use large amounts of chemicals would be disastrous to our health and water supplies. Would the rules cover many acres and a lot of chemicals? Who decides what are weeds? Charles Baughman 1 Ed Keith From: Robert Northrup rlapinebob @gmail.com> Sent: Thursday,January 23, 2014 11:39 AM To: Ed Keith Subject: Noxious weeds After reading the article at KTVZ online, and you should read the comments. I would suggest rather issue fines, a 30 day ticket to remove the problem, and a fine if not complied with. I worked for a public agency and on occasion we would use juvenile delinquents in removing brush along right- of ways. They jumped at the chance to get outdoors and it also helped the community. I am sure there are seniors and disabled that can't afford to pay someone and are not able to do it themselves.And it would put the county in a better light to offer assistance to those in need. Bad44 Ed Keith From: John Baker <john@nedbakercom> Sent: Thursday, January 23, 2014 11:42 AM To: Ed Keith Subject: Weed Inspector Dear Sir, Please pass on my lack of support to spend our tax dollars for a weed inspector. I would also suggest that legal counsel for the county review existing laws regarding trespassing as I do not think the county wants to be spending money defending a weed inspector who is entering on to private property without permission. Sincerely, John Baker John Baker 18160 Cottonwood Rd PMB 149 Sunriver, Or 97707-9317 John @nedbaker.com 1 Ed Keith From: Calvin Arkanon <calvinarkanon@gmail.com> Sent: Thursday,January 23, 2014 11:56 AM To: Ed Keith Subject: Deschutes County Weed Ordinance Hi, I read about the proposed ordinance. I am 100% in support of adding a possible fine. The reason is in Redmond and areas around Redmond there are large areas of invasive weeds as listed by the State of Oregon. Like for instance in the vacant lot south of Big R farm store was one of the healthiest looking stands of what appeared to be purple knapweed I'd ever seen. We need to get serious about these invasive plants, and hopefully this proposal will get some press so people are informed about it. I moved here from Lincoln County and I was surprised to see so little enforcement here in Deschutes co. You won't find one of these weeds on my farm, but adjacent to my farm along the irrigation canal it's all infested with several invasive weeds, and every year the seeds come onto my farm from the irrigation water! THAT is something I've never seen and I've farmed all over the west. Thank you Calvin Arkanon Redmond, Oregon t Ed Keith From: paul skegman <wetlandboggs @live.com> Sent: Saturday, January 25, 2014 8:20 AM To: Ed Keith Subject: weeds hello---if you folks pass this weed law it will come back to haunt you. all we need is one more law!! well if it passes i will get maps that show all the county owned poperty (citys also) in deschutes county. i will scour these pieces of land looking for noxious weeds. i will photograph the evidence and document the area then demand the county gets $2.000 tickets sent to them.(citys also). i have friends in all parts of deschutes county----they will be out looking also. please pull your head out----there has got to be a better way. thank you for your time. 1 Ed Keith From: disneyhomes @aol.com Sent: Tuesday, January 28, 2014 11:49 AM To: Ed Keith Cc: Tony DeBone Subject: Re: draft ordinance (County Public Meeting ) Hi Ed & Tony, I have reviewed this Draft Ordinance and have several questions that I hope you can bring up at this meeting. I will not be able to attend this meeting due to previous scheduled appointments. Question 1 : There is no mention of the County Road Department or the County Forester to control these weeds in the County Right A Way on our County Roads and Public Right A Way Roads. This includes roads that are not yearly maintained by the County or State. I believe the County should include there participation in this Ordinance. Question 2 : There is no mention of the County Road Department or Forester to offer public assistance to assist land owners to abate these weeds on the owner's land. There are many Elderly Citizens, Disabled and Semi Disabled Citizens in our County that this physical activity would be very hard on them to accomplish. Question 3 : Some of our land owner's border the Deschutes National Forest and USA Bureau of Land Management along with Oregon State Lands. There is no mention of these Agencies being included in this Ordinance. Most private land owners are responsible for their lands fire reduction program; or make a good effort in doing so. I would like to see some type of responsibilities on these Government Agencies to be included in this Ordinance. These Agencies have been very poor in their weed abatement program and their so called weed seeds flow on to private land owners which makes it even more time consuming to get rid of these weeds and their tree diseases like Missile Toe. To conclude, I hope that you can address these issues in your Public Meeting and give me some type of response after your discussions. Thank you for serving our Community. Best regards, Dave Disney Real Estate Broker 541-410-8557 Disneyhomes@aol.com 1 Original Message From: Ed Keith <Ed.KeithCc�deschutes.orq.> To: disneyhomes <disnevhomesaaol.com> Sent: Fri, Jan 24, 2014 10:10 am Subject: draft ordinance Here is a copy of the draft ordinance. What may not come through in the ordinance is that as a matter of County policy we always seek voluntary compliance first, with the enforcement step being the last resort reserved for people that refuse attempts to work with them. There has been more coverage focused on the fine amount, so I have been trying to emphasize that we wish to work with people to help them achieve voluntary compliance. More information on the weed program is located here: www.deschutes.org/weeds Ed Keith Deschutes County Forester 61150 SE 27th Street Bend, OR 97702 541-322-7117—o 541-408-8862—c 2 Ed Keith From: Tom Anderson Sent: Wednesday,January 29, 2014 6:43 PM To: Ed Keith; Laurie Craghead Subject: FW:testimony regarding noxious weed proposal From Pam & Pat [mailto:sunrise3 @coinet.com] Sent: Wednesday, January 29, 2014 2:27 PM To: Tony DeBone; Tammy Baney; Alan Unger Cc: Board Subject: testimony regarding noxious weed proposal January 30, 2014 Dear Commissioners Tony DeBone, Tammy Baney and Al Unger, You may know me from CAG. But, today, I am not representing CAG. I write from a stance of Ceres, the position I hold at the Little Deschutes Grange in La Pine. Ceres was the Roman goddess of agriculture and motherly love. At the Grange, my duty is to report on local gardening and animal husbandry. I write because localized food production is my passion. I have worked with the La Pine Coop and Garden Tour since the beginning. My husband and I have composted and gardened and raised chickens and rabbits for the eight years that we have lived in La Pine. You might enjoy the website www.lapinecoopandgardentour.com. I write in response to the proposal regarding noxious weed control. When I read that "Every Owner or Occupant of land shall destroy or prevent the reproducing by any manner or spreading on the Owner's land or land occupied by Occupant of any Weed classified as a Noxious Weed by the Board using the most efficient and practical means available. " I am afraid that "the most efficient and practical means available" will mean using picloram or Round Up or any other toxic pesticides that will destroy the land's ability to grow food. The same goes for insisting on weed-free feed for horses. The manure from those horses is no longer fit be used for fertilizer to grow food. What is a horse owner to do with the manure? What is the gardener to do without it? Well, gee.... I guess they'd have to purchase commercial fertilizer. And, who makes that? Uh, that would be Monsanto Corporation, the makers of Round Up and genetically altered seeds which have their pesticides engineered into them. 1 And, say, didn't the State Legislature just vote to approve the Monsanto Protection Act? That act makes it impossible to sue Monsanto for any damage that they cause. In fact, our own representative, Mike McLane voted for it. Good timing. Speaking of timing, what's the emergency? Is there a sudden attack of noxious weeds? Or, is there some sort of resistance to getting rid of them? I think not. I just saw a brochure that had pictures of these weeds and some facts about them. That's the very first time I have seen them. Why haven't they been included in our tax forms or in some direct mail? I would inspect every inch of my property and dig them up and burn them. Who wouldn't want them gone? No, the emergency would be declared so as to not allow due process and input from the community, as we would have no recourse. After all, we could have been informed of this last year. The danger from weeds was the same then as it is now. But, the Monsanto Protection Act hadn't been passed yet. Hummm.... It goes to the classic question, "Who Benefits?" And, $2,000 fines! Whether you are a land owner or a renter? Really? Is the fine the same for a person on one acre or 1,000 acres? And, what if the people can't afford to pay the fine?Will a lien be placed on their land? Will there be a bounty on these weeds? Who gets the money? Will it be used to educate the public or help to clear the land? Or, will it be used to pay the inspectors? Once again, "Who benefits?" There is a bigger threat, you know. The drought in California is the worst in their history. It is bad in most of the Western states, where most of the food is grown in this country. Vegetables, fruits, and grains will all be in short supply, and therefore very expensive. The high priced grain will drive up the price of meat as well. We already know that food is in short supply for too many Oregonians. And the SNAP funds just got reduced. Once again, great timing. We are going to have to subsidize our food supply with locally grown produce if we are to mitigate this disaster. You could be setting up tool banks if you want to respond to the real emergency coming this summer. I believe that if you go about dealing with noxious weed control in the way that it is proposed, you will be enabling the commercial food corporations to further garner control of the food supply. There is a war going on that's making me crazy. On the one hand we've got the First Lady advocating for her 2 nice organic garden at the White House. Meanwhile, SWAT teams are invading family dairies and vegetable stands, arresting farmers and driving them out of business. I don't know what is paranoid and what is prudent anymore. But, I know it is not right. Do not do this. At the very least, make certain that toxic chemicals are not used in places that will affect gardening or animal feed or the general supply of water. And, please educate yourselves regarding the destructive track record Monsanto and Dow Chemical have in the world. I will be happy to send links to you if you are interested. With Respect, Pam Cosmo, Ceres Little Deschutes Grange #939 3 Ed Keith From: K.J.Phillips <rrconstdev @comcast.net> Sent: Wednesday, February 05, 2014 7:29 AM To: Tony DeBone;Tammy Baney; Ed Keith;Alan Unger Cc: Ed Criss, Plan'g Commissioner Subject: Ord.2014-002-Public Testimony Submittal-New Weed Dist&injurious Ordinance Attachments: Odr2014-002_k-Phillips-1.pdf; ORD 2014-002-KPhillips-2.pdf TO: Deschutes Employee Ed Keith & County Commissioner Unger County Commissioner Baney County Commissioner DeBone RE: Ord. 2014-002 w/3-part testimony submittal 1-Email 2-Attch. file of ORD 2014-001-KPhillips 3-Attch. file of ORD 2014-002-KPhillips Hello,...Mr. Keith, Commissioner Unger, Commissioner Baney, Commissioner DeBone I urge the Board to NOT APPROVE the proposed Ordinance 2014-002, awaiting BOCC action at Feb. 5th 'Business Meeting', because...it is injurious to Deschutes landowners and renters, because....it causes 'formation' of a New District without due process for the citizens, and, because...it purposefully, uses deceptive language to give both, a Title, and, create a comparison-similarity to the old Weed Control Chapter, and, additionally, emphasizes past amendments to imply this adoption a similar needed update action,that only corrects a (old Chapter) deficiency, by just adding'enforcement methods'....as new chapter. This Ord.2014-002 is admittedly injurious per County legal Dept. stated 'FISCAL IMPLICATIONS', as it increases County costs, and, is planned to be dependent on 'monetary penalties'. A re-write with full public disclosures, and, a proper District hearing process is needed, because proposed text creates a New District with a different & expanded 'Principle Act'with Weeds and/or Noxious Weeds as only small, incidental to this New Chapter. I support Oregon 'Noxious Weed' education and rules administered by Oreg.Ag Dept., or, County Soil & Water Conservation Districts, or, Federal FSA,...but, NOT this 'fake' Deschutes County Weed Control ordinance. My personal experience is based on 'Noxious Weed' rules &statutes applied to my Polk County farm by FSA, and, my Benton County farm by Oreg Ag Dept inspections related to that farm's State Nursery and Landscape License. The 'real' Noxious Weed statutes are Oregon Industry-based, and, intended to preserve productivity/markets/marketing of land or aqua-culture, business products or commodities.... The Deschutes Weed Control Ordinance 2014-002, is NOT!! It is deceptively worded to hide, new taxes, additional assessments, and, planned citation-revenue for Road Dept. maintenance activities, and, also attempts to conceal formation of a NEW County-wide Vegetation-maintenance District,....via the wrongful label, Weed Control District, from the old chapter. Most disturbing, Chris Doty and Tom Anderson, made a forceful 'Road Dept Needs Revenue' presentation at a Weed Meeting (2/14/2013), and, announced a looming funding loss due to a huge drop in Timber Revenues, and, their sudden change of County Noxious Weed Control into a sub-section of, and, merger with, the Road Dept. This Ord. 2014-002 is unnecessary and injurious to citizens, and, misrepresents legislation as Weed 1 Control, but, it will not aid and promote the County's affected industries or products, as intended by State Noxious Weed rules and statutes. It is largely, the Road Dept's, New District, and, Maintenance Revenue legislation. Please oppose this deceptive Ordinance and send it back for a re-write and further review by legal staff. Si-ftez-efy, Kathy Pkaapy F.Y.I. 569.43S Dissolution of weed control district;disposition of funds,if in the judgment of the court the enforcement of ORS 569.360 to 569.495 in any county which has been declared a weed control district seems impracticable or likely to work injury to the people of the districtt,it may after a hearing declare that such weed control district no longer exists,Any apedai weed control district shall be declared. terminated by the county court when a majority of landowners in the district,by petition or by public heart: a a that th desire such district terminated for an weeds declared noxious in the district. 569315 legislative findings.The Legislative Assembly finds and declares that; )1)Noxious weeds present a serious threat that adversely affects industries vital to the Oregon economy, including but not limited to the agriculture,forestry,fishing and tourism industries; (2)Failure to control the spread of noxious weeds in Oregon will reduce the productivity of Oregon industries and adversely affect marketing by those industries,resulting in a loss of business and the loss of existing jobs; (3)The use of aggressive measures to control the spread of noxious weeds will improve the actual and perceived quality of Ore.gon products and further the promotion and expansion of markets for those products; and (4)The control of noxious weeds through county weed control district programs will benefit Oregon's economy by preventing the loss of existing jobs,by,promoting and expanding Oregon business and by preventing the decline of Oregon business.(2011 c.392 51) 0 This email is free from viruses and malware because avast! Antivirus protection is active. 2 Date: Feb. 3,2014 ATTN: Deschutes Board of Commissioners RE: Mis-directed Submittals: BOCC Public Hearing Testimony-Ord 2014-002 FROM: K.J. Phillips, taxpayer/landowner The 1/23/2014,'Date Change' announcement,for a proposed ordinance hearing by the BOCC(elected governing body), also directed related written comment testimony to be submitted to a Deschutes Road Dept. employee, Ed Keith, not the County Board's office conducting the Public Hearing. This is an improper submittal designee, as any Ordinance comment testimony is closely tied to Dept.funding and the staffer's employment. The Road Dept. is not an impartial party to this* funding issue and the Dept. should not manage the Ordinance Hearing submittals.There is NO assurance 'opposition testimony' will become Public Record, because, it can be lost, or, as Anderson's CDD staff explained the loss of my past testimony,... Opposing opinions.... may/was'inadvertently destroyed' during moving of office documents. [Per* comments of Tom Anderson &Chris Doty, 2/14/13,noting Noxious Weed Program would be merged/changed to aid Dept. budget deficiencies due to PERS increases, and, mega- drop of State Timber Revenue.] BOCC should note; No past Weed Control Violations& complaints average'"2/mo. http://www.deschutes.org/Media-Releases/Weed-Control-Ordinance-Date-Change.aspx Weed Control Ordinance Date Change 1/23/2014 Hearing takes place Feb. 5 A public hearing to hear local resident comments about a proposed Deschutes County Weed Ordinance,will take place on Wednesday, February 5. This is a revised meeting date. Due to scheduling conflicts,the hearing cannot take place on the originally proposed date of January 22. The public is welcome to attend and speak at the public hearing, or submit written comments before and/or during the hearing.The public hearing will take place at the Deschutes County Board of Commissioners' Business Meeting at. 10:00 a.m. in the Deschutes Services Building-Barnes Room,first floor, at 1300 NW Wall St. in Bend. The new Weed Ordinance gives the County's weed inspector enforcement tools to prevent the growth of noxious weeds, and establishes a penalty fee of$2,000 for a landowner's failure to eradicate noxious weeds on their land. An emergency clause is proposed for the new ordinance in order to be proactive prior to weed growth season. A new ordinance usually has a waiting period of 90 days to go into effect.Waiting the traditional period of time for the Weed Ordinance to take effect would be problematic and less proactive for the weed growing season.Without the emergency clause,the ordinance would take effect in late May, after weed season begins. Initiating the new ordinance earlier,will help in the early eradication of weeds and cost less than later eradication,when weeds in Deschutes County are more widespread. To read the proposed Deschutes County Weed Ordinance prior to the hearing, please visit www.deschutes.org/weeds and look for the document under"The Law". Testimony cannot be submitted by phone.To submit written comments, or for more information about the hearing, please send email to Ed.Keith @co.deschutes.or.us or call (541)322-7117. http://www.desrhutes.orgJ What's Happening in Deschutes County Deschutes County News Board Meetings Requests for Proposals Media Releases 1/28/2014-Sisters Volunteer Needed for Planning Commission Seat 1/23/2014 -Weed Control Ordinance Date Change 1/23/2014-Shots for Tots Comes to a Close Your County Government Deschutes County reinvests your local tax dollars in your community,your famHy and you, We are proud to provide you with professional and efficient local services that are vital to your quality of life. ' - ' o c a, o a 0 a o -a � c ° Ez E s 3voyp g• 6 � � a yd a Q s-. m -moo N o 7 0 I, � -' c o n c o w d 3 p < U C T L .0 N 0 4 i6 W N . -O C to a , . - U a _ e "k 2 ? O m2, nn1 G -y ,an C N-E ! 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E m w y o c — -c =o v a w o a _•v oar Q • ,, E m 4 p a ,o Eat m a Y ~ 0 7 • 3 u° a To is Post Office Box 1038 La Pine, Oregon 97739 Commissioner Alan Unger Commissioner Tammy Baney Commissioner Tony DeBone Board of County Commissioners Deschutes County 1300 NW Wall Street, Suite 200 Bend, Oregon 97701 February 4, 2014 Re: Draft Ordinance 2014 002, Noxious Weed Control. Dear Commissioners: Thank you for the opportunity to give testimony about this draft ordinance. We are opposed to this draft for the following reasons: 1. The Deschutes County Weed Board and county staff recommend adoption of this ordinance through the emergency clause powers, however, no impending threat to public health or safety exists to warrant the use of such powers. This draft has serious problems that need careful vetting through public hearings; using the emergency clause silences the voice of the people who will pay the consequences for such an hasty action by the Board of Commissioners. 2. The draft ordinance claims to replicate ORS 569, however, there are serious and disturbing departures: 1. The definition of noxious weed expands to include "injurious to public health," a dangerous expansion of powers. The intent of ORS 569 is to address invasive weeds; this draft could potentially expand those powers to include native plants that cause allergies. We fail to see the need to expand the state noxious weed definition. 2. The definition expands cleaning of agriculture equipment to "means pressure washing the sides, tops, wheels and undercarriages of all machinery in order to remove all seeds,plants, plant fragments, dirt and other debris." This places a burden on the small farmer and rancher, where ORS 569 simply requires "thoroughly swept and cleaned" (ORS 569.445). Continually pressure washing hay bailing equipment is probably not beneficial, nor is it practical in the field. 3. The draft expands the compliance notice requirement to "post," when ORS 569.380(b) states "service," a significant departure (8.35.050(D) and 8.35.060(B)). Landowners in the hospital or on vacation could return to find themselves out of compliance without ever receiving notice. 4. The draft shortens the time period for compliance once notice is posted to "10 days" (8.35(D)(3)), where ORS 569.380(b) provides "20 days," a significant and unreasonable departure. 1 In summary, no immediate threat to public health or safety exists. No rational exists to expand the powers of ORS 569 as the framers of this draft ordinance desire. We urge the Board of Commissioners to reject the emergency clause and re-frame the draft to mirror ORS 569. Respectfully submitted, John Huddle, Ed.D. President Deschutes County Citizen's Action Group 2 Bonnie Baker From: Pam & Pat<sunrise3 @coinet.com> Sent: Wednesday, January 29, 2014 2:27 PM To: Tony DeBone; Tammy Baney; Alan Unger Cc: Board Subject: testimony regarding noxious weed proposal January 30, 2014 Dear Commissioners Tony DeBone, Tammy Baney and Al Unger, You may know me from CAG. But, today, I am not representing CAG. I write from a stance of Ceres, the position I hold at the Little Deschutes Grange in La Pine. Ceres was the Roman goddess of agriculture and motherly love. At the Grange, my duty is to report on local gardening and animal husbandry. I write because localized food production is my passion. I have worked with the La Pine Coop and Garden Tour since the beginning. My husband and I have composted and gardened and raised chickens and rabbits for the eight years that we have lived in La Pine. You might enjoy the website www.lapinecoopandgardentour.com. I write in response to the proposal regarding noxious weed control. When I read that "Every Owner or Occupant of land shall destroy or prevent the reproducing by any manner or spreading on the Owner's land or land occupied by Occupant of any Weed classified as a Noxious Weed by the Board using the most efficient and practical means available. " I am afraid that "the most efficient and practical means available" will mean using picloram or Round Up or any other toxic pesticides that will destroy the land's ability to grow food. The same goes for insisting on weed-free feed for horses. The manure from those horses is no longer fit be used for fertilizer to grow food. What is a horse owner to do with the manure?What is the gardener to do without it?Well, gee.... I guess they'd have to purchase commercial fertilizer. And, who makes that? Uh, that would be Monsanto Corporation, the makers of Round Up and genetically altered seeds which have their pesticides engineered into them. And, say, didn't the State Legislature just vote to approve the Monsanto Protection Act? That act makes it impossible to sue Monsanto for any damage that they cause. In fact, our own representative, Mike McLane voted for it. Good timing. 1 Speaking of timing, what's the emergency? Is there a sudden attack of noxious weeds? Or, is there some sort of resistance to getting rid of them? I think not. I just saw a brochure that had pictures of these weeds and some facts about them. That's the very first time I have seen them. Why haven't they been included in our tax forms or in some direct mail? I would inspect every inch of my property and dig them up and burn them. Who wouldn't want them gone? No, the emergency would be declared so as to not allow due process and input from the community, as we would have no recourse. After all, we could have been informed of this last year. The danger from weeds was the same then as it is now. But, the Monsanto Protection Act hadn't been passed yet. Hummm.... It goes to the classic question, "Who Benefits?" And, $2,000 fines! Whether you are a land owner or a renter? Really? Is the fine the same for a person on one acre or 1,000 acres? And, what if the people can't afford to pay the fine? Will a lien be placed on their land? Will there be a bounty on these weeds? Who gets the money? Will it be used to educate the public or help to clear the land? Or, will it be used to pay the inspectors? Once again, "Who benefits?" There is a bigger threat, you know. The drought in California is the worst in their history. It is bad in most of the Western states, where most of the food is grown in this country. Vegetables, fruits, and grains will all be in short supply, and therefore very expensive. The high priced grain will drive up the price of meat as well. We already know that food is in short supply for too many Oregonians. And the SNAP funds just got reduced. Once again, great timing. We are going to have to subsidize our food supply with locally grown produce if we are to mitigate this disaster. You could be setting up tool banks if you want to respond to the real emergency coming this summer. I believe that if you go about dealing with noxious weed control in the way that it is proposed, you will be enabling the commercial food corporations to further garner control of the food supply. There is a war going on that's making me crazy. On the one hand we've got the First Lady advocating for her nice organic garden at the White House. Meanwhile, SWAT teams are invading family dairies and vegetable stands, arresting farmers and driving them out of business. I don't know what is paranoid and what is prudent anymore. But, I know it is not right. Do not do this. At the very least, make certain that toxic chemicals are not used in places that will affect gardening or animal feed or the general supply of water. And, please 2 educate yourselves regarding the destructive track record Monsanto and Dow Chemical have in the world. I will be happy to send links to you if you are interested. With Respect, Pam Cosmo, Ceres Little Deschutes Grange #939 3 Bonnie Baker From: Tom Anderson Sent: Sunday, January 12, 2014 2:20 PM To: Ed Keith; Laurie Craghead; Chris Doty Cc: Board Subject: RE: noxious weed fines FYI Original Message From: pandg [mailto:nandgPnwlink.com] Sent:Sunday,January 12, 2014 12:48 PM To: Board Subject: noxious weed fines Dear County Commissioners- We are delighted to learn that you may consider fining county land owners who do not adequately control their noxious weeds.The two of us have worked very hard at a considerable expense to control weeds on our property, but seeds from neighboring properties make it extremely difficult to keep our land in good condition.Just knowing that there could be fines might provide incentive for violators to do the right thing by managing their land more responsibly. We encourage you to approve any policies that will result in fines. Sincerely, Robert and Gretchen Pederson 18925 Pinehurst Rd. Bend, OR 97701 1 Introduction This is a public hearing on applications for a Plan Amendment and Zone Change, to amend the comprehensive plan designation on 171 acres from agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agricultural (File Nos. PA-13-1, ZC-13-1) submitted by NNP IV-NCR, LLC aka "Newland." These applications were previously considered by the Deschutes County Hearings Officer in the written decision mailed on October 24, 2013. Deschutes County Code 22.28.030 requires that for lands which are designated farm or forest use, a de novo hearing shall be conducted by the Board of County Commissioners. This hearing constitutes the required de novo hearing. Burden of proof and Applicable criteria The applicant has the burden of proving that they are entitled to the land use approval sought. The standards applicable to the applications are listed in the previously issued Hearings Officer's decision. Failure on the part of any person to raise an issue, with sufficient specificity to afford the Board of County Commissioners and parties to this proceeding an opportunity to respond to the issue precludes, appeal to the Land Use Board of Appeals on that issue. Additionally, failure of the applicant to raise constitutional or other issues relating to the proposed conditions of approval with sufficient specificity to allow the Board to respond to the issue precludes an action for damages in circuit court. Hearings Procedure The procedures applicable to this hearing provide that the Board of County Commissioners will hear testimony, receive evidence and consider the testimony, evidence and information submitted into the record, and will be the basis for their decision. The record as developed to this point is available for public review at this hearing. Order of Presentation The hearing will be conducted in the following order. The staff will give a staff report of the prior proceedings. The applicant will then have an opportunity to make a presentation and offer testimony and evidence. All others will then be given a chance to testify. After both proponents and opponents have testified, the applicant will be allowed to present rebuttal testimony, but may not present new evidence. At the Board's discretion, if the applicant presented new evidence on rebuttal, opponents may be recognized for a rebuttal presentation. At the conclusion of this hearing, County staff will be afforded an opportunity to make any closing comments. Cross-examination of witnesses will not be allowed. A witness who wishes, during that witness' testimony, however, to ask a question of a previous witness, may direct the question to the Chair. If a person has already testified but wishes to ask a question of a subsequent witness, that person may also direct the question to the Chair after all other witnesses have testified, but prior to the proponent's rebuttal. The Chair is free to decide whether or not to ask such questions of the witness. Continuances: The grant of a continuance or record extension shall be at the discretion of the Board. If the Board grants a continuance or record extension, it shall continue the public hearing or leave the written record open to a date certain. If, at the conclusion of the hearing, the Board leaves the record open for additional written evidence or testimony, the Board shall establish the time period for submittal of new written evidence or testimony and for additional for response to the evidence received while the record was held open. If the hearing is continued or the record left open, the applicant shall also be allowed time after the record is closed to all other parties to submit final written arguments but no new evidence in support of the application. Pre-hearing Contacts, Biases, Conflicts of Interests Do any of the Commissioners have any ex-parte contacts, prior hearing observations, biases, or conflicts of interest to declare? If so, please state the nature and extent of those. Does any party wish to challenge any Commissioner based on ex-parte contacts, biases or conflicts of interest? (Hearing no challenges, I shall proceed.) Community Development Department � „,t / Planning Division Building Safety Division on Environmental Soils Division NNW \ , mow P.O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ NOTICE OF PUBLIC HEARING The Deschutes County Board of Commissioners will hold a Public Hearing on Wednesday, February 5, 2014 at 10:00 P.M. in the Barnes and Sawyer Rooms of the Deschutes County Services Building located at 1300 NW Wall Street in Bend, to consider the following request: FILE NUMBERS: PA-13-1/ZC-13-1 SUBJECT: Applications for a Plan Amendment to change the comprehensive plan designation of certain property from Agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agriculture (MUA-10). A total of 171 acres is proposed to be rezoned. This is a de novo hearing as required under DCC 22.28.030. APPLICANT: NNP IV-NCR, LLC LOCATION: County Assessor's Map 17-12-24, tax lots 206, 300, 301, 302, 304, 305, 401, 405 and 406 ALL INTERESTED PERSONS MAY APPEAR, BE HEARD, BE REPRESENTED BY COUNSEL, OR SEND WRITTEN SIGNED TESTIMONY. ALL WRITTEN REPLIES MUST BE RECEIVED BY THIS DEPARTMENT PRIOR TO THE HEARING DATE OR SUBMITTED AT THE HEARING. ANY PARTY TO THE APPLICATION IS ENTITLED TO A CONTINUANCE OF THE INITIAL EVIDENTIARY HEARING OR TO HAVE THE RECORD LEFT OPEN IN ACCORDANCE WITH SECTION 22.24.140 OF THE DESCHUTES COUNTY CODE. Recipients of this notice may request a copy of the Hearings Officer's decision (25 cents a page). Any person submitting written comment or who presents testimony at the hearing will receive a copy of the decision. Failure to raise an issue in person at the hearing or in writing precludes appeal by that person to the Land Use Board of Appeals (LUBA). Failure to provide statements of evidence sufficient to afford the decision-maker an opportunity to respond to the issue precludes appeal to LUBA based on that issue. Copies of the application, all documents and evidence submitted by or on behalf of the applicant and applicable criteria are available for inspection at the Planning Division at no cost, and can be purchased for 25 cents a page. Quality Services Performed with Pride STANDARDS AND APPLICABLE CRITERIA: Title 18 of the Deschutes County Code, the County Zoning Ordinance Chapter 18.16, Exclusive Farm Use Zone Chapter 18.32, Multiple Use Agricultural Zone Chapter 18.136, Amendments Title 23 of the Deschutes County Code, Deschutes County Comprehensive Plan Chapter 2, Resource Management Chapter 3, Rural Growth Appendix C, Transportation System Plan Oregon Administrative Rules, Chapter 660 Division 12, Transportation Planning OAR 660-012-0060, Plan and Land Use Regulation Amendments Division 15, Statewide Planning Goals and Guidelines Division 33, Agricultural Land NOTICE TO MORTGAGEE, LIENHOLDER, VENDOR OR SELLER: ORS CHAPTER 215 REQUIRES THAT IF YOU RECEIVE THIS NOTICE, IT MUST PROMPTLY BE FORWARDED TO THE PURCHASER. Please contact Paul Blikstad, Senior Planner, with the County Planning Division at (541) 388- 6554 if you have any questions; Email address: paul.blikstad @deschutes.org Dated this day of January, 2014 Mailed this day of January, 2014 tAt.) et a,ifine. BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest a?wl Date 2 / 51 H Name u 1� Address 2U(77 t3eVla Phone #s 1. 42/-)- t o 2 E-mail address In Favor Neutral/Undecided H Opposed Submitting written documents as part of testimony? Yes No -re 0 Of 4 0, BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest A'2.,/./7 j Date Name Address /77n ,.. v,e_.7,4,4J- 6-_ y77 Phone#s 6/‘) - 2ej E-mail address /""1Or �f J "D a‘/4/)GijW � .r In Favor n Neutral/Undecided n Opposed Submitting written documents as part of testimony? Li Yes 7 No 0 a o r" 1 BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest *-8 /zC fl ( P c_. Date 2._/ / /<-1- Name I Z7 C tfi Z Address (v '`V 1-( ) 2 - o ct-a-c-D a Phone #s s-ct- ( 6s- — 3 0(cD--1 E-mail address Z l ffiIn Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? lor4 Yes n No (t) 4 a y � BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest Y LOA ,/.. °". Otifm, Date 2 15 1 Li Name 1-C Y6 (Y) (t:30 Address Z \ ;9—d e fn ... r r I 1M2iJ tea. ) 6r Phone#s E-mail address � f' I t_. ..JY7-1, In Favor n Neutral/Undecided ,.Opposed Submitting written documents as part of testimony? H Yes No 10/.4 BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest pf( )(l& Date z f 5/if Name G `>' 1 6- Address I (.3 -60 L`c0— (AA ,iSL, 71) 0 Phone#s s41. 3q2 -3Q,44. E-mail address G\J kg. V\ 0 6 rS L ' " In Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? fl Yes ,No o a e' *{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interes—t lkQ`^' ` E ' %\ Date -2-- f `. I I 'I Name t?" :,,. ,�,:,,.. Address `5 6 v o w f k CAA Phone#s S 1+1 C" �+'1 4, E-mail address `L 1, � `2 , ° In Favor Neutral/Undecided 1 Opposed Submitting written documents as part of testimony? { Yes No tyf 0140, Z 8°f, ;'I BOARD OF COMMISSIONERS' MEETING y REQUEST TO SPEAK Agenda Item of Interest �': /- E C 13 l Dated Name y Pc, Fe -'-�.. I 1 CO Address ,; � l� � 0 3 f6 0`Yl C( C . .. Pn CY bey 7 70 / Phone #s (7/ o UJ P-O-Ajfe" ... E-mail address ) i l cA ( c `yam - co/it__. I l In Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? Yes No U�v mss % <• oiK BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ,1 - r` - Date ,,-c? - -/`y Name loll)/ //c�2 Address /15<-% { Phone #s E-mail address TX In Favor Neutral/Undecided Opposed Submitting written documents as part of testimony? fl Yes — No JrES Q U ° +-\ nI, - ,, BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK 4_4_1Agenda Item of Interest I , -!_ Date Name (A V �. C 11 . Address Z �.C4 e. 0 V? q 77 (,) Phone #s 3 (fictt E-mail address ( . - c ' - In Favor Neutral/Undecided ZOpposed Submitting written documents as part of testimony? Yes U No U�JT GHQ o eA BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda Item of Interest ,! • j ►V 4-1?-: ' 1 a / //y Name G i/ % co fi,G4 Address )CO, > >37' 5),5 , Phone #s 3-6 3 - S-S ,! E-mail address �/ I �)irt,A Et, 0-44(k j 1 s�-� UIn Favor Neutral/Undecided X Opposed Submitting written documents as part of testimony? Yes 17 No �G� DES c,_ z� �� l f . ; BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ; /L,-:v, (( Date s c �' C; Name r c r' Address a 5 .> L Ake ,"v A A tt el7 75-, Phone#s .6L11 - e( 90 '6 I.1 e, E-mail address ' t z L c } In Favor n Neutral/Undecided Opposed Submitting written documents as part of testimony? c Yes No w Z BOARD OF COMMISSIONERS' MEETING C REQUEST TO SPEAK Agenda Item of Interest AigitiMeJ0 Date 4,'12/.71 Name a,-1/ 1■) 1� �,i ..) `' aiTP Pc.-1; ■ `fi t` && Address /06 3- 5-W 2474C Cr ou'k;`n, oiL 'nns0 Phone#s :5 7-V0 E-mail address ,S4"eti'•i (�, G( '�11 srpf-P nIn Favor Neutral/Undecided E. Opposed Submitting written documents as part of testimony? I I Yes No <ft ftit:°4 BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK ,4f Agenda Item of Interest 74 vee y et/ir 44-,P Date .1 /( Name t, e ,r 61*_ ("q' 44/-1 (1, Address .8 7 5 hc /I( I .,( (4 y 77e Phone#s I n sc E-mail address (- f.:(1/((I c c''lL/11"--1(1/ - ( / - In Favor Neutral/Undecided 71 Opposed Submitting written documents as part of testimony? [-7 Yes El No i- s 1,e4c BOARD OF COMMISSIONERS' MEETING cv, REQUEST TO SPEAK • Agenda Item of Interest ttioia,7,-1 1:w[if9 Date ,2 -.5-- .26-04 Name Address PC) CX 1J2SI 5)5i-e4 6" 11?5-1 Phone#s 45/1i E-mail address parntid NJ C(1/01 LI aryl 1-7 In Favor Neutral/Undecided Opposed Submitting written documents as part of testimony? fl -Yes Ki No �`` z BOARD OF COMMISSIONERS' MEETING Vj "� ~ REQUEST TO SPEAK Agenda Item of Interest Nov P/L/ - iV c 2 h,G✓) Date "s -26/9 Name 77 r r No 'I s Address FGA &J k 53 7 ,/!.s /th'i r el 2257 Phone#s Sc j- ,t2 u - V 2-- E-mail address Jer,.7 ? nIn Favor Neutral/Undecided x Opposed Submitting written documents as part of testimony? { ?C No Yes ►; BOARD OF COMMISSIONERS' MEETING , REQUEST TO SPEAK Agenda Item of Interest ��,4 ere - -2:1S/7 Date + c Name £ -(JC/it Address a 7 C o 5 s i p . F77,7:--7 Phone#s S1//- -7a r- Fa a E-mail address .e — /L ?7 e r_72 In Favor Neutral/Undecided ® Submitting written documents as part of testimony? ' `es ❑ No a o•, 1►;a � BOARD OF COMMISSIONERS' METING Cf:19 REOUES'J LM SPEAK Agenda Item of Interest - , ,4 —/3 — //7C_,3--) Date 2 --, _f zf Name 1.4\ F� 7�o� Lo .r-e I - . Address b 9�7��O La_kt Dr--x Vc r 5 C) fZ 977_V? Phone#s .c-// 7 X 07 L( E-mail a d d r e s s IA) Io we_ 17 q 0,-,0 , c ©vv, In Favor D Neutral/Undecided INF-Opposed i Submitting written documents as part of testimony? ❑ Yes 4No . .. , ., BOARD OF COMMIISSIONERS' METING REQUEST TO SPEAK Agenda Item of Interest N a L Date --/5`// 1 Name Address : fin Phone#s 3— ? / - 23' E-mail address 0,.•-Q E c-„tskr o - In Favor Neutral/Undecided [] Opposed Submitting written documents as part of testimony? El Yes n No • �{ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest _ Date Name "Ti c k )Q k4 \ CD Address 62 91,c8 @ Q e odd r c41 Phone#s 94 l /j L/- cI / 41-7 E-mail address In Favor C Neutral/Undecided Posed Submitting written documents as part of testimony? Yes ❑ No IJ BEFORE THE BOARD OF COMMISSIONERS OF DESCHUTES COUNTY File Numbers: PA-13-1/ZC-13-1 Applicant: NNP-NCR, LLC Subject: Plan Amendment from Agriculture to Rural Residential Exception Area and Zone Change from EFU-TRB to MUA-10 Staff Reviewer: Paul Blikstad,Senior Planner APPLICANT'S RESPONSE TO HEARINGS OFFICER'S RECOMMENDATION DATED OCTOBER 23,2013 Summary Hearings Officer Karen Green determined that NNP has demonstrated compliance with the vast majority of the approval criteria for the Board to rezone its Property MUA-10. She identified two issues that led her to recommend denial of the application: (a) proof that a reasonable farmer would not farm the property with an intention to make a profit in money;and (b) her recommendation that the County study the soils found on each lot or parcel that comprises the NNP Property rather than study the property as a whole—the approach taken in prior, recent County decisions involving nonagricultural land. The Hearings Officer incorrectly read the economic analysis and,therefore, reached incorrect conclusions regarding profitability. Specifically,she did not recognize that the costs of the irrigation system,fencing and buildings were depreciated over time and were not deducted from a single year of operations. As a result, her conclusion that replacing new equipment with used equipment would make farm operations profitable was in error. Even if used equipment and facilities are factored into the economic analysis, NNP's Property cannot support a profitable farm operation. This is consistent with the fact that,according to the 2007 Census of Agriculture prepared by USDA,82.4%of all farms in Deschutes County, including those with high-value farm soils,did not make a profit in 2007 which is the latest year for which figures are currently available. The Hearings Officer was correct in determining that the County is not required to study the soil characteristics of each legal lot of record rather than the entire NNP Property. NNP disagrees with the Hearings Officer's recommendation that the County choose to use this approach. The Hearings Officer's approach is inconsistent with how the County applied the standard to the DSL property and to other properties in similar applications. The County's prior approach to the issue makes the most sense and should be applied to decide the NNP application. Specific Responses PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 1 of 11 The applicant has quoted text from the Hearings Officer's Recommendation in italics and has provided a response below each quotation. "Under the unique circumstances of this case, where the subject property is a tract with multiple parcels, the applicant must demonstrate that each parcel consists of predominantly Class VII and VIII soils rather than simply analyzing the tract as a whole."' Response: The fact that the NNP Property is a tract comprised of multiple parcels is not a "unique circumstance." To the applicant's knowledge,the County has never required a lot by lot analysis as suggested by the Hearings Officer. To the contrary, in every recent nonagricultural land case where an applicant's property has been comprised of multiple lots,the County has analyzed the property proposed for rezoning, not individual lots to determine whether a majority of the property was comprised of nonagricultural (Class VII and VIII)soils. This is shown by Exhibit A,attached. The Land Use Board of Appeals has recognized that the fact that NNP's property is comprised of multiple lots is not unique. LUBA noted in the Wetherell case cited by the Hearings Officer that"[a]farm unit could be located on a single parcel or lot, but more commonly farm units are located on more than one parcel or lot"and that a farm unit"may be a relevant consideration in determining whether land is properly viewed as agricultural land." Wetherell v. Douglas County(Standley), 50 Or LUBA 71 (2005) (entire parcel must be reviewed to determine predominant soil type). The current case law has held that it is not appropriate to study areas smaller than lots or parcels but it has not held that it is not permissible to study a group of lots and parcels as one property when owned by a single owner. The overarching theme of EFU-zone regulations is to combine parcels into tracts and to base land use decisions on the basis of tracts whenever EFU lots and parcels have the same owner. "The applicant failed to demonstrate the entire subject property is unsuitable for farm use considering profitability and other factors set forth in the administrative rule.i 2 "[T]he applicant has failed to demonstrate the subject property is unsuitable for farm use considering profitability and factors in the Goal 3 administrative rule."3 Response: This conclusion is based on a misunderstanding by the Hearings Officer of the economic analysis prepared by Agronomic Analytics. Agronomic Analytics correctly determined that farming the NPP Property is not profitable. This determination is consistent with the history of the property and the track record of farming in Deschutes County in general. Prior owners of the subject property were unable to obtain a profit from farming the property in a number of smaller farm operations. The vast majority of Deschutes County farmers,82.4%,do not make a profit from farming. The average farm size in Deschutes County,according to the 2007 Census of Agriculture is 92 acres. The average loss per farm in 2007 was$9,220 on a net cash income of$25,818.See, Exhibit B. The results arrived at by Agronomic Analytics are based on a conservative analysis. The analysis did not include the complete costs of farming,such as the cost to purchase and finance the land to be farmed, farm housing costs and family farm labor. The results of the Agronomic Analytics analysis show that 1 Page 7,Hearings Officer's Recommendation(erroneously labeled"Decision of Hearings Officer"). 2 Page 8,Hearings Officer's Recommendation. 3 Page 17,Hearings Officer's Recommendation PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 2 of 11 farming NNP's Property as a single farm unit will not be sufficient to make farming a property with a history of farm losses a profitable venture. The Hearings Officer misunderstood how to apply the Goal 3 administrative rule factors,as explained later in this response. The rule lists factors to be considered when determining if a reasonable farmer would buy the NNP Property with an intention of making a profit in money by conducting farm activities on the land. The factors are not each separate approval criteria. A copy of the relevant part of the County's DSL decision that addresses the criteria as factors rather than approval criteria is attached as Exhibit C. "I have found that the applicant's soils study does not justify the proposed plan amendment and zone change to MUA-10 because it analyzed soils on the entire property rather than as to each parcel.'"° "[T]he applicant's soil study is not adequate because it does not demonstrate the parcels comprising the subject property are predominantly Class VII and VIII soils..."$ Response: The Oregon Supreme Court has held that,when changing Agricultural land plan designations, the predominant soil capability classification of land should be determined based on the area proposed for change.1000 Friends of Oregon v. Wasco County Court,299 Or 344,371-73,703 P2d 207(1985)(land removed from Agricultural designation for incorporation in a new city from a very large area of ranch land). This decision has not been overruled. As a result,the holding of that case applies to NNP's application and supports NNP's position that the entire property should be considered when determining whether the property is predominantly comprised of Class VII and VIII soils. Since 1000 Friends was decided, legal cases and administrative rules have imposed new requirements that prevent local government from looking at less than a lot or parcel. This approach prevents property owners from removing unproductive areas from parcels that are,as a whole,good agricultural land. The law does not, however, mandate that a county evaluate properties comprised of multiple lots or parcels as one unit of land. It does not prohibit a county from reviewing the soils on a farm property comprised of a group of parcels as a single unit of land.The latter approach is required to determine whether land is suitable for profitable farm use if a unit of land is a farm unit. Using the same approach to study soils is reasonable and fair. It does not make sense to study approximately ten separate parts of the NNP Property to determine predominant soil type simply because, historically,the property was divided into many small lots. The lot lines on the NNP Property are meaningless to a farmer. Farm operations will be and have been conducted across property lines. Boundary lines,also,can be adjusted to new locations. As a practical matter,were the County to require a lot by lot analysis,the applicant would be able to adjust the lot boundaries in a way so that each lot satisfied the soil analysis requirements. This fact alone supports the approach of evaluating the farm unit rather than individual lots comprising the farm unit. The lot lines on the NNP Property were established when zoning regulations allowed small lots to be created on farm land to allow for hobby farm and residential use. The lines were not established to help protect agriculture. In fact,the current Goal 3 would prohibit the creation of most of these small lots. a Page 16,Hearings Officer's Recommendation 5 Page 17,Hearings Officer's Recommendation PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 3 of 11 These small lots are clearly unsuitable for farm use—they need to be used as a single unit of land to have any chance of obtaining a profit in money from agriculture. LCDC's rules allow a County to look at units of land as small as a lot or parcel without considering an entire farm unit but they do not require that a county study soils on a parcel basis. This fact is recognized by Ms.Green who wrote: "In the absence of clear direction from the courts, LUBA or the board concerning application of the language of OAR 660-033-0030(2)to the unique circumstances of this case—i.e. a tract consisting of multiple parcels—the Hearings Officer finds it reasonable to conclude the rule gives the County discretion to choose the appropriate unit of land for the predominant"soils"analysis. In other words, the county can choose either to evaluate soils on an individual parcel basis or as to the entire tract." As discussed earlier,the County has consistently looked beyond lot and parcel boundaries when deciding whether a unit of land is comprised, predominantly,of Class VII and VIII soils. This approach is the best approach because it matches the requirement imposed by State law to study an entire farm unit when determining whether land is suitable for farm use. Oregon case law regarding the suitable for farm use and farm unit rule shows that looking to the entire farm unit typically prevents, rather than helps, properties from qualifying as nonagricultural land. As a result,such an approach is consistent with Goal 3's aim to protect agricultural land. "OAR 660-033-0030 sets forth the process by which the county identifies 'agricultural land.'Subsection (2)of that rule states in relevant part: 'When a jurisdiction determines the predominant soil capability classification of a lot or parcel it need only look to the land within the lot or parcel being inventoried. However, whether land is suitable for farm use requires ***the consideration of conditions existing outside of the lot or parcel being inventoried.-6 Response: This rule allows a county to look at a unit of land as small as a lot or parcel when deciding the predominant soil capability. It does not require a county to study each and every lot and parcel within a farm unit or unit of land proposed for rezoning when deciding if property is nonagricultural land. NNP agrees that the issue of whether land is suitable for farm use requires that a larger area be considered. NNP believes that where a larger area must be studied to determine suitability and that area comprises contiguous land owned by one person or entity,that the area of land that should be considered to determine whether land is agricultural land or nonagricultural land is the entire unit of land proposed for rezoning,as allowed by the 1000 Friends of Oregon v. Wasco County Court case. "[P]revious county decisions redesignating and rezoning nonresource land have not addressed this question. That is likely because the prior county cases involved single parcels rather than tracts comprised of multiple parcels. For example, the Pagel and DSL decisions cited above involved, respectively, a 17-acre parcel and a 380-acre portion of a 640-acre parent parcel." 6 Page 22, Hearings Officer's Recommendation. PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 4 of 11 Response: A review of County decisions shows that prior County cases,other than Pagel, have all involved multiple parcels and that the predominant soil classification was determined based on the soils found on the entire area proposed for rezoning.See,Exhibit A. "In a supplemental memorandum dated March 20,2013, the applicant's attorney Steven Hultberg * ** argued that as a practical matter,focusing on individual parcels rather than the entire tract makes little sense since parcel lines can be adjusted or vacated to meet the predominance test. While in theory such adjustments could be made * * *the Hearings Officer finds that fact does not justify interpreting the term 'parcel'to mean 'tract.' Moreover, the Hearings Officer is concerned about the result of such parcel manipulation. It could have a negative effect on preserving or protecting agricultural land. . . Response: The Hearings Officer appears to have missed the point of Mr. Hultberg's argument. Mr. Hultberg is saying that because lot lines can be removed or moved by NNP they do not provide a meaningful unit of land for study. How land is used and owned is more relevant. This is particularly true where,as here,the property was divided prior to or during the early days of Statewide land use rules into units of land that are too small for commercial farm operations. Putting these lots or parcels into a single farm operation is what is desired by State law. It is reasonable for the County to study both the soils and viability of farming such land on the basis of the entire unit. The"parcel manipulation"the Hearings Officer fears will have a negative effect on preserving or protecting agricultural land can occur even if the County follows her recommendation to study each lot and parcel separately. This simply requires approval of a lot consolidation which is allowed as a matter of right. NNP believes that most owners of productive farm land will not be willing or able to acquire properties with poor soils,consolidate them and then seek a nonagricultural designation for the combined property. First,the good farm land must adjoin land with very poor soils. Second,the expense to acquire additional land and apply for and justify approval of a nonagricultural designation is extremely high. "Although the 'Revised Soil Map'at page 24 of Mr. Borine's soil study shows that significant parts of Tax Lots 206,300 and 304 are composed of Class VII and VIII sails, the soil map also shows the remaining six tax lots have large areas of Class Ill-Vl soils which are considered high value soils when irrigated." Response: The Hearings Officer misunderstood the Borine soil study. It does not show that the NNP property contains large areas of soils which are considered high value soils when irrigated. Only 6%of the NNP Property would be considered high-value when irrigated based on the results of Mr. Borine's soil study.8 Most of this land is found in one small field that is surrounded by a large area of very poor Class VII and VIII soils(Soil Unit D)found on the same parcel and adjoins a property that is also comprised of very poor nonagricultural soils. The Class VII and VIII soils are interspersed across all parts of the NNP Property. Page 23,Hearings Officer's Recommendation. 8 Soil Mapping Unit A, Deskamp loamy sand,0-3%slopes is the same as Class 36A,Deskamp loamy sand,0-3%that is high-value when irrigated. This is the only soil identified by Mr.Borine that is the same as an NRCS soil mapping unit that is rated high-value when irrigated. PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 5 of 11 "[T]he Hearings Officer finds that it is appropriate for me to consider profitability in the context of the seven factors of the administrative rule[OAR 660-033-0020(7)(a)(B)j, but that it is not a determining factor in the suitability analysis. Each of the seven factors is discussed below." Response: The Hearings Officer correctly found that the administrative rule says that land that is "suitable for farm use as defined by ORS 215.203(2)(a)"should be inventoried as Agricultural Land. The term "farm use" is defined to mean "the current employment of land for the primary purpose of obtaining a profit in money" by undertaking specified agricultural activities. Seven factors are to be considered in determining suitability but the point of consideration is to determine whether the land is suitable for profitable farming. No matter how"favorable"a factor may be in terms of making it possible for the land to be used for agricultural activities, if it is not profitable to conduct the activity on the property the activity is not farm use and the property is not"Agricultural Land." It,therefore, is not accurate to say that profitability is not a determining factor in this application.See, Wetherell v. Douglas County, 342 Or 66, 160 P3d 614(2007)(DLCD rule set aside because it prohibited consideration of profitability when determining whether land is nonagricultural land). This rule is applied throughout the State. In many parts of Oregon,Class V9 and VI soils are not considered agricultural land unless shown to be suitable for profitable farm use. In Central Oregon, these lands are"agricultural" based solely on their classification. Lands comprised of those marginal or wet soils are deemed suitable for farm use in Central Oregon no matter how unprofitable it is to farm them. Class VI soils that are automatically"agricultural land" in Deschutes County are far more likely to be suitable for profitable farm use than the extremely poor Class VII and VIII soils found on the NNP Property. This fact weighs in favor of finding that NNP's Property is not agricultural land. "1. Soil Fertility.***Ms. Fancher argues a reasonable farmer would not incur the costs associated with amending and fertilizing the soil. However, the applicant's * *economic analysis* *shows no fertilizer expenses at all in the annual budget for a cattle grazing operation, identified as one of the most likely farm uses of the subject property. The annual budgets for a bluegrass seed operation and an alfalfa hay operation show fertilizer costs of$10,712 and$3,970,respectively. Thus, the fertility of the Class VII and VIII soils on the subject property could be improved with fertilizer to a sufficient degree to sustain a grass seed or grass hay operation. The applicant does not explain why a reasonable farmer would not be willing to incur these relatively low fertilizer expenses for such operations." This analysis misses the bigger picture. It is clear that the soils on the property are extremely poor. NRCS advises that Class VII soils"have very severe limitations that make them unsuited to cultivation." With fertilizer,the Class VII and VIII soils produce low crop yields. As a result,there is less or no income to pay for all of the expenses of farming including the cost of fertilizer. A cost of$3,970 or$10,712 for fertilizer is a significant expense for a farmer who is going to lose money from farming. These are also very large numbers for an "average" Deschutes County farmer who has an average net cash income of $25,818,average farm size of 92 acres and an average net cash loss from farming of$9,220. It is also a significant expense for a farmer who has a farm the size of the NNP Property as demonstrated by the economic analysis provided by Agronomic Analytics. a Class V soils are wet soils. PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 6 of 11 Soils scientist Roger Borine has advised the County that multiple applications of fertilizer and soil amendments are needed "to maintain a minimum level of essential nutrients for proper crop growth."10 Mr. Borine has advised NNP that fertilizer will pass through poor soils and enter the aquifer where it will cause harm to the environment. Fertilizer and amendments,therefore,will not make a lasting change in the inherent or long-term fertility of the soil present on the NNP Property. Furthermore, Mr. Borine has advised the county that soil sampling, lab analysis and soil amendments are needed to produce a crop on these poor soils. Those costs were not considered by the Hearing Officer and further increase the loss a farmer will incur from growing a crop on the NNP Property. A prior owner attempted to conduct a profitable hay operation on the large tract of irrigated land in the southwest part of the NNP Property (Tax lot 406) but that operation was not profitable. There is no real reason to believe that a different result would be achieved now or in the future. The report by Agronomic Analytics clearly states that it assumed that pastures would be fertilized for livestock operations in calculating the number of cattle that could be kept on the property. The revised budgets have been revised to show the cost of fertilizer as a separate line item. "2. Suitability for Grazing. ***The applicant argues that the subject property is not suitable for farm use because it cannot be profitably managed for livestock grazing. ***Ms. Fancher relied on the July 11, 2013 Budget Analysis Study' ***prepared by Stephen C. Caruana of Agronomic Analytics. This study concluded the subject property is not suitable for farm use because it could not be operated profitably if the full costs of the agricultural operation are considered. ***Mr. Caruana's analysis***did not include as costs the land purchase price, debt service, or property tax payments."11 Response: This is an accurate summary of NNP's position. It is important to note that the analysis provides a conservative analysis of the costs of farming the NNP Property. It does not include any of the costs that would need to be expended by a farmer to purchase the NNP Property,to pay debt service for the land or to pay real property taxes. It does not include costs for farm housing or family farm help. When even a modest amount is assumed for these necessary farm expenses, it is clear that a reasonable farmer would not purchase and use the NNP for farming with the intention of making a profit in money. "Mr. Caruana developed a budget for each of the five agricultural enterprises(he studied]. ***Mr. Caruana concluded none of the five agricultural enterprises he evaluated,including livestock grazing, would produce a profit.***Mr. Caruana's analysis is very detailed. However, the Hearings Officer questions what weight it should be given in general,and for a grazing operation in particular, because of its expense assumptions. The livestock operation budget includes expenses for a start-up operation without apparent consideration of existing assets. ***The budget identifies over$50,000 for the purchase of equipment, including$42,000 for a new truck and trailer without explaining why less used truck and trailer would not be adequate. Finally, Mr. Caruana's budget for livestock grazing operation lists$150,000 in expenses for the initial investment in an irrigation system. ***It is unclear from this record how much of the original irrigation system remained on the subject property after the applicant purchased the property and to what extent it was considered by Mr. Caruana. ***Because Mr. Caruana's budget calculations appear not to account for the value and utility of existing irrigation equipment and infrastructure, I am not persuaded his projected expenses for irrigation in particular,and for a grazing operation in general, are accurate. Inasmuch as the projected loss for the grazing operation 10 Hearings Officer's Recommendation,page 28. 11 Hearings Officer's Recommendation,page 30. PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 7 of 11 was approximately$21,000, the Hearings Officer finds elimination of or reduction in the projected costs of buildings,fences, equipment, and irrigation system easily could exceed that amount, thereby making the cow/calf operation profitable." Response: The Agronomic Analytics report is being revised to include the results of an inventory and assessment of existing equipment and buildings. The revised report will be provided to the Board in the near future. With these changes,the report will continue to show that livestock grazing is not profitable. This is true, in part, because only a fraction of the large costs identified by the Hearings Officer are considered the cost in the year studied by Mr.Caruana. These costs are depreciated— divided over a period of many years with a fraction of the total cost being deducted from income in any given year. As a result,the elimination or reduction of these expected costs is not sufficient to erase an annual loss of approximately$21,000. NNP would also like to point out certain key facts that may have been overlooked by the Hearings Officer: • Used equipment,fencing and existing buildings, like new equipment, have a cost to a farmer. The fact that equipment or buildings were purchased in a prior year does not mean that they are not a cost of current year operations. This error appears to have arisen from the Hearings Officer's mistaken belief that 100%of capital costs are deducted in the year they were incurred. If such were the case, no cost would be assigned to equipment purchased in a prior year. Since it is not,the correct approach is to assign a current value to used assets and depreciate that value over the rest of its useful life. • Used equipment and buildings will have a shorter useful life than new equipment and buildings. This means that the annual, depreciated cost(the cost deducted from the estimated annual farming income by Agronomic Analytics)of something used is not necessarily significantly different from that of new equipment. • Maintenance expenses will increase as equipment becomes older. • The existing irrigation equipment on the NNP Property is old. Much of it is in poor condition and cannot be used in the integrated system needed to irrigate the entire property. A careful study of this issue was conducted by Roger Borine. This study will be submitted with the revised economic analysis and budgets in the near future. Mr. Borine estimated the cost of a new irrigation system using conservative costs obtained from a reliable,governmental source(NRCS EQUIP). He then determined that the cost of using existing irrigation to create an integrated system will be more expensive because a new pump is required and the value of the used equipment is close to the same as the cost of new equipment(the new equipment estimate is a very conservative/low estimate of cost). If the irrigation system were to include used equipment,it would require increased maintenance and would be more likely to fail which could have dire consequences during the growing season. "3. Climatic Conditions. The applicant argues the subject property is unsuitable for farm use because the climate in Central Oregon is cold and dry. ** *(T]he Hearings Officer agrees climatic conditions are not ideal for commercial agriculture.***l find the Central Oregon climate certainly makes farm use more PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 8 of 11 challenging,but lam not persuaded***that climatic conditions would dissuade a reasonable farmer from putting the subject property into agricultural use." Response: The law does not require the applicant to prove that the NNP Property is unsuitable for farm use due to climate alone. The challenging climate of Central Oregon limits the type of agricultural activities that can be conducted and impacts the costs and returns to be expected from such activities. Climate makes many agricultural activities infeasible in Central Oregon. Those that are feasible will have lower returns than those in better climates due to longer and more reliable growing seasons and more abundant rainfall. Dry soils are more easily lost due to wind erosion and this makes farming less likely to be profitable. The Central Oregon climate does not prevent all agricultural uses of the NNP Property. The applicant is not required to show that it does or that the climate,alone,would dissuade a farmer from putting the subject property into agricultural use. The applicant need only show that,after considering all of the factors together,a reasonable farmer would not expect to make a profit in money from conducting agricultural uses on the NNP Property. The applicant has made that showing so its application should be approved. 4. Existing and Future Availability of Water for Farm Irrigation Purposes.***Water is available for the subject property now and in the future for farm irrigation purposes. Response: NNP agrees that water is available to the NNP Property. The Sage West, LLC/Borine soils report shows, however,that applying irrigation water to most of the soils found on the property will not improve their soils classification (Soils C, D and E and part of Soil B)and, by extension,their suitability for farm use. Additionally, it is very expensive to apply irrigation water to the property. Water must be stored on site and pumped at a considerable cost to distribute water over the property. The shallow sandy soils do not retain the water and crop yields are low. As a result,the fact that water is available is insufficient to lead a prudent farmer to believe that farming the property will be profitable. Due to the dry climate, in some years irrigation water is rationed. Such may be the case this year due to extremely low snowfall. If water is rationed, it will be allocated based on the seniority of water rights not based on which land is the most productive. This could mean that water will be available to irrigate the poor soils of the NNP Property but not to other area farms that have better soils if the NNP Property were placed into farm use. In addition, retaining water in-stream during low water years is a more beneficial use of water—as well as one that may compete with irrigation in future years,as it has been in the Klamath Basin. "5. Existing Land Use Patterns.***DLCD and ODA argue, and the Hearings Officer agrees that there is nothing about this land use pattern that would limit"responsible farming practices"or serve to reduce the property's value for agriculture." Response: The use of the word "responsible" presupposes that extra care must be taken to protect nearby residents by a farm operator and that limitations are imposed on farm use in this area. Such extra care is required in order to conduct farm uses on the NNP Property. Crops cannot be sprayed by crop dusters due to the fact that surrounding lands are heavily developed with single-family homes. Any application of a pesticide must be done with extra care to avoid drift onto adjoining residential PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 9 of 11 properties. Early morning farm operations may give rise to noise complaints. The heavy amount of traffic that passes the property each day on Butler Market Road prevents a farmer from keeping and raising noise sensitive animals. In terms of land use pattern,the pattern around the subject property makes about as strong of a case for a nonagricultural land designation as possible. If this property is not constrained by the existing land use pattern,which other property is so constrained. Why would similar uses constrain those properties and not the NNP Property? The surrounding area is close to the City of Bend, has been developed with many homes,adjoins two churches(southwest)and is located on a major roadway that carries traffic to the Bend Airport. LCXC has decided that this is a relevant factor for farm use and NNP trusts its judgment on that point. "6. Technology and Energy Inputs Required. [T]he Hearings Officer has found Mr. Caruana's annual budget for a cattle grazing operation does not include any expenses for amending and fertilizing the soil. The annual budgets for grass seed and alfalfa hay operations amount to only approximately$10,000 and $4,000, respectively. And I have questioned the accuracy of the cost Mr.Caruana projections[sic]for the irrigation system. Based on these findings, I am not persuaded that the technological and energy inputs required to put the subject property to profitable farm use are excessive. Response: All of the farm uses considered by Agronomic Analytics require the application of fertilizers and pesticides. Fertilizer needs to be applied repeatedly as it travels through the"soil"and enters the aquifer. The NNP farm uses all require the use of an irrigation system. That system has a cost of approximately$170,000 according to cost estimates prepared by Roger Borine based on costs provided by NRCS/EQIP and used prices obtained from respected Central Oregon irrigation system suppliers.12 The irrigation system requires electricity to be operated. Farm equipment requires gasoline or diesel fuel. The amount of these inputs is high because the soil does not hold water and nutrients for adequate periods of time. These facts are a part of the reason that costs are high and a reasonable farmer would not expect to make a profit in money from farming the NNP Property. "7. Accepted Farm Practices.***(Cjattle grazing, bluegrass seed and alfalfa hay production are accepted farm practices in the county and in the area surrounding the subject property but argues on the basis of Mr. Caruana's study that these practices are not profitable.***I find only minor adjustments to projected expenses could put these operations in the profit column. For example, cutting the projected $45,000 expense for a new truck and trailer for the cow/calf operation would wipe out the projected losses for that operation. Reducing the$150,000 expense for the irrigation system by 15%would wipe out the projected losses for all of the operations requiring irrigation. For these reasons and considering past livestock grazing and hay production on the property, I find the applicant has failed to demonstrate a reasonable farmer would not put the subject property to farm use with one or more of these three accepted farming practices." Response: The examples provided show that the Hearings Officer misread the Caruana study. Cutting the truck and trailer expense would not"wipe out the projected losses for that operation." That operation had an estimated loss of$20,767.68. Only$6,000 of the cost of purchasing a truck and trailer 12 The budget reviewed by Ms.Green used an even more conservative cost figure of$150,000. Mr.Borine's review,the NRCS/EQIP figures and information obtained from irrigation suppliers show that it was appropriate for Agronomic Analytics to use this figure. PA-13-1/ZC-13-1(NNP IV-NCR, LLC) Page 10 of 11 were considered an annual cost of operating the farm. As completely removing the expenditure from the budget would not have the effect stated by the Hearings Officer, it is clear that reducing("cutting") the amount of the expenditure will not"wipe out" projected losses. The same is true with the irrigation system expense. Only$5,000 was deducted from the budget as a cost of operation—not$150,000. Furthermore,a separate review by Roger Borine has shown that the$150,000 cost estimate was reasonable for either a new or a used irrigation system. Even a significant reduction in the cost of the irrigation system such as$51,000 would only result in a reduction in the annual cost of$1,700.00. Such a change would not make the cattle operation profitable. The applicant has shown by uncontested evidence of prior farm use(in the record),that the prior livestock grazing and hay production operations were not profitable. This fact was confirmed by Guy Hamby who testified that the property was once a dairy operation in the 1950s and 1960s and that it became unprofitable and was sold due to that fact. He also testified that the farm activities on the property since that time have not been profitable. As it is none of the accepted farm practices are able to be conducted with an intention to yield a profit in money as required by law,the subject property is not suited for farm use. 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"-' o w 0 c I_ Z 3 ° V o a `—° } °c 3 ° a o a m c +; Z a E ' c a •c C o y ° ' O ea 0.ca , a w e ^3 « o u E m °c in as s s u o z o a o a Z +' V C n G a) rn to r+ .. o a a 4'. z v c a a ;. m v a *' a m a) a o u1 Z a y a E ° E o ro E a a o r a a) u ° E m L z i o C E c ° ° z s 2 Q c H . Q w ra Z c. Z LL a , 4- • c a E z Z fl.ra -17/ n 1.01 W C c U oC t ~ LL in a 0 1- n a a Z a z c a Z ` cc m W of 0. W ac oao a •C _ W ac w di z C Lc±(a a�co z � �.. u_ W Z W 0 v o a W CO z C_C N `r L61 (tl P. 0 a) V CC „� Q W O H Q � I V Z in W • . °a © � a a 2 0 g a Q 215.211 and OAR 660-033-0030(5)(b)could be the applicant or any opponents of an application as well. OAR 660-033-0020(1)(a)(B) OAR 660-033-0020(1)(a)(B)requires that the applicant demonstrate that even though the subject property may be composed of soil Classes VII and VIII,the property is also not "suitable for farm use." The state administrative rules implementing Goal 3 explain how local governments are to determine whether land is suitable for farm use. OAR 660-003-0030(2)* * *whether land is"suitable for farm use" requires an inquiry into factors beyond the mere identification of scientific soil classifications.The factors are listed in the definition of agricultural land set forth at OAR 660-033-0020(1)(a)(B).This inquiry requires the consideration of conditions existing outside the lot or parcel being inventoried.Even if a lot or parcel is not predominantly Class I-IV soils or suitable for farm use,Goal 3 nonetheless defines as agricultural"lands in other classes which are necessary to permit farm practices to be undertaken on adjacent or nearby lands."A determination that a lot or parcel is not agricultural land requires findings supported by substantial evidence that addresses each of the factors set forth in OAR 660-033- 0020(1). • (3)Goal 3 attaches no significance to the ownership of a lot or parcel when determining whether it is agricultural land.Nearby or adjacent land, regardless of ownership,shall be examined to the extent that a lot or parcel is either"suitable for farm use"or"necessary to permit farm practices to be undertaken on adjacent or nearby lands"outside the lot or parcel. Thus, OAR.660-033-0030(2)requires a review of: 1)fertility,2)suitability for grazing,3) climatic conditions,4)existing and future availability of water for farm irrigation purposes,5)existing land use patterns,6)technological and energy inputs required,7) and accepted farming practices. In addition to addressing these seven factors,the Land Use Board of Appeals has recently explained that these two provisions read in conjunction with Oar 660-033-0020(1)(a)(B) allow a local government to consider whether"a reasonable fanner"would be motivated to put the land to agricultural use. Wetherell v. Douglas County, Or LUBA_,LUBA No.2010-052,September 16,2010. LUBA has also held that where the question of whether the land can be used for grazing has been raised in the local proceedings that OAR 660-033-0030(3)requires that the local government consider whether the subject property can be used in conjunction with adjoining or nearby agricultural or grazing operations. Wetherell v. Douglas County(Garden Valley Estates),58 Or LUBA 101, 116 (2008). 19 EXHIBIT C On this topic,Staff found: "The use of the subject property for farm use in conjunction with adjacent lands is not possible. There is no farm use on the adjacent properties. It would not be combined with any other adjacent land for farming to occur. The property is not adjacent to,or intermingled with,lands in class I-VI soils. A small portion of the subject property(approximately 12 acres)is already located within the Bend urban growth boundary." These findings appear to be supported by the Burden of Proof,and the Hearings Officer cannot find any substantial disagreement from participants in this proceeding including Newland. After reviewing the record,the Hearings Officer agrees with the findings of Staff. OAR 660-033-0020(1)(a)(C) This rule addresses whether retaining the subject property as agricultural land is necessary to allow adjacent properties to continue to function as agricultural land. For the same reasons discussed in the fmdings for OAR 660-033-0020(1)(a)(B),I find that the application is consistent with OAR 660-033-0020(l)(a)(C). OAR 660,Division 12,Transportation Planning Rule OAR 660-012-060,Plan and Land Use Regulation Amendments. (1) Amendments to functional plans,acknowledged Comprehensive Plans,and land use regulations which significantly affect a transportation facility shall assure that allowed land uses are consistent with the identified function,capacity,and performance standards(e.g.level of service,volume to capacity ratio,etc.) of the facility.This shall be accomplished by either: (a) Limiting allowed land uses to be consistent with the planned function,capacity and performance standards of the transportation facility; (b) Amending the TSP to provide transportation facilities adequate to support the proposed land uses consistent with the requirements of this division; (c) Altering land use designations,densities,or design requirements to reduce demand for automobile travel and meet travel needs through other modes; or (a) Amending the TSP to modify the planned function,capacity and performance standards,as needed,to accept greater motor vehicle congestion to promote mixed use,pedestrian friendly development where multimodal travel choices are provided. (2) A plan or land use regulation amendment significantly affects a transportation facility if it: (a) Changes the functional classification of an existing or planned transportation facility; 20 Paul Blikstad From: Jinings,Jon<jon.jinings @state.or.us> Sent: Wednesday, March 20,2013 12:27 PM To: Paul Blikstad Subject: Correction to DLCD/ODA Comments on PA-13-1 &ZC-13-1 Paul, Our comment letter sent by e-mail on Monday,March 18,2013 at 4:42 PM indicates that Deschutes County may not have considered language included in Section 3.3 of the county plan in previous land use decisions. It has come to our attention that this language has been considered and addressed by a Deschutes County Hearings Officer and the Deschutes County Board of Commissioners. This discovery does not change the state agencies(ODA&DLCD)position on the matter. However,we would like the record to show our recognition that questions surrounding the above language have been considered and decided by the county in at least one previous decision. . Please add this e-mail message as a supplement to our original comments in the record. Sincerely, Community Services Specialist 1 Department of Land Conservation and Development I 1 3 i 1 1 i ( 1 1 i Paul Biikstad From: .linings,Jon<jon.jinings©state.or.us> Sent: Monday,March 18,2013 4:42 PM To: Paul Blikstad Subject: NNP IV-NCR, LLC Attachments: Newland Comments 3-18-13.pdf Hey,Paul. Here are our comments regarding local files PA-13-1&ZC-13-1. Please include this letter in the record of this case on behalf of the Department of Land Conservation and Development (DLCD)and the Oregon Department of Agriculture(ODA). Ii The following individuals are receiving blind copies of this message: 1 Liz Fancher,Attorney Karen Swirsky,DLCD Katherine Daniels,DLCD Jim Johnson,ODA Please consider this your copy of the attached comments. Jon I 1 i i I s I i x 1 i 1 1 ia i l i 1 4 i I Department of Land Conservation and Development • (I)regon Bend RSC,Millpoint Building 1 John a wt:dienu,rim,Governor 650 SW Columbia St,Ste 7100 (541)322-2032 www.lod.state.or.us March 18,2013 Paul Blikstad .�..... Deschutes County Community Development Oregon Department of Agriculture 117 NW Lafayette 635 Capitol Stree NEt Bend,OR 97701 Salem,OR 97301-2532 1 Qum RE:Local File PA-13-1 &ZC-13-1. DLCD File:ADESC 015-08. `""°'watwv Mr.Blikstad: This letter includes the joint comments of the Oregon Department of Agriculture(ODA) and the Oregon Department of Land Conservation and Development(DLCD). Both departments would like to thank Deschutes County for the opportunity to review and comment on the land use proposal referenced above.The subject proposal seeks to convert about 171 acres from an Agricultural Plan designation and Exclusive Farm Use Zoning district(EFU-TRB)to a Rural Residential Exception Area Plan designation and Multiple Use Agriculture Zoning district(MUA-10).The request is based on a justification that the property does not qualify as"Agricultural Land"pursuant to OAR 660-033-0020(1).No exception to statewide planning goal 3 is proposed. It is our understanding that the subject property is a tract composed of multiple parcels that are now in one ownership.Several homes are present,including at least two that have been approved under the nonfarm dwelling provisions in the county code.The tract consists of some dry land and has over 100 acres of irrigation water rights.According to Deschutes County records,only those parcels including nonfarm dwellings have been removed from farm tax deferral. Our initial observations have been that the subject tract appears capable to be managed as agricultural land and is not an obvious candidate for redesignation to Rural Residential. Our comments and concerns are as follows. Agricultural Land vs.Nanresource Land The most common way for land to be converted from an Agricultural designation is to pursue an exception to statewide planning goal 3.The exceptions process is identified at ORS 197.763 and interpreted by OAR Chapter 660,Division 4.Three exception 1 Deschutes County -2- March 18.2013 1 opportunities are described in the administrative rule.Showing that lands are either "physically developed"or"irrevocably committed"to uses not allowed by the applicable goal are the two opportunities most applicable to the creation of a new rural residential exception area. However,as mentioned above,the applicant is not pursuing an exception.Instead,the applicant is attempting to demonstrate that the subject tract fails to satisfy the definition of agricultural lands.Areas that do not qualify as agricultural or forest lands are often referred to as"Nonresource Lands." Nonresource lands are fundamentally different from rural residential exception areas. Exception areas display an existing settlement pattern and have the characteristics of a rural residential neighborhood,including the presence of public services.Nonresource lands are often large,undeveloped tracts that do not include an existing settlement pattern. Nonresource lands are more likely to exist in remote areas and are usually not complemented with a full range of public services. Statewide planning goal 3 and OAR 660-033-0020(1)provide a definition of agricultural land.The definition states: (1)(a)"Agricultural Land"as defined in Goal 3 includes: (A)Lands classified by the U.S.Natural Resources Conservation Service(NRCS) as predominantly Class I-IV soils in Western Oregon and I-VI soils in Eastern Oregon; (B)Land in other soil classes that is suitable for farm use as defined in ORS 215.203(2)(a),taking into consideration soil fertility;suitability for grazing; climatic conditions;existing and future availability of water for farm irrigation purposes;existing land use patterns;technological and energy inputs required;and accepted farming practices;and (C)Land that is necessary to permit farm practices to be undertaken on adjacent or nearby agricultural lands. 1 (b)Land in capability classes other than I-IV/I-VI that is adjacent to or intermingled i with lands in capability classes I-IV/I-VI within a farm unit,shall be inventoried as agricultural lands even though this land may not be cropped or grazed; Materials from the Natural Resource Conservation Service identify the subject tract as predominantly Class 1-VI soils.On this basis,the property is correctly defined as agricultural land.The applicant has presented additional site specific soils information to supplement the NRCS data which indicates that the subject tract is actually composed predominantly of Class VII soils.The departments find the conclusion that level, irrigated land could be considered Class VII surprising.Should the county agree with the applicant's i soils report addition provisions of the definition of agricultural land must be considered. i i l 1 1 i 1 Deschutes County -3- March 18.2013 Even if the subject tract is viewed as predominantly composed of Class VII soils,available evidence shows that it is certainly suitable for farm use as defined in ORS 215.203(2)(a). Further comments on this topic are offered below. Farm Use The definition of farm use is very broad and everything from crop production to livestock grazing to selling dairy products to aquaculture is included. Honey bees,raising poultry, mink farms,feedlots,aquaculture and,stabling or training equines,included in the definition of"farm use."A site comprised of mostly level land with over 100 acres of irrigation water rights is entirely capable of being used for any number of legitimate farm uses. Profitability is an important aspect in agriculture and any business venture.Past performance is one thing to consider when factoring profitability for farming.Future potential is another.Success in agriculture requires the right management at the right time with the right crop or commodity.This management may be applied by the property owner or it may be applied by a tenant who leases the land and incorporates it into a larger agricultural enterprise.The applicant's materials describe past uses of the subject tract. However,this is an assessment built from individual properties managed independently by multiple different operators who are generally not commercial farmers or ranchers. Managing the property as a single 171-acre unit for commercial purposes is likely to yield different results.The attached aerial views obtained from Google Earth show the subject property on a number of different dates going back to 1994.This photographic history shows that for nearly 20 years there has been some level of ongoing farm or ranch activity on the tract.Although the property has been neglected it still retains substantial potential for commercial agriculture.This evidence strongly supports a conclusion that the subject - property is suitable for farm use,especially when that term is so broadly defined and could include crops and practices yet to be considered. Soil Fertility We appreciate that soil fertility can be a limitation to agriculture,especially when a property has been neglected.However,applying lime and manure as well as fertilizers to recover soil capacity and boost production are common practices in central Oregon and elsewhere. We also recognize that entire categories of farm uses are not strictly dependent on soil fertility.For instance,boarding and training horses requires space and topography conducive to facility development but soils are not an absolute requirement.Many horse breeding and raising facilities in central Oregon operate on dry,often rocky ground. Confinement livestock or poultry operations require building locations but not necessarily deep soil.Members of central Oregon's growing Community Supported Agriculture(CSA) might say that they create their own soil and all they need is a place to produce their commodities. f Deschutes County -4- March 18.2013 According to the applicant's materials the subject tract has adequate soil fertility for i pasture,hay production and growing Christmas trees.The attached aerial views do not appear to show lands so compromised in soil fertility that they are unable to support a farm use of any type. Suitability for Grazing The subject tract is suitable for livestock grazing.It is also large enough to be commercially significant either on its own or in conjunction with other properties.The Animal Unit Month(AUM)method for calculating grazing ability is described in the applicant's materials so we will not restate it here.What we will offer is that irrigated pasture in central Oregon is generally assumed to be able to support one cow-calf pair for a grazing season running roughly from May 15 through October 15,or about five AUMs per acre. Dry land pasture has a much lower capability.The applicant's materials suggest that dry land on the subject tract could support one pair per acre for 30 days,or about one AUM per acre.Added together, 103 acres of irrigated pasture and 68 acres of dry land pasture would result in 583 AUMs capable of supporting about 117 pairs for a five-month grazing season. Other grazing alternatives could include for higher stocking rates for a shorter period.If cattle were not the selected livestock the same number of AUMs could support about 580 sheep or goats for the same amount of time. If property configuration and other factors where to limit utilization to 75%of the total potential,the subject tract would still be capable of running over 80 pairs for a grazing season.In most central Oregon cow-calf operations calves will be born between January and March and weaned at around 205 days.Seven month old calves from most traditional beef breeds should weigh about 500 lbs.If the weaned calves are then sold rather than held through the winter the subject property could produce 80 or more calves for market each Fall.For the week of March 11,2013,400-500 lb calves sold for between$152 and$181 per hundred weight($1.52-1.81 per pound)at the Central Oregon Livestock Auction in Madras,Oregon.Eighty 500 lb calves fetching$1.66 per pound would result in a gross return of$66,400. A high number of weaned calved available in the Fall could result in lower market prices. Please see the attached documents for additional information regarding weaning beef cattle. Climatic Conditions The subject property is in the rain shadow of the Cascade Mountain Range on the edge of the Oregon High Desert.In other words,the area is dry with cold winters and the potential for frost nearly every month.These climatic conditions are not ideal for commercial agriculture.However,commercial agriculture is active in similar settings in the local area and throughout the mountain and intermountain regions of the United States.For example, the hay and cattle producing regions of Ft.Rock and Christmas Valley share similar precipitation constraints and are located at an elevation of 4,699 and 4,318 feet above sea level,respectively,compared to an elevation of 3,623 at Bend,Oregon. The hay and cattle 1 Deschutes County -5- March 18.2013 producing region of the Big Hole basin near Wisdom,Montana sits at an elevation of over • 6,000 feet above sea level. Existing and future availability of water for farm irrigation purposes The subject property has over 100 acres of irrigation water rights.It has been irrigated in the recent past and is considered"irrigated"pursuant to OAR 660-033-0020(9).Therefore, : - water for farm irrigation purposes is existing and available now and in the future. 1 Existing land use patterns We generally agree with the applicant's description of the existing land use pattern.We do not believe that the presence of surrounding land uses would limit responsible fanning practices or serve to reduce the property's value for commercial agriculture. Technological and energy inputs required The subject property appears to have been neglected and untended for some time. Recovering neglected properties takes effort but it can be done and is not uncommon.The soils can be amended and fertilized.The irrigation pond(s)can be improved.Irrigated lands in central Oregon typically receive about 2.5 acre-feet of water per irrigation season.The water applied to the subject property would not be in excess of what is applied to other lands in the Central Oregon Irrigation District.The property has had irrigation systems and equipment that either remain in place or have been removed by prior operators or the current owner.Any shortcomings with the irrigation system are a function of management and not a problem with the subject property. Accepted farminjpractices Common and accepted farming practices include,but are not limited to,efforts involving hay and livestock production,some cereal grain production and boarding and training equines.Nothing about the subject property indicates that it could not operate with accepted farming practices common in the area. Land necessary to permit farm practices on adjacent or nearby agricultural lands The applicant discusses why the subject property is not necessary to permit farm practices to be undertaken on nearby and adjacent lands. We do not necessarily agree or disagree I with this assessment. Other Capability Classes The definition of farm use includes,"Land in capability classes other than I-IV/I-VI that is adjacent to or intermingled with lands in capability classes I-IV/I-VI within a farm unit, shall be inventoried as agricultural lands even though this land may not be cropped or grazed." Deschutes County -6- March 18,.2013 In this situation the NRCS soils information shows the subject property as predominately class I-VI soils while the applicant's private soils study claims that the subject property is predominantly class VII soils.The primary difference,as we understand it,between the two different soils assessments is that the private study identifies inclusions of class VII soils within the irrigated lands.In other words,there is capability class VII soil intermingled with capability class I-VI soils.The applicant's materials and the attached aerial views clearly show that these areas have been managed together as irrigated units.Therefore,the lands in this area should be inventoried as agricultural lands.The result is essentially a return to the beginning and a conclusion that the property is correctly designed as Agriculture and Exclusive Farm Use. Goal 14 Based on the above and in light of the attached aerial views we believe this property satisfies the definition of agricultural land and should retain an Agricultural Plan designation and an Exclusive Farm Use Zoning district.However,even if we agreed that the property did not deserve to be protected under statewide planning goal 3,we would still have concerns that the proposal may not be compliant with statewide planning goal 14. OAR 660-004-0040 provides guidance for planning and zoning new rural residential exception areas.Specifically,OAR 660-004-0040(7)requires new rural residential exception areas to have a minimum lot size of at least 10 acres. The subject proposal does not seek to create a new rural residential exception area.Instead, it attempts to demonstrate that that the subject property is nonresource land and not deserving of protection under statewide planning goal 3.Nonresouce areas are specifically excluded from the provisions of OAR 660-004-0040.We believe that in most cases nonresource lands should be placed in a plan and zone category that requires at least a 20- acre minimum parcel size. At a minimum,the applicant must address how the proposal is compliant with goal 14. County Plan The Deschutes County Comprehensive Plan does not address or contemplate land found to be"nonresource."There is no basis in the plan to designate"nonresource land"for rural residential or any other use.Statewide planning goal 2 states: All land use plans shall include identification of issues and problems,inventories and other factual information for each applicable statewide planning goal, evaluation of alternative courses of action and ultimate policy choices,taking into consideration social,economic,energy and environmental needs. Section 2.2 of the Plan identifies Agricultural Lands Policies and least three are applicable to the subject proposal. Deschutes County -7- March 1$.2013 2.2,2 Exclusive Farm Use sub-zones shall remain as described in the 1992 Farm Study shown in the table below,unless adequate legal findings for amending the sub-zones are adopted or an individual parcel is rezoned as allowed by Policy 2.2.3. 2.2.3 Allow Comprehensive Plan and zoning map amendments for individual EFU parcels as allowed by State Statute,Administrative Rules and this Comprehensive Plan. 2.2.4 Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. In addition to the policies of Section 2.2 the Deschutes County Plan does includes clear and unambiguous language that identifies that new Rural Residential Exception Areas to be established through the appropriate exceptions process. Section 3.3 of the Rural Development Chapter of the Plan expressly states: Rural Residential Exception Areas In Deschutes County most rural lands are designated for farms,forests or other resources and protected as described in the Resource Management chapter of this Plan.The majority of the land not recognized as resource lands or Unincorporated Community is designated Rural Residential Exception Area.The County had to follow a process under Statewide Goal 2 to explain why these lands did not warrant farm or forest zoning.The major determinant was that many of these lands were platted for residential use before Statewide Planning was adopted.In 1979 the County assessed that there were over 17,000 undeveloped Rural Residential Exception Area parcels,enough to meet anticipated demand for new rural housing. As of 2010 any new Rural Residential Exception Areas need to be justified through taking exceptions to farm.forest,public facilities and services and urbanization regulations,and follow guidelines set out in the OAR.(emphasis added) The subject proposal clearly runs contrary to the plain language cited above because the applicant is attempting to designate lands Rural Residential Exception Area without taking an exception to the applicable goals. Reading all of the relevant together language is clear that the county desires to establish provisions regarding converting agricultural land and, that until such policy has been established,nonresource designations are not available under the Plan. We understand that this issue has been before Deschutes County decision makers in a previous case. However,we did not see that the language in Section 3.3 was considered. We would also say this language creates a fundamental difference between similar proposals submitted under the previous county plan,which was silent on the matter of exception vs.nonresource designation. Deschutes County -8- March 18.2013 In sum,The Deschutes County Plan does not evaluate alternative courses of action or ultimate policy choices with regards to planning and zoning of nonresource lands.We concede that there may be lands in the county that do not satisfy the definitions of farm or forest land,but that determination,and the consideration of alternatives and policy choices regarding proper plan and zone designations for such land,must be a deliberate,legislative decision by the county,not left to ad hoc quasi-judicial actions like this one. The department believes that Deschutes County does not have the authority to designate nonresource lands until and unless the planning work anticipated by Plan Policy 2.2.4.is done to create a local Nonresource Lands Planning Program.The county completed a significant update of its plan as recently as 2011 and chose not to include any reference to nonresource land.This indicates a deliberate decision to retain the Rural Residential designation for exception areas only. Conclusion In conclusion,the department believes that the subject property satisfies the definition of agricultural land regardless of which soils information is used.Further,we believe the plain language in the county's own plan makes a nonresource land determination unavailable.Finally,any lands that can be justified for conversion from an Agricultural designation based on a nonresource determination are subject to Goal 14 regarding appropriate lot size regulations.It is our recommendation that the existing Plan and Zoning provisions remain intact and that the county decline to process additional nonresource lands proposals until a local nonresource lands planning program has been developed. Again,thank you for this opportunity to comment. We request that this letter be entered into the record of these proceedings and that we receive a copy of the decision.If additional information is provided at the hearing,we ask that the hearing be continued,pursuant to ORS 197.763(4)(b),to allow us time to review the new information and respond if " necessary. Respectfully, Jon Jinings James W.Johnson Community Services Specialist Land Use and Water Planning Coordinator Cc: Liz Fancher,Esq. Karen Swirsky,DLCD Katherine Daniels,DLCD ................... Deschutes County -9- March 18.2013 Attachment A- Aerial Photos From Google Earth Recent View September 29,2006 August 17,2003 July 24,2000 May 7, 1994 Attachment B- Weaning Beef Calves,Oregon State Extension Service Attachment C- Beef Breed Differences:Preliminary Results from the U.S.Meat Animal Research Center,Virginia Cooperative Extension. iii ç2: T ::^,a r '4:-. f#'°,°4 VSc4a rat^va ''?' e rw --,- r--,-; ;e;. r et_ t� f��� d`r„ „ -11' .:'•� y AC. r 4i.q •'t > ;.( »$ . �,p”- { y ht � W, ^1'•} +'t '"'6 i• t Y=:144..14 h,3: i i+ a` ` 'i- ,- ,. .4,,,,:. ? r ., � { ��� 3 w f •,V1 *a31 a Y 2 .r' ••; a6 . '� �. a' N 4.y * +fin Y! :�? t •._,+ '�c. "4tiY' 4: �5 +4• '.�", • -.,,W "�,. C �A k ^, fr .."4na rJ a� � �yrv"'a * > � .t ',,,�Ft"^ y T K ,^�r•" � ' .,++v tit r w,..., m Ned. t „ , •^'� d f 1""t s x '. ,t, ., y.- i ''w .fir ; x.'[ 1-C n paMF ,.,. �i...,.. .. {� * ,41,p,, 1,. u 0! a ^;% w:,r. 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", f••' ••5 i-r :4-4y,•yn •. 4,M.••l ,�J Jr f , ry•.,0.0 �$0,+-n,. 01 j:'..• .ti ' "� ''''-'.....•'"S� PI l ,M1V M Jig r>% ft M�, 1 �rAf �,V �'j•-"a .•$: 'te n i r w�.'' z.^'t:.'"-i r'1'ra 41' ..r... i^fir^ 1 I t '�•i' �^r.4 ,.•7-,5� 4- ?"'1 }*r 7 r )1�y Hew }•. t r 'i q OP.* 't.:u ,' ,,.: g', i� ,�'""'.• •s. ��F4."'...v. 4ti ° .1..::: •-.,t�: 4'c. :r'r `3...^Fc,.. . ,.. �``r. _c �... r ATTACHMENT Oregon State Extension Circular No.Regl.800503 Revised August 2011 UNIVERSITY Service Courthouse Annex,1134 SE Douglas Ave.,PO Box 1165,Roseburg,OR 97470 Phone:541.672-4461 or 4190463.7568 Weaning Beef Calves By Shelby Filley Regional Livestock&Forage Specialist • Fence-line weaning is a method of low-stress weaning. ; .: sr_e Photo:Dan Drake,Univ.of CA Cooperative Extension. Introduction k.:: .__:_ Weaning time for many spring-born calves is just around the corner.We all know that weaning is the removal of a suckling calf from the cow.But,what might not be so obvious are all the stressors and impacts associated with weaning,both for the calf and the cow.Weaning can also be stressful for the owner of the animals,especially if the weaned calves are placed in a pen near a..,__._._.... • person's bedroom window.As animal managers,we should try and make weaning as stress-free as we can,while keeping productivity and profitability in line with our goals. . There are many considerations for weaning,including time of weaning,preparation for weaning,`'', method of weaning,and post-weaning management.Different strategies of weaning affect performance of the calf(market weight,health,etc.)and the cow(reproductive efficiency,cull - weights,health,etc.),and therefore can affect profitability.The information below is a summary of several publications(see references on page 3).Full benefit to the agricultural producer comes from study of the materials and in-depth consideration of incorporating them into the ranch management plan. Time of Weaning Several factors can influence time of weaning,including loss of dam,forage resources and Cow body condition,sale time,other ranch activities.Calves can be weaned any time after their rumens become fiwctional,that is,when their digestive system can process whole feeds.If a newborn calf is unable to nurse its darn,use of a surrogate cow may be the best way to raise the calf until weaning.''::' Bottle-fed calves can be weaned after one month of age,while calves nursing cows are weaned between 3 and 8 months of age.It is usually best to wean at the older age.For comparing weight of calves weaned at different ages,a 205-day weaning weight is sometimes calculated.This"205-day- WW"is the calf weight adjusted for birth date and weaning date,and does not infer that calves should necessarily be weaned at that age.One potential management tool for the breeding program that is related to weaning is a practice called 48-hr calf removal.This temporary removal of calves from cows 48 hours prior to breeding has been shown to improve first service conception rates. If forage is in short supply or cow body condition is low,calves can be weaned early(before 8-- ,`r mo).This preserves cow energy reserves to allow for development of the new calf inside her and keep her in good shape for timely re-breeding after that calf is born.Studies have shown,that in times of forage shortages,it can be economical to wean calves early.In those cases,the cost of Oregon Stale University Extension Service otters educational programs,activities,and materials—without regard to race,cola,religion,sex,sexual orientation, . . netlrrrei origin.age marital status disability,and disabled veteran or Vietnam era veteran status-as required by Tide VI of the CM Rights Act of 1964,Tide IX of the Educatlen Amendments of 1972,and Section 504 of the Rehabilitation Act of 1973.Oregon State University Extension Service is an Equal Opportunity Employer. r feeding early-weaned calves was more than offset with improved reproductive performance of cows that were kept in a body condition that favored efficient reproductive performance. Most calves are born in the spring and weaned in the fall.This causes the supply of weaned;'». :-• calves to be highest in the fall.This high supply leads to seasonally low calf prices.Consider how'`': :'' changing calf weaning date can affect sale weight and price. Although weaning date may revolve -• around other routines,consider making weaning a higher priority. . Preparation for Weaning Preparing calves well in advance to actual weaning time has benefits well worth the'effort. Because immune function and response is lower in times of stress,and weaning can be stressful;'': many veterinarians suggest that vaccinations be given 3-4 weeks prior to weaning and that '. deworming be done after weaning,This not only lessens the stress at weaning,but also improves' '- immune response to the vaccines and anthelmintics.Other management procedures,such as ;:`..':'' :";`'` branding,castrating,and dehoming should be done well in advance of weaning.Also,it is a good idea to make sure that,before weaning,calves are use to eating the intended post-weaning diet.You can feed that diet to both cows and calves for a short period of time,about two-weeks,or provide it- in a creep feeder-narrow passages into a feeding area are set up so the calves creep in,but larger cows cannot.Although creep feeding can be used to acclimate calves to a post-weaning diet,it's primarily use is to provide supplemental feed to nursing calves in order to increase weaning weight,., It is of benefit to calves,but not a direct benefit to cows.Economically,a good rule of thumb is that:,;..: • calf prices at sale time($/lb)should be 10 times the cost of the creep feed($lib).See references for ° more detail. +1; Make sure that the post-weaning diet is appropriate for the age of calf,including forage quantity and quality,and contains a vitamin/mineral mix and plenty of fresh,accessible water.For the very young calf,this means a special calf starter diet,either bagged or specially formulated feed.-For •-- --- older calves,good quality forage(fall pasture re-growth,irrigated summer pasture,or very good quality hay/balage)will suffice,depending on target performance.Make sure they can safely reach water and know how to drink it.If the calves are unfamiliar with drinking water from a trough,let the water over-flow a bit so that it makes a trickling sound.Work with a nutrition consultant or veterinarian to provide a vitamin/mineral mix. Weaning Method Whether your weaning consists of total separation of cows and calves or the relatively new,low- stress technique of fenceline weaning,make sure you address nutrition and health measures.Total separation weaning can be accomplished with good success if pre-weaning and post-weaning management address stress,health,and nutritional management sufficiently.For traditional weaning, , it is best to have cows and calves together in the place where calves will stay.Remove cows to a. new location out of sight and sound from calves.Leave calves in familiar surroundings.It is normal for cattle to bawl for several days. In fenceline weaning,cows and calves are placed on opposite sides of a strong fence(woven wire or multiple-strand,high-tensile wire). As with total separation weaning,cows are moved and calves remain in the initial pasture.Although the cattle are seldom seen challenging the fence,they have some nose-to-nose contact,but spend the majority of time grazing away from the fence. . : . .. Fenceline visits gradually decrease over the fast five days and the weaning process is complete within a week.Studies have shown these calves bawled less and gained more weight during the weaning process than with complete separation weaning. . I • • • Post-weaning Management .. . . Much information is available on post-weaning management.Preconditioning is a nutrition'and..4, ,;, health management practice that prepares calves as stocker/feeder cattle in the next phase of production.Study the information on this important topic and consider having a preconditioning period for calves before they are moved to their next destination.A 45-day post-weaning period before shipping has been shown to be beneficial in comparison to shipping calves immediately after weaning.If you cannot provide this preconditioning period,make sure newly weaned calves are rested,fed,and watered before shipping. i.• Glenn Selk,Oklahoma State University,has some good advice on being pro-active with • marketing strategy.He suggests you provide buyers with the details of your preconditioning y.y:,;w.....• program and let them know where your calves can be purchased He said,"Whether you participate in an organized Value-Added Calf program or whether you simply sell your calves on the regular s sale date at the closest market,it makes good business sense to tell buyers that your good calves are available for sale.Don't just rely on others to tell your story.This fall promote the good quality, healthy cattle that you raise.They deserve it!!" References for Further Study Raising Newborn Calves.F.Rulofson,M.Gammth,and D.Hansen.Oregon State University • Extension Service publication No.EC 1418 httt;//ir.librarv,ore¢onsta andle/1957/14257/ecc1418.pdflseauencer'1 : .. Creep Feeding Beef Calves.F.Rulofson and B.Zollinger.Oregon State University Extension Service publication No.EC 935 (http://ir.librarv.oreaonstate.edu/xmluj/bitatream/b le/1957/13842/ec935.ndf?sc uence'1).. Weaning Management for Calves.G.Pirelli and B.Zollinger. httn://www.csubeef,com/drndocuments/748.pdf • Time of Weaning and Cow Condition.Jack C.Whittier,Colorado State Extension Beef Specialist Ron C.Toren and Ben Bruce,University of Nevada.CL 747 in:Cow-calf Management. Guide and Cattle Producers Library http://www.csubeef.com/dmdocuments/747.pdf:.. Fenceline contact of beef calves with their dams at weaning reduces the negative effects of. separation on behavior and growth rate.E.O.Price,J.E.Harris,R.E.Borgwardt,M.L. . Sween,and J.M.Connor.J.Anim Sci.2003 81: 116-121. httn./extension.oreaonstate.edu/douelas/sites/default/files/documents/Wfenceline_ndf . . The effects of weaning beef calves in two stages on their behavior and growth rate.D.B.Haley,D. W.Bailey,and J.M.Stookey.J Anim Sci,September 1,2005;83(9):2205-2214. http://extension.oreaonstate.edu/douglas/sites/default/tiles/documents/lf/fenceline2„,lf • Buyer Survey to Determine Desired Production Practices for Value-added Program for Beef Calves in California.VM Castro,GM Veserat,and JW Oltjen. 1998.Proceedings,Western Section,-- - Am.Soc.Anim,Sci.49:332. . htto://extension.oreaonstate.edu/doualas/sites/default/tiles/documents/lf/Buverstuvev.pdf Nutrition and Management Considerations for Preconditioning Home Raised Beef Calves,D. Lalman,et.al.Oklahoma Cooperative Extension Service publication No.F-3031 httn://pods.dasnr.okstateeciu/docushare/dsweb/Get/Document 1957/F-3031.weh.pdf • f Beef Breed Differences: Preliminary Results from the U.S. Mea pAcre 1 nf4 'ATTACHMENT C 1 { You've reached the Virginia Cooperative Extension Newsletter �. Archive. These files cover more than ten years of newsletters posted Oil our old website(through April/May 2009), and are provided for_ l?.istorical purposes only. As such, they may contain out-ofdate references and broken links. toZY see our latest newsletters and current information,visit our r�vebsite at http://www.ext.vt.edu/news/. Newsletter Archive index: http:/tsites.ext.vt.edu/newsletter-archive/ I '= Ei it aril Vir_inia Coo•erative Extension.. 4' `: tiwr, ;K notti'(ic' (' for LIL t„oonnL'tff ctIt/ +� Beef Breed Differences: Preliminary Results.from the U.S. Meat Animal Research Center Livestock Update, September 2002 Scott greiner, Extension Animal Scientist, Beef, VA Tech . -. r ; ! j ' Over the past 25 years, considerable research has been conducted to characterize and compare the major beef breeds in the U.S. The most comprehensive studies have been conducted at the U.S. Meat Animal Research Center in Clay Center, NE. Since 1970, over 30 breeds have been evaluated in a common environment and management system for characterization of economically important traits. Many of the largest and most widely used breeds in the U.S. were characterized 25-30 years ago at Clay Center. Since that time, considerable changes have been made to these breed populations as the result of selection. Therefore, research _. has been initiated at the U.S. MARC to evaluate relative changes that have - occurred among the prominent U.S. beef breeds since they were initially evaluated in the 1970's, and to provide a current evaluation for these breeds..The http://w.w.sites.ext.vt.edu/newsletter-archive/livestock/aps-02,.. 3/18/2013. Beef Breed Differences: Preliminary Results from the•U.S. Mea... Page 2 of 4 followi tables present preliminary results from Cycle VII of the Germ lay g P P �'Y �' p sm,':: Evaluation Program at the U.S. MARC. Procedures for the evaluation of the breeds were similar to that utilized in. previo s.GPE cycles. For the current breed characterization,sires from the seven largest,U.S. beef breeds (based on number of registrations) were mated to mature!Angus, Hereford and composite MARC III cows (1/4 Angus, Hereford, _.Pinzgauer,_Red Poll). Approximately one-half of the sires sampled froxrl.:each breed Were among the top 50 in number of calf registrations in their respectwve- --: breed, and about one-half were young unproven sires of each breed :Calvea wine:' born the spring of 1999 and 2000. Following a postweaning adjustment- period, steers were fed a high energy diet and slaughtered (average.o'f239.,dayS: on feed): Steers were slaughtered serially in 5 groups spanning 43 days. Steers were harvested in a commercial facility, and individual carcass measurements taken after a36-hour chill.. Sire breed effects for preweaning traits for calves born in 1999 and 2000 are shown below. Lighter birth weights and a higher percentage of unassisted births were reported for Angus and Red Angus compared to Hereford and the. Continental breeds (Simmental, Gelbvieh, Limousin, Charolais). The three Britishbreeds (Hereford, Angus, Red Angus) were similar for 200-day weaning weight; Limousin sired calves were lighter at weaning than all other breed. groups: 200-day weaning weights for Gelbvieh toperosses were similar to those of the British breeds. Simmental toperosses were heavier at weaning that all other breed groups. Charolais sired calves were heavier at weaning than Limousin, Hereford, and Red Angus, Sire Breed Means for Preweanin: Traitsa Sire Unassisted Birth !Survival 200-d breed of Gestation calvings, weight,' to wean. calf length, d % lb. wean., wt., lb. Hereford .1284 95.6 90.4 196.2 524 Angus 1282 99,6 84.0 196.7 53.3 Red . . . 282 99.1 84.5 96.7 526 Angus Simmental 285 97.7 92.2 96.7 553 ,Gelbvieh 284 ,97.8 88.7 97.1 534 http //www.sites.ext.vt.edu/newsletter-arch ive/livestock/aps-02r... 3/18/2.013 Beef Breed.Differences: Preliminary Results from the U.S. Mea..,. Page 3 of 4 0 t Limousin 286 197.6 89.5 96.9 519 Charolais 283 92.8 93.7 97.1 540 LSDI' 1.5 3.4 3.1 3.8 14 'source!. Cundiff et al.,200 1, Germplasm Evaluation Program Progress Report No.21 ^bEreed differences that exceed the LSD are significant(P< .05) Postweaning growth and carcass traits for the sire breed groups are presented for the 1999-born calf crop only. Postweaning average daily gains were similar__. ._ among:all breed groups. The British breeds were similar in slaughter weight adjusted to 448 days of age. Limousin toperosses were generally lighter than I other sire breed groups at slaughter. Differences between the breed groups in slaughter hter.weight are also reflected in carcass weight. Amon the British breeds � g � � � g� is Angus and Red Angus sires were superior to Hereford in marbling score and percent Choice. Angus and Red Angus also had higher marbling scores than the Continental breeds. The Continental breeds were similar for marbling score. . Continental breed toperosses had less 12th-rib fat than British toperosses. Additignally, Continental breed toperosses had larger ribeye areas that British toperosses except for Angus..Angus-sired calves had greater ribeye area than Red Angus and Hereford-sired calves, and were not different from the Continental breeds. Collectively, the British breeds produced progenyy which were 88.8% Choice or higher, and 22.3% Yield Grades 1 & 2..The Continental breed sires produced progeny with carcasses that were 60.9% Choice or higher, and 57.0%Yield Grad es 1 & 2 (data not shown). Sire Breed Means for Postweaning and Carcass Traits (adjusted to constant age of 448'days)a Sire Post- Carcass'Marb. USDA Fat REA, breed of wean.ADG, Slaughter weight, score, Choice, Yield Th., sq., calf 'bid wt., lb. lb. % % Grade in. in. [Hereford 3.46 [1363 832 538 79.1 135 .55 112.74 Angua 3.40 1375 846 1577 93.6 3.32 .58 13.48 Red 3.40 1362 839 589 96.0 3.76 .60 12.21 Angus Simmental 3.47 1390 ,854 536 61.2 2.95 [.42 13.71 I ' IF II II II 11 II II 11 1 http://www.sites.ext.vt.edu/newsletter-archive/l ivestock/aps-02 .. 3/18/2013. Beef Breed Differences: Preliminary Results from the U.S. Mea... Page•'4 of 4 f Grelbvieh 1L3.33 111348 11826 1[514 163.0 2.80 1.39 113.43 Limousin, 3.3.0 1308 815 [507 44.8 .63 .41 11.4:.02 Charotais 3.43 F1370 843 517 75,7 , :43 1411 -.: LSD " .18 55 33 35 22.5 .41 .1.1, .75: asource:.Cundiff et al.,2001, Gertnplasm Evaluation Program Progress Report No.21 rbBreed.;ddifrerences that exceed the LSD are significant(P <.05) Preliminaly from these breed comparisons indicate that differences, ' .:'. .. ..... between British and Continental breeds are not as great for'unassisted.calving' percentage, weaning weight, postweaning gain, and slaughter weight compared to when the•same breeds were evaluated in the 19700s. British breeds have . . empha$ized selection for growth rate, whereas Continental breeds have empha4ized improvement in birth weight and calving ease. Consequently., smaller differences exist between British and Continental breeds for growth rate and c allvin .ease as compared to 25 years ago. However, significant differenc es exist . between British and Continental breeds for marbling and�percentage retail praduci(yield grade). These differences in carcass composition exist despite the increases in growth rate and corresponding carcass weight that have been characterized in the British breeds. These results confirm that no single breed excels in all economically important. traits,4 well-designed crossbreeding system that captures the advantages of hetero,'s and utilizes these breed differences in a complimentary fashion is the most effective genetic resource for an efficient beef production system. For they fill'report on Cycle VII of the GPE study visit httD://sol.marc.usda.gov/. Visit Virginia Cooperative Extension. http://Www.sites,ext.vt.edu/newsletter-archive/livestock/aps-022... .3/.1.8/20.1.3 I i • In our professional opinion, a prudent operator would not expect to make a profit I by farming the subject property_ i • The cropland and rangeland on the property occur primarily on shallow soils with limited productivity(Sage West, LLC, 2012). • Irrigation water rights are available for approximately 103 acres. • The balance of the property, aside from acreage in structures, yards, and water developments is currently rangeland or idle agricultural land. • Based upon observation, assessment, and the 1'1 Order Soil Survey prepared by Sage West, LLC, in the professional judgment of Agronomic Analytics, the NNP Property will require additional capital inputs (e.g. additional fencing, buildings, stock equipment, etc.) in order to be used for livestock production in the most efficient manner as a single farm operation. • Based upon observation and assessment, in the professional judgment of Agronomic Analytics, the cropland present on the NNP Property will require additional capital inputs (e.g. irrigation equipment, weed control, replanting, machinery, etc.) in order to be used for pasture or crop production in the most efficient manner as a single farm operation. • Several types of agricultural operations were examined in the enterprise budgets detailed in this report: o The first is a horse boarding enterprise for 14 horses. Revenues and costs vary depending on the level of care and training provided. o The second is a llama enterprise consisting of 28 llamas raised for the pet market and wool production. o The third is a standard cow/calf operation with 40 cow/calf pairs. This is a full year operation that retains a mother herd of fertile cows which are bred to produce a crop of calves, which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. a The fourth enterprise is an analysis of costs and returns associated with the establishment of a grass(rough bluegrass) crop for seed. a The fifth enterprise examined is irrigated alfalfa hay production utilizing the available water rights. • Even when factoring out costs associated with land purchase or lease, none of the numerous budget analyses conducted showed a positive cash flow or positive return on investment as an agricultural enterprise. Under the scenarios examined in this report, which are representative of the types of agricultural operations typical in the Bend area of Deschutes County, a positive cash flow was not shown on the NNP Property. An agricultural operation, as with any business operates with fixed and variable costs on a year to year basis. This analysis 2 has accounted for all such costs using published values where possible and conservative local values. Table 1. Budget Summaries Budget Total Net Return/ Scenario No. of Animals/Yield Revenues Total Costs Loss 1 14 Horses Boardi • $115,080.00 $119,437.71 1 2 28 Llama Pet Market $38,780.00 $70 998.05 $32 218.05 MIIIM 40 Cow/Calf $29,218.25 $49,985.93 ($20,767.68) Blue Grass $109,695.00 $116,422.15 ($6,727.15) Establishment MIMI Alfalfa Ha 3 cuttin•s $61,800.00 $72,173.98 $10,373.98 The budgets presented in this analysis represent the costs and revenues associated with the farming operations only. The costs to purchase the land, service the debt, and pay the taxes are not included in the budgets. Those costs would be the same regardless of the type of operation. The costs associated with the purchase of the NNP Property will be in excess of $100,000 per year if carried in a traditional 30-year mortgage. This cost far exceeds the potential net revenue possible with the farming operations agronomically feasible in the Bend area with the soils present on the NNP Property. 3 I INTRODUCTION This letter report describes assumptions, methods and results of budget analyses of • various agricultural enterprises that might be considered by a typical Central Oregon farmer for the NNP Property. The budget analyses were conducted utilizing published range, pasture, and cropland productivity values for the soils on the NNP Property Deschutes County Map 17-12-24,Tax Lots 206, 300, 301, 302, 304, 305, 401,405, and 406, a 174.3-acre property located off Butler Market Road in Bend, OR. The NNP Property is currently occupied by five rural residences with the agricultural land currently idle. The property is currently designated Exclusive Farm Use — 550 or 551 Farm and 400 or 451 Tract. A field investigation was conducted on April 22, 2013. The purpose of the field visit was to assess the general vegetation and soils present on the property and to identify factors contributing to or limiting the use of the property as a working agricultural enterprise. The financial analyses were completed utilizing various Enterprise Budgets published by Oregon State University Extension Service. The enterprise budgets track fixed and variable costs and returns for both the entire enterprises and on a per head basis (where applicable). Costs for inputs and prices received are derived from government published statistics, local farm suppliers, advertised values, or personal experience. PROJECT BACKGROUND Agronomic Analytics was retained by NNP to determine whether the NNP Property is suitable for farm use, taking into consideration soil fertility, suitability for grazing, climatic conditions, irrigation availability, and other factors. This report focuses primarily with the profit and loss evaluation of typical farm operations for Central Oregon. The determination of the profitability of a farming operation is governed by many factors. In a livestock or cropping operation, the number of animals that can be raised on the property or the yields of the crops is limited by the inherent productivity of the soils on the property, the availability of working capital, the level of investment necessary to establish the agricultural operation, the management expertise of the owner/operator, and prices for inputs. Consideration must also be given to determining if investments in increased productivity (e.g. fertilization, liming, and reseeding of pastures) will provide an adequate return for the investment made. The soils on the NNP Property were mapped in the Soil Survey of the Upper Deschutes River Area, Oregon, including parts of Deschutes, Jefferson, and Klamath Counties (USDA, 1992). In addition, a private 1st Order Soil Survey was completed on the subject property in May 2012 by Sage West, LLC, 2012. 4 The NNP Property is comprised of over 170 acres of land consisting of nine tax lots. Five of the nine tax lots contain houses, structures, and improvements incidental to farming and ranching. These improvements include boundary fences, cross fences, small earthen dams for water storage, and farm roads. The NNP Property is bordered to the west by rural residential properties, single-family homes and the Bend Seventh-day Adventist church. To the north across Butler Market Road are properties used for agriculture, and residential purposes. The land to the south is a rural residential subdivision. The privately-owned properties that adjoin the east side of the subject property are developed or partially developed with nonfarm, single-family dwellings. The other property that adjoins the east side of the subject property is owned by an electric cooperative and contains major power lines above ground that is not engaged in farm use. The nearest surface water body is the Deschutes River. The NNP Property has water rights to approximately 103 acres. The agricultural land on the site is topographically level to nearly level with a moderate, rocky landscape increasing in steepness towards the eastern edge of the property. The western two thirds of the property are flatter, and have been used for cropland in the past. The site ranges in elevation from 3,446 feet above mean sea level (U.S. Geological Survey, 1987) at the northeast corner of the property to approximately 3,516 feet in the south central rangeland of the site. The NNP Property is 4.5-miles northeast of downtown Bend, Oregon. The tract and parcel identifiers are shown on Figure 2 and listed in Table 2 below. The NNP Property was acquired by NNP in 2006 and 2007. Prior to that time, the NNP Property consisted of a number of small hobby farms and vacant land. When acquired, five hobby farming operations were occurring on the NNP Property. NNP's review of County land use records shows that this pattern of small hobby farm use on multiple parcels has been in place for more than thirty years. Tax Lot 206 (approximately 29.92 acres) has no known history of farm use. Table 2 below lists the various tax lots which are included in this study. 5 Table 2.Tract Descriptions Assessor Real Market Value Assessed Value' Property Tax Tax Lot Class Acres' (2012-2013) (2012-2013) (2012-2013) 300 551-Farm 4.52 $120,300.00 $70,630.00 $950.79 206 400-Tract 29.92 $172,770.00 $73,390.00 $987.91 405 451-Tract 4.90 $312,480.00 $299,400.00„ $3,951.74 401 551-Farm 20.13 $386,390.00 $260,672.00 $3,508.98 302 550-Farm 13.42 $82,910.00 $3,844.00 $50.89 304 551-Farm 13.84 $365,620.00 $237,048.00 $3,190.98 305 550-Farm 6.79 $64,080.00 $2,191.00 $29.21 j 406 550-Farm 75.81 - $292,420.00 $18,007.00 $240.10 301 551-Farm 5.00 $178,320.00 $118,132.00 $1,590.21 Totals: 174.33 $1,975,290.00 $1,083,314.00 $14,500.81 CHARACTERISTICS OF THE REPORTED MAPPED SOILS AND THEIR PRODUCTIVITY The subject property was mapped by the USDA Natural Resources Conservation Service and soil types were published in the Soil Survey of the Upper Deschutes River Area, Oregon, including parts of Deschutes, Jefferson, and Klamath Counties (USDA, 1992) (NRCS Survey). In addition, a private 1st Order Soil Survey was completed on the NNP Property in May 2012 (Sage West Survey, LLC). The Sage West, LLC survey is a private 1st Order survey undertaken to more narrowly define the extents and limits of the soil series present on the NNP Property.3 This survey provides detailed and accurate information about NNP soils and forms the basis of productivity calculations on the NNP Property. The Department of Land Conservation and Development has approved the Sage West, LLC survey for used in Deschutes County's review of the NCR land use applications. The tables below depict the soil acreages present on the NNP Property and the productivity ratings associated with each soil series. Table 3 below presents the acreages and land capability classes of the soils as mapped in the Sage West Survey on the NNP Property. 'The Assessor's Record shows a total lot size that is believed to be slightly larger than actual. 2 Assessed Value is the lower of Real Market Value and Maximum Assessed Value. 3 Agricultural Soils Capability Assessment completed by Sage West,LLC,Bend,OR.July 11,2012 6 Table 3. Soils Present on the MNP Property (Sage West, LLC) Land Map Unit Land Capability Capability Symbol Map Unit Name Non-irrigated Irrigated Map Unit Acres Deskamp loamy A sand,0 to 3%slopes 6(VI) 3(III) 11.0 Gosney,deep- Deskamp complex,0- 8 8%slopes 6(VI) 6(VI) 46.0 Gosney-Zeta C complex,0-3%slopes 7(VII) 7(VII) 41.0 Gosney-Rock outcrop D complex,0-15 slopes 7(VII) 7(VII) 48.0 Gosney extremely stony loamy sand,0- E 3%slopes 7(VII) N/A 25.0 �_. Total: ._.. �M. 171.0 Capability classes, the broadest groups, are designated by Roman numerals I through VIII. The numerals indicate progressively greater limitations and narrower choices for practical use. The classes are defined as follows: • Class I soils have few limitations that restrict their use. • Class II soils have moderate limitations that reduce the choice of plants or that require moderate conservation practices. • Class III soils have severe limitations that reduce the choice of plants or that require special conservation practices, or both. • Class IV soils have very severe limitations that reduce the choice of plants or that require very careful management, or both. • Class V soils are not likely to erode but have other limitations, impractical to remove, that limit their use. • Class VI soils have severe limitations that make them generally unsuitable for cultivation. • Class VII soils have very severe limitations that make them unsuitable for cultivation. • Class VIII soils and miscellaneous areas have limitations that nearly preclude their use for commercial crop production. 7 3419 Chaucer Way Agronomic Eugene,OR 97405 Analytics 8000 TRANSMITTAL Date: July 11, 2013 Agronomic Analytics Project No.:AA2013-1 To: Mary Ruby NNP IV-NCR, LLC 2660 NE Hwy 20, Suite 610-369 Bend, OR 97701 Subject: Letter Report Budget Analysis Study NNP IV-NCR, LLC Property Tax Lots: 206, 300, 301, 302, 304, 305,401, 405, &406 Butler Market Road Bend, OR 97701 We are sending the following: One copy of the above referenced report. 1 1 Remarks: If you have any questions, please contact our office at(541)684-8000. Thank you. BE OS IP Stephen C. Caruana Principal Date: July 11, 2013 Agronomic Analytics Project No: AA2013-1 Mary Ruby 4`. ■ • NNP IV-NCR, LLC 2660 NE Hwy 20, Suite 610-369 Bend, OR 97701 SUBJECT: Letter Report Budget Analysis Study NNP IV-NCR, LLC Property Tax Lots: 206, 300, 301, 302, 304, 305, 401, 405, &406 Butler Market Road Bend, OR 97 Dear Ms. Ruby: EXECUTIVE SUMMARY This report presents the results of a site investigation and agricultural budget analysis that was conducted for NNPIV-NCR, LLC ("NNP") by Agronomic Analytics. The site investigation was conducted on April 22, 2013 on the NNP Property located on Butler Market Road, Bend, Oregon (°NNP Property"). The site investigation entailed visual observation of the NNP Property. A detailed financial analysis of the various types of agricultural operations customary for the Deschutes County area was conducted, and the results presented in this report. In addition to the field investigation, extensive research was also conducted into historical soil surveys, present and past aerial photography, and the published literature. The financial analysis was completed utilizing the various Enterprise Budgets published by the Oregon State University Extension Service. Input values for the models were derived from published statistical summaries of the United States Agricultural Statistical Service, and current market rates for fuels, fertilizer, feed, pasture rental, and interest rates. Direct, documented costs or receipts were used when available. The conclusions drawn from the historical and published record, field observations, and the enterprise budget analyses are that: • In our professional judgment the subject property is not suitable for farm use. • In our professional judgment the NNP Property could not be operated profitably as a commercial agricultural enterprise, especially if the mortgage servicing and capital improvements are included in the cost of the farm operation. 1 Range and pasture classifications are derived from the published Soil Survey Deschutes County Area values where available. The absence of published data may indicate either that no data was available or that the productive capacity of the soils was considered so low as to be impossible to measure or of no forage value. For the purposes of this analysis hay yields and pasture AUM values are assigned equivalent to reported values for similar capability class soils. Pasture yield (AUM) - Animal-Unit-Month: the amount of forage or feed required to feed one animal unit such as one cow-calf pair) for 30 days. So, for example, to feed one cow-calf pair for one year requires 12 AUMs (1 Animal Unit x 12 Months). If the pasture is rated at 2 AUMs then 6 acres will be required to supply the feed and forage needs for one cow-calf pair for one year (12 Animal Unit Months 12 Acres) either as pasture or hay. If a 15-acre property had an average AUM rating of 2 AUMs/acre then the total available AUMs available would be 30 AUMs. This would produce enough forage to feed 2.5 cow-calf pairs for the entire year. A llama is calculated at 0.6 Animal Units per month and a horse is calculated at 1.2 Animal Units per month. Management of pastures for maximum production requires a high level of management and the application of inputs. With regard to the subject property these levels of input may be either unprofitable or simply impossible to implement. For example, due to limitations imposed by terrain, certain areas of the property could only be fertilized from the air. While this could improve the theoretical carrying capacity of the pastures, it would not do so at a cost that would make the improvement worthwhile. Despite these practical limitations the report incorporates a reasonable high-yield evaluation of AUMs and assumes expenses for reasonable expenses only. In reality, the subject property is unlikely to obtain these levels of AUM productivity. However, for the purposes of providing a conservative analysis, these levels of productivity will be assumed in this report. SITE INVESTIGATIONS On April 22, 2013, Agronomic Analytics visited the NNP Property to meet with the owner's representatives to discuss the operation and to conduct a visual reconnaissance of the base property. The site investigation consisted of a pedestrian survey conducted at selected locations across the NNP Property. Sample sites were chosen which were considered to be representative of the current condition and vegetation present on this property. 8 Research was conducted utilizing historical surveys and aerial photography. The site investigation included general observations of vegetation conditions, observation of exposed soil profiles, and assessing the general condition of agricultural facilities. Typical sites on the ranch are illustrated in the Photo Set which accompanies this report in Appendix B. The idle agricultural fields are currently not being used for production agriculture. The fields would require inputs to be placed into production. REPORT METHODOLOGY This report presents the findings of a series of enterprise budget analyses conducted to examine the costs and returns from various possible agricultural operations that are typical and customary for the Bend area of Deschutes County. What all agricultural efforts have in common is that they can only be as productive as the inherent quality of the land itself. Likewise, the types of crops that can be grown and animals raised are limited by the environmental conditions present. Average annual rainfall, growing season length, and most importantly the soil's capability all govern what can be grown in an area profitably. Stated another way, an agricultural operator chooses what to grow based upon risk and potential profitability. The primary limiting factor on the NNP Property is the poor quality of the soils. Five types of agricultural enterprises typical of the Deschutes County area were chosen for analysis. They were chosen based upon the soils present on the NNP Property and the types of farm uses that might be considered for the property by a prudent farmer who hopes to make a profit by farming the land. For the livestock operations, the starting point to determine herd size was the number of animals that can be fed directly from the hay and pasture grown on the property. Then additional animals were added based on the ability to purchase feed and, where typical and likely to be cost effective, to operate a confined operation. The accepted farm practice is to graze on pasture or range during the growing season (typically seven months) and fed during the winter months. The first step is based on the concept of the Animal Unit Month described above. Tables 4, 5 and 6 below outline inherent soil productivity; the potential yields of pasture, hay land, or range; and the total maximum available animal units the NNP Property is capable of producing. The five agricultural enterprises examined are: • A horse boarding enterprise for 14 horses. Revenues from this are variable depending on the level of care and training provided. 9 • The second is a llama enterprise consisting of 28 llamas raised for the pet or breeding market and wool production. • The third is a standard cow/calf operation with 40 pair. This is a full year operation that retains a mother herd of fertile cows which are bred and produce a crop of calves, which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. • The fourth enterprise is a grass(rough bluegrass) crop grown for seed during the establishment year. • The fifth enterprise examined is an irrigated alfalfa hay crop utilizing all the available water rights. The basis of any agricultural enterprise is the productive capacity of the soil. Based upon the Order 1 Soil Survey completed by Sage West, LLC, Sage West prepared Table 4 to show the potential yields for each soil mapping unit found on the NNP Property. 10 Table 4. Soil Productivity(Sage West, LLC) Dry/land Irrigated Irrigated I Rangeland Pasture Grass Hay Pasture Symbol Name Acres (AUM/ac) (lbs./ac/year) (tons/ac) (AUM) Deskamp loamy A sand,0-3%slopes 11.0 350 3 1.5 Gosney,deep- Deskamp complex,0-8% B slopes 46.0 350 3 1.5 Gosney-Zeta complex,0-3% C slopes 41.0 200 1.5 0.5 Gosney-Rock outcrop complex D 0-15% 48.0 0.12 N/A N/A N/A Gosney extremely stony loamy sand, l 0-3%slopes 25.0 0.25 N/A N/A N/A 171.0 As described above, animal unit numbers are derived utilizing aggressive estimates of the maximum carrying capacity of both the pasture and hay land in an improved condition. Various budget enterprise scenarios were developed that assumed fertilization and liming of the potential hay land or pasture. The grass hay harvested from the hay land is used to feed the livestock during the winter. Increases in the productivity of the hay land will allow more animals to be fed during the winter; however, the limiting factor is how many animals can be pastured on the available pasture. In addition, increasing the productivity of the hay land brings with it costs for fertilization and increased inputs. A farmer whose operations are not profitable may not be able to bear this expense, given the low return on investment likely due to the shallow depth and sandy (porous) texture of the soils on the NNP Property. Based upon the values in Table 4 above, the agricultural land is potentially capable of producing the following maximum yields. 11 Table 5.Computed Soil Yields Available Hay irrigated Native Dryland Production Pasture Rangeland Pasture Potential (Potential (Potential (Lbs. Symbol Name Acres (Tons/ac.) AUM) _ AUM) lAcrelyr.) Deskamp loamy A sand,0-3%slopes- 11.0 33.0 16.5 3,850.0 Gosney, deep- Deskamp complex,0-8% B slopes _ 46.0 . 138.0 69.0 16,100.0 Gasney-Zeta complex,0-3% C slopes 41.0 61.5 20.5 8,200.0 Gosney-Rock outcrop complex D 0-15% 48.0 5.8 Gosney extremely stony loamy sand, E 0-3%slopes 25.0 6.3 Totals: 171.0 232.5 106 12.1 28,150.0 Utilizing the values presented in Tables 4 and 5 above, the maximum numbers of available Animal Unit Months (AUMs) for three classes of livestock are displayed in Table 6 a, b, and c below. Table 6a presents the number of animals that be supported from the NNP Property under dryland conditions, the low numbers are indicative of poor quality soils present on the NNP Property. Tables 6b and c present the AUMs available under the for the confined cattle operation for 12 months and seven months if the animals are fed on irrigated pasture during the growing season and fed purchased hay for five months during the winter months. 12 Table 6a.Available Animal Unit Months(Dryland,No Irrigation) Enterprise Productivity Available AUMs Land Use Cattle Operation Llama Operation Horse Dry land Pasture 28 28 47 Rangeland _ 12 20 10 Total 40 67 33 12 Month Animal Unit 3 6 3 Table 6b.Available Animal Unit Months(Irrigated Pasture) Enterprise Productivity Available AUMs Land Use Cattle Operation Llama Operation Horse Irrigated _ Irrigated Pasture 106 177 88 Rangeland(not irrigated) 12 20 10 Total 118 197 98 7 Month Animal Unit 17 28 14 Table 6c.Available Animal Unit Months(Irrigated Hayland) Enterprise Productivity Available AUMs Land Use Cattle Operation Confined Operation Irrigated Hayland 465 Rangeland(not irrigated) 10 Total 475 12 Month Animal Unit 40 Commercial agriculture is the production of commodities (crops or animals) from a parcel of land for a profit. If a farm is incapable of generating a profit, the farm's income must be supplemented through off-farm sources of revenue. The ability of a farm to produce a commodity is governed by the inherent quality and fertility of the land itself. Maximizing the yields from the land is dependent upon the management skills of the operator and the level of inputs (fertilizer, animal breeds, adapted varieties, weed and pest control, etc.). The prices received by the farmer are subject to market forces of supply and demand, consumer attitudes, and the availability of markets and suppliers. In addition to the five farming enterprises chosen for analysis, other operations were considered but ultimately rejected for the following reasons: 13 • Horse Breeding: The recent economic downturns have released a glut of horses onto the market. At present there are too many free horses available, prices are low, and horses have been reported abandoned. • Llamas for Breeding Stock: Similar to the horse breeding market, llamas are in limited demand at present. The available supply is large and too readily available to be profitable. • Dairy: The dairying industry in Central Oregon has undergone continual retrenchment for decades. Only one large commercial dairy operation now exists in the Deschutes County area. A small scale family operation may be feasible but not commercially viable due to a lack of available processors or purchasers. • Aquaculture: The NNP Property is severely limited for aquaculture enterprises. The property lacks an appropriate year-round water source, e.g. a nearby stream or spring. A municipal water source is inappropriate because it contains chlorine that will kill fish and other aquatic species. Irrigation water is only available during the growing season. Aquaculture requires water temperature to be carefully controlled. The only known private aquaculture facility in Central Oregon is located in Klamath County. It relies on geothermal water to regulate the temperature of its ponds — a resource lacking on the NNP Property. Expensive concrete or lined ponds would also be needed due to the porous nature of the soils. • Fur Production: Oregon is a leading producer of mink pelts. Due to increased foreign demand, production has increased in recent years; however, the eighteen existing mink farms are located west of the Cascades. Mink production in Eastern Oregon is likely to be severely limited for the following reasons: 1. Mink are raised in cages in open-sided shelters. Mink are extremely susceptible to intense heat which makes Central Oregon a poor choice for a mink farm (especially as opposed to a location in the Willamette Valley where the climate is more temperate). 2. Mink are fed fish filleting waste, by-products of poultry processing and slaughterhouse offal. The NNP Property, unlike properties in Western Oregon, is not located close to facilities that provide a reliable supply of this feed. 3. A more remote location than provided by the NNP Property(a site surrounded on two sides by a well-traveled arterial street) is needed for at least three reasons: 14 a. The security of the farmer and his/her investment are threatened by a visible location (the location of mink operations are identified on-line so that would be protesters and animal liberators are informed). b. The slaughter of animals, the processing of fat to produce mink oil and the need to dispose of the carcasses makes this use inappropriate for a rural residential neighborhood with many neighbors. c. Mink are aggressive animals that bite readily (escapees or animals released by animal rights activists). d. It would be difficult to obtain financing to conduct this operation in such a visible location. e. Attacks and sabotage by animal rights activists disrupt production, endanger neighbors and traffic, and increase insurance costs. • Honeybees: The production of honeybees is centered on their use as pollinators of commercial crops (e.g. almonds, alfalfa, etc.). Honey production is a byproduct. Commercial honeybee operations are not conducted in Deschutes County. Honeybees are experiencing hive collapse disorder, making it difficult to obtain financing for such a startup operation. Additionally, it is not an accepted farm practice to keep a large number of hives in a single location; apiculturists typically spread hives across a number of properties in order to minimize disturbance to neighbors. This would preclude keeping several thousand hives on the NNP Property, located as it is near numerous residential properties. • Chicken Production: Recent years have seen a growing interest in free-range and pasture raised chickens. Much of this growth has been in small scale, backyard operations.A large scale, commercial operation was not deemed viable on the NNP Property due to the seasonal nature of the NNP water rights, winter conditions in the Bend area, and the need to operate in compliance with federal water and air quality regulations. Additionally, this farm use is not an accepted farm use in the area of the NNP Property. • Christmas Trees: The NNP Property currently has approximately 5 acres of Christmas trees under production. The trees have done poorly and undergone significant rodent predation. Production of Christmas trees in Central Oregon faces competition from healthier, easier grown stock in the Willamette Valley and from u-cut programs administered by the U.S. Forest Service. • Cattle Feed Lot: A feed lot was not studied as it is not a common farm practice in the area and the property is not suited for the use. The east third of the NNP Property is rocky, wooded, moderately steep rangeland unsuited for use as a 15 feed lot. The NNP Property adjoins rural residential exception areas developed decades ago with a large number of rural residences. Establishment of a feed lot in close proximity to these established residences is likely to be vigorously opposed. Further limitations include a lack of year round irrigation water rights, limitations on the use of the domestic water supply, and no low-cost water source • for the winter months severely limits the NNP Property for use as a feed lot. Finally, large feed lots generate high levels of air and water pollutants. Large sites are subject to rigorous environmental air and water quality regulations. The cost of complying with these regulations and of managing these pollutants on this site will require significant capital investments. 16 FINANCIAL ASSUMPTIONS Debt service and taxes are included in each of the budgets. Unlike other fixed expenses, however, these costs are shown below the Profit/Loss line and illustrate that even without debt service and taxes considered, each of the enterprise budgets shows a loss. With debt service and taxes included, the losses for each enterprise are larger. Like feed, barns, fencing and other fixed costs, costs attributable to land ownership must be factored into the enterprise budget. Even in instances where a farm may be owned outright by a long-term family farmer, capital and operating loans are common, with the farm property and equipment used as collateral. Consequently, whether classified as a mortgage cost or debt service, a typical farmer will have to cover some level of fixed monthly payments. Whether categorized as mortgage costs or debt service,the amounts reflected below are reasonable and what a typical farmer would be expected to pay in order to operate on the property. For purposes of the present analysis, two possible land values were considered: real market value and assessed value. Both values are considerably less than the purchase price paid by the current owner and the debt service amounts factored into this analysis are far below the debt service amounts actually paid by the property owner. Both scenarios anticipate a 30% down payment and a 5% interest rate on a 30-year loan. These figures are rather conservative given that commercial loans typically include shorter loan periods and higher interest rates. In each scenario, present taxes for the property have been amortized over a 12-month period. Real Market Value vs. Maximum Assessed Value Oregon law requires the assessor to value all property at 100 percent of its real market value (RMV). RMV is typically the price real property would sell for in a transaction between a willing buyer and a willing seller on January 1 of the assessment year, the assessment date for the tax year On the other hand, a property's maximum assessed value (MAV) is the taxable value limit established for each property under the Oregon Constitution. The first MAV for each property was set in the 1997-98 tax year. For that year, the MAV was the property's 1995-96 RMV minus 10 percent. MAV is subject to a maximum 3% increase each year, or other limited adjustments for specific reasons. RMV is typically much higher than MAV due to the 3% limitation. Although the subject property could be sold for a value close to RMV, both RMV and MAV were used in the enterprise budgets in order to show a range of values on the property and the corresponding debt service associated with those values. 17 Table 7. Mortgage Costs Real Market Value _ Assessed Value Value $1,975,290.00 $1,083,314.00 Down Pa ment @ 30% $592,587.00 $324,994.20 Amount Financed $1,382,703.00 $758,319.80 Interest Rate 5%b 5% Monthly Payment $7,422.64 $4,070.82 Taxes(per month) $1,208.40 $1,208.40 Total Monthly Payment $8,631.04 $5,279.22 Total Yearly Payment $103,572.49 $63,350.65 The second highest fixed costs are usually those associated with capital improvements and machinery. Upfront costs are usually highly variable depending if equipment is purchased new or used, buildings are built by the operator or contracted out, and the period of depreciation. Interest rates are higher if older, used equipment is purchased. Representative costs associated with these expenditures are included within each budget scenario. Periods of depreciation typically range from 5 to 15 years. • The following table exhibits the average Oregon prices for cows, steers, and heifers for the period 2000 to 2008. These are the prices illustrate the variability exhibited by the cattle market. Cattle prices exhibit great volatility, subject as they are to consumer demand, feed costs, and variable inputs. Current market prices4 for steers are$130. per hundredweight (cwt), heifers $135./cwt. The cow/calf enterprise budget utilizes current market prices; however, a prudent operator would base their long term planning on the average cattle prices. Table 8 below presents average cattle prices reported between 2000 and 2008. 4 Capital Press.May 10,2013.Farm Market Reports,Livestock Auctions,Madras,OR Auction Yard. 18 Table 8.Average Recent Cattle Prices Cattle Prices(steers&heifers)(sell prices)_ Year June July August 2000 $84.30 $83.60 $84.00 2001 $84.50 $84.40 $84.90 2002 $73.00 $72.50 $70.50 2003 $80.00 $81.00 $85,00_ 2004 $100.00 $101.00 $101.00 2005 _ $108.00 $99.00 $98.00 2006 $101.00 $102.00 $99.00 2007 $93.00 $91.00 $93.00 Average 2008 $93.80 $95.50 $95.00 Average $90.84 $90.00 $90.04 $90.30 per cwt Minimum $73.00 $72.50 $70.50 $72.00 per cwt Maximum _ $108.00 $102.00 $101.00 $103.67 per cwt Cattle Prices(calves).(purchaseprice) Year October November December 2000 $92.00 $90.90 $90.20 2001 $89.10 $86.50 $86.60 2002 $79.00 $82.50 $87.00 2003 $99.50 _ $100.00 $100.00 2004 $113.00 $110.00 $110.00 2005 _... $117.00 $121.00 $124.00 2006 $114.00 $104.00 $99.00 2007 $104.00 $101.00 $101.00 Average 2008 $85.00 $88.00 $86.00 Average $99.18 $98.21 $98.20 $98.53 per cwt Minimum $79.00 $82.50 $86.00 $82.50 per cwt Maximum $117.00 $121.00 $124.00 $120.67 (Source: 2000-2008 Agricultural Prices Summaries, Agricultural Statistics Board, NASS, USDA) 19 1 BUDGET ANALYSES RESULTS A series of detailed enterprise budget analyses are presented below. The results are displayed as tables in Appendix A. Each budget is based upon reasonable assumptions for variable and fixed costs, necessary inputs to produce a crop or raise livestock, and the revenue from expected returns. Neither the cost of debt servicing for the purchase of the land nor the cost to lease the land are initially factored into the enterprise budgets. There is no charge for family labor although it represents a lost opportunity cost. In all budgets, it was assumed that at least one member of a farm family would be principally engaged in the farm use of the land without compensation unless the operation generates net income. Costs for capital improvements e.g. barns, fencing, irrigation equipment etc. are depreciated over a specified time period. Livestock numbers are based upon the maximum potential animal units that can be supported on NNP Property through careful husbandry and the application of the requisite inputs. Crop production is assumed to utilize the available water rights. Even with land costs factored out, and even with a very conservative estimate of the productivity of the property, none of the farm operations are profitable. Horse Boarding Enterprise The first is a horse boarding enterprise for 14 horses. Revenues from this enterprise are highly variable depending on the level of care and training provided. Based on AUMs, the NNP Property can support up to 33 horses if horses are confined to the barn and 8 horses if the pasture is irrigated and used for grazing. A confined horse boarding operation is not an accepted farm operation and would not attract boarders. Horses require exercise to remain fit and healthy. Boarders expect to be able to ride their horses in pastures on the property where their horses are boarded. As a result, it was assumed that hay would be purchased for feed. The purchase of hay and other factors allowed an increase to 14 horses beyond the 8 horses that could be fed using hay grown on the subject property. This budget includes the assumption that the owner/operator will be a horse trainer and that all horses boarded will hire the owner/operator to train their horses. Horse training and lessons supply the majority of income for the horse boarding operation. The income is generated by personal labor that is not tied to growing crops or raising livestock on the land. Llama Ranch The second is a llama enterprise consisting of 28 llamas raised for the pet market, breeding females, and wool production. The numbers of llamas raised is based on the 20 number of AUMs that could be produced by the NNP pastures with intense management. Cow/Calf Operation The third is a standard cow/calf operation. This is a full year operation that retains a mother herd of fertile cows which are bred to produce a crop of calves which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. Based upon the soil productivity values established above, the NNP Property can be expected to support 40 animal units in a confined operation fed on the hay raised on the irrigated 103 acres of the property. The animals will be in confinement for 12 months. This type of cattle operation was selected as it is believed to have the best chance of being successful and profitable on the NNP Property. Grass Crop Establishment The fourth enterprise examined is the establishment of a grass (rough bluegrass) crop for seed. This enterprise is an example of a field crop operation. It analyses the first (or establishment) year of a multi-year crop rotation. Alfalfa Hay Production The fifth enterprise examined is irrigated alfalfa hay production utilizing the 103 acres of available water rights. Production is limited to the irrigated farmland (103 acres). It requires the purchase of equipment necessary to a cropping enterprise. This includes: a tractor, tillage equipment, swathers, and balers. The construction of a hay storage shed or building is required. Hay is marketed throughout the central and western Oregon. No animals will be fed on the farm. CONCLUSIONS AND FINDINGS The enterprise budgets analyzed represent a sampling of typical agricultural operations feasible in the Bend area. The budgets are based on the best available data for inputs and returns and represent a conservative approach. Returns and costs are summarized in Table 9 below. The losses shown below do not include costs associated with debt service. 21 Table 9. Budget Scenario's Costs and Returns Budget Total Net Return/ Scenario No.of Animals/Yield Revenues Total Costs Loss 1 14 Horses Boarding $115,080.00 $119,437.71 ($4,357.71) 2 28 Llama Pet Market $38,780.00 $70,998.05 ($32,218.05) 3 40 Cow/Calf $29,218.25 $49,985.93 ($20,767.68) 4 Blue Grass $109,695.00 $116,422.15 ($6,727.15) Establishment 5 Alfalfa Hay(3 cuttings) $61,800.00 $72,173.98 ($10,373.98) The conclusions drawn from the historical record, field observations, a review of soil productivity data, and the budget analyses are that: • Under the budget analyses conducted the NNP Property cannot be operated profitably for representative agricultural operations. • The losses are far greater when mortgage and capital expenditures are included. • Climate and poor soils limit feasible production to pastureland and hayland. The poor soils found on the property will not support the commercial production of any other crops. • Of the numerous budget analyses conducted, none showed a positive cash flow or positive return on investment as an agricultural enterprise. 22 PROFESSIONAL AUTHENTICATION AND LIMITATIONS This report utilizes generally accepted practice standards for care and diligence as employed by recognized consulting firms undertaking similar studies. This report presents our professional judgment based upon data and findings identified in this report and on data reported by independent analytical services and governmental agencies. This report reflects the interpretation of such data based on our experience and background, and no warranty, either expressed or implied, is made. The conclusions and recommendations presented are based upon the conditions observed at the time of the site visits and as a result of the limited laboratory analysis conducted. Recommendations are subject to change if field conditions warrant or more extensive sample collection and laboratory analysis is desired and conducted. This report has been prepared and reviewed by the undersigned. This report is void if original signature is not present. Date: July 11, 2013 116 I/ LA.A.0"44_,.■ • Stephen C. Caruana Principal Attachments: Figures Appendix A—Budget Scenarios Appendix B- Photo Set 1 Appendix C—Statement of Qualifications cc: Liz Fancher, Esq. Steve Hultberg, Esq. 23 REFERENCES USDA Natural Resources Conservation Service. 1992. Soil Survey of Deschutes County Area, Oregon. U.S. Government Printing Office.Washington, DC. USDA National Agricultural Statistics Service. 2007. 2007 Census of Agriculture. County Profile. Deschutes County. Oregon. U.S. Government Printing Office. Washington, DC. USGS Bend Airport 7.5 Topographic Quadrangle, Bend, OR. 1962. U.S. Government Printing Office.Washington, DC. 24 APPENDIX A BUDGET SCENARIOS A-1 Horse Boarding Bu et Based on Boarding: 14 Horses Time Period: _ 12 Months(7 months pasture,5 months fed) Initial Years Yearly FIXED COSTS Investment Depreciated Expense Building&facilities: Barn(14 horses) 550,000.00 10 $5,000.00 Run-in shred(10 x 25 ft) $4,000.00 10 _ 5400.00 Outdoor rung arena(100 x 200 ft.) $5,000.00 10 $500.00 Indoor arena(80 it 12011.) $47,000.00 10 $4,700.00 Fencing:(10000 ft.) 5-strand high tensile installed($1.75/11) $17500,00_ 10_ $1,750.00 Equipment Trader(used) _ $8,000.00_ 7 $1,142.88 Manure spreader(used) $1,000.00 7 $142.85 2-horse trailer(new) $7,000.00 7 $1,000.00, 4-wheel-drive truck(new) $35,000.00 7_ $5,000.00 WIrrigation System $150,000.00 30 $5,000.00 Insurance/tnterest-bidgs&equip.(4%) $12,980.00 TOTAL FIXED COSTS I $324,500.00 I S37,815.71_ Yearly VARIABLE COSTS Manthiylhorse Yearly/horse Monthly Total Total Feed requirements: Commercial feed(520150 lb bag;8 lb lhorse/day $72.00 $884.00 $1,008.00 $12,096.00 Hay(1/2 bale/horsefday-5 months,$6/bale) $90.00 $450.00 $1,260.00 $6,300.00 Supplements($1.50/day) $45.00. __.$540.00 $630.00 $7,560.00 Salt block($12 ea;1/horse/yr.) $1.00 $12.00 $14.00 $188.00 Bedding: Straw($2.50/bale;3/4 bale/horse/day) 58.25 $575.00 $787.50 . $9,450.00 Hired labor($10/hr,25 min/horse/day) 5125.00 $1,500.00 $1,750.00 $21,000.00 Repair&maintenance: Vehicles(515/ma/horse) $15.00 $180.00 $210.00 $2,520.00 Pasture($40/acre) $4,920.00 • Building&fences($8.00/horse/mo.) $8.00 $96.00 $112.00 _ $1,344.00 , Utilities; Electric($5/horse/mo.) $5.00 $80.00 $70.00 $840.00 Water($5/horse/mo.) $5.00_ $60.00 $70.00 $840.00 Replacement of supplies($3/horse/mo.) $3.00 r $36.00_ $42.00 $504.00 Insurance:(highly variable) Care,custody,and control $10.00 $120.00 $140.00 $1,680.00 Riding Instruction $10.00 $120.00 $140.00 $1,680.00 Commercial liability $50.00 $500.00 5700.00 $8,400.00 Workman's compensation $15.00 $180.00 $210.00 $2,520.00 TOTAL VARIABLE COSTS $81,822.00 TOTAL COSTS $119,437.71 Yearly REVENUES Monthly/horse Yearly/horse Monthly Total Total Board($250/mo1 $250.00 _ $3,000.00 $3,500 00 $42,000.00 Training($400/mo.) $400.00 $4,800.00 $5,600.00 $67,200.00 Lessons($35/hrj $35.00 $420.00 $490.00 $5,880.00 TOTAL REVENUES _$115,080.00 NET RETURNS/(LOSSES) ($4,357.71) A-1 Llama Raising Budget Based on Raising 28 Llama µ Time Period: 12 Months(7 months pasture,5 months fed) Initial Years Yearly FIXED COSTS Investment Depreciated Expense Building&facilities: Barn(28 llamas) $50,000.00 10 $5,000.00 Fencing:(10000 ft.) 5-strand high tensile installed($1.75/ft) $17,500.00 10 $1,750.00 Equipment: Tractor(used) $8,000.00 7 $1,142.86 Manure spreader(used) $1,000.00 7 $142.86 Trailer Lnew) $7,000.00 7 $1,000.00 4-wheel-drive truck(newt. _ $35,000.00 7 $5,000.00 Irri Lion stem $150,000.00 30 $5,000.00 Insurance/Interest-bldgs&equip.(4%) $10,740.00 TOTAL FIXED COSTS I $268,500.00 I I $29,775.71 Monthly VARIABLE COSTS Monthly/llama Yearly/llama Total Yearly Total Feed requirements: Grain($0.40/lb,0.75 lbs/head/day) $9.13 $109.51 W $255.53 $3,066.34 Salt and Minerals(24 Ibs./head/yr.,$3.00/mo.) $3.00 $36.00 $84.00 $1,008.00 I Hay(1/5 bale/llama/day-5 months,$6/bale) $36.00 $180.00 $1,008.00 $5,040.00 L Animal Overhead Veterinary Expenses($25/head) $2.08 $25.00 $58.33 $700.00 Marketing Expenses($10/head) $0.83 $10.00 $23.33 $280.00 Repair&maintenance: Pasture($40/acre) _ $4,920.00 Vehicles($10/mo./head) $10.00 $120.00 $280.00 $3,360.00 Building&fences($8.00/head/mo.) $8.00 $96.00 $224.00 $2,688.00 • Utilities: Electric($5/head/mo.) $5.00 $60.00 $140.00 $1,680.00 Water($5/head/mo.) $5.00 $60.00 $140.00 $1,680.00 Insurance:(highly variable) Commercial liability w $50.00 $600.00 $1,400.00 $16,800.00 TOTAL VARIABLE COSTS $41,222.34 TOTAL COSTS ..._ _ $70,998.05 REVENUES Quantity Price/Unit Value Yearly Total Wool(5 lbs./animal,$75/pelt) 5.00 $75.00 $375.00 $10,500.00 Cries(90%weaning,2%death loss) 1.00 $1,100.00 $1,100.00 $27,720.00 Culled Females(10%cull,$200/head) 1.00 $200.00 $200.00 $560.00 TOTAL REVENUES _ $38,780.00 NET RETURNS/ILOSSES) ($32,218.05) A-2 Cow1Calf Costs and Returns High Desert Area Herd Size: 40 Cows Time Period: 12 Months (Confined,fed completely from irrigated hayland) Initial Years FIXED COSTS Investment Depreciated Total Per Cow Building&facilities: Barn $50,000.00 10 $5,000.00 $125.00 Cattle Equipment $7,500.00 10 $750.00 $18.75W Fencing:110000 ft.) _. $0.00 5-strand high tensile Installed($1.75fft) $17,500,00 10. $1,750.00 $43.75 Equipment $0.00 Tractor(used) , $8,000.00 7 $1,142.86 $28.57 Manure spreader(used) $1,000.00 7 $142.86 $3.57 Trailer(new) 57,000.00 7 $1,000.00 $25.00 4-wheel-drive truck(new) $35,000.00 7 $5,000.00 $125.00 Irrigation System $150,000.00 30 $5,000.00 $125.00 Insurance/interest-bldgs&equip.(4%) _ $11,040.00 $276.00 TOTAL FIXED COSTS I $278,000.001 I $30,825.71 J $770.64_ Quantity VARIABLE COSTS (head) Value Unit $UUnit Total Per Cow Salt 1 Ton $160.00 $180.00 $4.00_ Minerals(custom mix) 0.2 Ton $600.00 $120.00 $3.00 Fuel&Lube,Machinery&Equipment $1,208.89 $30.22 Interest-Operating Capital $333.33 $8.33 Repairs,Machinery&Equipment $2,472.62 $61.82 Fence Repair Materials $450.00 - $11.25 Supplies $700.00 $17.50 Utilities $900.00 $22.50 Vet&Medicine $1,550.00 $38.75 Brand Inspection $100.53 $2.51 Horse Purchase 0.25 head $2,000.00 $500.00 $12.50 Bull Purchase 0.3 head $2,000.00 $600.00 $15.00 Marketing Fees _ $544.85 $13.82 Accounting $400.00 $10.00 Legal&Related Expenses $200.00 $5.00 Farm Help Labor $4,000.00 $100.00 Hayland Maintenance($40./ac.) $4,920.00 $123.00 TOTAL VARIABLE COSTS I l_ I $19,160.22 $479.01 TOTAL COSTS I $49,985.93 $1,249.65 Quantity REVENUES (head) , Value Unit $/Unit Total Per Cow Cull Bulls 0.3 15 cwt _ $82.00 $369.00 $9.23 Cull Cows 6 9.5 clot $74.00 $4,218.00 $105.45 Cull Horse 0.25 1 head $500.00 $125.00 $3.13 Heifer Calves 5 4.75 cwt $135.00 $3.206.25 $80.16 Yearling Heifers 9 8.5 cwt $100.00 $7,650.00 $191.25 Steer Calves 20 5.25 cwt $130.00 $13,650.00 5341.25 TOTAL REVENUES $29,218.25 $730.46 NET RETURNS!(LOSSES)I _. I I ($20,767.68)I ($519.19L A-3 Rough Bluegrass Establishment Year- Central Oregon Production: 103 Acres Initial Years Yearly FIXED COSTS Investment Depredated Expense Building&facilities Storage shed(50 x 100 ft) $25,000.00 10 52,500.00 Equipment Implements $35,000.00 7 $5,000.00 Tractor(used) $8,000.00 7 $1,142.86 Self propelled E ui ment 515,000.00 7 $2,142.86 4-wheel-drive truck(new) 535,000.00 7 $5,000.00 Irrigation System $150,000.00 30 55,000.00 Insurance/interest-bldgs&equip.(4%) $10,720.00 TOTAL FIXED COSTS $31,505.71 Price VARIABLE COSTS Unit (5) Quantity Amount($) Farm Total Herbicides Acre $40.63 1 $40.63 $4,184.89 Fungicides Acre $13.44 1 $13.44 $1,384.32 Custom Applications Acre $30.59 1 $30.59 $3,150.77 Seed Acre $14.00 1 $14.00 $1,442.00 Miscellaneous Field Work Acre 5149.00 1 $149.00 $15,347.00 Hand Labor Acre $153.65 1 $153.65 $15,825.95 Fertilizer Acre 5104.00 1 $104.00 $10,712.00 Water Acre 5114.12 1 $114.12 $11,754.36 Diesel Fuel Gallon $3.99 12.86 $51.31 $5,285.07 Gasoline _ Gallon $3.50 1 ` $3.50 $360.50 Repair&Maintenance Acre $41.13 1 541.13 $4,236.39 Interest on Operating Capital Acre 534.06 1 $34.06 $3,508.18 Services(Accounting,Legal,Insurance) Acre $75.00 1 $75.00 $7,725-00 TOTAL VARIABLE COSTS $824.43 $84,916.43- TOTAL COSTS $824.43 $116,422.15 Price REVENUE Unit (5) Quantity Amount(5) Farm Total 1 Grass Straw Acre $20.00 1 $20.00_ $2,060.00 Rough Bluegrass Seed Pound $1.10 950 $1,045.00 $107,635.00 TOTAL REVENUE $1,065.00 $109,695.00 NET RETURNS(LOSSES) $240.57 ($6,727.15) A-4 Alfalfa PreduNan 11416Untal SLAIN Central RlT81ah _ Production:r 103 maoll I . 1 I I I I - lyddal Tears Yearly P1XEDOD515 „W..., Investment _ Depredated Expense Building&Eacfhles _ Storage died(50 s TAO R) _ _ 525.000.00 10 , $2,500.00 Equipment implernen5 . $35,000.00 7 55,000.00 Tratta(usad( _ _, 58.000.00 7 $1,142.86 Self,propelfed Equipment $15,000.00 m. 7 $2142.86 4-w4rddfW4trudl(nnr) $35,000.00 7 $5$90.00 - - irripdonSystem $150,00000 30.... 55.000.00 Inszearloe/Reerast•hldp+agl+b.(4%t ., $30720.00 TOTAL FCCE0006I5 I I I I I I I $31.505.71 Amuun Subtvp Machine, VARIA*U COSTS t Unh 5/Unit I Labor y Materials Total Amount TOTAL Sail Tut 0.0 515. 5411 Taal 2 we 00 $0.30_ 50.00 50.00 50.30 50.30 530.90 Weed Control 50.00 50.00 538.97 $38.97 $4,013.40 Herbldde 3 pint $8.88 $26.63 Herbicide 1,/ pint_ $4.56 $6.84_ . CustomAppSWtion 1 acre $5.50 55.50 Fertilizer $0.00 $0.00 $38.55 $38.$5 $3,970.65 pound . Clypsum _. .,400 $ 10.06 522.00, pound Murated Potash S0 s .50.08 54.05 . pound Triple Phosphate 50 1 50.12 56.00 � Custom pparition 1 , we 56.50 565 m..0 � n Harrow $3.63 51.55 $0.00 $5.59_ $533.54 Rodent Control 512.00 $0.00 $5.00 $17.00 $1,751.00 Gas Pits 1 we $5.00 55,00 irrigate _ 544.00 $000 554.20_ 598.20 510,114.60 Repair IL Maintenance 1 we $4.55 $4.55 Electricity 1 acre $25.00 $25.00 Yeater/Canstruetion Charge 1 acre 524.65 $24.65 Weevil Control $0.00 Saw $8.84 81425 5910.78 , insecticide 0.5 pint 510.38, $5.19_ _ Sticker 0-015_ gallon _ $27.00 $0.41_ _ Custom Air Application 0.5 acre 56,50 53.25_ Harvest ,_.__......__..,....�._.... 5120.00 $12,360.00 Custom Harvest 4 ton, $30.00 5120-00 Load Hay _ 9.08 9.03 0 518.11 $1,865.33 Storage Shed Repair&Maintenance 50-37 $0.00 $0.50 50-87 589.61 Operating Capital Interest _ 50.00_ 50.00 $11.78. 511.78 51,21334 General Overhead 50.00 50.00 510.00 510.00 51.030.00 n Pickup 515.00 5434 50.00 519.34 51,992.02 1-- ATV 07.50 50.10 50.00 $7.70 $793.10 TOTAL VARL88i!COSTS $394.84 $40,551.51 TOTAL COSTS TI ._...._-J I _... $72,173.98 ....__._.. -.. quantal ......._...._._. REVENUE Y Unit 5/Unit Totel/as, _FARM TOTAL Alfalfa 3 ton $200.0D $600.00 $61.800.00 NET RETURNS(L45565) $600.00 ($10,373.96) A-5 ................................................. I - J n '. ,mo i.. I _ 4-;tr,y r '' : -x, - iyp, > IK� +' / 'f ♦ Y Irv. r1'�y7 t,y i �� r r• yW'ti { TT sh Fi:ure.A Idle A• icultural Field Fi:ure B Native Rangeland 3 _rii z.^�yty k .s wiT x ��. •wa . " 'k .., dNM1n w,�K I - '� ,I� H . .:) M E. r ,.� �I.. 1 a ; t ;a r \ c` mo : y•Y 'r! ': . F .,...,'..,...-:..,-• it . a T N pYlri'W � +4K y I ,,,,,,t.i _Ye_ t... ,*f Fi„ure C Irritation Ditch Fi:ure D Irri_ation Eruirment.. lit':,, , , I. • !. ' I I1 1 i, a jam' � x , •/ / Fi:ure E.Colonizin• Ponderosa Pines Fi:ure F.Existin Fencin SITE PHOTOGRAPHS Agronomic NNP PROPERTY BEND,OR Analytics PROJECT NO.AA2013-1 Appendix B-Photo Set 1 APPENDIX C STATEMENT OF QUALIFICATIONS Introduction Agronomic Analytics began in 1 997. The object was to provide the highest level of service for developing environmentally sound and economically viable solutions to agricultural and land use challenges. We bring a solid background in agronomy,soils,ecosystem analysis,environmental marketing,soil testing,and conservation engineering to the challenges of conducting thorough and detailed analysis of soils,vegetation,and erosion processes. Agronomic Analytics has expertise in agricultural consulting,watershed restoration,project development,erosion studies and public outreach campaigns. Agronomic Analytics brings fifteen years experience with the Natural Resources Conservation Service(NRCS),eleven of those years as a District Conservationist in three field offices in the Midwest and the Pacific Northwest. This experience allows Agronomic Analytics to bring a complete familiarity and understanding of the soils,geology,and vegetation analysis required to complete detailed erosion and sediment studies. We bring direct experience working with endangered species and sensitive watershed issues. As the Salmon Recovery Coordinator for the NRCS the principal of Agronomic Analytics worked closely with agencies and tribal entities to promote positive habitat improvement. Mission Statement The mission of Agronomic Analytics is to cultivate the harmonious integration of society and the environment. Experience Land-use Studies • Agricultural economic enterprise studies: Lane,Benton,Douglas,Marion,Lincoln,and Deschutes Counties • Determination of environmental impacts from proposed manufacturing activities. Soil Interpretation and Assessment • Thirty years experience interpreting soil surveys for agricultural,range,forestry,and land development. • Completion of hundreds of Corps of Engineers accepted wetland delineations based on field assessment of soil conditions • Conducted detailed site assessments of existing soil surveys for revision based upon on-site analysis. Erosion and Sediment Control • Development of post-wildfire burn assessments. • Determination of past,present,and future erosion and sediment conditions on an Idaho Ski Resort. • Administered eight separate federal cost-share programs to encourage voluntary installation of conservation treatments on private land. C-1 • Supervised planting of 75,000 acres of native and introduced grasses for the Conservation Service. Modeling • Developed the Farming Systems Comparison Procedure decision analysis tool for the Soil Quality Institute and the Conservation Technology Information Center. Model developed utilizing extensive Excel and Visual Basic Programming language. • Extensive experience with the Revised Universal Soil Loss Equation(RUSLE),Water Erosion Prediction Project(WEPP),and the Wind Erosion Equation(WEQ) • Experience and knowledge of Geographic Information Systems(ArcView),Climate and Crop Modeling(CropSyst,Climgen),and the hydrology of sediment delivery. • Watershed modeling and hydrological analysis of semi-arid,forested,and urban watersheds. Project Management • Oversight of non-native vegetation removal and water quality testing for Brae Burn Creek Stream Stabilization Project. • Formulated the goals,workplan and strategy and developed the technical criteria for the Salmon Safe Program of the Pacific Rivers Council. • Developed technical criteria and certification standards for assessing the soil,water,and ecosystem resources of participating farms. Watershed Analysis • Conducted hydrological analysis(TR-55 and Rational Method)of Brae Burn Creek Watershed. • Assisted Oregon's Soil and Water Conservation Districts in the formation of watershed councils. • Evaluated and recommended watershed assessment strategies for use by the Soil Conservation Service. • Collaborated with staff specialists of the Confederated Tribes of the Umatilla Indian Reservation to select suitable watersheds for restoration. Resource Assessment • Completed econometric and socioeconomic analysis of Conservation Reserve Enhancement Program proposal for the Governor's Watershed Enhancement Program. • Developed environmental impact statements in accordance with NEPA to assess archaeological,cultural,and environmental values. Credentials • B.S. -Agronomy,Oregon State University,Corvallis,Oregon • Post Graduate Work: Landscape Architecture,University of Oregon,Eugene,Oregon • Certified Erosion and Sediment Control Lead(CESCL),2012 • OSHA 40-hour HAZWOPER,2008 • Supplemental Training:Wetland Delineation,Archeology,Soil Interpretation and Classification C-2 Client List Agronomic Analytics has provided technical consulting services for the past 15 years. Besides private individuals,we have worked with the following agencies and groups. • Edgewood Townhouse Association • Northwest Power Planning Council • Brundage Mountain Ski Resort • USDA-Soil Quality Institute • Conservation Technology Information Center • Oregon Governor's Watershed Enhancement Board • National Marine Fisheries Service • Environmental Protection Agency • Forest Service Employees for Environmental Ethics • K&A Engineering • Pacific Rivers Council • Land Use Attorneys • Private Landowners Publications and Papers Caruana, S.C. 2013. Condit Dam Removal. Environmental Connection: International Erosion Control Association.San Diego,CA. Canaan,S.C.and D.M.Johnson.2008.Griffith Park Burn Area Assessment,Erosion Control,and Debris Flow Mitigation. In: StormCon: North American Surface Water Quality Conference and Exposition. Annual Conference Proceedings.Orlando,FL, Canaan, S.C. and D. Towery. 2001. Better Soils Better Yields. Conservation Technology Information Center.West Lafayette,IN. Caruana, S.C., E. Larkin, I. Eddy, and R Graves. 1996. Buck Hollow 2000: A comprehensive watershed restoration for salmonid recovery. In: The Role of Restoration in Ecosystem Management. Ed. D.L. Pearson and C.V. Klimas. Society for Ecological Restoration. Madison,WI. Caruana, S., A. Tugel, M.Norfleet, and D. Towery. 1999. Procedures to identify and assess soil quality enhancing farming systems. In: Soil and Water Conservation Society 54th Annual Conference Proceedings.Ankeny,IA. Awards November 1994 — Certificate of Appreciation from the Oregon Soil and Water Conservation Commission for assistance with Salmon Recovery Efforts December 1991 — USDA Certificate of Merit for Sustained Superior Performance as District Conservationist at Moro,OR C-3 0 N Lf'1 N * w A C1 43 '"■ i M O C co p C 0 N C N ' +C+ U CI = C 0 o o ❑ ` �--i o Q 1 ❑ u, E :C o C- O ` 6 -J IV Z my 3 0. 0 a v L v fD a- c a' Q i p C Q v E ao a� ro O o T] =Q a/ ro 0 co 0 7 4- O 0 J ate, z '� LL ro 0 r` 0 t6. to a ''.. D v, m vi o ca ,n A in ❑ z . 4_ o .0 .O b • • H • • • J J ❑ L ❑ c O a rn _ _ p� O `� 0 U _ VI c U v CC v DC a °�' ° . v Q E fi 4 o ,c 0 ^0 z `ti V 4, q 6, vi C v —J '- o. J w u c n, �, < va^' �• v, 4 Q 0 v ti t 0 a, ,U qCt v fi b '-1 o_ - O -c31 .',-1 ) C a a Q°a J (.9 o a o o ` ° 4 z v, u v1 • a L- • v in 0'` V do •� (4 +. 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C• U L Cu- .— U d " CIA L i DECISION OF THE DESCHUTES COUNTY HEARINGS OFFICER FILE NUMBERS: PA-11-7 and ZC-11-2 APPLICANT: State of Oregon Department of State Lands do Douglas Parker 775 Summer Street NE, Suite 100 Salem, OR 97301 REQUEST: The applicant requests approval of a Plan Amendment to change the designation of certain property from Agriculture to Rural Residential Exception Area,and a Zone Change from Exclusive Farm Use(EFU- TRB)to a Multiple Use Agricultural (MUA-10). HEARING DATE: February 21, 2012 and March 20,2012 RECORD CLOSED: May 18,2012 STAFF CONTACT: Paul Blikstad, Senior Planner I. APPLICABLE STANDARDS AND CRITERIA: Title 18 of the Deschutes County Code, the County Zoning Ordinance Chapter 18.16,Exclusive Farm Use Zone Chapter 18.32,Multiple Use Agricultural Zone Chapter 18.136,Amendments Title 23 of the Deschutes County Code, Deschutes County Comprehensive Plan Chapter 2,Resource Management Chapter 23.64,Transportation System Plan Oregon Administrative Rules, Chapter 660 Division 12,Transportation Planning OAR 660-012-0060,Plan and Land Use Regulation Amendments Division 15, Statewide Planning Goals and Guidelines II. FINDINGS OF FACT: A. LOCATION: The DSL holding contains two tax lots(18-12, 1700 and 1800). It is located immediately adjacent to SE 27th Street and Stevens Road,to the west and north,respectively. 1 B. LOT OF RECORD: The Planning Division has previously determined under application No. CU-97-132 that tax lots 1700 and 1800 together form one legal lot of record. C. ZONING AND PLAN DESIGNATION: The Deschutes County Comprehensive Plan map designates the subject property as Agriculture. In addition,the subject property is zoned Exclusive Farm Use— Tumalo/Redmond/Bend subzone(EFU-TRB). D. SITE DESCRIPTION: The DSL holding consists of approximately 640 acres, and has a varied topography of level areas, interspersed with some rock outcrop. The undisturbed portions of the site have a vegetative cover of juniper trees, and an understory of scrub brush and grasses. A very small number of ponderosa pine trees also exist on the property. Formal access to the site appears to exist only in the immediate area of the natural gas pipeline adjacent to Stevens Road. The property has several dirt trails widely scattered throughout the property. The property is undeveloped, except for the underground Pacific Gas Transmission pipeline running south to north through the property. The gas transmission line area has been cleared of trees and the vegetation in the pipeline area is primarily all scrub brush. The record indicates there are small cave sites on the property. The approximately 12-acre portion of the property northwest of Stevens Road is not included in the property,as this portion is already located within the Bend city limits. The NRCS identifies the soil mapping units on the subject property as 58C, Gosney-Rock outcrop-Deskmap complex, 0 to 15 percent slopes; 38B,Deskamp- Gosney complex 0 to 8 percent slopes; 27A, Clovkamp loamy sand,0 to 3 percent slopes; and 157C, Wanoga-Fremkle-Rock outcrop complex, 0 to 15 percent slopes. The 58C, 38B, and 157C soils cover approximately 97%of the subject property. The 58C, 38B, and 157C soil mapping units are nonhigh value soils. The 27A soil is considered high value when irrigated. Because the subject property is in public ownership,there are no taxes paid on the property. It is listed as"Non-Assessable"on the County Assessor's records. It does not appear to have ever been farmed,nor does it contain any water rights. The applicant states on page 2 of the burden of proof statement the following: "The 12 acres located in the northwest corner of the SRT',north of Stevens Road, are already annexed into Bend city limits and include a Central Oregon Irrigation District(COID)water conveyance canal." This 12-acre portion of tax lot 1800 is not a part of the request,as it is already located within the Bend city limits. 'The applicant lists"SRT" in many places in the burden of proof statement. SRT stands for Stevens Road Tract,which is the applicant's reference for the subject property. 2 E. SURROUNDING LAND USES: Surrounding land uses include privately owned properties developed with residential uses, including land within the Bend urban growth boundary directly west and northwest of the property. There are also rural residential properties located to the north and east. The surrounding area includes a few parcels that Staff would consider as hobby farms, with small areas of irrigation,mainly in the form of pasture. Additionally,the surrounding area includes the Deschutes County Knott Landfill site(18-12-14, 100/500/503), County Road Department/County Surveyor complex and office(18-12-14, 100); Humane Society(18-12-14, 104),as well as a Central Electric Cooperative electric substation(18-12-14, 502), and office facility(18-12-14, 102). Also in the surrounding area is the High Desert Middle School (18-12-14, 101), a veterinary clinic (18-12-15, 1901)and a dog kennel business(18-12-15,200). Zoning in the area includes Multiple Use Agricultural land directly east and north, Exclusive Farm Use land to the northeast and southeast, Surface Mining to the south(Knott Landfill and the Rose&Associates mining site), and Residential zoning and Public Facility zoning within the Bend urban growth boundary to the west,northwest and southwest. F. PROPOSAL: The applicant is requesting approval of a plan amendment to change the designation on approximately 380 acres of the overall holding ("subject property")from Agriculture to Rural Residential Exception Area,and a zone change from Exclusive Farm Use(Tumalo/Redmond/Bend subzone)to the Multiple Use Agricultural (MUA-10)zone. The applicant is not requesting a goal exception to Statewide Planning Goal 3, Agricultural Land. The applicant is instead relying on the premise that the portion of the subject property west of the east boundary of the gas pipeline easement is predominantly not agricultural land, based on a soils data from the NRCS Soil Survey and a report provided by Roger Borine. The applicant has submitted the following as part of the plan amendment/zone change request: • Burden of proof statement addressing the applicable criteria in County Code and State law • BLM Land Patent recorded at 2001-27360 • Soils investigation(report)prepared by Sage West,LLC • Soils investigation(report)amendment to reduce the acreage to 380 acres • Traffic study for subject property prepared by Kittelson&Associates, Inc. • Stevens Road Tract Conceptual Master Plan • Traffic study addendum submitted by Kittelson&Associates on behalf of the applicant 3 G. PUBLIC/PRIVATE AGENCY COMMENTS: The Planning Division mailed notice to several agencies and Staff report states that the following comments were received into the record: Bureau of Land Management: In response to application number PA117- 1812000001700,request for a Plan Amendment from Agriculture to Rural Residential Exception Area for 380 acres,in Township 18 South,Range 12 East, Section 11,Willamette Meridian,Oregon, involving land along 27th Street,just southeast of Bend,I have the following comments: Although there is no BLM nearby,this is a parcel that BLM transferred out of BLM ownership to DSL in 1997, after completing an environmental analysis (EA) #DOI-BLM-P060.1195-0090, Section 11 State-in-lieu selection. The 1997 Decision Record says: • Six caves found on Section 11 are significant under regulations pursuant to the Federal Cave Resources Protection Act. • The transfer of land ownership will be subject to valid existing rights and mutually developed conditions. • The State of Oregon does covenant and agree to the following: Cave resources,as generally depicted on Exhibit A, shall be secured and conserved. • No significant adverse or cumulative effects have been identified resulting from the transfer of the property, as mitigated,to the State of Oregon. Attachment A states: As a condition to clear listing of the above lands, and by acceptance into their ownership,the State of Oregon does covenant and agree to the following: • Cave resources, as generally depicted on Exhibit A, shall be secured and conserved in a manner consistent with a management plan designed to maintain, and to the extent practical,the significant biological, geologic, recreational and educational resource values present. Exhibit A depicts the cave management zone. The cave management zone includes lands not more than 350 feet from a cave passage and shall be the maximum area subject to the cave management plan. • The State of Oregon or its successor in interest shall be subject to the conditions described in the management plan. Should lands with cave resources pass to a successor in ownership to the State of Oregon,the State of Oregon shall monitor the cave resources. Should the area subject to the management plan revert to inactive cave use,the management plan will be suspended. Please see the attached map depicting the caves. 4 Deschutes County Transportation Planner: I have reviewed the submitted materials for the Department of State Lands(DSL)holding on the east side of 27th Street,which is also known as Section 11 (18-12-00,TL 1700). The land use is to rezone a 380-acre portion from Exclusive Farm Use(EFU)to Multiple Use Agricultural, 10-acre minimum(MUA-10), east of 27th between Stevens and Ferguson Roads. Staff tentatively agrees with the traffic study's conclusions that no significant affect would result from this land use,but needs further documentation from the applicant regarding Table 3. Staff agrees with the 280 trips generated from the proposed MUA-10,it is the 100 daily trips generated from the existing EFU that seems high. Staff believes the 100 trips from the existing EFU is high for four reasons. First,the applicant bases the 100 trips on three potential uses distributed across two parcels. Second, a farm stand is a seasonal trip generator and that operational aspect needs to be factored in. Third, a church generates the bulk of its trips on the day of worship unless there is a school attached. Fourth,a rural fire station also does not have consistent trip generation as the trips are tied to both Staffing and number of calls to which the station responds. Table 3 could also include 10 trips a day from a home which is allowed under EFU. Table 3 of the traffic study indicates the plan amendment/rezone could result in 28 single-family homes and 28 p.m. peak hour trips. Ultimately,the applicant will be assessed transportation system development charges(SDC's) during the building permit process. Currently,the SDC rate is $3,528 per p.m.peak hour trip for an estimated SDC of$98,784 (28 trips x$3,528 per trip). Planning Division Staff informed the County Transportation Planner that with a cluster or planned development scenario,the density of development on the subject property could essentially be doubled,based on the density bonus allowed under DCC 18.32.040(A). With that information,the Transportation Planner submitted the following additional comments: "To answer the question definitively, the applicant's traffic analyst would have to redo the TIA and re-examine all studied intersections. Without that, I have made a first-magnitude estimate below of the effect of the density bonus. The TIA showed the 28 units would generate 28 trips in the p.m. peak. This is an increase of 18 trips more than the current EFU zoning would allow. Adding the density bonus (site is within one mile of the Bend UGB)would increase the number of potential units to 56. These 28 additional units would result in 28 more trips for a total of 46 more p.m. peak hour trips than would occur under existing zoning. Figure 4 of the TIA displays the performance of the studied intersections. All have adequate capacity by varying margins. I doubt the addition of 28 more peak hour trips will cause the intersections to fail." 5 The Transportation Planner responded to the addendum submitted by Kittelson &Associates by stating: "1 have reviewed the Jan. 10, 2012 memo by Kittelson on the transportation impacts of the Section 11 rezone proposed under ZC-11-7. This additional analysis is to address the "density bonus"of an MUA-10 site being located within a mile of the UGB. I agree with the KA1 report's methodology, conclusion, and recommendation." County Road Department: No comments concerning the zone change. The Road Department will have comments concerning access and road improvements when development of parcels occurs. Arnold Irrigation District: In response to the above request, Arnold Irrigation District does not have any facilities or water rights at this location. Bend Fire Department: The Fire Department submitted a 1-page list of fire code requirements,which would apply should the property be developed in the future. Pacific Power and Light: No comment response. The following agencies did not respond to the request for comments: Central Oregon Irrigation District,Bend Metro Parks and Recreation, Watermaster, Cascade Natural Gas,Central Electric Cooperative, Qwest. Bend-La Pine School District,Oregon Department of Transportation, City of Bend Engineering,P G& E Transmission. H. PROCEDURAL HISTORY: The subject property(tax lot 1800)was approved for three previous land use applications as follows: CU-97-132, A conditional use permit to establish a mainline valve and blowdown assembly for an existing natural gas pipeline. This application was approved in January of 1998,mailed out on January 26, 1998. The applicant was Pacific Gas Transmission Company. CU-04-21,A conditional use permit to establish a utility facility consisting of an electric substation. The applicant was Central Electric Cooperative2. PS-09-4,Department of State Lands sign-off for a renewal of Central Electric Cooperative's power line easement across State lands. The applicant was Central Electric Cooperative. 2 This electric substation was never constructed. The subject property remains undeveloped. 6 The initial hearing on the subject applications was originally scheduled for Tuesday,January 16,2012. The applicant requested a continuance of that hearing to February 21,2012, and that request was granted by the Hearings Officer. The continued hearing was conducted on Tuesday,February 21,2012. Evidence and testimony were submitted at the hearing. The Hearings Officer again continued the hearing to Tuesday, March 20,2012. At the March 20,2012 hearing,Attorney Liz Fancher representing Newland, an entity with similarly zoned lands located elsewhere in the County requested that the written record remain open until April 20,2012 to provide additional testimony. The applicant requested an additional month thereafter to file a final response. The Hearings Officer granted both requests. T During the open record period the applicant submitted an April 18,2012 letter with an attached letter from DLCD dated April 3, 2012. Newland submitted four separate memoranda before the April 20,2012 deadline expired. Those documents are discussed in more detail below. III. CONCLUSIONS OF LAW: Chapter 18.136,Amendments 1. Section 18.136.010,Amendments DCC Title 18 may be amended as set forth in DCC 18.136. The procedures for text or legislative map changes shall be as set forth in DCC 22.12. A request by a property owner for a quasi-judicial map amendment shall be accomplished by filing an application on forms provided by the Planning Department and shall be subject to applicable procedures of DCC Title 22. FINDING: The applicant has requested a quasi-judicial plan amendment,and filed the applications for a plan amendment and zone change. The Hearings Officer agrees with Staff that the procedures of DCC Title 22 apply. 2. Section 18.136.020,Rezoning Standards The applicant for a quasi-judicial rezoning must establish that the public interest is best served by rezoning the property. Factors to be demonstrated by the applicant are: A. That the change conforms with the Comprehensive Plan, and the change is consistent with the plan's introductory statement and goals. 7 Applicable Law At the February 21,2012 public hearing,Newland raised the question of whether the County's newly adopted Comprehensive Plan provisions regarding Agricultural Land Policies(Section 2.2)and Rural Housing Policies(Section 2.3) should apply to the application. Those policies were adopted by the Board of County Commissioners on November 9,2011,after the consolidated application was filed on October 31,2011. Ordinarily, a quasi-judicial land-use application which was found to be complete prior to any amendments in the local development code would be reviewed under the code provisions in place at the time the application was deemed complete. ORS 215.427. Newland argued that this rule does not apply to intervening Comprehensive Plan amendments. Newland cites a fairly recent Court of Appeals opinion Setniker v. Polk County,244 Or App 618 (2011)which found that such intervening Comprehensive Plan amendments do apply to consolidated Comprehensive Plan map and zone change applications. As Staff noted in the supplemental Staff report,the County Counsel's Office reviewed the case and tentatively agreed recommending: My formal opinion for the record is that,while it may create a hardship for applicants because it will be a moving target for Comprehensive Plan amendment applications filed prior to a statutory or rule change,whether coupled with a zone change or not,there is nothing in the statute or rules that were the subject of Setniker or in the case itself that limits the applicability of Setniker to the TPR. Although the applicant initially argued that following the Setniker rule could subject an applicant to a potentially endless chain of Comprehensive Plan amendments,removing certainty from the application process,the record appears to demonstrate that the applicant eventually conceded to Newland's position. Having reviewed the case,the Hearings Officer agrees with Staff and the County Counsel's Office that the November 9, 2011 amendments to the County Comprehensive Plan apply to this application. Those policies are discussed in more detail below. Chapter 2,Resource Management Section 2.2,Agricultural Lands Policies 2.2.2 Exclusive Farm Use sub-zones shall remain as described in the 1992 Farm Study shown in the table below,unless adequate legal findings for amending the sub-zones are adopted or an individual parcel is rezoned as allowed by Policy 2.2.3. 8 2.2.3 Allow Comprehensive Plan and zoning map amendments for individual EFU parcels as allowed by State Statute,Administrative Rules and this Comprehensive Plan. FINDING: As Staff correctly states,the applicant is proposing to rezone the subject property from the EFU to the MUA-10 zone. The applicant has applied for a plan amendment to support this zone change which would identify the approximately 380 acres as Rural Residential Exception Area rather than Agricultural land. Rather than pursuing an exception to Goal 3, which would ordinarily be the method of effectuating such a change,the applicant is attempted to demonstrate that the subject property does not meet the state definition of"agricultural land." Staff is correct that the Land Use Board of Appeals allowed this approach in Wetherell v. Douglas County, Or LUBAA, (LUBA No. 2006-122,October 9,2006). The Hearings Officer also accepted this method in PA-10-5 (Rose &Associates). The facts pertinent to the subject property are sufficiently similar to those in PA-10-5 to allow the applicant to attempt to show that the subject property is not agricultural land,rather than seeking an exception to Goal 3 under state law. 2.2.4 Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. FINDING: Newland has raised questions about whether the County must adopt a nonagricultural land designation in the Comprehensive Plan,and perhaps an associated zone under the development code before the application can be approved. Those concerns appeared to be most closely associated with this policy. Staff appears to be unsure whether this policy mandates the creation of such designations prior to acting upon the applicant's request for a Comprehensive Plan amendment. Staff also notes that DLCD has encouraged the County to create such a Comprehensive Plan designation because in its opinion such a designation would enhance the planning process in the County for lands which are demonstrated to be non-resource lands. Of course,the record shows that no such Comprehensive Plan designation or zone exists currently. The recently adopted policy acknowledges this fact and provides a general directive that requires the County to at least consider such a Comprehensive Plan designation at some point in the future. The policy sets no deadline for doing so. The policy also does not dictate any consequences for failing to do so. More specifically, from a statutory construction perspective,the policy does not state that quasi-judicial Comprehensive Plan amendment applications cannot be processed and approved until such a non-resource designation is established. To read this requirement into the policy would violate the most basic rule of construction which is to not add words or phrases which have been omitted from the text. ORS 174.010. This being the case,the Hearings Officer finds that the current application presents essentially the same facts as were present in PA-07-1 (Pagel) in which Hearings Officer Karen Green found that a proposal to amend land from"Agriculture"to"Rural Residential Exception Area" could be allowed regardless of the fact that the applicant 9 was not seeking a Goal 3 exception,and that no non-resource Comprehensive Plan designation existed to accommodate land that was determined to be nonagricultural. I find that the current circumstances with regard to the requirements of the Comprehensive Plan are essentially the same as when Hearings Officer Green reached her decision in 2007. Although the above policy indicates the desired direction for the County,that work has not yet been accomplished,and there is no indication that the BOCC intended to impose a moratorium on the type of quasi-judicial Comprehensive Plan amendment applications such as the one currently proposed. Section 2.5 Water Resource Policies 2.5.24 Ensure water impacts are reviewed and,if necessary,addressed for significant land uses or developments. FINDING: Staff found, and the Hearings Officer agrees,that any proposed water use for the development of the subject property would be reviewed under any necessary land use process for the site(i.e. conditional use,tentative plat). Section 3.3 Rural Housing Rural Residential Exception Areas "In Deschutes County most rural lands are designated for farms,forests or other resources and protected as described in the Resource Management chapter of this Plan. The majority of the land not recognized as resource lands or Unincorporated Community is designated Rural Residential Exception Area. The County had to follow a process under Statewide Goal 2 to explain why these lands did not warrant farm or forest zoning. The major determinant was that many of these lands were platted for residential use before Statewide Planning was adopted. `In 1979 the County assessed that there were over 17,000 undeveloped Rural Residential Exception Area parcels, enough to meet anticipated demand for new rural housing. As of 2010 any new Rural Residential Exception Areas need to be justified through taking exceptions to farm,forest, public facilities and services and urbanization regulations, and follow guidelines set out in the OAR." FINDING: Staff is concerned that while the above language is not a policy, it may indicate that new rural residential exception areas could require an exception to the applicable Statewide Planning Goal. Newland also raises questions about the applicability of this section in both its February 21, 2012 submission and their submission received on April 20,2012. Newland essentially argues that the language quoted above stating that any new rural residential exception areas need to be justified through taking 10 exceptions"is a clear directive that the applicant in this instance must seek an exception in order to gain approval of the Comprehensive Plan amendment and zone change. As noted in the record,the above quoted language is not a policy itself,but rather an explanation of how the County desires to handle future conversion of,in this case agricultural land,to a designation and zoning which allows rural residential development. Despite the fact that the quoted language does not represent policy, I agree with Newland that it represents a confusing directive in the context of the present application. However, for the reasons discussed below I do not find that the quoted language presents a bar to the proposed Comprehensive Plan amendment and zone change. Section 3.3 of the 2011 Comprehensive Plan provides some historical context for how the County initially identified areas suitable for rural residential development. Similar to many other counties at the time prior to initial acknowledgment, local jurisdictions were allowed to identify lands which would otherwise qualify as an agricultural lands by soil type but which were already developed at rural residential densities. These areas could be identified as exception areas even though a formal exception under ORS 197.732 had not been undertaken. Regardless of their value as farmland, for example,these areas were allowed to remain in rural residential use because they were already developed or committed in some way to nonagricultural use. The subject property in this application was not initially identified in 1979 as qualifying as a de facto exception area prior to initial acknowledgment of the County's Comprehensive Plan. However, as explained above,the applicant is seeking to demonstrate that the land does not meet the definition of agricultural land, and therefore should never have been designated as agricultural land under the Comprehensive Plan or zoned for exclusive farm use. For reasons discussed more fully below,the Hearings Officer believes that the applicant is successful in doing so. To the extent that the quoted language above represents a policy,it appears to be directed at a fundamentally different situation than the one presented in this application. The quoted language addresses conversions of"farm"or"forest"land to rural residential use. In those cases,the language indicates that some type of exception under state statute and DLCD rules will be required in order to support a change in Comprehensive Plan designation. See ORS 197.732 and OAR 660, Division 004. That is not what this application seeks to do. The findings below explain that the applicant has been successful in demonstrating that the subject property is composed predominantly of nonagricultural soil types. Therefore, it is permissible to conclude that the property is not "farmland"as defined under state statute,DLCD rules,and that it is not correctly zoned for exclusive farm use. As such,the application does not seek to convert"agricultural land"to rural residential use. If the land is demonstrated to not be composed of agricultural soils,then there is no"exception"to be taken. There is no reason that the applicant should be made to demonstrate a reasons,developed or committed exception under state law because the subject property is not composed of the type of preferred land which the exceptions process was designed to protect. For all these reasons,the Hearings Officer concludes that the applicant is not required to obtain an exception to Goal 3. 11 There is one additional related matter which warrants discussion in connection with this issue.It appears that part of Staff's hesitation and caution on the issue of whether an exception might be required is rooted in the title of the Comprehensive Plan designation that would ultimately apply to the subject property—which is"Rural Residential Exception.Area." There appears to be seven countywide Comprehensive Plan designations as identified in the plan itself. These include"Agriculture,Airport Development,Destination Resort Combining Zone,Forest, Open Space and Conservation, Rural Residential Exception Area,and Surface Mining."Of the seven designations,only Rural Residential Exception Area provides for associated zoning that will allow rural residential development. As demonstrated by reference to the Pagel decision discussed above,there appears to be instances in which rural residential zoning has been applied without the underlying land necessarily being identified as an exception area. This makes the title of the"Rural Residential Exception Area"designation confusing,and in some cases inaccurate,because no exception is associated with the underlying land in question. However, it is understandable that since this designation is the only one that will allow rural residential development,that it has become a catchall designation for land types that are authorized for rural residential zoning. That is the case with the current proposal,and again,for the same reasons set forth in Hearings Officer Green's decision in Pagel, I cannot find a reason why the County would be prohibited from this practice. Chapter 23.60,Transportation Section 23.60.010,Transportation * * * The purpose of DCC 23.60 is to develop a transportation system that meets the needs of Deschutes County residents while also considering regional and state needs at the same time. This plan addresses a balanced transportation system that includes automobile, bicycle, rail,transit,air,pedestrian and pipelines. It reflects existing land use plans, policies and regulations that affect the transportation system. FINDING: Staff correctly notes that the transportation section of the Comprehensive Plan has not yet been amended. The current transportation section is applicable. Access to the subject property is proposed to be from either SE 27th Street or Stevens Road,or possibly from both roads. Staff found that if the property were to be rezoned and if a development proposal is made,there could be road improvements that may be necessary to accommodate the development. SE 27th Street is an arterial street and Stevens Road is a collector street. Staff concluded that these two roads would have the capacity necessary to accommodate the number of new dwellings that could occur in the MUA-l0 zone. Prior to the February 16, 2012 public hearing, questions were raised about the potential impact to the transportation system if the density bonus allowed for planned or cluster 12 developments were allowed in the future when a development plan is submitted for the subject property. A January 10,2012 memorandum from Kittelson and Associates addresses this issue and finds that even with the potential for increased rural housing densities that there will be no "unmitigated significant effect on the transportation system." The record shows that Senior Transportation Planner,Peter Russell,reviewed the Kittelson memo and essentially concurred. This provision can be met. • Ten acre minimum lot size for new rural residential areas. FINDING: On related topic, Newland questions whether the proposed MUA-10 zoning would be consistent with the requirements of OAR 660-004-0040(7)(i)(A)which states that for rural residential areas designated after October 4,2000,"any new lot or parcel have an area of at least ten acres." Staff responded that the proposed MUA-10 zoning designation for the subject property will have a 10-acre minimum lot size,and concluded that OAR 660-004-0040(7)(i)does not prevent the possibility of a density bonus for planned or cluster developments. Staff found that the 10-acre minimum lot size would apply outside of any request for a planned or cluster development. Newland argues that Staffs approach will not satisfy OAR 660-004-0040(7)(i)(A) because the MUA-10 zone allows for lots as small as 2 acres for such planned and cluster developments. Newland argues that for this reason the MUA-10 zone cannot be applied to the subject property as part of this application. Newland asserts that the County will be unable to enforce a 10 acre minimum lot size on the subject property at the time of development because the zone will allow smaller lot sizes as of right.Newland is also concerned that this issue must be raised and resolved at the time of this Comprehensive Plan amendment and zone change in order to properly preserve the argument, instead of leaving that discussion for some point in the future when an actual development proposal is poised for review. Newland argues that once the current proposal is approved, and if unappealed becomes acknowledged, MUA-10 zone will allow smaller lot sizes and as a result OAR 660-004-0040(7)(i)(A)will be thwarted. The Hearings Officer finds that Newland has taken OAR 660-004-0040(7)(i)(A)out of its intended context. OAR 660-004-0000 states that"[t]he purpose of this division is to interpret the requirements of Goal 2 and ORS 197.732 regarding exceptions." This division discusses rules that apply specifically to three different types of exceptions allowed under ORS 197.732 - "Physically Developed,Irrevocably Committed, and Reasons." The section identified by Newland, OAR 660-004-0040 only applies once such an exception has already been taken by the local government. The purpose of this section is"[t]o specify how Goal 14 "Urbanization" applies to rural lands in acknowledged exception areas planned for residential uses." Once again,that is not what the present application seeks to accomplish. While the 10 acre minimum lot size may apply to lands already identified as exception areas and zoned for rural residential use, the rule by its own terms does not apply to lands which are not exception areas. The Hearings Officer finds that there is no intent under this rule to apply a 10 acre minimum 13 lot size to lands which were never identified as exception areas, and if proven to be nonagricultural lands,would never require an exception in order to be zoned and developed to rural residential standards. For these reasons,the Hearings Officer finds that OAR 660-004-0040(7)(i)(A) does not prohibit the County from applying the MUA-10 zone to the subject property. Chapter 23.68,Public Facilities Section 23.68.020,Policies 1. Public facilities and services shall be provided at levels and in areas appropriate for such uses based upon the carrying capacity of the land,air and water, as well as the important distinction that must be made between urban and rural services. In this way public services may guide development while remaining in concert with the public's needs. 3. Future development shall depend on the availability of adequate local services in close proximity to the proposed site. Higher densities may permit the construction of more adequate services than might otherwise be true. Cluster and planned development shall be encouraged. 9. New development shall not be located so as to overload existing or planned facilities,and developers or purchasers should be made aware of potentially inadequate power facilities in rural areas. FINDINGS: The Staff report states that the applicant submitted letters from various service providers that indicated that services could be made available for residential use of the subject property if rezoned. Newland appears to dispute this finding by arguing that ultimately the lots that may result from an eventual development plan may rely on on-site wells for water,and that no factual analysis of the adequacy of the city sewer or infrastructure has been conducted to support the application. The record shows that some service providers have been contacted and have indicated an ability to serve the subject property, or have not objected to this Comprehensive Plan amendment and zone change. The policies identified above do not require the applicant to demonstrate at the time of the Comprehensive Plan amendment or zone change that water, sewer, storm water or other public utilities are currently sufficient to support the maximum buildout that may ultimately be allowed by the approved zoning. Here, Newland does not present evidence or argument that supports the position that rezoning the subject property to a density of approximately 38 10-acre lots is so intensive that it would"overload existing or planned facilities." For these reasons,the Hearings Officer 14 finds that the record is sufficient to demonstrate that the proposal can comply with the identified public facilities policies. Chapter 23.96, Open Space, Areas of Special Concern, and Environmental Quality ............ ........ . . .. . Section 23.96.030,Policies 10. As part of subdivision or other development review,the County shall consider the impact of the proposal on the air, water,scenic and natural resources of the County. Specific criteria for such review should be developed. Compatibility of the development with those resources shall be required as deemed appropriate at the time given the importance of those resources to the County while considering the public need for the proposed development. FINDING: Staff found, and the Hearings Officer agrees,that this policy is not applicable as the applicant is not seeking subdivision or development review at this time. The proposed rezone should have minimal impact on the air and water resources of the County, The record shows that water can be provided by either private wells, or by Avion Water Company. A. That the change in classification for the subject property is consistent with the purpose and intent of the proposed zone classification. FINDING: The purpose of the MUA-10 zone is listed under DCC 18.32 010 as follows: The purposes of the Multiple Use Agricultural Zone are to preserve the rural character of various areas of the County while permitting development consistent with that character and with the capacity of the natural resources of the area; to preserve and maintain agricultural lands not suited to full- time commercial farming for diversified or part-time agricultural uses; to conserve forest lands for forest uses; to conserve open spaces and protect natural and scenic resources; to maintain and improve the quality of the air, water and land resources of the County; to establish standards and procedures for the use of those lands designated unsuitable for intense development by the Comprehensive Plan,and to provide for an orderly and efficient transition from rural to urban land use. The applicant responded to this provision in the Burden of Proof. The Hearings Officer finds that the proposal is consistent with the purpose of the MUA-10 zone. B. That changing the zoning will presently serve the public health, safety and welfare considering the following factors: 15 1. The availability and efficiency of providing necessary public services and facilities. 2. The impacts on surrounding land use will be consistent with the specific goals and policies contained within the Comprehensive Plan. FINDING: The applicant has obtained letters from relevant service agencies and providers. Those letters are in the record. The foregoing findings for Public Facilities are incorporated here by reference.This criterion is met. C. That there has been a change in circumstances since the property was last zoned,or a mistake was made in the zoning of the property in question. FINDING: As an initial matter, Staff found that there was not a mistake made in the County's original decision to designate the property as agriculture, and in zoning the property for exclusive farm use. The land holding was large, and this site would likely not have qualified for a rural residential exception area,based on its development pattern or lack thereof, at the time. Nor was the subject property committed to any development proposal at the time (1979) it was zoned for farm use. The fact that it was in federal ownership may have been a small factor in its being zoned EFU,but the parcel size and lack of development probably played a much larger role in its current zoning designation. The applicant has addressed this criterion on pages 16-17 of the Burden of Proof. Other than the applicant's statement about federal ownership being the main reason for its current zoning, Staff agreed with the applicant's arguments on this criterion. Staff found that there have been several changes of circumstances since it was zoned for farm use in November of 1979, as outlined in the applicant's Burden of Proof statement,one of the most significant being the urbanization of the adjacent portion of the City of Bend. As argued in the record, the rural residential Comprehensive Plan designation and MUA-10 zone would be consistent with providing a transition between the urban uses in the City if Bend and the lands to the east of the subject property. OAR 660-033-0020 The applicant is arguing that the zone change is justified because the soils on the subject property are predominantly Class VII and VIII. Staff reviewed that assertion under this section and for ease of comparing the Staff report to this decision I will do so as well. The question here is whether the 380 subject property acres meets the state definition of "agricultural land." OAR 660-033-0020(1)(a) provides the definition of "agricultural land" which includes the three following categories: (A) Lands classified by the U.S.Natural Resources Conservation Service (NRCS) as predominantly Class I-IV soils in Western Oregon and I-VI soils in Eastern Oregon; 16 (B) Land in other soil classes that is suitable for farm use as defined in ORS 215.203(2),taking into consideration soil fertility,suitability for grazing; climatic conditions; existing and future availability of water for farm irrigation purposes; existing land use patterns;technological and energy inputs required;and accepted fanning practices; and ........ .............. .............. .. .......... (C) Land that is necessary to permit farm practices to be undertaken on adjacent or nearby agricultural lands OAR 660-033-0020(1)(a)(A) In response to this portion of the definition,the applicant submitted a soil investigative report,prepared by Roger Borine. In short,that report concludes that the subject property is composed predominantly of Class VII and VIII soils which do not meet the definition set forth in this administrative rule. Newland argued at both the March 20,2012 public hearing and in written submissions that in order for the County to rely on the applicant's soils report,the recently adopted Oregon statute at ORS 215.211 and DLCD rules at OAR 660-033-0030 and 0045 must be applied to this application. Newland argued that these administrative rules, adopted on October 1,2011,clearly apply to the application. This does not appear to be disputed. Newland then argued that a specific provision,OAR 660-033-0030(5)(b), which essentially mimics the statute, triggered a required review by DLCD of the Borine report. Newland argued that the County was prohibited by both the statute and DLCD rule from relying on the report until the DLCD had conducted a review under the rigorous provisions of OAR 660-033-0045. The applicant and DLCD disagreed with Newland. Specifically,the applicant provided an April 3,2012 letter from DLCD representative Katherine Daniels in which she argues that OAR 660-033-0030(5)(b)is only triggered where an applicant and the local government desired to rely upon a soils report, such as the Borine report,to challenge or contradict the NRCS Soil Survey, which is considered to be the primary source of soils information for the state. OAR 660-033-0030(5)(b) states: "If a person concludes that more detailed soils information than that contained in the Internet soil survey of soil data and information produced by the National Cooperative Soil Survey operated by the NRCS of the USDA has of January 2, 2012,would assist a county to make a better determination of whether land qualifies as agricultural land, the person must request that the department arrange for an assessment of the capability of the land by a professional soil classifier who is chosen by the person,using the process described in OAR 660-033-0045." Newland argued, and the Hearings Officer agrees,that this provision may be applicable in the context of a request to change the zoning of EFU land to a non-resource zone. 17 OAR 660-033-0030(5)(c). However,the Hearings Officer disagrees with Newland that a DLCD analysis is necessary as part of the current application. I also disagree with Ms. Daniels's interpretation of OAR 660-033-0030(5)(b),because it reads too much into the administrative rule and probably grants the department more discretion than the statute intends,but my disagreement is not relevant to the review of this application. In this case,Newland reads the administrative rule far more strictly than the actual language of the rule indicates. The rule does not require that any time an applicant submits a soils report in support of an application to rezone EFU land to a non-resource zone that the report must be vetted by DLCD. That analysis is only triggered when the report"would assist a county to make a better determination of whether land qualifies as agricultural land." Where the NRCS Soils Survey itself is sufficient to demonstrate that the land in question is predominantly Class VII and VIII soils, and a supplemental soils report merely confirms that data,the rule is not necessarily triggered. Here,the record contains three sets of corroborating data which all appear to indicate that at least 50 percent,and as much as 70 percent, of the subject property is composed of Class VII and VIII soils. The primary data is the information submitted by the applicant in its April 18,2012 letter which contains the NRCS Soil Survey. The supplemental data includes the Borine report, and calculations submitted by Staff which were initially identified in a March 20,2012 e-mail from Tim Berg to Paul Blikstad,and then refined and submitted during the open record period as a table showing that the subject property is composed of at least 51 percent Class VII and VIII soils. Taken together,this information is sufficient to demonstrate that the subject property is not predominantly agricultural land as defined in administrative rule. While the Borine report is helpful in confirming the base soil survey data,the application is not solely dependent on the report, and the Hearings Officer would consider it unreasonable to expect the applicant to seek and obtain an additional DLCD review of the report when other reliable data adequately serves the same purpose. Newland submitted criticism of the Borine report in one of its April 20,2012 submissions arguing that the report does not adequately explain a distinction between Class VI and Class VII components of some of the Deskamp-Gosney soils on the property. The Hearings Officer does not find these arguments persuasive. Newland's criticisms appear to be adequately answered by the applicant submission of the NRCS Soils Survey and Staff calculations of Class VII and VIII soil types on the subject property. The Hearings Officer would also note that while Newland is careful to confine its criticism to the Borine report,to be successful in demonstrating that the subject property is predominantly composed of Class I-VI soils,and therefore not eligible to be rezoned from EFU zoning,Newland might be required to prove that the NRCS Soils Survey for the subject property is incorrect. Such a challenge would appear to require a soils report that would"assist a county to make a better determination" about whether the subject property qualifies as agricultural land, and would likely trigger the DLCD review required by OAR 660-033-0030(5)(b). In other words,the "person" identified in ORS 18 215.211 and OAR 660-033-0030(5)(b)could be the applicant or any opponents of an application as well. OAR 660-033-0020(1)(a)(B) OAR 660-033-0020(1)(a)(B)requires that the applicant demonstrate that even though the subject property may be composed of soil Classes VII and VIII,the property is also not "suitable for farm use." The state administrative rules implementing Goal 3 explain how local governments are to determine whether land is suitable for farm use. OAR 660-003-0030(2) * * * whether land is "suitable for farm use" requires an inquiry into factors beyond the mere identification of scientific soil classifications.The factors are listed in the definition of agricultural land set forth at OAR 660-033-0020(1)(a)(B). This inquiry requires the consideration of conditions existing outside the lot or parcel being inventoried. Even if a lot or parcel is not predominantly Class I-IV soils or suitable for farm use, Goal 3 nonetheless defines as agricultural "lands in other classes which are necessary to permit farm practices to be undertaken on adjacent or nearby lands." A determination that a lot or parcel is not agricultural land requires findings supported by substantial evidence that addresses each of the factors set forth in OAR 660-033- 0020(1). (3)Goal 3 attaches no significance to the ownership of a lot or parcel when determining whether it is agricultural land.Nearby or adjacent land, regardless of ownership,shall be examined to the extent that a lot or parcel is either "suitable for farm use" or"necessary to permit farm practices to be undertaken on adjacent or nearby lands" outside the lot or parcel. Thus, OAR 660-033-0030(2)requires a review of: 1) fertility,2) suitability for grazing, 3) climatic conditions,4) existing and future availability of water for farm irrigation purposes, 5)existing land use patterns, 6)technological and energy inputs required, 7) and accepted farming practices. In addition to addressing these seven factors,the Land Use Board of Appeals has recently explained that these two provisions read in conjunction with Oar 660-033-0020(1)(a)(B) allow a local government to consider whether"a reasonable farmer"would be motivated to put the land to agricultural use. Wetherell v. Douglas County, Or LUBA ,LUBA No. 2010-052, September 16,2010. LUBA has also held that where the question of whether the land can be used for grazing has been raised in the local proceedings that OAR 660-033-0030(3) requires that the local government consider whether the subject property can be used in conjunction with adjoining or nearby agricultural or grazing operations. Wetherell v. Douglas County(Garden Valley Estates), 58 Or LUBA 101, 116 (2008). 19 On this topic, Staff found: "The use of the subject property for farm use in conjunction with adjacent lands is not possible. There is no farm use on the adjacent properties. It would not be combined with any other adjacent land for farming to occur. The property is not adjacent to,or intermingled with,lands in class I-VI soils. A small portion of the subject property(approximately 12 acres)is already located within the Bend urban growth boundary." These findings appear to be supported by the Burden of Proof,and the Hearings Officer cannot find any substantial disagreement from participants in this proceeding including Newland. After reviewing the record,the Hearings Officer agrees with the findings of Staff. OAR 660-033-0020(1)(a)(C) This rule addresses whether retaining the subject property as agricultural land is necessary to allow adjacent properties to continue to function as agricultural land. For the same reasons discussed in the findings for OAR 660-033-0020(1)(a)(B),I find that the application is consistent with OAR 660-033-0020(1)(a)(C). OAR 660,Division 12,Transportation Planning Rule OAR 660-012-060,Plan and Land Use Regulation Amendments. (1) Amendments to functional plans,acknowledged Comprehensive Plans,and land use regulations which significantly affect a transportation facility shall assure that allowed land uses are consistent with the identified function,capacity,and performance standards (e.g. level of service,volume to capacity ratio, etc.) of the facility.This shall be accomplished by either: (a) Limiting allowed land uses to be consistent with the planned function, capacity and performance standards of the transportation facility; (b) Amending the TSP to provide transportation facilities adequate to support the proposed land uses consistent with the requirements of this division; (c) Altering land use designations, densities,or design requirements to reduce demand for automobile travel and meet travel needs through other modes; or (a) Amending the TSP to modify the planned function, capacity and performance standards,as needed,to accept greater motor vehicle congestion to promote mixed use,pedestrian friendly development where multimodal travel choices are provided. (2) A plan or land use regulation amendment significantly affects a transportation facility if it: (a) Changes the functional classification of an existing or planned transportation facility; 20 (b) Changes standards implementing a functional classification system; (c) Allows types or levels or land uses which would result in levels of travel or access which are inconsistent with the functional classification of a transportation facility; or (d) Would reduce the performance standards of the facility below the minimum level identified in the TSP. (3) Determinations under subsections (1)and(2)of this section shall be coordinated with affected transportation facility and service providers and other affected local governments. FINDING: Staff found, and the Hearings Officer agrees,that the above language is applicable to the applicant's proposal because it involves an amendment to an acknowledged plan. The applicant is not proposing any land use development of the property at this time and has indicated that future development may include rural residential uses. The applicant submitted a transportation impact analysis(TIA)with the application and this analysis was later supplemented by the January 10, 2012 Kittelson memorandum noted in the findings above. Staff found that the TIA,with the additional analysis to include the density bonus,demonstrates that the transportation facilities in the area will not be impacted to the point of changing the functional classification of any road, or affecting the performance standards of the TSP. The Hearings Officer agrees. The record shows that Staff sent(notice)of the proposed plan amendment and zone change to a total of 16 different public agencies,including the City of Bend Engineering, Bend Fire Department, Central Electric Cooperative, Pacific Power and Light,Oregon Department of Transportation, Bend-La Pine School District, County Road Department, Bend Metro Parks and Recreation District,Arnold Irrigation District, Central Oregon Irrigation District, Watermaster,Bureau of Land Management, PG&Gas Transmission, Qwest). The submitted responses are listed in the foregoing Public Agency comments. Staff found,and the Hearings Officer agrees,that this notice complies with the"shall be coordinated with affected transportation facility and service providers"as listed above. OAR 660,Division 15,Statewide Planning Goals and Guidelines FINDING: Findings regarding the Statewide Planning Goals and Guidelines are provided below: Goal 1, Citizen Involvement.The Planning Division has provided notice of the proposed plan amendment and zone change to the public through individual notice to affected property owners,the applicant will be posting a"proposed land use action sign," and notice of the public hearing will be in the"Bend Bulletin"newspaper. In addition, a public hearing will be held on the proposed plan amendment/zone change. Goal 2,Land Use Planning. Goals,policies and processes related to zone change applications are included in the Deschutes County Comprehensive Plan, and Title 18 of 21 the Deschutes County Code. The application of the processes and policies/regulations are documented within this Staff report. Goal 3,Agricultural Lands. Based on the evidence and argument in this proceeding, the applicant has successfully demonstrated that the subject property is no agricultural land. Goal 3 does not apply. Goal 4,Forest Lands.The existing site and surrounding areas do not include any lands that are zoned for,or that support, forest uses. Goal 5, Open Spaces,Scenic and Historic Areas and Natural Resources. According to the submitted information,the site has caves that are required by the agreement between the applicant and the Bureau of Land Management to preserve and protect the existing caves on this property area. The applicant has committed that this will occur. Goal 6,Air,Water and Land Resources Quality. The applicant does not propose a specific use for the property at this time. Rezoning the property to MUA-10 will not impact the quality of the air,water, and land resources. Goal 7, Areas Subject to Natural Disasters and Hazards.This goal is not applicable because the subject property is not located in a known natural disaster or hazard area. Goal 8,Recreational Needs.The proposed plan amendment and zone change do not affect recreational needs. Goal 9,Economy of the State. This goal is to provide adequate opportunities throughout the state for a variety of economic activities. The proposal will not adversely impact economic activities of the state or area. Goal 10,Housing. Since the applicant is not proposing a housing development at this time,this goal is not applicable and the applicant's zone and plan changes will not affect the supply of needed housing. Goal 11,Public Facilities and Services. The applicant's proposal will have no adverse effect on the provision of public facilities and services to the subject site. Goal 12,Transportation. The above findings on the Transportation component of the Comprehensive Plan and TPR demonstrate that rezoning the property to MUA-10 will not adversely impact transportation facilities. Goal 13,Energy Conservation. Since no specific development is associated with the proposed plan amendment and zone change,the proposal will not have an effect on energy use or conservation. 22 Goal 14,Urbanization. This goal is not applicable because the applicant's proposal does not affect property within an urban growth boundary and does not promote the urbanization of rural land. Goals 15 through 19. These goals do not apply. IV. CONCLUSION: Based on the record and the Findings of Fact and Conclusions of Law set forth above,the Hearing Officer recommends that the application be APPROVED. /4444* L Kenneth D. Helm,Hearings Officer A DECISION BY THE HEARINGS OFFICER BECOMES FINAL TWELVE (12) DAYS AFTER THE DATE OF MAILING,UNLESS APPEALED BY A PARTY OF INTEREST. Dated this 10th day of July,2012 Mailed this 10th day of July,2012. 23 REVS r LEGAL COUNSEL For Recording Stamp Only DECISION OF DESCHUTES COUNTY BOARD OF COMMISSIONERS • FILE NUMBER: PA-11-7, ZC-11-2 • • • APPLICANT/ State of Oregon Department of State Lands PROPERTY OWNER: do Douglas Parker,Asset Planner 775 Summer Street NE, Suite 100 Salem, OR 97301 REQUEST: The applicant requests approval of a Plan Amendment to change the designation of certain property from Agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use (EFU-TRB) to Multiple Use Agricultural (MUA-10), for approximately 380 acres. STAFF REVIEWER: Paul Blikstad, Senior Planner HEARING DATES: September 24, 2012 and December 3, 2012 RECORD CLOSED: December 3, 2012 I. APPLICABLE STANDARDS AND CRITERIA: Title 18 of the Deschutes County Code,the County Zoning Ordinance Chapter 18.16, Exclusive Farm Use Zone Chapter 18.32, Multiple Use Agricultural Zone Chapter 18.136,Amendments Title 23 of the Deschutes County Code, Deschutes County Comprehensive Plan Chapter 2, Resource Management Chapter 23.64,Transportation System Plan Oregon Administrative Rules, Chapter 660 Division 12,Transportation Planning OAR 660-012-0060, Plan and Land Use Regulation Amendments Division 15, Statewide Planning Goals and Guidelines II. FINDINGS OF FACT: Exhibit"D"to Ordinance 2013-009 Page 1 of 7 The Board of County Commissioners ("Board") adopts the Hearings Officer's Findings of Fact,except as specifically amended as follows. F. Proposal: The applicant is requesting approval of a plan amendment to change the comprehensive plan designation on approximately 380 acres of the subject property from Agriculture to Rural Residential Exception Area; and a zone change from Exclusive Farm Use (Tumalo/RedmondlBend subzone) to the Multiple Use Agricultural (MUA 10) zone. The applicant is not requesting a goal exception to Statewide Planning Goal 3, Agricultural Land. The applicant is instead relying on the premise that the portion of the subject property west of the east boundary of the gas pipeline easement is predominantly not agricultural land, based on the Natural Resources Conservation Service Soil Survey Map, and a soils analysis conducted by the applicant's soil scientist. H. Procedural History: The subject property (tax lot 1800) was approved for three previous land use applications as follows: CU-97-132, A conditional use permit to establish a mainline valve and blowdown assembly for an existing natural gas pipeline. This application was approved in January of 1998, mailed out on January 26, 1998. The applicant was Pacific Gas Transmission Company. CU-04-21, A conditional use permit to establish a utility facility consisting of an electric substation. The applicant was Central Electric Cooperative'. PS-09-4, Department of State Lands sign-off for a renewal of Central Electric Cooperative's power line easement across State lands. The applicant was Central Electric Cooperative. In addition to the procedural hearing described in the Hearings Officer's decision, the Board adds that the Hearings Officer's written recommendation for approval was mailed out on July 10,2012. Because the subject property is designated agricultural land, a de novo hearing in front of the Board is required under Deschutes County Code 22.28.030(C). The de novo hearing in front of the Board was conducted on September 24, 2012. The oral portion of the hearing was closed on that same day, and the written record was left open until October 10, 2012 for additional comments/submittals. A rebuttal period for the applicant was left open until October 26, 2012. During the applicant's rebuttal period, the applicant submitted what the Planning Division determined was new information. Based on that submittal, the Board determined that reopening the record was necessary to allow all parties to review and comment on the new information. The Board signed Order No. 2012-038, reopening the public hearing, but limiting it only to testimony regarding soils classifications. The Board conducted the reopened hearing on December 3, 2012. The oral and written records were closed at the end of the reopened hearing. The Board conducted deliberations for a decision on the proposed plan amendment/zone change applications on December 17, 2012. The Board upheld the Hearings Officer's decision and approved the request, subject to staff preparing a written decision for the Board's review at a later meeting. This decision constitutes the final decision by the Board in this matter. 'This electric substation was never constructed. The subject property remains undeveloped. Exhibit"D"to Ordinance 2013-009 Page 2 of 7 III. CONCLUSIONS OF LAW: The Board adopts the Hearings Officer's Conclusions of Law, except as specifically amended herein. 2. Section 18.136.020, Rezoning Standards The applicant for a quasi Judicial rezoning must establish that the public interest is best served by rezoning the property. Factors to be demonstrated by the applicant are: A. That the change conforms with the Comprehensive Plan,and the change is consistent with the plan's introductory statement and goals. Chapter 2, Resource Management Section 2.2,Agricultural Lands Polices 2.2.4 Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. FINDING: Newland raised questions about whether the County must adopt a nonagricultural land designation in the Comprehensive Plan, and perhaps an associated zone under the development code before the application can be approved. Those concerns appeared to be most closely associated with this policy. The record shows that no such Comprehensive Plan designation or zone exists currently. The recently adopted policy acknowledges this fact and provides a general directive that requires the County to at least consider such a Comprehensive Plan designation at some point in the future. The policy sets no deadline for doing so. The policy also does not dictate any consequences for failing to do so. More specifically,from a statutory construction perspective, the policy does not state that quasi-judicial Comprehensive Plan amendment applications cannot be processed and approved until such a non-resource designation is established. To read this requirement into the policy would violate the most basic rule of construction which is to not add words or phrases which have been omitted from the text. ORS 174.010. This being the case, the Hearings Officer found and the Board concurs that the current application presents essentially the same facts as were present in PA-07-1 (Pagel) in which Hearings Officer Karen Green found that a proposal to amend land from "Agriculture" to "Rural Residential Exception Area" could be allowed regardless of the fact that the applicant was not seeking a Goal 3 exception, and that no non-resource Comprehensive Plan designation existed to accommodate land that was determined to be nonagricultural. The Hearings Officer found that the current circumstances with regard to the requirements of the Comprehensive Plan are essentially the same as when Hearings Officer Green reached her decision in 2007 on Pagel. Although the above policy indicates the desired direction for the County,that work has not yet been accomplished, and the Board finds that it was not intended to impose a moratorium on the type of quasi-judicial Comprehensive Plan amendment applications such as the one currently proposed. • Exhibit"D"to Ordinance 2013-009 Page 3 of 7 OAR 660-033-0020, Agricultural Land definitions The applicant testified and included written materials stating that the zone change is justified because the soils on the subject property are predominantly Class VII and VIII. The reopened hearing was allowed specifically to obtain additional testimony on the soils classifications. The question here is whether the 380 acres proposed for a rezone meets the state definition of "agricultural land? OAR 660-033-0020(1)(a) provides the definition of"agricultural land" which includes the three following categories: (A) Lands classified by the U.S. Natural Resources Conservation Service(NRCS)as predominantly Class I-IV soils in Western Oregon and I-VI soils in Eastern Oregon; (B) Land in other soil classes that is suitable for farm use as defined in ORS 215.203(2), taking into consideration soil fertility, suitability for grazing; climatic conditions;existing and future availability of water for farm Irrigation purposes;existing land use patterns; technological and energy inputs required;and accepted farming practices;and (C) Land that is necessary to permit farm practices to be undertaken on adjacent or nearby agricultural lands OAR 660-033-0020(1)(aNA) Agricultural Land under this section of the OAR's lists Class 1-VI soils as being agricultural land in Eastern Oregon.2 The subject property was determined by Staff, based on the Natural Resource Conservation Service map,to have four(4)soil types,which are listed as follows: 58C. Gosney-Rock outcrop-Deskamp complex, 0 to 15%slopes 38B, Deskamp-Gosney complex, 0 to 8%slopes 157C,Wanoga-Fremkle-Rock outcrop complex, 0 to 15% slopes 36A, Deskamp loamy sand,0 to 3%slopes The 58C soil is found to have the following composition: 50%Gosney soil and similar inclusions 25% Rock outcrop 20% Deskamp and similar inclusions 5%contrasting inclusions The 38B soil is found to have the following composition: 50% Deskamp soil and similar inclusions 35%Gosney soil and similar inclusions 15%contrasting inclusions The 1570 soil is found to have the following composition: 35%Wanoga soil and similar inclusions 30% Fremkle soil and similar inclusions 20% Rock outcrop 2 Eastern Oregon is defined in OAR 660-033-0020(5):"means that portion of the state lying east of a line beginning at the intersection of the northern boundary of the State of Oregon and western boundary of Wasco County,then south along the western boundaries of the Counties of Wasco,Jefferson,Deschutes and Klamath to the southern boundary of the State of Oregon. Exhibit"D"to Ordinance 2013-009 Page 4 of 7 15%contrasting inclusions The 36A soil is found to have the following composition: 85% Deskamp soil and similar inclusions 15%contrasting inclusions Planning Staff requested, prior to the staff report being written, that Geographic Information Systems Specialist Tim Berg calculate the acreages of each soil type within the approximately 380-acre portion of the DSL property. Those calculations were as follows: 38B—203.83 acres 58C—153.13 acres 157C—3.98 acres 36A—2.06 acres Total 363 acres Testimony at the December 4, 2012 reopened hearing included input from Thor Thorson,Acting NRCS State Soil Scientist. Mr. Thorson indicated there are three types of soils classification measures which can be taken to determine whether land falls within different classes of soils. These three measures are listed as follows: • Most limiting soil component • Most dominant soil component • Weighted average of major soil components The most limiting soil component assigns the total area of a soil complex to the lowest soil classification. In the case of the subject plan amendment/zone change request, the 38B soil complex has the Gosney soil (class 7—71.34 acres) as the lowest classification; the 58C soil has the Rock outcrop (class 8 — 38.28 acres) as the lowest classification; and the 157C soil complex has the Rock outcrop (class 8 - .79 acres) as the lowest classification. The combined acreages for these three soil types are 110.41 acres, which is approximately 30% of the 363 acres. The property would thus be considered agricultural land, as more than 50% of it would be class 6 soils under this method. The most dominant soil component assigns the total area of a soil complex to the soil type that has the highest percentage of soil classification. In the case of the subject plan amendment/zone change request,the 38B soil complex has the Deskamp soil (class 6)with the highest percentage within the soil complex (203.83 acres); the 58C soil complex has the Gosney soil (class 7) with the highest percentage within the soil complex (153.13 acres); the 157C soil has the Wanoga soil (class 6) with the highest percentage within the soil complex (3.98 acres); and the 36A soil is all class 6(2.06 acres). The combined total of the soils with the dominant soil type class 6 is 209.87 acres, which is approximately 58% of the area of the property. The property would thus be considered agricultural land, as more than 50% of it would be class 6 soils under this method. The weighted average of major soil components assigns a percentage/acreage to each soil type within the complex based on the NRCS soil breakdowns. In the case of the subject plan amendment/zone change request, the break downs are listed as follows: Soil No. Soil type ` Class 6 soils Class 7 soils Class 8 soils %Class 7/8 area 36A 2.06 acres 2.06 acres 0% Exhibit"D"to Ordinance 2013-009 Page 5 of 7 38B 203.83 acres 101.91 acres 71.34 acres 35% 58C 153.13 acres 30.62 acres 76.56 acres 38.28 acres 75% 157C 3.98 acres 2.58 acres .79 acre .02% 363 acres 137.17 acres 147.9 acres _ 39.07 acres 51.5% The Board finds that it has the discretion to choose between the three methods presented by Mr.Thorson. The Board finds that the weighted average is the best and most accurate method for determining soils classifications, as it takes into account individual soil types within each complex. The weighted average method determined in the above case that more than 50% of the subject property was class 7 and 8 soils. Based on this figure, the subject property is not agricultural land,as the predominate soil types on the subject property are class 7 and 8 soils. Each of the above three methods for determining soil classifications is based on the Web Soil Survey of the Natural Resources Conservation Service. Specifically the mapping that was done for Deschutes County under the Soil Survey of the Upper Deschutes River Area,Oregon. The Board notes that the Borine/Sage West LLC soils investigation submitted with the applications, originally dated July 6, 2010, and amended (July 26, 2011) to include a reduced area for the plan amendment/zone change request stated that 56% of the subject property was land capability class 7 and 8 soils, and 44% class 6 soils. The Board finds that the soils investigation report merely corroborates the finding that the subject property is more than 50% class 7 and 8 soils and is not considered agricultural land. The soils report is thus not subject to DLCD review under Oregon Administrative Rules 660-033-0030(5), as the Board did not specifically use the soils report to determine that the subject property is not agricultural land. As for the contrasting inclusions, the Board finds that staff's choice of not assigning a percentage to the contrasting inclusions to be the best method. This is the best method because, under the state administrative rules, an applicant need not provide a detailed soil classification study. Therefore, contrasting inclusions cannot be formally determined, as the percentages are not identified specifically within the soil type descriptions. As an example of this,the NRCS soils information indicates that for the 38B soil (Deskamp-Gosney complex), the contrasting inclusions are: Clovkamp soils in swales; soils that are very shallow to bedrock or are on ridges; and rock outcrop. The 58C soil (Gosney-Rock outcrop-Deskamp complex) has contrasting inclusions of: Clovkamp soils in swales; and soils that are very shallow to bedrock. The Board notes that the Clovkamp soils are class 4 soils, and the soils that are very shallow to bedrock and the rock outcrop are class 7 and 8 soils. For the purposes of this review and decision, the Board finds that determining the percentages of contrasting inclusions is not necessary,given that the property is more than 50 percent class 7 and 8 soils. OAR 660, Division 15,Statewide Planning Goals and Guidelines FINDING: The Hearings Officer's findings regarding the Statewide Planning Goals and Guidelines are incorporated herein: Goal 3, Agricultural Lands. Based on the evidence and argument in this proceeding, the applicant has successfully demonstrated that the subject property is not agricultural land. Goal 3 does not apply. The Board concurs with this finding. 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'',,obi -''�.1"-'T4 yh� 1Y r�yL' 1 .,y f 5 { i P 7j(6, ";',1'.i9+}1h” M 0h l!",p i) , iff4 &Z7, �' c y :� �"!ha„�q .• r tl 7 ww h i1L 41 i L', '6 y44 iap,F y r- a , 70/ , W °° ?� = a•.Z • • • b a aI } ` �5rf �1 a d� rya ` I 1-d • 5 r•mad, Ja ICv" .'#)F " �i` � Itaelryfi' 0 n�;w tits 7 d F OI ii'�•�71iryplr stir'"vi ry a4 ; t7 464 y,4�1re•y R Ii r tgr e yl4 , 0 o i 0 • W .Y l { Hilary Garrett 21663 Paloma Drive Bend, OR 97701 January 29, 2014 Paul Blikstad Senior Planner Deschutes County Community Development Department 117 NW Lafayette Ave. Bend, OR 97708-6005 Dear Mr. Blikstad: My name is Hilary Garrett. I reside in Bend at 21663 Paloma Dr. I would like to comment on the proposal by Newland Real Estate Group to change the zoning of the 171-acre parcel they own near Butler Market and Hamby Roads from EFU-TRB to MUA-10. The Bend Bulletin, in an article published 1/20/14, quoted Dave Wood, Newland's regional president thusly: "....we're just trying to get (the land) into a residential zone...Certainly we hope to develop."According to Mr. Wood, Newland Group would like to put 1,000 homes on this property. When Deschutes County Hearings Officer Karen Green recommended denying the zone change proposal, the denial focused on the failure of soil tests to demonstrate that the land is not suitable for agricultural use. I would like to emphasize that this land is agricultural land protected by Oregon's Statewide Planning Goals & Guidelines Goal 3: Agricultural Lands (OAR 660-015-0000(3). The Goal states that: 'Agricultural lands shall be preserved and maintained for farm use, consistent with existing and future needs for agricultural products ..."and that, "Counties may authorize farm uses and those nonfarm uses defined by commission rule that will not have significant adverse effects on accepted farm... practices': http://www.oregon.gov/LCD/docs/goals/goal3.pdf Rezoning this land will have a significant adverse effect on the area's future needs for agricultural products. If this land is developed, it will never again be usable as farm land. Of the 171 acres of Newland Communities land, 103 acres have water rights (i.e., are irrigated), which suggest that its highest and best use is for farming. Newland Communities land is tax- deferred agricultural land (specifically, seven of the nine tax lots are receiving tax deferral and has very recently been used to raise income crops such as hay and alfalfa. It is rightly zoned as Exclusive Farm Use (EFU), eligible for urbanization ONLY if there is an insufficient supply of higher priority lands. On July 26, 2007, the Oregon Department of Agriculture's James Johnson formally opposed the inclusion of farm lands in Bend's expanded UGB. His letter is part of the public record: http://www.ci.bend.or.us/depts/community development/docs/UGB ODA Testimony 7 27 1 .pdf Hilary Garrett Page 2 1/30/2014 Additionally, urbanizing Hamby Road farmlands will financially harm the Central Oregon Irrigation District, as evidenced in a letter from its District Secretary/Manager Steve Johnson (please see Appendix A). The applicant Newland Communities has failed to analyze—on a parcel by parcel basis—the class of soils of the land it wishes to have rezoned. In eastern Oregon, Class I, II, III, IV, V and VI soils are suitable for farm use taking into consideration ... "suitability for grazing, climactic conditions, existing and future availability of water for farm irrigation purposes, existing land use patterns, technological and energy inputs required, or accepted farming practices". Additionally, the applicant has declined to submit parcel-by-parcel soil samples but rather, has provided samples that were to act as a proxy for the entire tract. Natural Resources Conservation Service (NRCS) maps identify that 60 percent(103 of the 171 acres) of the Newland Communities land proposed for rezoning have Deskamp loamy sand and is virtually flat with very low grade slopes. Deskamp loamy sand soils are considered "high value" farm land when irrigated., particularly when the land is relatively flat. In the late 1970s, the County's records show that soils on this property were predominantly Class I-VI soils. The applicant's soil study does not justify the proposed plan amendment and zone change to MUA-10 because it analyzed soils on the entire subject property rather than on a parcel-by-parcel basis. The Department of State Lands (DSL) land which was rezoned by the County (as noted in the County's Community Development Memorandum dated November 26, 2013) was NOT irrigated land, and has lower value soil (e.g., the soil was of a poorer quality (had far less value for agriculture) than that of the Newland parcels and, thus, could not be used for agriculture, particularly as it has no water rights). The Newland parcels and the Department of State Lands' Section 11 holdings are not analogous. In closing, rezoning the Newland Communities land from EFU to MUA-10 does not represent the highest and best use of the land in question. It violates Oregon Administrative Rule (OAR)1/29/2014. Please, Deschutes County,do NOT pursue reckless, precedent- setting land use planning strategies that will serve to weaken Oregon's important statutes and guidelines. Respectfully submitted, 4; Hilary ett 21663 Paloma Dr. Bend, OR 97701 M Comments of Stuart Garrett, MD on the Newlands Corporation Proposal on 2/5/2014 Thank you for the opportunity to speak against the Newland Corporation's request for a Plan Amendment and Zone Change near Butler Market Rd. I have lived and practiced medicine in Bend for over 35 yrs and have lived within a half mile of the property under review for 33 years. I view this request as a proposal for a bailout. Newland is a major corporation with developments nationwide. They are not a long term Deschutes County resident widow needing money for retirement or a person needing cash for cancer treatment. Newland made a bad corporate real estate investment decision. That is their fault and does not need to be remedied by Deschutes County. There were a lot of people who bought land in 2007 who are losing money. They didn't get bailed out, neither should the Newland Corp. We don't need the 1000 homes they proposed. Newland Corp could have been smarter and bought land that would have been infill within the UGB. They chose to buy ag land well outside the UGB and roll the dice for a zone change. They lost. To allow them to move forward puts added pressure on schools, roads, and sewer. I question their soils analysis since nearly all of the properties surrounding them have ag uses including hayfields, productive grazing land, and irrigated pasture. In fact 7 of 9 of the parcels have farm deferrals and 104 of the 170 acres have irrigations rights. I have to laugh when they allege that the parcels are unsuitable for ag because it is "too cold and dry." If so, then most of the ranchers east of the Cascades should quit. There is also no need for more "rural residential exceptions" since there are 17,00calready identified. The Newland Corporation proposal violates both the spirit and letter of Oregon Land use laws. Violations include Goal 3 to preserve ag lands, Goal 5 to conserve open space, Goal 12 which causes excess travel, Goal 14 as the proposal does "prevent orderly and efficient transition from rural to urban land use" and also promotes the "urbanization of rural lands." If Tom McCall were alive today he would laugh at their request and just say NO. This situation is exactly why we have land use laws in Oregon. Say no to this and tell them that Oregon is not Texas, Calif, Fla or Arizona, where they have gotten by with developments that promoted urban sprawl. Thank you Respectfully submitted, Stuart Garrett, MD �. 14 21663 Paloma Drive Bend, OR 97701 w 4 Testimony of Paul Lipscomb,Sisters/Cloverdale Resident before the Deschutes County Board of Commissioners, February 5, 2014 on Newland Real Estate's Application for a Comprehensive plan Amendment and Zone Change This Comprehensive Plan Amendment and Zone Change Application should be denied because it does not comply with Statewide Planning Goals 3 and 14. The Deschutes County Hearings Officer,the Oregon Department of Land Conservation and Development,and the Oregon Agriculture Department have all carefully examined this proposal and concluded that it does not comply with the Oregon Statewide Planning Goals and Guidelines Goal 3: "To preserve and maintain agricultural lands." This Board should agree with the well-researched and well- reasoned conclusions by these experts. if not,this Board's decision is likely to undergo further scrutiny by the Land Use Board of Appeals, and any such appeal and remand procedure will likely prove needlessly expensive. The present tract before you is a large 171 acre block of rural land comprised of several parcels. Most of this land has been irrigated. There are 103 acres of water rights for agricultural irrigation,and much of it has been commercially farmed in the past. Yet the applicant asserts that it cannot be classified as agricultural lands because it cannot be"profitably"farmed under currently common regional farming practices. But that is not the applicable legal test under Oregon law, as has been pointed out by the Deschutes County hearings officer,and the Oregon Department of Land Conservation and Development and the Oregon Department of Agriculture. (See also Wetherell (Foley III),62 Or LUBA 80(2010): "while profitability is a permissible consideration in determining whether land is agricultural under the rule definition, it is a relatively minor consideration, and one with a large potential for distracting the decision maker from the primary considerations . . . .") If the applicant's proposed profitability criteria for agricultural lands were to be adopted here, a broad and powerful precedent would be set. And under that precedent most other irrigated farm tracts in Deschutes County would qualify as non-resource lands rather than agricultural lands. By the applicant's own calculations,82%of those farms are also not"profitable" under the applicant's proposed criteria. I would also point out that although much of the irrigated farm lands in Deschutes County may struggle to make a profit under current economic farming practices and conditions,that has not always been the case in the past,and it may well not be the case in the future. There are many new agricultural research developments available for implementation now and in the immediate future,and one in particular that apparently has good economic potential for Central Oregon,genetically modified drought resistant wheat, has already been successfully introduced in Egypt,Australia,and China,and it is currently under development by several major seed companies in the United States. (See for example the attached recent study done by the Department of Agribusiness and Applied Economics of North Dakota State University,which is entitled Valuing New Random GM Traits: The Case of Drought Tolerant Wheat, June, 2012 at page 23: "The results indicate that the value of drought tolerant wheat using GM technology is in the money at each phase of development.") r And significantly,this county is already in the process of considering the adoption of a non-resource lands designation in a careful,deliberative and public process through our Planning Commission. That process,which is already underway,should be allowed to continue unimpeded by an ad hoc adoption of the applicant's novel profitability criteria. In addition,the Oregon Department of Land Conservation and Development and the Oregon Department of Agriculture have jointly concluded that this application is also inconsistent with Oregon's Statewide Goal 14, Urbanization,although the hearings officer disagreed. Statewide Goal 14 declares that it is the State of Oregon's public policy"To provide for an orderly and efficient transition from rural to urban land use." This proposal violates that public policy because it would allow conversion of a large block of land zoned EFU to MUA—10,which in turn would allow up to 7.5 dwelling units per acre within a cluster development on 35%of the existing tract. (The balance of 65%would start out as designated open space but would be subject to redeveloped if and when the property came into the City of Bend's urban growth boundary.) That kind of intensive development with such a high residential density is urban, rather than rural in nature,and it would be inconsistent with the existing rural character of the surrounding properties. Simply put, it would be uncoordinated urban sprawl.The City of Bend would not have any voice in how that urban style development would be plotted or how the development process should best proceed in a manner that would be orderly,efficient,and consistent with the city's future growth in that direction, as well as with the accompanying public need for coordinated water, sewer and transportation infrastructure Connections with the rest of the city. As the applicant itself declared in its final argument before the hearings officer,the applicant acquired this property in early 2007"because it was a good candidate for inclusion in the Bend UGB, and the hearings officer made a similar finding: "The applicant acquired the parcels comprising the subject property because they had been identified for inclusion in the Bend UGB . . . " And in an article on January 20,2014 the Bend Bulletin reported that according to Dave Wood,the regional president for Newland: "The company initially hoped to build about 1,000 homes on the land . . . ." The applicant's bet that the Bend UGB would soon be extended to include this property was probably a good one in early 2007, before the local real estate market crashed, but in 2009 the City of Bend made a different decision. This present proposal is simply an end around attempt to accomplish the same development goal without the need for an urban growth boundary extension. That attempt, however, is a direct violation of Statewide Goal 14. For all of these reasons this application should be denied. Thank you for your consideration of these thoughts and comments. i Paul Li�• b it Agribusiness & Applied Economics 691 June 2012 Valuing New Random GM Traits: The Case of Drought Tolerant Wheat Sumadhur Shakya William W.Wilson Bruce Dahl Department of Agribusiness and Applied Economics Agricultural Experiment Station North Dakota State University Fargo, North Dakota 58108 7 Acknowledgements We wish to acknowledge support from the Center of Excellence in AgBiotechnology at North Dakota State University. It was partially supported under a USDA/ERS cooperative agreement titled Valuing GM Traits in Wheat, as well as research support from the North Dakota Agricultural Experiment Station, and the North Dakota State Wheat Commission. Finally, we thank Drs. Ryan Larson, Saleem Shaik and David Roberts for construction comments. This publication is available electronically at this web site: http://agecon.lib.umn.edu/. Please address your inquiries regarding this publication to: Department of Agribusiness &Applied Economics, P.O. Box 6050, Fargo, ND 58108-6050, Phone: 701-231-7441, Fax: 701-231-7400, Email: ndsu.agribusinessCc?ndsu.edu. NDSU is an equal opportunity institution. Copyright©2012 by Wilson. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. TABLE OF CONTENTS Page List of Tables ii List of Figures iii Abstract iv Introduction 1 Background 2 Valuing R&D in Crop Development Using Real Options 5 Modeling GM Drought Tolerant Wheat Using Real Options 7 Overview 7 Farm Budgets, Yields and Trait Efficiency 7 Stochastic Simulation and Risk Premiums 9 Real Options Methodology 10 Assumptions 13 Empirical Results 15 Derived Inputs for the Real Option Model 15 Real Option Values of DT Wheat 16 Sensitivities 19 Summary and Implications 22 References 25 i LIST OF TABLES Table Page 1 Trait Development Assumptions in Real Option Model Parameters and Distributions 14 2 Risk Premiums for Drought Tolerant GM Wheat, by Regions and Measures Of Trait Efficiency, ($/acres, RRAC=2) 15 3 Option Value Estimates for each Phase of Development ($ millions) 16 4 Expected Returns by Region 20 ii LIST OF FIGURES Figure Page 1 Comparison of Distribution of Wheat Yields for Conventional (CT), Drought Tolerant (DT) with Trait Efficiency of.2 and .25, Prairie Gateway Region 9 2 Option Tree for GM Trait Development 11 3 Option Values of Drought Tolerance' in HRSW Across Stages of Development Showing Minimum, Mean, and Maximum for Acreage in United States (Trait Efficiency=.20,$ in millions) 17 4 Option Values of Drought Tolerance' in HRSW Across Stages of Development Showing Minimum, Mean, and Maximum for Acreage in United States (Trait Efficiency=.25, $ in millions) 18 5 Ascending Cumulative Distribution for Option Values of Drought Tolerance Across Stages of Development in HRS at Trait Efficiency=.20($millions) 19 6 Values From Option Tree for Various Paths Taken (For a Sequence of Option to Continue, Wait or Abandon) 21 7 Tornado Results for GM Wheat Trait Development 22 iii Abstract There has been an increase in support for developing genetic modification (GM) technology in wheat. The purpose of this paper was to develop an analytical model to analyze the value of GM traits at different phases of development. To do so we developed a stochastic binomial model of real options. The results indicate that the value of drought tolerant wheat using GM technology is in-the-money at each phase of development. The greatest value would accrue to the Prairie Gateway and northern Great Plains regions in the United States. iv Valuing New Random GM Traits: The Case of Drought Tolerant Wheat Introduction Development of genetically modified (GM) crops is continuing on numerous fronts and in several countries. Wheat is one of the next crops to be commercialized with genetically modified ingredients. It will be one of the first food grains in which GM traits are introduced, and will likely be a precursor to similar developments in other food grains. Some traits have been targeted for many years in extensive breeding programs but, now some of these traits are targeted using GM technology and marker-assisted- selection (MAS) which are thought to be prospectively lower cost and more effective than conventional crop improvement technologies. These are still costly technologies and research and development using these techniques are subject to numerous risks. GM wheat is currently being developed in a number of countries and by a number of companies. Traits under development in wheat using GM techniques include Fusarium resistance (Huso &Wilson, 2005; Tollefson, 2011a; Valliyodan & Nguyen, 2006), drought resistance in Australia, and protein quality. Since the late 2000s all of the major agbiotechnology companies have made announcements indicating their intentions to enter the GM wheat market and in 2011 there were field trials by a number of companies in the United States and Australia. Amongst these, the most common traits being pursued include yield, drought tolerance (DT) and nitrogen use efficiency. Of interest to this study is that drought tolerance is extremely random, and the value of the trait results from numerous random events. Trait development strategy is fraught with randomness and extended periods for development, which results in substantial risks. It is generally thought that developing a trait can take at least 10 years. The trait pipeline typically is referred to as comprising phases ranging from proof of concept to regulatory approval. Each of these steps takes several years, is costly, and the outcome is uncertain. The costs of trait development range upwards from $130 million, and Monsanto indicated its current effort in wheat will cost at least$150 million. Finally, revenue streams from trait development do not ensue until a period following regulatory approval. For these reasons, trait development is highly risky and strategic, and as a result, real options are an appropriate methodology for valuing traits during the trait development period. The purpose of this paper is to develop a stochastic model using real options to value drought tolerant wheat. The model builds on previous studies using real options to value investments in research and development (R&D) (Brach & Paxson, 2001; Jensen &Warren, 2001; Luehrman, 1997; Morris, Teisberg, & Kolbe, 1991; Seppa & Laamanen, 2001) and on the use of real options to value GM traits in crops (Carter, Berwald, & Loyns, 2005; Flagg, 2008; Furtan, Gray, & Holzman, 2003; Wilson, 2008). Its major contribution is that it captures the effects of numerous ex ante random variables impacting trait development, resulting in random outputs in a real option framework and interpreted in the context of firm-level decision-making. Stochastic simulation is used to account for randomness in variables representing uncertain 1 outcomes associated with development of GM trait(s) including uncertainty and cost associated with their commercial release. Background Wheat is one of the largest acre food crops, but has not been a recipient of the new technologies that have benefited corn, soybeans, canola and cotton. Compared to these crops, wheat has been losing its competitiveness for a number of reasons.' Area planted to wheat in the United States has declined by 30-40% since the mid-1980s. During the same period, canola acreage in Canada has increased to now exceeding wheat acres, and there have been important geographical shifts in the composition of crops planted in these countries. Generally, this has been for lesser wheat acres and a gradual shift northerly and westerly to dryer areas. Since 1996 a number of GM traits have been introduced in competing crops. For corn, Round-up Ready (RR), Bacillus thuringiensis (BT) and several other traits have been developed and widely adopted. Some of these are now stacked in multiples of three or four traits in a single variety. During 2011 there was attention to the emerging new traits and technologies in corn (Birger, 2011; McMahon, 2011; "Search for Super Corn Seeks to Limit Nitrogen Use, Pollution," 2011) and challenges and opportunities for commercialization. Looking forward, a large number of traits are under development and expected to be commercialized in the next 10 or more years (Wilson & Dahl, 2010a, 2010b). For corn, there are at least 21 new GM traits under development. Some are producer traits, some consumer and some processor traits. Some of these traits are developed individually and some through joint initiatives. A comparable number and composition of traits is under development for soybeans. One of the most important traits for corn is drought-tolerance (DT) and after being under development for many years, it was deregulated in late 2011, and farm trials are planned for 2012 in North America. Development of GM wheat is important for a number of reasons (see (Wilson, 2004; Wilson, Janzen, Dahl, &Wachenheim, 2003) for a comprehensive discussion of the issues related to GM wheat). First, wheat will be one of the first food grains in which GM traits are introduced, and will likely be a precursor to similar developments in other food grains. Second, wheat is traded among many importing and exporting countries, and many of these have very different mechanisms for regulating trade in GM crops and for marketing products with GM ingredients. Third, there is no doubt demand will become highly differentiated for products produced with/without GM ingredients, and/or requirements to provide information to consumers, among these countries. • ' There have been numerous presentations to explain the extent of these changes. See in particular, Wilson(2008). 2 Several technologies exist for improving wheat including conventional breeding2, marker-assisted-selection (MAS) and genetic engineering (GM), amongst others. The focus of this article is on drought tolerance in wheat (discussed below). Drought tolerance has been a breeding goal for many years and has been described in the scientific literature for at least 40 years. Drought tolerance is felt to be difficult using conventional techniques due to the complexity of the plant's metabolic pathways to the plant. The appeal of using GM techniques for drought tolerance is that it may be more efficient in improving the crop. Integration of these breeding technologies (conventional, MAS and GM) has brought about a paradigm shift in crop development referred to "Seeds and traits" as a business function. It involves combining novel genetic traits with elite germplasm to develop crops that thrive while expressing the desired trait. The steps include discovering novel genes, transferring them into the cells of plants, optimizing the expression of the genetic trait in plants in the correct plant tissues, at the appropriate time and in sufficient levels and incorporating, through breeding, the genetic trait into commercially viable varieties or hybrids. As a business strategy, introduction of genetic traits via biotechnology does not reduce the importance of superior germplasm in the host plant, nor does it replace the need for plant science and plant breeding (Dow AgroSciences, n.d.; Kaehler, 2006). Round-up Ready had earlier been developed by Monsanto as a GM trait for wheat, but was withdrawn in 2004 in part due to anticipated consumer resistance. It was ultimately deregulated in the United States but not commercialized. Concurrently, Syngenta was developing a fusarium resistant trait, but never pursued commercialization. Following a number of years in which wheat acres declined in North America, largely being shifted to corn, soybeans, canola and cotton, a number of events unfolded which helped spawn the recent interest in GM wheat. One was a tri-lateral agreement amongst grower groups supporting development of GM wheat. The other was the radical escalation in prices during 2008 which precipitated concerns by end- users about the longer-term supplies and competitiveness of wheat. Monsanto was the first to announce their intent to expand into GM wheat. This was followed within months by announcements from each of BASF, Bayer Crops Sciences, Limagrain and DOW. Each of these companies are following work that has already been initiated in Australia by the Victoria Agrobiosciences Center (VABC) and CSIRO. Indeed much of the initial and early work was done in Australia in which their 2 As example, a salt-tolerant gene has recently been introduced into durum wheat using non-genetically modified genes by CSIRO and the University of Adelaide. 3 primary initial focus was on drought.3 These are in addition to near-simultaneous development of initiatives on GM wheat in China (Xia, Ma, He, & Jones, 2012). These firms and organizations have been pursuing varying strategies regarding acquiring germplasm, creating public-private partnerships, etc. In addition, to varying degrees they have each made claims about the traits they intend to develop using genetic modification. Most common, these include yield, drought tolerance and nitrogen-use- efficiency, amongst others. The criteria for selecting these traits are not exactly clear. Most likely, these choices are a result of experiences with other crops, plant stress, and anticipated changing geography of production, in addition to concerns of future water availability and cost (James, 2011; Rice Today, 2012; Sindrich, 2012). Drought tolerance (DT) is an example of a stress trait. It has been described in numerous articles and is the focus of extensive media promotion (The Economist, 2011 a, 2011b; Tollefson, 2011 b; Wall Street Journal, n.d.). DT is also the focus for trait development in other crops including rice (Reyes, 2009). Genes are being identified to be activated by drought (i.e., the efficiency gain by drought resistant gene is realized when drought occurs) so as to avoid any yield penalty in normal conditions and indicated that"Drought tolerant crops look to be one of the most promising upcoming biotech traits in pipeline, providing ability to produce 'more crop per drop' of water" (Fatka, 2008). It is designed to provide farmers yield stability during periods when water supply is scarce by mitigating the effects of drought—or water stress—within a plant. Drought tolerance has been analyzed fairly extensively in the case of corn (see Edmeades, 2006 for a detailed summary as of that time). Early results indicated that drought tolerant GM corn could potentially improve yields by 8-22% (15% average) under drought stress that reduces yields by 50 percent. This is commonly referred to as `trait-efficiency'which is a critically important parameter in analyzing values and inter- firm trait competition. However, their comparisons do not distinguish trait efficiency between GM technology and that from market assisted breeding. Monsanto (Monsanto, 2008, 2009, 2010) indicated yield improvements of 6-10% in water stressed environments and testing of first and second generation DT corn varieties ranges from 6.7 to 13.4% for first generation tests, 9-15% for second generation, 9-10% yield 3 The status and outlook in Australia is described in several places, including:Agrifood Awareness, GM Wheat-Fact not Fiction: A 7-10 year program of consultation and collaboration, available at http:!/www.afaa.com.au/GM_wheat_2010/AFAA_GMWheatBrochure_WEB.pdf; and the most recent application for GM wheat trials in Australia are described at: International Service for the Acquisition of Biotech Applications, 2012, "Australia's Gene Technology Regulator Oks Trial for GM Wheat and Barley, and, Pocket K No. 38 Biotech Wheat,which is available at http://www.isaaa.org/resources/publications/pocketk/38/default.asp. Finally, it was described previously at, http://www.financialexpress.com/news/droughttolerant-gm-wheat- under-trial-down-under/329163/http://www.newscientist.com/article/mg 19826623.500-droughtresistant- wheat-beats-australian-heat.html. 4 advantages were reported in low drought seasons and 15% in a high drought. More recently, Monsanto's drought-tolerant trait in corn (MON 87460)was deregulated in the United States and it is planning field trials for DT corn in 2012. The company said 40 percent of crop losses in North America are due to sub-optimal moisture (Reuters, 2011). In addition to GM technology drought tolerance for wheat, alternative approaches to improve wheat include conventional breeding, as well as marker-assisted selection to improve water efficiency. There have been fewer studies in the case of drought tolerant wheat, in part because the trait discovery is just commencing (in 2010/11). In the case of GM drought tolerance, there have been 4 years of field trials in Australia. Results from those studies indicate that GM lines had yield 20 percent higher than conventional wheat varieties under conditions of drought stress (prospectively greater). A challenge in valuing GM traits is that development time is long, it is highly risky as a result of uncertainties of numerous variables which are random, and it is costly. Typically, trait development including regulatory review takes about 10+ years, costs about$100 million and consists of a number of distinct phases. Estimates of these costs are difficult since they ultimately are firm-level activities and information is not readily published. Goodman estimated that development of a GM trait costs $60 million and can take 15 years. Recent estimates for regulatory costs are in the $6 to $15 million range (Bradford, Alston, & Kalaitzandonakes, 2006; Just, Alston, &Zilberman, 2006). Finally, one of the more recent studies that estimated these costs (McDougall, 2011) indicated the average cost of GM trait development is $136 million, and takes 13 years, though there is substantial variability across firms and traits on these estimates. Monsanto has indicated it will spend at least$150 million on its wheat initiative, though this includes costs of germplasm and breeding, in addition to MAS and GM. These costs reflect what are commonly referred to as discovery, proof of concept, early and advanced product development, and the regulatory phase, though the labels for these functions vary across firms. Valuing R&D in Crop Development Using Real Options Drought tolerance is of interest for a number of reasons. Most important for this study is that the value of traits that target drought is a result of numerous random variables and hence, the value of the trait is random. For these reasons it is ideally suited to be quantified using real options methodologies. Traditional methods for analyzing investment decisions in technology include net present value calculations, amongst others. However, these have difficulty capturing two important aspects that are important in valuing GM traits. One is the randomness throughout the development phase in numerous variables. The other is that technology (R&D) has embedded options which provide trait developers choices throughout the development process. By ignoring options and their value, there is a tendency to under-value technology projects, potentially resulting in an under-investment in R&D (Hayes &Abernathy, 1980; Hayes & Garvin, 1982; Schwartz &Trigeorgis, 2004; Schwartz, Trigeorgis, & Mason, 2004). 5 A number of recent studies have used a real options framework. The foundations are summarized in (Schwartz & Trigeorgis, 2004) who describe the evolution of this method and its role in valuing R&D. Features of the problem that are important include that 1) uncertainties are resolved through time and 2) managers have options that can be exercised throughout the duration of the project. Investments in R&D provide the option to continue, wait or abandon. Investing in R&D is equivalent to buying a call option and can be valued as a real option because it involves future opportunities, uncertainty and options. Earlier work on this methodology includes (Luehrman, 1997; Morris et al., 1991 for descriptions as to why real options can be used to model R&D); and applications by (Brach & Paxson, 2001; Jensen &Warren, 2001; Seppa & Laamanen, 2001). Since the process of crop development is staged in discrete phases and are measurable risks, there are uncertain outcomes to each stage, the real options approach lends itself well to use of this framework for valuation of GM traits. Investing in R&D buys the option to abandon, wait, or continue to the next phase of development, which buys the option to continue to the commercialization phase. The option value, derived at each phase, can be either in-the-money (ITM), or out-of-the- money (OTM). If expected cash flows at an early development phase are positive, it is ITM and the developer would likely proceed to the next phase. If the value of the option is OTM, the developer can either wait, or abandon the project. This paper models R&D as a compound call option using a stochastic binomial option specification. The 'continue' growth option represents the decision to continue to the next phase and make further investment to get to the next phase. So long as the option is ITM, management could choose to invest and continue. Earlier studies have used real options to analyze the value of GM traits in wheat (Flagg, 2008; Carter et al., 2005; Furtan et al., 2003). The two earlier studies analyzed decisions from a public sector perspective and were modeled as post-development timing options which were irreversible and the values were derived using the Black- Scholes model. Our approach differs from these in several respects. While these studies modeled the public costs and benefits of releasing a GM trait, we model the decision process of a private firm during the R&D process. Second, while these studies model a timing decision once the product is developed, we model real options confronting management of biotechnology companies during the development process. Their primary concern was the risks in the post-product development phase (e.g., the commercialization phase). In contrast, we model making R&D decisions through time and across phases of development. Lastly, many of the parameters are random in our approach, and for this reason we derived the option value at each phase using stochastic simulation. 6 Modeling GM Drought Tolerant Wheat Using Real Options Overview There are three steps to our empirical analysis. First we determine the value of DT wheat at the farm level. Second, we use stochastic simulation and stochastic efficiency with respect to a function (SERF) to derive the risk premium for DT wheat, which is interpreted as the expected value of the trait to growers. Farm budgets are simulated to measure risk and returns and SERF is then used to determine certainty equivalents with and without the trait. These results are used to derive the risk premium of the trait compared to no trait. The risk premium is defined as the value of the certainty equivalent that is required for a grower to be indifferent between the variety with and without the trait and is then used as the basis for pricing the new trait. Third, we use stochastic simulation and these values to derive the real option value of the R&D expenditure at each phase of development. Farm Budgets and Trait Efficiency We use farm budgets for each of the USDA defined crop reporting regions (USDA-ERS, 2010). The analysis quantifies risk to growers with and without the trait. Measures of risk and return per acre were derived through simulation of budgets, for each region. Random variables include crop yields, prices, seed costs, and prices for chemicals and fertilizer, and the probability of drought. Historical data for current technology (CT) wheat yields, prices and costs were fitted to distributions by budget region using data from 1996-2010 (USDA-ERS, 2010). Using current technology, returns to labor and management were defined as: ni = [(Pi * Pi) — (Si + A + EL + OCi + FC,)] Eq. (1) Where Tr,is the return to labor and management, P is price, Y is yield for Current Technology, S is seed cost, F is fertilizer cost, C is chemical cost, OC is other operating costs, and FC is fixed costs for region i and variables with ^ are random and drawn from fitted distributions. Yields for DT wheat were estimated relative to current technology yields (without the trait), trait efficiency and a probability distribution of drought coverage within the region. To accommodate a rightward rotation in yield distributions for drought technologies, yields for drought tolerant varieties were modeled assuming YDT YCT+ (MaXYCT- YCT) *TE * DCe Eq. (2) 7 Where CT refers to Current Technology, YDT is the yield for Drought Tolerant, MaxYieldcr is maximum yield, Ycr is a random draw for yield, TE is trait efficiency is the trait efficiency for the drought tolerant variety and DC is Drought Coverage and is a random variable indicating distribution of the proportion of area covered by drought for the region. There are a large number of distributions used in this analysis (for each random variable and region, as well as drought by region) and are not shown here, but are available from the authors. Distributions for drought coverage were fitted from data from the National Drought Mitigation Center (2010). We assigned river basins to ERS Budget regions based on which basin was predominant within each budget region. Then data for the basin assigned to the region was fitted to derive distributions for drought coverage for the budget region. Correlations between yield and drought coverage levels were estimated by mapping the joint cumulative distributions for yields and drought coverage assuming yield losses are due solely to drought. This means the joint cumulative distributions of yields and drought coverage were defined at percentiles of the distribution from 5 to 95% such that high yields were associated with low drought coverage and low yields with high drought coverage. Then correlations were computed from these joint observations. While yield losses can occur due to other environmental differences, this implies that lower CT yields occur when droughts cover a wider area of the budget region and should represent an upper bound for the value of the drought tolerant trait. Trait efficiency is defined as the increase in yields as a result of the GM technology being inserted into conventional germplasm. While many companies are working on DT wheat, there are only a couple public references indicating efficiency for this trait. In our base case we define trait efficiency using results from field trials in Australia (the only published reference to date on trait efficiency). Results from these studies indicate a trait-efficiency of .20 and apply this to the yield difference from maximum yields for the region. This value was from results of field trials in Australia and implies that DT wheat variety can recover 20% of the yield loss attributable to drought. This is a critical value. There is also a subtle difference between corn and wheat in the interpretation of the probabilities. For corn, it is interpreted as 12 percent of losses can be saved during drought years due to the GM trait, whereas the results for wheat are interpreted that yields would be at least 20 percent more than conventional varieties under stress conditions. It is also a critical value for competition amongst trait providers as they try to compete by increasing their trait efficiency versus their competitors. In the analysis, our base case assumes a trait efficiency of.20 and we conduct sensitivities at .25. Increases in trait efficiency have the impact of shifting the function rightwards, as illustrated in Figure 1. 8 1 0.9 0.8 07 l▪ 0.6 a 05 CT --DT= .20 E 0.4 DT= .25 ✓ 0.3 l 0.2 ... 0.1 20 25 30 35 40 45 Yield(bu/a) Figure 1 Comparison of Distribution of Wheat Yields for Conventional (CT), Drought Tolerant(DT)with Trait E fficiency of.2 and .25, Prairie Gateway Region. Stochastic Simulation and Risk Premiums for Grower Trait Valuation Monte-Carlo procedures using @risk (Palisade Corporation, 2007) were used to simulate the farm budgets with and without the DT trait. Random variables included yields, drought coverage, prices, and costs of seed, fertilizer and chemicals. In some cases, correlations among random variables were included. Budgets were iterated 10,000 times at which time stopping criteria indicated additional iterations would not improve the results. SERF was used to derive the certainty equivalent that growers would place on a risky alternative relative to a no-risk investment (Hardaker& Lien 2003, Hardaker, Richardson, Lien, Schumann 2004). Certainty equivalents were estimated for wheat with and without the DT trait, by region for a range of Relative Risk Aversion Coefficients (RRACs) ranging from risk neutral (RRAC=0) to highly risk averse growers (RRAC=4). These were used to derive risk premiums by grower risk attitude for the trait, which are used as inputs in the option model. 9 Real Options Methodology R&D in GM trait development is modeled as a compound option, consisting of the options to continue, wait or abandon. It is modeled as a binomial model using discrete event simulation which is one in which variables change at discrete points in time (in contrast to a continuous system is when state variables change continuously over time). The binomial model was specified as an option tree encompassing each of the phases of GM trait development, and simulated over a 15 year period. The model is an extension of(Jagle, 1999), which developed a real options model for"new product development" case. Different phases of the R&D and commercialization were defined along with estimates of the probability of success and costs for each phase (Seppa & Laamanen, 2001). The model specifies a binomial option tree with multiple steps. These are illustrated in Figure 2. The preceding number before the developmental stage corresponds to option 1 to continue, 2 for the option to wait and 3 for option for abandon. Thus a sequential depiction of such numbers before a developmental stage illustrates the options at each phase of trait development which is contingent on previous states. At the end of each stage, there is an option to continue wait and abandon. The option price is solved at the initial node of the tree, which is done by repeatedly applying the principles established above (Hull, 2004). The length of time is replaced with At years to account for the multiple steps in the binomial pricing method. !1 = e-rAt[pHu Eq. (3) erAt _ d P = u — d Eq. (4) 10 Early t0c/1 eec ''`Zi, Regulatory +, Discovery Proof of Concept' s 1 Development ri De �l?i#0 submission 7, (Continue I--- IContinue 11 Continue-1 _-- 1111f Cpntintie!I = Hi ill Continue 1n' — 111il[Abandon Abandon „Abandon Abandon Abandon'- _ 22.12 Wait • --- • Wait --1- 1111 Continue rvr Wait M,t — , 112 Wait 1 Continue ,1211 t~AtltinUe 11212 Wait _..... l;u Wait - . 11:2' Walt 11222 Walt — Wait -' 121;Continue ...— 1211 Continue .•..� 1 111 C'aPtintte 1k. Wait '1 1 -- > 1212 Wait - 11121 Continue k[�, 12222 Wait 4+ii {lam > 122 Wait 1,Ft Continue - 12231 Continue I 12212 Walt = Conrinue +a, 1222 Wait -".7 > 12221 Continue `✓,?j,� - Abandon 12222 Wait Cell f,plo, Slage o(develpp„i p„i ����i�J Figure 2. Option Tree for GM Trait Development. Where f7 is the payoff corresponding to upper node u and lower node d, p and (1-p) are probabilities for reaching upper and lower node respectively; and r is risk-free rate of interest. Equation 4 is repeated and the following sequence of equations represents a multi-step binomial model 11= e-rtt[Plluu + (1 — P)fl,.,di Eq- (5) e-rat[pllud + (1 _ P)11ddj Eq. (6) I> = e-rat[Pflu + (1 — P)17di Eq. (7) 11 Equation 6 is the payoff from the option that can reach the upper node consecutively, or, reach the upper node and then lower node. Equation 7 represents the payoff from reaching the upper node and then lower node or reaching lower nodes twice. Substituting from these equations we get 11= a-2rAtr„2]]uu + p(� —p)nud + (1 —p)217dd� Eq. (8) The variables p2, 2p(1-p), and (1-p)2 are the probabilities that the upper, middle and lower nodes will be reached. The option value is equal to its expected payoff in a risk- neutral world discounted to the risk-free rate of interest (Hull, 2004). The model is an extension of(Jagle, 1999), which developed a real options model for"new product development” case. The net present value of future expected returns (FER) for the agbiotechnology company is calculated from technology fees (TF), planted acres (PA) and projected adoption rate (PAR) and derived over 15 years after commercialization of trait is calculated as: IFERt = c•TFt • PAt • PARE • ( 1 / ( 1 + 1) ^ Tt) i=0 Eq. (9) where: t refers to the year after commercialization, c = technology fee ratio (i.e., share of the trait value charged as a technology fee); TF = technology fee charged (for ith yea`) in $/acre equivalent; PA= planted acres (for ith year) for the crop; PAR = projected adoption rate (for ith year); I = weight adjusted cost of capital ((WACC) = 10 %); T = Time elapsed after trait is commercialized; i = the year after commercialization. The FER for 15 years after commercialization is then used to calculate nodal values of the binomial option tree using backward induction. The development time and investment costs are treated as random in the binomial option tree. Each phase has a probability that the GM trait would successfully proceed to next phase. The cumulative probabilities are from Monsanto (2008b) and converted into single period probabilities and then treated as risk neutral probabilities to derive the option value at each node (e.g., development phase). The risk neutral probability for any node is solved as: P — ((1 +r)t') *S—S_ (S+ —S-) Eq. (10) Where: P = risk neutral probability; r = risk free interest rate; tp = time in the phase of development; S = current value of project; S+= Present value of cash flow at the end of 12 phase, in case of upward movement and S_= Present value of cash flow at the end of phase, in case of downward movement. Monte-Carlo simulation was used to quantify the real option values due to the numerous distributions, some of which are binomial, and some were non-normal. Valuations were derived for individual regions, aggregated to compose a U.S. market value, and then were used to evaluate the logic of the option model. The option values were simulated 10,000 times at which time stopping criteria indicated additional iterations would not improve the results. Assumptions Assumptions were made for the analysis and are defined below and in some cases are relaxed in the sensitivities. Trait prices are based on a relation to the value of the trait to growers which are derived from risk premiums. In our base case, we assumed a relative risk aversion of 2 to derive the risk premium. This was relaxed in sensitivity since the distribution of growers' risk preferences is not known. In this sensitivity we derived risk premiums for three different levels of relative risk aversions which were 2, 3 and 4. From these we simulated the trait fees assuming a triangular distribution of trait valuations. Trait prices are assumed to equal 30% of the value of the trait to the grower, though this is a simplification of a broader more complicated problem of GM pricing. Typically, agbiotechnology companies price traits such that they capture 50% of the value of trait to growers. However, Monsanto indicated a change in strategy and that in the future they would seek to capture 30% of the value of the trait to the grower (Monsanto 2010). Hence, we used the distribution of trait values as shown in Table 1 as the underlying value from which the trait price was defined as .3 of that value. This implies that prices would vary regionally which is a common practice. Acres planted were defined by USDA crop budget regions and used the percent of acres planted to each region as a point of departure (USDA-NASS, 2010). From this 4 Further,this research focuses on valuing a single trait,and prices of that single trait. This is much more complicated for stacked traits. See (Gillam,2011)and (Shi, Chavas, &Stiegert, 2010)who explore pricing stacked traits,and (Magnier, Kalaitzandonakes, &Miller, 2010) . 5 This is a simple view of a very complicate firm-level optimization problem on trait pricing. Traditionally, the technology fee is defined as 1/2 the value of the risk premium as defined above (i.e., half of negative exponential utility weighted risk premiums). This is in line with what published news in Bloomberg suggests wherein analyst Mark Gulley commented on Monsanto that"They are in essence splitting the value of extra yield 50-50" (Kaskey, 2009). Monsanto has since indicated it will reduce prices for its most expensive crop seeds next year by as much as 75% in a bid to combat market share gains by DuPont.(Kaskey, 2010). 13 we used an aggregate planted acre of 53.47 million acres with a 5 percent standard deviation. The adoption rate was specified as a triangular distribution, the values of which were subjectively determined reflecting data on adoption rates for GM traits (James, 2008) and industry trends. Specifically, penetration increases and reaches a peak in year 7 after introduction, at 70% of the targeted area, and declines thereafter. Adoption of drought tolerant varieties would be insignificant unless there are consecutive years of drought. To incorporate this in the model, the projected adoption rate is correlated with drought occurrence in the prior year. In the case of drought in the previous year, the random draw of adoption rate would tend towards the maximum, else, towards lower half of distribution. The probability of occurrence of drought is modeled as drought coverage area (random) derived from fitted distributions for drought coverage from National Mitigation Center(2010) for each respective region for each of the 15 years after commercialization. Table 1. Risk Premiums for Drought Tolerant GM Wheat, by Regions and Measures of Trait Efficiency, ($/acre, RRAC=2). Trait Efficiency 0.2 0.25 Region $/acre Heartland 16.4 20.5 Northern Crescent 6.37 20.44 Northern Great Plains 8.58 10.72 Prairie Gateway 9.2 11.5 Eastern Uplands 2.14 13.71 Southern Seaboard 2.63 3.21 Fruitful Rim 8.74 8.97 Basin Range 3.34 4.18 The salvage value represents the value the company may get by abandoning the project at any stage of development or by licensing it out to other competitors. Since these values are not known, they are evaluated in the simplest(first option tree) scenario wherein salvage option values are all the bottom nodes. Duration and development cost are each random variables and were taken from previous publicly accessible reports (Monsanto, 2008, 2009). The duration of each phase, along with its development cost and probability of success were defined and shown in Table 1. 14 Table 2. Trait Development Assumptions in Real Option Model Parameters and Distributions. Phase of Development Distrib Early Advanced Regulatory ution Proof of Develop- Develop- Sub- Type Discovery _ Concept ment ment mission Time Uniform (Years) (2, 4) (1, 2) (1, 2) (1, 2) (1, 3) Investment Uniform ($million) (2, 5) ; (5, 10) (10, 15) (15, 30) (20, 40) Cumulative Discrete Probability 0.05 0.25 0.50 0.75 0.90 Single Discrete Period Probability 0.20 0.50 0.67 0.83 0.90 Source: Monsanto (2008b), Flagg (2008) Empirical Results First we show and interpret some of the derived values that are parameters in the real option model. Then, we describe the results from the real option model, managerial interpretation and then show results from some sensitivities. Derived Inputs for the Real Option Model An important variable into the ex-ante valuation of any GM trait is its valuation. Ultimately, this is the basis of pricing of the GM trait. These were derived using SERF procedures, and interpreted as the certainty equivalence of reduced uncertainty related to use of the GM trait, versus not. Results are shown in Table 3. These indicate that the greatest value, on a per acre basis in the base case is for Heartland, Northern Crescent, Eastern Uplands, followed by Prairie Gateway and Northern Great Plains. These indicate that the greatest value, on a per acre basis in the base case is for Heartland, Northern Crescent, Eastern Uplands, Prairie Gateway and Northern Great Plains at$6.40, $6.37, $12.14, $9.20 and $8.58 per acre respectively. Strictly, a value of$8.58/acre is the value of the DT trait in the Northern Great Plains and reflects the value of the increased yield and reduced risk associated with the DT trait, versus conventional technology. Thus, in the extreme case if the price of the trait exceeded this value, the grower would choose conventional technology. If the trait price is less than this value, the GM technology would be chosen. These values were derived assuming a RRAC=2. The change in the risk premium with improvements in trait efficiency is important. Our base case assumes published values in Australia. However, biotechnology companies compete on trait efficiency, ultimately trying to choose events that have 15 greater efficiency than that of their competitors. We simulated impacts of a trait efficiency=.25. In this case, the value of the trait increases by $2 to $4/acre for the major wheat producing regions. This is a very important figure and is an indicator of the prospective increased profitability associated with greater trait efficiency. Finally, for comparison, values for DT corn using similar methodologies are lesser than those shown here. In corn, the trait efficiency is in the area of.12, versus wheat which is about .20. Thus, for corn, as example in Northern Great Plains, the risk premium for DT is about$6.39/acres, vs. $8.58/acre for wheat indicating the value of improved resistance to drought is apparently much greater for wheat than corn. This is largely driven by the measures of trait efficiency for the traits in the two crops. Real Option Values of DT Wheat: Real option values were derived for each phase and for each region. In addition, since this is a stochastic model, the distributional parameters are important. First we describe the aggregate results for each phase. Then, we show the results for each region. The base case results are shown in Table 3 for both the base case and one with trait efficiency = .25. The results indicate that the real option value is in-the-money at each phase of development. It increases from $12 million at the discovery phase, to $77 million during proof of concept, and ultimately to $419 at the point of regulatory submission. It is of interest that in all simulations the minimum values exceed nil. Thus, the likelihood that the real option value is OTM is nil which would provide substantial confidence about the future payoff. Table 3. Option Value Estimates for Each Phase of Development ($ millions). Development Phase Trait Parameter Discovery Proof of Early Advanced Regulatory Efficiency Concept Development Development _ Submission Base case Mean .20 12 77 176 301 419 Min 3 37 90 166 250 Max 25 139 305 498 651 StD 3 15 31 49 62 .25 Mean 16 100 227 384 526 Min 6 50 120 218 316 Max 31 176 383 623 812 StD 3 15 31 49 62 Real option values and their distributions across phases are shown in Figures 3 and 4. The distribution of real option values increases as R&D moves through the development phases. This is illustrated in the CDFs (Figure 5) and in the spreads between the minimum and maximum in Figures 3 and 4. Looking forward from the beginning of development, the amount of uncertainty escalates through time. However, 16 both the mean and standard deviation increase through the development phase. The coefficient of variation decreases through the development phase (i.e., from .23 in the discovery phase to .14 at regulatory submission) meaning the greater risk in more advanced phases is offset by a proportionately greater expected real option value. These relationships are also illustrated in Figure 6. Here the vertical axis is the NPV, and the others show the development phases, and the combinations of sequence of options that may be chosen. The option to continue (11111), when chosen consecutively till the last stage of regulatory submission, provides highest return for trait value (Figure 6) at nearly $419 million. The sequence 11113 is to continue for first four stages and then abandon and the NPV is shown accordingly. The sequence 11121 (a sequence of continue, continue, continue, wait and continue), 11211 and 12111 provide the same final value of$267 million despite choosing the option to wait at different stages of development. Also note that all three outcomes refer to trait having completed 4th (Advanced development) stage of development (as there are four 1s in them, thus the option to continue was chosen four times). Real option values for DT wheat were derived for each of the wheat producing regions. These are shown in Table 4 and shown for the final development phase. The regions that would have the greater values are Prairie Gateway and the Northern Great Plains at$225 and $266 million respectively. There is no doubt that these are the regions being targeted by the technology companies. Values in all other regions are substantially less. Option Values Across Stages of Development 703 ($in Millians,20% Eff.Gain) 3 500 400 300 200 ..... . 100 ................... 0 Discovery Proof of Concept Early Development Advanced Development Regulatory Submission Mean Min Max Simulation 1 0.20 ^; 5 4g. +Ga 6AiW M1� 4 Drought Tolerance in HRSW ` ,, , .; ;`•' E `��'' Min 3,411,179 36,452,322 89,899,279 166,138,437 249,880,718 Mean 12,021,269 76,937,656 176,295,015 301,281,004 418,875,764 Max 24,585,008 138,884,899 304,839,531 497,455,131 651,088,370 Figure 3. Option Values of`Drought Tolerance' in HRSW Across Stages of Development(Trait Efficiency=.20„$ in millions). 17 Option Values Across Stages of Development so ($in Mlllions,25% Eff.Gain) 2 2w 600 500 400 300 200 0 - i Discovery Proof of Concept Early Development Advanced Development Regulatory Submission .Mean Min Max• Simulation 2 { 0.25 ^ a1 M* .jl 1 Drought Tolerance in HRSW Min 5,707,476 49,997,412 120,239,552 217,723,191 315,581,585 Mean 15,897,497 99,964,288 226,526,141 383,457,289 526,425,114 Max 31,098,782 175,877,117 383,274,987 623,391,570 811,641,198 Figure 4, Option Values of`Drought Tolerance' in HRSW Across Stages of Development(Trait Efficiency=.25, $ in millions). 18 5.0% 90.0%, 5.0%68.8% r31.2°01 t5 0.0°% 0,01 0.008 / 0.006 1 i r i 0.004 If 0.002 f / ! i 0 I Values in Mons (s) HRSW/Regulatory Submission(Sim#1) -----HRSW HRSW/Advanced Development(Sim#1) HRSW/Early Development(Sim#1) --HRSW/Proof of Concept(Sim#1) HRSW/Discovery(Sim#1) Figure 5. Cumulative Distribution for Option Values of Drought Tolerance Across Stages of Development In HRS for Trait Efficiency= .20 ($millions). Sensitivities One of the most important variables that affect the real option value is what we refer to as trait efficiency. For illustration, we ran the model for a trait efficiency of .25 and these results are shown in Tables 3 and 4. The impact of increasing trait efficiency from .2 to .25 is to increase the risk premium to growers, and the real option value to the trait provider. In this case, the real option value increases at each development phase. At the point of regulatory submission, the value increases from $419 to $526 million. Thus, the value of increased trait efficiency is about$107 million to the trait developer. This is a substantial increase in real option value, and hence the reason that trait firms spend so much time identifying the best event, and testing it substantially to verify its efficiency. Sensitivity was also conducted to determine the random input variables having the greatest impact on variability in the NPV of returns. These are shown in Figure 7 (this is a tornado diagram using regression coefficients from @risk). These results indicate that the most important factors that negatively impact variability in output is the 19 time period for regulatory submission and discovery followed by uncertainty in development. Uncertainty in the technology also has a positive impact on the output variable. Table 1. Expected Returns by Region Efficiency Gain 20% 25 % Region $ Million Heartland 65 82 Northern 25 32 Crescent Northern Great 266 207 Plains Prairie Gateway 225 281 Mississippi Portal 14 17 Southern 5 6 Seaboard Fruit Rim 36 41 B' Range 22 28 Derived as: 1) over 15 years after commercialization; and 2) using a technology fee of 30-50% of the traits value. The advantage of real option methodologies over NPV procedures is that the option tree captures decisions that management can take at the end of each development stage. The risk associated with distribution of values at each stage is accounted in subsequent stages of development, providing a full potential pathway of option tree for all 'what if' scenarios. Management can therefore directly compare the value of GM trait at any stage without worrying about"had a different combination of option to continue or wait been chosen". For example, it is clear that GM trait development has maximum value if it is allowed to continue at all stages of development. Different combinations and sequence of options to continue and wait have potential to provide next best trait value, which also implies that given different market conditions, decisions can be chosen to maximize the value of trait development. Such comparisons cannot be done using NPV alone. 20 $450000,000 $400,000.000 $3`,0,000,000 011111 0 11113 11112 $300000,000 •11121 11122 $250,000,000 11211 •11212 $200,000,000 ,A 11271 11222 wn $150,000,000 ✓12111 16 12112 12171 $100,000,000 12222 12212 12227 72122 12211 12121 12122 12211 $50,000000 112 12212 12221 $- 1 12222 11112 11121 11112 11113 11111 Figure 6. Values from Option Tree for Various Paths Taken (For a Sequence of Option to Continue, Wait or Abandon) 21 HRSW / Discovery (Sim.-. Regression Coefficie... yr{ w Time (in Years)/Regulatory Submission- V041 Time (in Years)/Discovery- 15CI Prairie Gateway/Tech Fee Ratio- 0.355 Investment/Discovery- 5 Time (in Years)/Advanced Development- Time (in Years)/Early Development- '04; Time (in Years)/Proof of Concept- P54 Planted Acres HRSW/Tech Fee Ratio- O:xi Investment/Proof of Concept- 0.09'' ........... . . Planted Acres HRSW/Tech Fee Ratio- 0:09 Heartland/Tech Fee Ratio- i''0',08. Investment/Regulatory Submission- -0.07 Salvage Value/Proof of Concept- 0.07 Investment/Advanced Development- -0.07 B'Range/Tech Fee Ratio- Investment/Early Development- -0.04 in in 7 Ii N .r 0 0 0 o 9 9 0 0 6 0 0 0 Coefficient Val... Figure 7. Tornado Results for GM Wheat Trait Development. Summary and Implications Wheat has been losing its competitiveness relative to competing crops, particularly those that have access to GM technology, notably corn, soybeans, cotton and canola. Partly in response to this, there has been an increase in grower support for developing GM technology in wheat. Many of the agbiotechnology companies have responded and are all in the process of evaluating and developing traits for this crop. Important in this evaluation is that trait development takes a long period of time, there are many risks associated with development, and it is costly. 22 The purpose of this paper was to develop an analytical model that could be used to analyze the value of GM traits at different phases of development. To do so we developed a stochastic binomial model of real options. Compared to other studies, this study modeled the private managerial decisions and captured to the extent possible the numerous sources of risks throughout the trait development process. The results indicate that the value of drought tolerant wheat using GM technology is in the money at each phase of development. Second, the value of GM drought tolerant wheat exceeds that of drought-tolerant corn (Shakya, Wilson and Dahl, 2012). These results no doubt indicate why most of the agbiotechnology companies are developing this trait, amongst others. The greatest value would accrue to the prairie gateway and northern Great Plains regions in the United States, though there would be similar value in numerous other countries which were not the focus of this study. The value of the trait has growing uncertainty throughout the trait development process, looking forward from the inception. However, the variability in NPV diminishes at each phase looking forward. For any probability of success at a developmental stage, the expected value of the trait increases with subsequent stages of development. Also, for a certain value of GM trait, there is less risk associated in later stages of development. A trait that is more likely to be discarded for development such as drought tolerance in initial stages due high probability of being OTM becomes increasingly ITM as the developmental stages pass. The option tree provides the leverage to management to choose the option to wait by recognizing the need of market conditions and still be able to get next best value for the GM trait by deciding to continue later on. Such flexibility is absent when investment decision is made solely on NPV. There are both public and private implications of these results. From a private perspective, the positive values provide encouragement for further development of this trait. However, the value is not as great as other traits in other crops and as such, this likely means that any variety of wheat would have to have a combination of stacked traits to be commercially acceptable. Finally, that most of the companies are working on similar traits is important. Ultimately, competitive pressures will force companies to strive for the greatest trait efficiency as possible, which as illustrated here, has an important impact on trait valuation. The public implications of these results differ from those of previous studies in part due to the scope of these studies. Here the results indicate positive strategies option values of developing GM traits, in this case, drought tolerance, for wheat. This is encouraging such development, but, in the future as these become commercially available, then many of the issues that are important for post- development commercialization (e.g., as discussed in Carter, Berwald & Loyns 2005; Furtan, Gray & Holzman 2003), strategies for segregating (Wilson & Dahl, 2005), and overall welfare implications of GM wheat (Wilson, DeVuyst, Taylor, Koo, & Dahl, 2008) will become important. Finally, there are a number of future studies related to the methodologies 00 results here. One is that this trait is being developed for many counties and regions. Results here are for the United States only. Similar methodologies could be used for 23 other regions. 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GM Wheat Development in China: Current Status and Challenges to Commercialization. Journal of Experimental Botany, 63(5), 1785-1790. doi:10.1093/jxb/err342 28 F Al OREGON , CENTRAL OREGON IRRIGATION DISTRICT 1055 SW Lake Court, Redmond, OR 97756 . „;. Phone: 541.548.6047 Fax: 541.548.0243 IRRIGATION. _ iw�p�v7�r www.coid.org DISTRIVA A MUNICIPAL CORPORATION OF THE STATE OF DRE5C1N 17-12-24 NW Quarter Water Right History NE NW Contract Water(signed 1910)—31.0 acres NW NW Contract Water(signed 1906)—35.0 acres S %2 NW Contract Water(signed 1904)—55.0 acres There were minor tweaks to the water and land partitions over the last 100 + years bringing the water to the current configuration: NE NW-30.0 acres NW NW—34.65 acres SE NW— 1.3.60 acres SW NW --37.40 acres Hilary Garrett Page 3 1/30/2014 Appendix A: Testimony from Central Oregon Irrigation District CENTRAL OREGON CENTRAL ORFG'ON IRRIGATION DISTRICT 11155 SW Lake Court, Redmond,OR 97756 >.� Phone; 541.548.6047 Fitt; 541,548.0243 www.cold.m e IRRIGATIIN U!1snueT r::71rvFr; ;°tr 'Mr Syr+,rr a^r ray.arar. October h. 2008 Kevin Keillor Via Email: Ajkeillor@edgewirelesscom City of Bend Planning Commissioner Patrick Oliver Via Email: potroe«'olicereg.eom City of Bend Planning Commissioner Cliff Walked' Via Email: bevulhroadband.corn City of Bend Planning Commissioner Nathan Hovekannp Via Email: nitcmekanrp@valaoo.corn City of Bend Planning Commissioner Jodie Barran Via Email; ,jdtarram(ti)hornail.corn City of Bend Planning Commissioner Steve Miller Via Email: cmiller@hendbroadbanicart City of Bend Planning Commissioner Donald Senecaal Via Email: donandcorka @hendbrcxrdrnad,corn City of Bend Planning Commissioner Re: Bend Planning Commission Work Session—October 6.21M0$—5:30 PM Dear Commissioners: We appreciate the city's collective attention to the LUGB Expansion process. City Councilors,Planning Commissioners and staff have dedicated many hours crafting and evaluating methods and alternatives. COED also recognizes the efforts of staff and the Council and the Planning Commission to work with COIF cooperatively on various common issues and responding to comments throughout the 1.1GB process. Therefore it is very disappointing to see a brand new alternative(Alternative 4i issued on Friday,October 3`a just one working day before tonight's hearing apparently to be selected as the preferred alternative. COIL)has serious issues with the question of due process and with the capability for the Commission or the public to adequately evaluate this alternative in such a short time frame. We know the schedule is pressing toward a recommendation but Alternative 4 has a dramatically different impact on COIL)than the last discussed Alternative 3A and needs serious review and several questions answered. 4 0 LL u3. u. U- IL LL 0 ( 0 ro ro N a LL LL To To To N A U-. (�p LL LL LL LL T C C N N a a a a W - ip _ _ co co co (0 co A LL co LL LL LL LL to no (p (p co N r. To _ _ _ _ co co f0 (0 no•C) 3 f 7 7 3 5 t' t.+ t. t' t. Z - A LL (p LL LL LL LL (p (p Co to (p ❑ CL CL a CL d LL ' w _.— n a 3 N❑ — LL E F 4 CO (a - _ ..... m ` is (U z. Qw GC. ❑ o .. r 3 > > a m t AO ,a W o A LL 4 LL LL LL LL CU p) a a C c n a F E •i g w a M L A LL ry LL 11 A LL co N O N N n ❑ (" 0- a s a 0- 4 = 0❑ N i, . _.._ o ._ To _ .o To 76 o gtn a u N O LL LL (L ❑ p a a A a a• 4a •-1 a a a3 a3 E t 7 t' t' z 0 a D A A u.. A A A C d a w .nil U - U ,-1 z f E E it E ON O A (O LL (p r4, A a+ ` y (p (p c- ° c c «. C ° a _.. (n — C 3 _ m m_ (o E c LL m (o (o (n co TO ,y L- E a 4. d n a ' t 9i ' (. — A (n A LL a '^ a '^ v '^ a s C (l i 1 , I,� Z N rn in m er .r m a '' N p Q d ci ti c C7 LA ni ni r S' a 8,..._ Cl.) 4-. 14 ... 4, 4, 4-. 4-. 4-, 4-, 4-• N m a 00 00 0 00 OD no 00 CO no no 00 0 C) C) a 0 Chi 01 CO 0 C) 0 0 CS CS M -a CO CO m m m m CO d `v co u C7 J LL' T z z a a E ru N > U CC N I 0.Z N Z Hilary Garrett Page 4 1/30/2014 1. Where is the detailed analysis for Alternative 4 on number of irrigated acres per irrigation district and zoning class as had been provided by City staff fix alternatives 1,2 and 3':' 2. The legal justification for Alternative 4 provided by City staff in their October 3,2008 memo for adding additional resource acres in Area B and Area C is erroneous. Staff cites soil studies provided to the staff by private developers for the first time claiming that there are soils that rate at Class VII or below(completely non-fannable)even when irrigated. The staff's memo to the Planning Commission on September 19, 2(X)8 for Alternative 3 included these same lands but never mentioned the soil studies for justification of inclusion into the UGI3. This contradicts the Oregon t)elhartment of Agriculture's testimony submitted to the Commission in July 2007 (attached)that states there are no soils in the UGB study area that are below Class IV if irrigated. This testimony was further substantiated by official National Resource and Conservation Service(MRCS)soil class maps that were submitted into the record. COI[)has requested City staff to provide their substantiation fix the claim that there are soils that rate at Class. VII or below even when irrigated. Damian Syrnik sent COLD an email this afternoon on how to obtain these source documents from the City web site, but we have not had time to review prior to submitting this letter, 3. There has been no detailed evaluation of potential conflicts between future urban activities and agricultural activities,or impacts to the irrigation districts with any of the proposed UGB alternatives except.for the number of irrigated acres. City staff merely mentions this in its list of disadvantages for all the UGB alternatives. The fact is that all four alternatives impact between 1.3(X)to nearly 1,7(X)acres of irrigation district lands with no discussion of financial or operational impact leaves important questions unanswered. In addition,the issue of public safety with locating additional development near open main canals and laterals is likewise not addressed. While the irrigation districts have been meeting with City staff this past year discussing all of the issues mentioned above,the results of those conversations appears to be a discounting of irrigation district input and concerns_ Thank you, in advance,for your consideration of our request. Sincerely, StevelA, Cja�1�.sow Steven C Johnson District Secretary—Manager cc; Damian Syrnvck-- ViaE.nnhii:d.shrrrvk@ci.bend.er.us Elizabeth Dickson—COLD Legal Counsel • A' " w'I'r lJr' *fi x i arm „rte : .,.,,;. rep. 5 4..,..!, x 1 .•�w! l r 0,,,m..,,,'.:0,,,,,, tom° iriVA.-46 '/�.I i . ✓'; i, p, ,,,-.,,,.;:i,,,,,x .. ,,, 0,d 1 1 t ger 4- eripr,ifiror r s ... . ___ ..41., ,: _.. BUTLER MARKET RD - asq r _ 9y,°^t rick "+,r"� .2 ac. 9� !` �r �},�.; ��03 act"� . � � .. a r J �-, s a5 9;dc'r ,, r �' ��. 10.8 ac. 765pc. tg a ° 3:,1 'act t F ► ' ' 12ac►;� '�J $, i , + w iii' .„,,,,k' Nm�' . '� �. + :i1„ rig r t r it-....4 . , -4 4, ,,,,7,4 -. ,-,. . , - 1 ,... ,, riv fr"."1.s' ' m!� 4 941 lY `l ti • r ''a ai . 1ps3�ac: r ''^° ,3 2 ac: P r , j �(# vG,r is 1+1��] ac. ;y.• ji lac. 05 ac., *. . ' TThl �• ,w..,___, ,,.../.. ,_.,_ buy■3 3 ac ..• * ice. ULI ✓ ,”,t n ,�. x x, r . . ._. *'.•a t . i� ' ,P a,Y., '; 'YV x`0:3QUIC 05 ac , +r . ,� t�+ w G '' in, t + A'� ! �1#, ,, " " r � Pr , F�' yr ,� w 3a'2 ac: + ► , y a R' ` "F d /fa ! + !""4 „ ""• at p: Yq��� ny i s a • !'�w a n ' N X111. 11 3; ,s 5> fir,' �� ^'� R y a �-. w S 4 `: ��'' u � ;n a rt '.: y q, r... �. i3! s 1S`�'ws�yP" .. rm • , . ad',.. : ,.a� 21,', pG`� 4.., + si' R' , S ,, s f r r,.%• qG r f 'W 1,� .' " 5 r+v',',4-:, ifft'i 't'');''''';''',,t,A,'', 'r .,..''ii,111,6'tic , `'.4'c'4'1--„,,k''''' `-'r'r '' 4" I:, � >s w 1t "v 't } lP. til 'k t A w Rr, n frc >tar '.{' *:Ii/. 7.3 aC Ali . , ^.�. . : * pk . y?,t I;..pp ' n a r (':i '"a`"g; t R 9.'r v -�i MY `,� I x P �'�� air P° ° �' d+ Y ,'. if ^JY ,J• (i, ,; ° �,„a #a!� .. " { i I,1 T i.. ,',A,:'`,.: p, y ly ,%t< y a t (; �! ":—.—^•—•. •4"°'! l ` .�{ '> &� "n s T1r�''�'1 t 'R .pr n £:'.� `"« i lr 1 f�'!1 rya, '.A ' '1.. wT. ,, 3yy flr ,'p r✓G 1 i� - :4' . H�' oti es , i x • 4 � ,(, '! 7 [ fit,. ,� tj � �,�.� W./°:.%1';� �++�! r� �`a< 1 's § � � ▪ Rw �,r■� � ?4,-*,_ '` � < ft• ���QS, •/ Y ✓ Pk.Y,y.! -' k ,NMi,l; ! ',"•� ' , gr„ti ✓n, ,, p 1 2 ac, •i .t •., , , , ,k' 4.e � 7+�ti ' ,(,, ! to .M T rNP;" �h { rn w 9 T �- C i' a rat?: r: �C � w p wy � 1 1• ;� 0 37ac 02 ac. 0'03 ac .;, r� s ' "5 V0.15 -� (( ,ter - � ac. l, �3:.1 ac. , �.� ' ' f ': �' 1 44,1, x0.3119 pe� r �.• � � ► f ,�.. 2 . m . , �Y' �• _. w��. �,,. � ; 1 1 a ' �x 0:319 ac. w v7,,,- `Po t. a . Y c ,�. �:.;. µ.Ai atiY414 PHOTO DATE 7/22/2004 "" .... Vim. 0 . 0�,� ac:•(}=`'i .kI u121•( )\. , CGID 2004 IMAGERY r N 44- 171224 /\� -_,. —_. NW 1/4 0 100 200 400 1,,. ,, F��c Date: 2/4/2014 File#PA-13-1/2C-13-1 Applicant NNP-1V-NCR,LLC Concern:Applicant wants to change a property from Agriculture to Rural Residential representing zone change from E.E U. To MUA-10- 171 Acres Commissioners Baney,Debone, & Unger and Planning Dircetor Lelack, Applicant argues that subject property is not agricultural land protected by Goal 3 thus does not request an exception to statewide planning Goal 3. Applicant's argument that subject property is not agricultural land is based on highly questionable interpretations of the lands soil classifications and its agricultural economic potential. Because the applicant's proposal does not meet all statewide goals it does not comply with Goal 3 and should be denied. The most obvious reason the proposal should be denied is the fact that the land is classified Agricultural by its E.F.U. status_ Other concerns #1 Soil Classification a) Under definition of agricultural lands Goal 3 lands are defined agricultural if they consist of Classification I-VIII soils and are suitable for farm use, with water rights trumping soil classifications. The subject property consists of 171 aces approximately two-thirds of which is covered with water rights for irrigation purposes. The applicant states that the soils classification are not suitable for agricultural purposes. The majority of the soils are classified I- IV soil and are suitable for farm use with the water rights providing further suitability as set forth on OAR-660-03-0020 (1) (9) (8). The purpose of mentioned ordinance and the responsibility of elected officials is to protect agricultural lands and croplands and keep these lands in the inventory of the county's agricultural lands as defined by law. #2 Applicant argues that the land is not suitable for agricultural purposes because of its inability to make.a profit. a) Soil fertility is inadequate states applicant. This can easily be improved(if even needed)by crop rotations and green manure crops which are plowed under and build up the soil capacity to hold water and create nutrients such as nitrogen's and phosphates. Improved fertilizers are slow release which allows them to work through growing season of a particular crop before the value of the fertilizer is simply watered into the subsoil. b) Suitability for grazing is inadequate states the applicant. The expense numbers given by applicant are not realistic. They are using figures as if the property had no infrastructure existing on the premises, which is not the case. Using and upgrading not only existing buildings but also the irrigation system would eliminate many of the projected costs suggested by the applicant, saving thousands of dollars making the property manageable under a farm plan. c) Applicant argues climate conditions forbid profitability of agricultural practices. This argument simply does not hold up. Nearly all E.F.U. Lands in Central Oregon and Deschutes County have the same weather conditions effecting growing season,etc.,give or take two to three weeks. Certain crops thrive in our environment. For example,the cold night temperatures create higher protein counts in crops such as alfalfa, which has become a major export crop to emerging markets in need of high protein feed. This example has grown considerably in the past few years and will continue to do so at a quickening pace in the future. There are many options today,that we did not see as possible twenty years ago,to create profit and sustainability on our E.F.U. Lands. We have entered the golden age of Agriculture. d)Water for farm irrigation purposes-- applicant argues property is not suitable for irrigation purposes but is better suited for other uses due to the soils, etc. This is a flawed concept and it is very important to keep water rights with the land, and until the State of Oregon completely changes the definition of beneficial use, the arguments by the applicant are redundant and inapplicable. e)Applicant suggests surrounding land use patterns are not wholly compatible with agricultural practices. Untrue. "Right to Farm" allows farming practices to continue regardless of surrounding land use patterns. Farmers are protected to carry out their needs of production to insure the stabilization of E.F.U. lands and their productivity. f) Technological and energy inputs are an economic concern for applicant.All fanning and operations in any part of the state requires technological and energy improvements. These are part of the evolution of farming which has kept our country in the forefront of world agricultural production. It is these very issues that have allowed us to be the number one producer of protein for the ever-increasing world population. Often these improvements can lower the cost of productivity allowing greater profit for the land and the owner. In summary, I see no way to get from E.F.U. T\to MUA-l0 designation under State Goal 3 simply by stating the property is non-agricultural when by all definitions it is agricultural. It is not the land that is responsible for production, it is the land owner and his or her responsible stewardship. The applicant's proposal does not meet all statewide goals, does not comply with Goal 3 and should be de ied. /�j Tygh Redfield 68860 Goodrich Road Sisters, OR 97759 • Bonnie Baker From: Robin Vora <robinvoral @gmail.com> Sent: Sunday, February 02, 2014 10:26 AM To: Board; Planning Commission Subject: Newland proposal I urge you to not allow Newland to circumvent Oregon's protective land use laws and approve Newland's request to convert farm, open space and wildlife habitat outside the Bend urban growth boundary into a residential subdivision. Butler Market Road is already busy and we don't need more residential sprawl in Deschutes County. Thank you for your time and consideration. Robin Vora 1679 NE Daphne Dr. Bend, OR 97701 1 Bonnie Baker From: Chuck<chuckinsisters @msn.com> Sent: Monday, February 03, 2014 9:18 PM To: Board; Tammy Baney; Tony DeBone; Alan Unger Cc: Nick Lelack Subject: Newland Hearing on 5 February 2014 Attachments: Newland Ietter.doc Dear Commissioners, I am attaching a letter regarding the Newland Hearing on the morning of 5 February 2014,which I am unable to attend. I would appreciate it if you would take my comments into consideration during your deliberations. Thank you. Chuck Humphreys Sent from Windows Mail 1 Charles Humphreys PO Box 653 Sisters, OR 97759 Home: 541 549 1943 Mobile: 541 815 1543 chuckinsi sters @m sn.corn Tuesday, February 11, 2014 Board of County Commissioners Deschutes County 1300 NW Wall St. Bend, OR 97701 Dear Commissioners, I am writing to urge you to deny the Newlands request to reclassify its EFU lands so they can be developed for residential housing. As I am unable to attend the 5 February 2014 hearing in person, I would appreciate it if you would include these written comments in the record. The crux of the Newlands argument is that its lands can never provide sufficient returns from any farming to support the land owners and should therefore be converted to non- farm use. They base this argument on a detailed financial analysis of farming costs and revenue. While it is possible for a reasonable person to dispute many of their assumptions and figures, engaging in that discussion would obscure the fact that their argument is based on the wrong premise. For most farmers throughout the US and in Oregon, the viability of owning farm land depends on much more than farm income. It is precisely the value of these additional factors, as well other, considerable social benefits, that the EFU designation seeks to capture. By focusing only on income viability,Newlands' argument ignores them completely. The facts clearly support the view that farming is not only about farm income. The majority of farmers, in both the US and Oregon, require nonfarm income to survive. Based on the 2007 Agricultural Census, less than half of all farms had positive net farm income. Less than half the farms listed farming as the primary occupation; in Deschutes County it was only about 40%. Of the 1.2 million"principal farm operators" in the US, nearly 90% received over three-quarters of their household income from nonfarm sources. The average net farm income in Oregon in 2007 was only about $23,000,just above the national poverty level that year for a family of four. And because of the extremely skewed distribution of farm sizes (the median farm size is just 29 acres compared to the average farm size of 425 acres), the median farm income in Oregon was certainly below the poverty line. USDA's classification of farms reflects the fact that "farming" is more than just about farming income: 71% of US faiins are classified as "limited resource farms", "retirement farms", and "residential lifestyle farms." Therefore, it would be wrong to declassify Newland's EFU lands on the basis of its presumptive analysis that its lands are incapable of supporting the owners financially. More importantly, doing so would establish a disturbing precedent that could totally undermine land use policy in Deschutes County, because it would allow the majority farmers to claim a similar declassification, on the basis that they cannot survive solely on farm income. Newland demonstrates no compelling private or social reason for such a sweeping change in land use policy. Newland has other options,most notably working to have its lands incorporated into Bend's UGB when justified by urban growth, which would allow for the development it seeks, while preserving the State's and the County's land use principles. I urge you to uphold the decision of the Hearings Officer by denying the Newland appeal. Sincerely, 'i 1 Charles Humphreys Bonnie Baker From: Kimry Jelen <kimry@kimryjelen.com> Sent: Wednesday, February 05, 2014 11:26 AM To: Board; Tammy Baney; Tony DeBone; Alan Unger Subject: Newland Board of County Commissioners Deschutes County 1300 NW Wall St. Bend, OR 97701 February 5th 2013, Dear Commissioners, I am writing to urge you to deny the Newlands request to reclassify its EFU lands so they can be developed for residential housing. As I am unable to attend the 5 February 2014 hearing in person, I would appreciate it if you would include these written comments in the record. We live in a beautiful place here in Oregon. Oregon is a special place - that's why developers want to develop here. We need to stick to a plan or make a plan that values ALL aspects of what makes this area special. It appears the Newland development people made a gamble in purchasing that land hoping they could develop it. Gambles don't always work out. Please do not give this matter anymore attention, deny it. This is not how we care for your lands, our future generations, water and community here in Oregon. End of story. Thank you, Kimry Jelen PO Box 736