The URL can be used to link to this page

2019-353-Minutes for Meeting July 24,2019 Recorded 8/8/2019Co BOARD OF COMMISSIONERS 1300 NW Wall Street, Bend, Oregon (541) 388-6570 10:00 AM Recorded in Deschutes County CJ2019-353 Nancy Blankenship, County Clerk Commissioners' Journal 08/08/2019 3:34:44 PM \31 ES,(-o Il � l I II II loll I' I II II I I (I I'I I'll 2019-353 FOR RECORDING STAMP ONLY BARNES & SAWYER ROOMS Present were Commissioners Phil Henderson, Patti Adair, and Anthony DeBone. Also present were Tom Anderson, County Administrator; David Doyle, County Counsel; and Sharon Keith, Board Executive Assistant. Several citizens and no identified representatives of the media were in attendance. This meeting was audio and video recorded and can be accessed at the Deschutes County Meeting Portal website http://deschutescountyor.igm2.com/Citizens/Default.aspx CALL TO ORDER: Chair Henderson called the meeting to order at 10:02 am PLEDGE OF ALLEGIANCE: CITIZEN INPUT: None presented CONSENT AGENDA: Before the Board was Consideration of Approval of the Consent Agenda. ADAIR: Move approval of Consent Agenda DEBONE: Second BOCC MEETING JULY 24, 2019 PAGE 1 OF 10 VOTE: ADAI R: Yes DEBONE: Yes HENDERSON: Chair votes yes. Motion Carried Consent Agenda Items: 1. Consideration of Board Signature of Order No. 2019-033, Designating Tax Collector 2. Consideration of Board Signature of Order No. 2019-031, Authorizing the County Property Manager to Sign Documents Related to the Purchase of Property Located at 703 N. Larch Street, and Approval of Document No. 2019-578, a Sale Agreement, and Document No. 2019-588 and 2019-589, Assignments/Assumptions of Leases. 3. Consideration of Board Signature for Document No. 2019-577, Sheriff's Office Terrebonne Substation Lease Renewal 4. Consideration of Board Signature of Letter Appointing Lester Moorman to the Deschutes River Recreation Homesites Special Road District Board #8 5. Consideration of Board Signature of Letters Reappointing Alysha Gilpatrick, Chris Perry, Doug Kelly, and Jared Jeffcot to the Ambulance Service Area Advisory Committee 6. Consideration of Board Signature of Letter Reappointing Art Sharkey to the Four Rivers Vector Control District Board 7. Consideration of Board Signature of Letter Thanking Donna Smith for Service on the Four Rivers Vector Control District Board 8. Approval of Minutes of the May 21, 2019 BOCC Meeting 9. Approval of Minutes of the May 22, 2019 BOCC Meeting 10.Approval of Minutes of the June 11, 2019 Legislative Update Meeting 11.Approval of Minutes of the July 1, 2019 BOCC Meeting 12.Approval of Minutes of the July 3, 2019 BOCC Meeting 13.Approval of Minutes of the July 10, 2019 BOCC Meeting 14.Approval of Minutes of the July 15, 2019 BOCC Meeting 15.Approval of Minutes of the July 17, 2019 BOCC Meeting Commissioner Henderson announced the celebration of the 100th year of the Deschutes County Fair this year. Commissioner Henderson also announced the federal government grant to improve US Highway 97 on the north end of Bend. BOCC MEETING JULY 24, 2019 PAGE 2 OF 10 Commissioner Adair acknowledged Kaylee's Law signed by Governor Kate Brown and asked everyone to keep the family in their thoughts and prayers. ACTION ITEMS: 16. READING OF PROCLAMATION: Recognizing July 21 - 27, 2019 as Pretrial, Probation, and Parole Supervision Week Ken Hales, Community Justice Department presented the proclamation. DEBONE: Move approval ADAIR: Second VOTE: DEBONE: ADAIR: HENDERSON: Yes Yes Chair votes yes. Motion Carried Commissioner DeBone read the proclamation into the record. OTHER ITEM: Representatives of Central Oregon Veterans Outreach, JW Terry and Kathy Skidmore presented the Board of Commissioners with a plaque for their support of the Veteran's Day Parade and life-saving support of veterans in the homeless community. 17. PRESENTATION: Request for Support for the Commissioning of the USS Oregon Johnny Corbin presented history of the USS Oregon on behalf of the BOCC MEETING JULY 24, 2019 PAGE 3 OF 10 commissioning committee. Mr. Corbin reported the US Navy is unable to provide funding for the commissioning ceremony for the submarine USS Oregon. The Committee's goal is to raise $200,000 to sponsor the commissioning of the USS Oregon. The commissioning is scheduled for some time next year. 18. PRESENTATION: Housing Works Annual Update Housing Works representatives presented the annual update. Challenges of finding affordable land options was noted by the Board member (who is also a land developer). A copy of the presentation is attached to the record. 19. Consideration of Chair Signature of Document No. 2019-509, a Notice of Intent to Award Contract for the Paving of Ward Road and Local Streets Project to 7 Peaks Paving LLC County Engineer Cody Smith presented the project scope of work and bid process. Three bids were received and the low bidder was 7 Peaks Paving LLC. DEBONE: Move approval of Document No. 2019-509 ADAIR: Second VOTE: DEBONE: Yes ADAI R: Yes HENDERSON: Chair votes yes. Motion Carried 20.Wildfire Hazard Zone Working Group Community Development Department Director Nick Lelack, Planner Zechariah Heck, and County Forester Ed Keith presented the follow-up on the BOCC MEETING JULY 24, 2019 PAGE 4 OF 10 formation of a committee that will review and recommend the framework of the wildfire hazards maps and zones. Commissioner Henderson commented on the Board's involvement in shaping this committee. Commissioner Adair noted the importance of our community and having the Board involved. Commissioner DeBone agrees the working group should be appointed by the Board. The Board reviewed the purpose of the committee. Commissioner DeBone spoke on the efforts of Project Wildfire and the development choices and the overlap. Staff suggested the working group include seven to twelve members representing fire service/first responders, homebuilders/realtors, an insurance representative, a homeowner's association representative, and planning commissioners. Commissioner Henderson suggested the membership be revised to include a member of Project Wildfire and to have the representative quantity change to 2 - 3 verses 2 - 4. Commissioner DeBone suggested publishing the decisions and report back to the Commissioners. Commissioner Adair expressed concern over the areas of the County that do not have fire service coverage. The Board agreed a member of Project Wildfire should be involved as well as homeowners association and insurance representatives. Applications will be presented to the Board for their recommendation of appointments. OTHER ITEMS: Project Wildfire: Commissioner Henderson presented this discussion and reported on proposed questions to survey the Project Wildfire Steering Committee on whether to change the Project Wildfire Director from a contracted position to a Deschutes County employee or to consider some other structure. Commissioner DeBone spoke on the possibility of a full time employee and whether we expand to a next level of fire planning. Commissioner Henderson suggested we do more and wants discussion on whether we maintain the independent contractor model or if we switch to a County employee model. Commissioner Adair inquired what we can do to accomplish safety for our community and how we can do more for reducing fire risk. County Forester Ed Keith feels we could do more but asked if we are asking questions about staffing and asks for clarification prior to posing the BOCC MEETING JULY 24, 2019 PAGE 5 OF 10 question to the Project Wildfire Steering Committee. Protecting the community from wildfire is a permanent and important obligation of the County. Commissioner Henderson is in favor of asking the Project Wildfire Steering Commissioner for input and commented an employee will have more time to commit. Commissioner DeBone feels fuels reduction efforts are important. A full- time employee may make it more effective and will bring more continuity for wildfire efforts. Commissioner Adair agrees that the staffing question should be brought to the Steering Committee to review. An employee would bring the efforts to the next level and add value to the community efforts for fuels reduction. The reason to not just leave this decision up the Steering Committee is that Deschutes County is committed to Project Wildfire by County Code with financial and safety responsibility. Mr. Keith will present this question to the members of the Steering Committee and then form a subcommittee to present the outcome of the responses to the Board. Commissioner DeBone offered assistance in gathering information but explained he doesn't need to be involved in the interviews. 21.PUBLIC HEARING Continued: Marijuana Production Appeal, 60148 Stirling Drive Isabella Liu, Community Development Department Planner presented the hearing procedures. Hearing no conflicts or bias by the Commissioners or challenges by those present, Commissioner Henderson opened the public hearing. Ms. Liu presented the staff report. Michael Hughes attorney and applicant Tommy Nehmzow presented testimony on odor and noise mitigation as well as their comments on the neighboring property claiming a youth activity center (YAC). The water usage for the operation was reviewed. The applicant stated he is present on the property a couple days per week and has never seen any youth activity on the neighboring property. Attorney Liz Dickson, representing appellants Keith and Kristin Adams presented testimony. Mr. Adams presented reference materials for the BOCC MEETING JULY 24, 2019 PAGE 6 OF 10 record. Multiple residents of the Sundance community were in the audience. The appellants have appealed this application on behalf of the entire Sundance community. Norm Sundholm is a member of the Board of Directors of the Sundance Meadows Ranch and also presented testimony. Materials were provided showing the various activities offered at the Ranch. Mr. Adams also presented a letter of support by Sheriff Shane Nelson. Ms. Dickson provided exhibits depicting the property area and provided testimony. Ms. Dickson commented on portions of the application that are misleading and contradicting. A petition of 1,096 signatures have been submitted to the record in opposition of this application. Ms. Dickson asks the application be denied. RECESS: At the time of 12:45 p.m., the Board took a recess and reconvened the meeting at 1:02 p.m. OTHER ITEMS: A quick announcement was made by Randy Povey regarding the Buckaroo Breakfast invitation to the Commissioners to serve breakfast on Sunday, August 4 from 6:00 a.m. to 10:00 a.m. Commissioner Henderson called for public testimony. Ron Brooks, resident of Sundance provided testimony in opposition of the proposed marijuana grow. KB Brooks, resident of Sundance provided testimony in opposition of the proposed marijuana grow. • Jim Moran presented documents for the record and presented testimony regarding the marijuana grow impacts to real estate and to the property values and quality of life in Sundance. • Kelly Donaldson, resident of Sundance provided testimony in opposition of the proposed marijuana grow. BOCC MEETING JULY 24, 2019 PAGE 7 OF 10 • Jeff Stob, resident of Sundance provided testimony in opposition of the proposed marijuana grow. • Kristin Adams presented documents for the record and provided testimony in opposition of the proposed marijuana grow. • Mark Smith presented testimony in opposition of the proposed marijuana grow. • Norm Sundholm, presented testimony on behalf of Delores Schultz in opposition of the proposed marijuana grow. Mr. Sundholm presented a signed document on behalf of the residents. • Brenda Stanton, residence of Sundance presented testimony in opposition of the proposed marijuana grow. • Mary Petsch, resident of Sundance provided testimony in opposition of the proposed marijuana grow. • Wendy Burkhardt provided testimony in opposition of the proposed marijuana grow and provided written testimony for the record. • Deborah Lee, residents of Sundance presented testimony in opposition of the proposed marijuana grow. • Shirley and John Marsh, residents of Sundance presented testimony in opposition of the proposed marijuana grow. • Erik Moyerman, resident of Sundance presented testimony and commented on the ingress and egress to this subject property through a residential neighborhood. Ron Houser, resident of Sundance presented testimony in opposition of the proposed marijuana grow. Pam Fredricksen, resident of Sundance presented testimony in opposition of the proposed marijuana grow. BOCC MEETING JULY 24, 2019 PAGE 8 OF 10 Mr. Hughes applicant's attorney provided rebuttal. Mr. Hughes commented there is nothing the County can do about the level of odor at marijuana or hemp grow operations. Mr. Nehmzow's parents bought the property for him. Commissioner Henderson closed the oral portion of the public hearing. Ms. Liu reviewed the deadlines for testimony. RECESS: At the time of 2:27 p.m., the meeting went into recess and was reconvened at 2:40 p.m. in the Allen Conference Room. EXECUTIVE SESSION: At the time of 2:40 p.m. the Board went into Executive Session under ORS 192.660 (2) (e) Real Property Negotiations. The Board came out of Executive Session at 3:12 p.m. to direct staff to proceed as discussed. OTHER ITEMS: Commissioner Henderson is interested in having the Deschutes County staff employee in the Health Service Department that works with the homeless come in to present data and efforts on outreach with the homeless and public agencies either individual meetings or at a BOCC meeting. EXECUTIVE SESSION: At the time of 3:18 p.m. the Board went into Executive Session under ORS 192.660 (2) (d) Labor Negotiations. The Board came out of Executive Session at 3:32 p.m. BOCC MEETING JULY 24, 2019 PAGE 9 OF 10 OTHER ITEMS: • Commissioner Henderson reported on a request for a letter of support to the federal delegation in support of the United States -Mexico -Canada Agreement (USMCA). Commissioner Adair will draft a response. • Commissioner Henderson inquired regarding the proposed courthouse expansion, are we moving forward regardless of being approved for an additional judge. Commissioner Adair and DeBone are supportive of a discussion on the March 4, 2020 agenda. • County Administrator Anderson reminded the Board of the Annual Employee Appreciation Breakfast and requested individual donations of the Board for prizes. • County Administrator Anderson also reported on audit committee appointments and Commissioner Adair will participate in the interviews. • Commissioner DeBone noted there is one remaining vacancy for citizen appointment for the Public Safety Coordinating Council. Being no further items to come before the Board, the meeting was adjourned at 3:40 p.m. DATED this Day o 2019 for the Deschutes County Board of Commissioners. A7. l� - ,/:,. - ANTHONY COMMISSIONER Q la � n+ �' B �Y,. L� f I F BOCC MEETING JULY 24, 2019 PAGE 10 OF 10 Deschutes County Board of Commissioners 1300 NW Wall St, Bend, OR 97703 (541) 388-6570 - www.deschutes.org BOCC MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 AM, WEDNESDAY, JULY 24, 2019 Barnes Sawyer Rooms - Deschutes Services Center - 1300 NW Wall Street - Bend This meeting is open to the public, usually streamed live online and video recorded. To watch it online, visit www. des chutes.org/meetings. Pursuant to ORS 192.640, this agenda includes a list of the main topics that are anticipated to be considered or discussed. This notice does not limit the Board's ability to address other topics. Meetings are subject to cancellation without notice. Item start times are estimated and subject to change without notice. CALL TO ORDER PLEDGE OF ALLEGIANCE CITIZEN INPUT CONSENT AGENDA 1. Consideration of Board Signature of Order No. 2019-033, Designating Tax Collector 2. Consideration of Board Signature of Order No. 2019-031, Authorizing the County Property Manager to Sign Documents Related to the Purchase of Property Located at 703 N. Larch Street, and Approval of Document Number 2019-578, a Sale Agreement, and Document Numbers 2019-588 and 2019-589, Assignments/Assumptions of Leases. 3. Consideration of Board Signature for Document No. 2019-577, Sheriffs Office Terrebonne Substation Lease Renewal Board of Commissioners BOCC Meeting Agenda Wednesday, July 24, 2019 Page 1 of 3 4. Consideration of Board Signature of Letter Appointing Lester Moorman to the Deschutes River Recreation Homesites Special Road District Board #8 5. Consideration of Board Signature of Letters Reappointing Alysha Gilpatrick, Chris Perry, Doug Kelly and Jared Jeffcot to the Ambulance Service Area Advisory Committee 6. Consideration of Board Signature of Letter Reappointing Art Sharkey to the Four Rivers Vector Control District Board 7. Consideration of Board Signature of Letter Thanking Donna Smith for Service on the Four Rivers Vector Control District Board 8. Approval of Minutes of the May 21, 2019 BOCC Meeting 9. Approval of Minutes of the May 22, 2019 BOCC Meeting 10.Approval of Minutes of the June 11, 2019 Legislative Update Meeting 11.Approval of Minutes of the July 1, 2019 BOCC Meeting 12.Approval of Minutes of the July 3, 2019 BOCC Meeting 13.Approval of Mintues of the July 10, 2019 BOCC Meeting 14.Approval of Minutes of the July 15, 2019 BOCC Meeting 15.Approval of Minutes of the July 17, 2019 BOCC Meeting ACTION ITEMS 16. 10:10 AM READING OF PROCLAMATION: Recognizing July 21 - 27, 2019 as Pretrial, Probation, and Parole Supervision Week - Ken Holes, Communityjustice Director 17. 10:15 AM PRESENTATION: Request for Support for the Commissioning of the USS Oregon 18. 10:35 AM PRESENTATION: Housing Works Annual Update Board of Commissioners BOCC Meeting Agenda Wednesday, July 24, 2019 Page 2 of 3 19. 11:00 AM Consideration of Chair Signature of Document No. 2019-509, a Notice of Intent to Award Contract for the Paving of Ward Rd and Local Streets Project to 7 Peaks Paving LLC - Cody Smith, County Engineer 20. 11:10 AM Wildfire Hazard Zone Working Group - Zechariah Heck, Associate Planner 21. PUBLIC HEARING Continued: Marijuana Production Appeal, 60148 Stirling Drive - Isabella Liu, Associate Planner LUNCH RECESS OTHER ITEMS These can be any items not included on the agenda that the Commissioners wish to discuss as part of the meeting, pursuant to ORS 192.640. ADJOURN 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) 617-4747. FUTURE MEETINGS: Additional meeting dates available at www.deschutes.orf/meetinLycalendar Meeting dates and times are subject to change. If you have questions, please call (541) 388-6572. Board of Commissioners BOCC Meeting Agenda Wednesday, July 24, 2019 Page 3 of 3 Who We Are Central Oregon Regional Housing Authority (CORHA)-Rebranded as Housing Works in 2006 ORS 456 - Public Corporation Established in 1977 by Deschutes and Jefferson Counties, Crook County Joined in 2001 We are one of the largest landlords in Central Oregon We help house about 2.5% of the households in the region S t COR HA Ne know the wav home 7/26/2019 1 Our Mission: Fostering Dignity Through 9Cousing 7/26/2019 2 A Our Service Jurisdiction Concepts That Guide Us A Create housing opportunities Connect• • and resources Demonstrate sound and professional STEWARDSHIP stewardship 7/26/2019 3 CoNlaboration provides more e than a home • Health Care: Capital Dental - Mobile Van, Mosaic Medical • Child and Youth Development: Sisters, Bend & Redmond Parks and Rec, Boys and Girls Club, Deschutes County Library, Central Oregon Youth Development • Nutrition Education: OSU Extension Services, WIC (Oregon DHS) • Social Services: Thrive Central Oregon, Saving Grace • Case Management: Deschutes County Behavioral Health, Pfeifer and Associates • Employment Support: Heart of Oregon — Youth Build, Work Source • Family and Education Services: Head Start (Neigh borlmpact) • Language Services/Outreach: Latino Community Association • Financial Education: Credit Builders Alliance (CBA) - Credit Enhancement 7/26/2019 4 Investing In Our Families The HomeQuest Program Helping Families Become Homeowners • 157 Total Homeowners since 1996 • 72 PATHWorks Program Participants. • 13 HCV Holders • 72 Other Programs, VIDA, NSP, Ground Lease 7/26/2019 L� What is Affordable Housing? What is an affordable rent? Test: > 30% of income = "Rent Burdened" Working at minimum wage $10.75 ($22,360/yr) a household could afford $559 in rent Fair Market Rent in Deschutes County is $884 for a 1 Bedroom and $1,071 for a 2 Bedroom 18% of Deschutes County households make less than $25,000 per American Community Survey HOUSING WORKS'. 7/26/2019 u Local HOUSING statistics Deschutes County Rent Burden HH without burden o HH - rent burdened N HH - extreme burden 7/26/2019 0 Housing Choice Vouchers 1. A 45 year-old Federal Program administered by the Office of Housing and Urban Development (HUD) through Public Housing Authorities like Housing Works. 2. Generally a "tenant -based" Program, meaning that Voucher Holders are given rent support to rent housing in the private market. Subsidy is given to the landlord, not directly to the tenant, and covers the portion of rent that exceeds 30% of the Voucher Holder's income. 3. The number of Vouchers allocated to a City or region is set by Congress through HUD's budget, and the number of Vouchers available to Central Oregon has not significantly increased over the past 10 years. 4. Voucher Holders cannot earn more than 50% of the Area Median Income, although HUD targets that at least 75% of Voucher Holders earn less than 30% of Area Median Income. Housing Choice Voucher Program Statistics Deschutes County Voucher Holder Population 1,041 Total Vouchers 2,140 People Served m VASH hrnsr_re�n_rr� ;eneral HCV Average household size is 2.1 51 % of all voucher holders are elderly and/or disabled 7/26/2019 0 Housing Choice Voucher Program Statistics Bend Average Monthly Housing Assistance Payment Average Annual Income of Voucher Households = $13,773 Deschutes Average Monthly Housing Assistance Payment Housing Works pays out $296,489 in housing assistance payments each month to landlords in Bend. Average Annual Income of Voucher Households = $14,322 Housing Works pays out $561,273 in housing assistance payments each month to landlords in Deschutes County. Housing Works Portfolio HW Portfolio by Locality 7/26/2019 Oj What does it take to develop Affordable Housing? 7/26/2019 10 ' $11.6 mil for 62 Apartments $11.6 mil for 62 Apartments $7.2 mil GAP Mortgage "Affordable Rents" 38% 2 br rent= $780 $44 mil9 3 br rent = $860 Market Rate Mortgage Rents 75% — 2 br rent = $8.7 mil $1,250 3 br rent = $1,600 $7.2 mil GAP Mortgage "Affordable Rents" 38% 2 br rent= $780 $44 mil9 3 br rent = $860 How Do We Make it Work? Government Subsidies A) Federal Low Income Housing Tax Credit (9% and 4%) B) State Housing Loans 1. GHAP (document recording fee proceeds) 2. LIFT (State Bond Funds) C) Local Support 1. CDBG (if Entitlement Jurisdiction) 2. Local Housing Fee revenues 3. General Fund Grants 4. Urban Renewal Grants/Loans 2. Cost Reductions A) Donated or Discounted Land B) Waived or Reduced SDCs and Fees C) Economies of Scale (Higher Densities) Plus a lot of Creativity! ,� `w. .�•: �Ff ,�� ice. � �;pg �,,,: .�,� � �. a.. qF V. County Land Donation Made Hawks View Estates Possible 7/26/2019 12 7/26/2019 13 �0TES CO a Deschutes County Board of Commissioners 1300 NW Wall St, Bend, OR 97703 (541) 388-6570 - Fax (541) 385-3202 - https://www.deschutes.org/ AGENDA REQUEST & STAFF REPORT For Board of Commissioners BOCC Wednesday Meeting of July 24, 2019 DATE: July 18, 2019 FROM: Zechariah Heck, Community Development, 541-385-1704 TITLE OF AGENDA ITEM: Wildfire Hazard Zone Working Group BACKGROUND AND POLICY IMPLICATIONS: On July 1, the Board directed staff to propose a conceptual working group to review and recommend to the Board if the Wildfire Hazard Zone should be updated and where/how it should apply. Staff has prepared a memo (attached) that provides options for the Board's consideration. FISCAL IMPLICATIONS: None. ATTENDANCE: Nick Lelack, CDD Director; Ed Keith, County Forester; Chris Gracia, Ast. Building Official; Zechariah Heck, Associate Planner. COMMUNITY DEVELOPMENT MEMORANDUM DATE: July 17, 2019 TO: Board of County Commissioners ('Board") FROM: Nick Lelack, CDD Director Ed Keith, County Forester Chris Gracia, Assistant Building Official Zechariah Heck, Associate Planner RE: Working Group for Wildfire Hazard Zone Consideration On July 1, 2019, the Board decided to move forward with creating a working group to review and recommend to the Board if the Wildfire Hazard Zone should be updated and where/how it should apply. The following is a draft framework for a working group. It provides options and seeks Board direction. I. Type of Committee: Board or CDD Director Appointment? If appointed by the Board, then it is a public body that must follow all established public meetings laws, including meeting minutes (or recordings), etc. If appointed by CDD Director, then it is an "ad-hoc" committee. The meetings will still be open to the public, but formal open public meetings law procedures are not applicable and meeting minutes are not required. However, staff would still establish a webpage, regular meeting dates (posted on the website), post memorandums, and provide at least meeting outcome summaries. Question for the Board. Should the working group be appointed by the Board or the CDD Director? II. Purpose • To recommend one or more wildfire hazard maps/zones; • To recommend whether to apply Oregon Residential Specialty Code (ORSC) R-327.4 and/or land use standards based on the above; and/or • Another purpose per Board direction. Questions for the Board. Does the Board support the purpose statements suggested above? Should there be other purposes for the working group? 117 NW Lafayette Avenue, Bend, Oregon 97703 1 P.O. Box 6005, Bend, OR 97708-6005 (541)388-6575 @)cdd@deschutes.org www.deschutes.org/cd III. Membership Staff suggests the working group include seven to twelve (7-12) members representing the following interests: 2 to 4 representatives from fire service/first responder agencies • 2 to 4 representatives from a homebuilder/realtor business 1 insurance representative 1 HOA representative • 1 to 2 County Planning Commissioners Questions for the Board. How many members serve on the working group? Does the Board support the proposed make-up of the working group? Are there any other stakeholders not listed above that should be included? IV. Schedule Staff proposes the working group meet twice per month for up to four months. Regular check -ins with the Board can occur monthly or more frequently if deemed necessary. The following table lists a draft CDD Director Appointed Committee schedule:' Month Topics of Discussion August Mid -August Orientation, Introductions, Purpose/Charter, Ground Rules, Overview of Draft Wildfire Hazard Maps/Zones, R327, Land Use Standards, Major Decision Points. Late -August Wildfire Hazard Maps/Zones: Review and discuss concepts; develop additional concepts? September Early September Review and discuss draft Wildfire Hazard Map/Zone Concepts; Identify and discuss: R327 Decision Points, Questions, Information Needs to make recommendations. Late September Discuss and potentially recommend Wildfire Hazard Maps/Zones; Discuss R327 Decision Pts. October Early October Finalize Wildfire Hazard Map/Zone; Discuss and potentially recommend R327 Decision Pts. Late October Finalize R327 recommendations; Identify and discuss Land Use Standards Decision Points, Information Needs. November Early November Review and discuss Land Use Standards. Late November Finalize Land Use Standards recommendations. December Early December If necessary, finalize any outstanding recommendations. Questions for the Board. Does the Board support the proposed conceptual schedule and timeline to finalize recommendations? A Board appointed Committee would begin in late September and conclude in January 2020 due to the time necessary for the Board to appoint official members. Page 2 of 2 F 4Q Deschutes County Board of Commissioners 1300 NW Wall St, Bend, OR 97703 (541) 388-6570 - Fax (541) 385-3202 - https://www.deschutes.org/ AGENDA REQUEST & STAFF REPORT For Board of Commissioners BOCC Wednesday Meeting of July 24, 2019 DATE: July 19, 2019 FROM: Isabella Liu, Community Development, TITLE OF AGENDA ITEM: PUBLIC HEARING Continued: Marijuana Production Appeal, 60148 Stirling Drive BACKGROUND AND SUMMARY: The applicant received an administrative approval to establish a marijuana production facility in the Exclusive Farm Use (EFU) Zone. The administrative decision issued by staff was timely appealed on May 28, 2019. The Board of County Commissioners called up the matter for their review on May 21, 2019 via Order No. 2019-014. The Board held a hearing on June 26, 2019 and continued it to July 24, 2019. See attached staff memo for further background information. ATTENDANCE: Izze Liu, Associate Planner DATE: July 24, 2019 TO: Board of County Commissioners FROM: Izze Liu, Associate Planner RE: Continued Public Hearing for an appeal of an Administrative Determination for marijuana production. File No. 247-19-000431-A (appeal of 247 -18 -000915 -AD). I. Background The Deschutes Board of County Commissioners ("Board") conducted a public hearing on June 26, 2019 to consider the appeal, filed by appellant Keith and Kristin Adams, represented by Attorney Liz Dickson (together "Appellant") in response to an administrative decision approving a marijuana production facility proposed by Tommy Nehmzow, represented by Michael Hughes (together "Applicant"). At the applicant's request, the Board granted a continuance of public hearing to July 24, 2019. This staff memorandum is supplementary to the original memo dated June 26, 20191. II. Record The record, in its entirety, was presented to the Board as attachments to the May 21St staff memorandum regarding the work session held on May 21 It to consider an order to hear a potential appeal of this application. The appeal documents were presented to the Board on June 10th for the work session held on June 24th to prepare for the public hearing. Neither the applicant nor the appellant provided oral testimony at the public hearing on June 26, 2019 and no new information has been presented into the record. A binder containing copies of all materials in the record has also been prepared for the Board. It is located in the Board offices so that it is accessible at any time and the Board may reference it at the public hearing and any other meeting. 1 This memo can be found at htt deschutescount or.i rn2.com Citizens FileO en.as x?T e=1&ID=2092&Inline=True. Additional documents can be found at https:/Idial.descfiutes.org/Real/DevelopmentDocs/275713. III. Decision, Notice, and Timeline The Planning Division issued the administrative decision on May 13, 2019, determining the proposal met the approval criteria. A Notice of Decision was sent to neighboring property owners and those who submitted comments and provided a mailing address. The administrative decision was timely appealed on May 28, 2019. A Notice of Public Hearing was mailed on May 30, 2019. A public hearing was held on June 26, 2019 and at the applicant's request, the Board granted a continuance of public hearing to July 24, 2019. The applicant submitted a written request on June 24, 2019 to extend the clock for 60 days. The statutory time period for issuance of a final local decision ends on September 20, 2019, unless this period is further extended by the applicant. IV. Conclusion & Next Steps The statutory time period for issuance of a final local decision ends September 20, 2019. As of the date of the continued public hearing (July 24, 2019), there will be 58 days left on the timeline. At the conclusion of the hearing, the Board may choose to: 1. Close the record and begin deliberations. 2. Leave the record open until a date certain for additional written evidence or testimony. 3. Continue the public hearing to a date certain. 247-19-000-431-A (247 -18 -000915 -AD) >n m� tI m� SEE MAI 1812 25 ( I I C A 1 4'7, ' A m f a o gio� �a g m a� o 0 -- zo Cp w 3 u a+EBEC p,�yE wm m w m nv n d� m p w Cl)z s S W C/) CO Z co C rn w m o V a� t--------- }--- 1 I I s, I I I I zC ---- m ca i� ci SEEMi 1873 i—__--._—.»— i �—'_ � X o I Exhibit Page _ of O -r,: M (j) Cf) m C) _ C: o i� rn co 00 n cn O C:. z -� z -< m Exhibit Page_ of G Exhibit —.-- Page,?— ©f Nehmzow/Gore MJ Application Proximity to Other Uses / it/� �.' f � 4' /�/ %� 6 / � /✓/ ////:/G/�, , E$/."".. , Fz! � �� //�/ / y, /'�y s/., ,.N,,� 1�,, 1�� ,iv%/'�'��//i/✓//: t'�� : %I � j,� �� ,lG Jif; ,., /: �_ ,��7 / � ,i., /' /f/�„�a'// �, �y � / � ,''.�'� „;Y/� ..� /�/% ;G%rY",//y/�s..' �//„ / �i f:/ ;/ /Ol,✓;%%''/%r9 �/ y f % �/, /u`;if' V/..�/j/,� r/,o/////G/✓r ��i �''��/� / A'y `i ;/f/ /�'�/J✓'�i //'r/f/�IGF> 4,'' //� 4'// / �, `,. %��/ // , /'rj' �j.✓"/'///�'/�/ . �il� �j/�/� /ice! �f%/�/r, ;../ /vf��, .�� "/,':✓ �^y /�, ",f /.�,�///� /-/"///'/if/%/.✓��j/�✓p,,/� ��iizY �/G�.�.l!��,,/yyf//1/�,s .; i/, n,4/�,s-,�� :,,//O O ;� d / i/.. / � s r�>O /!/ .r/, . ,19:� � ; K� � /'.� / , 4i/,', � / � 4c/ ✓:�� /y,/<, ,, /.t' S.. i, r, /,/ ../� o r i�//'/� ;'/k,,�;�/ e� ✓ /;.,. // �, /'; / ::6, / , o- ,,. �%y .,, ' / � ,r✓./G; v/ ,�/i� YY � /'�Y'".' :✓a4s`', f /.ia v/, ,�-. ,/ //. � s� /G� ./.,/, /r f/2��ryh�i��ii,, i. s / ✓, ,� ',�%„/, !G�//.. t✓ ,/' �... ,%�f /�.�,��'��,�/ � / .�. � /:%�,��,y��/. //. s/�/ar;,/�� %=,fir `,/ G /r/ f,/ .,;vr./ g�/ / / e/i / %//, r,', ... j' / / /✓r / ,�//e / ��a/tea 1 ,�Y, r / �i�f/ / i �/� �/ Y/ i 1 r Oji fr v/. r,✓ � � / / c G � /r /, / r / . ,�/:/i. ��' , /i�.,..,.:/.. / ./ ,✓, /. .� /� °� i � % .../// �/ ,/Y',f.,./, , O s'/,/-:iG�, i�%r�sr.a,;r%� //i"��„/�/aG/�.. �. �/i,�/� ,4� .� j ! v�/ Gi„�� /�i ,r � /> .” :! u,, e E nay!„ ✓/� ��y/� / r�l�i��; r ✓%� �� ,e, � ,t.,�'// ✓i,.;,n/ / i�. iG/ r/j�r�,��'///ov ,/,/,c/t�y/,/yi,��/ „i Gf%r/,%,��%7�s% �/ � „� �/ //�� .� Detes'�Go�n� GIS✓s/�z/G/;..��,�/ /r ,i./. ////�r: � ,�:.; / l � �j�i,�iv%//sem✓yc ,'; , ,. <. ,..,„.�;/y _ „/,'�i' .<”'////ri, ,;>,;. ,.G''/G�,i,/” ,,. a. i�„ ,l/:;/,U,. ,. s„�,,, % Ga /,,✓'„/,,.��r /i .,�' /�,�,'%; 1 ,// i /„/i�r' PP y� y/ / Exhibit a' Pagc of �� ” Independently Owned and Operated JIM MORAN, Broker 486 5W Bluff Dr, Bend, OR 97701 DIRECT (541) 312-7287 CELL(541)948-0997 TOLL FREE (888) 572-7287 EFAX (866) 781-0845 jim@jimmoranbroker.com www.jimmoranbroker.com Re: Marijuana production facility disapproval narrative for 60148 Strling Dr. Bend, Oregon. Jim Moran Licensed Broker in the State of Oregon since 2010. Current Sundance resident 18 years. I have a 22 -year career in Portfolio Real Estate lending with a Federally Chartered Savings and Loan (World Savings). Supervised Origination staff of Loan Officers, Appraisers, Underwriters and Processors for residential and commercial Real Estate lending in Seattle Washington and the SF Bay Area. It's a known fact that the Federal Government has yet to approve or will ever approve the sale and production of marijuana nationally. It is currently considered that the product is in violation of Federal Law. Prosecutions are still pending. Civil, criminal and regulatory liability and censure are still being aggressively enforced. The proposed grow and production operation in question at 60148 Sterling Dr poses a threat to the future value, lifestyle, and potential liability for the community of 200 + homes in Sundance. It represents not only a non- conforming use but it will have an immeasurable impact on property values and quality of life going forward. The original cc&r's specifically prohibited such an operation which speaks to the spirit and original intent of the community. The State of Oregon required Seller Property Disclosure Statement mandates full disclosure by a seller to a buyer in a standard REAL Estate transaction. Among other notations a seller MUST disclose any non- conforming or illegal uses to the buyer that may impact the property. This Disclosure becomes part of the Real Estate Purchase contract that will be shared with the Title Company, Lender and Appraiser. An Appraisal will also carry further disclosure. RLJ {�-�11P �) .1 � '`�'t fib. r .- ® E rV ® aes i� w,�+ r• .VdL C H A M B E R MEMBER MORRIS REAL ESTATE Independently Owned and Operawd 11M MORAN, Broker 486 SW Bluff Dr, Bend, OR 97701 DIRECT(541)312-7287 CELL(541)948-0997 TOLL FREE (888) 572-7287 EFAX (866) 781-0845 jim@jimmoranbroker.com www.jimmoranbroker.com Title Companies, Mortgage Lenders, and Appraisers are Federally regulated. In recent years the Dodd Frank regulations have tightened the rules, regulations, requirements and penalties for violations. Their rules, aggressive reporting requirements and prosecutions have become legendary. Should this grow and production operation be granted, a seller in the Sundance community will be compelled to call out and identify this non- conforming, Federally illegal facility on their Seller Disclosure, since the property abuts the subdivision and provides the only means if ingress and egress for its employees, services and distribution of product. Upon review of this disclosure it will be highly questionable if not impossible for a Federally Chartered Title Company to grant a title policy or for a Federally Chartered Mortgage Lender to make a loan. They will be subject to Federal regulatory prosecution. Once these facts are brought to light in the Real Estate, Title, Lending and Appraisal communities, it's not hard to recognize the negative impact this operation will have on the value and livability of the 200 plus homes in Sundance. Note this information is not about the morality of a marijuana grow or production facility. It is just the reality of today's world and the potential impact this operation will bring to Sundance. A Federally illegal, non- conforming, conflicting use is not in harmony with the lifestyle here. This is a residential community and has been for many years. Attached you will find documentation supporting this narrative. PLEASE deny this application and do not saddle the Sundance community with this illegal operation. ae is atSRES CHAMBER f hY Oec}:� ,.... MEMBER A"E"'C4 181330 00 00600 FwstAmerican Title 60148 Stirling Dr Bend, OR 97702 r 5 4 t 6- �7 J- -A IN -V _ � .b i 1��'�, - _ "T`. ki,. ! �r w f Ir ;1 r. ••• i 1 / 1� j1' • — � _ ; -V ---------- N.------ ---- A, t N a®r R �N -A, 3 ? lz� Cr Natural CLJJSubject E' Taxiot 1-1,,-,.,,, Contours M Wetlands 100 Yr. Flood 711912019 Map Data is deemed reliable but not guaranteed. First American accepts no responsibility for accuracy. 4 ^ " ° R 181330 00 00500 FirstAY erican Title 60148 Stirling Dr Bend, OR 97702 I Public Lands IM COUNTY LAND [f] FEDERAL LAND IS STATE LAND 711912019 Map Data is deemed reliable but not guaranteed. First American accepts no responsibility for accuracy. j"nC a}ri...... ..... .. . KIM-. L 87 PA1.54 &ION&�:%;. :jBUfL1)ING AND ME'Rig v.. . ...... .. . .cfi ALL MBN BY THESE PRESENTS,GARY '�that- " GJAWAidoes oes heireby declare as follows.. East Phase I 6 Owner, of.Sund.tince li That he is th as described in the official plat thereof and said property owing -foll building and as�-pjatted shall be. subject to the use restr 1. u Each lot, in the sup division shallbe used . ..... �for residential purposes only, with no More than one -detached -,single family dwelling., not to exceed two 2 one double car storiesn t more'%than i height and no carport and two accessory buildings shall be garage Or str.uc on each lot invision. 2 The floor area of constructed residences Ghali be of not less than 1%,000 square feet exclusive of onestory porches and garages. q:3. Building must be for year around be s use and must be placed on permanent foundations, consist- ing of ,.concrete, brick, -pumice blocks or stone masonry. :Pitch of the roof and size and spacing and ceiling joists` must.beadequate to withstand heavy snow packs. Roofs % Must be of a shake or%Wood shingle. All buildings, fences , and improvements must be constructed in a workmanlike manner nn er and kept in -condition of good repair. 4. Setback line shall be at least one hundred -0) (100) feet back from the front lot line and forty (.4 3 feet from.side and back lot lines to any structure ,upon i�.:. the l6t.with the..'exception of a fence, not to exceed sixty (60) inches in height. Fences- must be constructed )f properly finished material and shall haTmonize.'with . the surroundings. All land owners must comply with ..the laws and regulations of the state of Oregon, County.`of Deschutes and any municipality applicable to fire protection, building construction, water, sanitation and,, public health. No campers Or travel tTailers..or mobile homes shall be allowed for permanent residence. 7. No more than 18 months time shall elapse. or t 6 h completion of a permanent dwelling nor shall a em t structure be used as living quirters except MPOTary. dwelling. An durinj the construction of a permanent exterior latrine shall be allowed only ,during the con struction of a permanent residence. .. 8. No portion of the property shall be used or maintained as A dumping ground for rubbish, trash, garbage.:., or other refuse. Such waste shall be kept in sanitary. containers at all times. Approved must be used in the area sufficiently cleared to prevent the "'Po's-sibility of fire starting on the property and,, shall be Pept in a clean and sanitary condition. A, U W!W W M..? A f� 75 1�..»J�t��•�,.�,�"r��'-�p"�' r 1 a. la.. Zr ��$}'>��tss.5.rr'a,.yul''k��i'x• 7n,sSxv:�i;a'wrat�t 155 $ No commercial or professional or noxious ox offensive`trade or aciivity.shall 6e carrie'd on `upon anyaot.nax''shall 'anything be•done thereon' which, may be May an::ansio. annoyance. or .nu sanct'to the neighborhood. :.m 10: The cutting or removal.of.living•trees will only<be permitted where necessary for :the`construction of a' bualiizngs.or.thinning for the, beautification:of the property. ll, Lot signswill be limited to one 10" 'x 24" olve,.green wooden sign with black lettering to identify._ tiie.:owner and his address: 12. No building shall be constructed within thjrty::(30).feet:.of the. equestrian easement .as shown.on the'gfficiai.plat.•'' No lot shall be dividedwithout prior approval of .the Deschute.s,Gounty Planning Commission. 14. No automobiles or other motor vehicles .not presently being used by the lot owner shall be stored or placed on the:premises. These covenants and restrictions or eond�aTSns are _ to .remain in effect fora period of ten (10) y from the date of this declaration and shall automatically extend unless the Diallers of 513 of the total area of all par.'cels in'the subdivision agree in writing to'a change.. k These restrictions shall be deemed to be for the protection~of each of the owners or occupants of any portion of the subdivision. It, is intended hereby that any such person shall have the right to prosecute such ;procding at law or in equity as may be appropriate to ;proceeding enforce'restrictions herein set forth. Inval.idation.of any of these foregoing covenants, �• restrictions or conditions or any portion thereof by court order, judgment. or decree shall in no way effect'asu of the other 'remai'ning provisions thereof which sha in such case t f continue to remain in full force and effe w awson x rrl� STATE OF.. OREGON ) .. ) ss. :Z.County of Deschutes} Subscribed and sworn to before me.':s _ ' `j ^, `�. r. f :cday 6fby Gary Clawson: a otary xc or rego j SPATE OF OREfIONI Ny commission expires : -20' Can ty b: D w.b.utes � 3'bw�eby.ce:ttfp t6n; :� :rY'u's'!ns»a'' mmfafwed=y7 imc iredbr9�en:d Zar o! el.D- .o'elcet�'d/r�cox3ea t? fis 9odk' on Pie l C7 Anto d� 2 of ` ur{ P. SvjmnY PATTEILS i Clak i f�� i� x�'s ..., r. rr ,aar.,,m,,,:,.,y. •r, -.,, .:i. t,..•:,,:,y ':--, t: -,r.,..'.. .. `..i „ ... 3'i.�, ,"�".'ii°%.... { *a5 -r. 77'�fit3� Ld;,I.�Y��iirMA,N.�. C6ORE Oregon Real E ,— Forma LLC' SELLER'S PROPERTY DISCLOSURE STATEMENT. Property Address INSTRUCTIONS• THE SELLER 1 Please complete the following form. Do not leave any spaces blank. Please refer to the line number(s) of the question(s) when you provide your 2 explanation(s). If you are not claiming an exclusion or refusing to provide the form under ORS 105.475 (4), you should date and sign each page of 3 this disclosure statement and each attachment. 4 Each seller of residential property described in ORS 105.465 must deliver this form to each buyer who makes a written offer to purchase. Under 5 ORS 105.475 (4), refusal to provide this form gives the buyer the right to revoke their offer at any time prior to closing the transaction. Use only the 6 section(s) of the form that apply to the transaction for which the form is used. If you are claiming an exclusion under ORS 105.470, fill out only 7 Section 1. 8 An exclusion may be claimed only if the seller qualifies for the exclusion under the law. If not excluded, the seller must disclose the condition of the 9 property or the buyer may revoke their offer to purchase any time prior to closing the transaction. Questions regarding the legal consequences of 10 the seller's choice should be directed to a qualified attorney. 11 DO NOT FILL OUT THIS SECTION UNLESS YOU ARE CLAIMING AN EXCLUSION UNDER ORS 105.470 12 Section 1 EXCLUSION FROM ORS 105.465 TO 105.490: 13 You may claim an exclusion under ORS 105.470 only if you qualify under the statute. If you are not claiming an exclusion, you must fill out 14 Section 2 of this form completely. 15 Initial only the exclusion you wish to claim 16 This is the first sale of a dwelling never occupied. The dwelling is constructed or installed under building or installation permit(s) # 17 issued by 18 This sale is by a financial institution that acquired the property as custodian, agent or trustee, or by foreclosure or deed in lieu of 19 foreclosure. 20 The seller is a court appointed (Check only one): ❑ receiver ❑ personal representative ❑ trustee ❑ conservator ❑ guardian 21 This sale or transfer is by a governmental agency. 22 Signature(s) of Seller(s) Claiming Exclusion 23 Seller Date <-- Seller 24 Signature(s) of Buyer(s) Acknowledging Seller's Claim 25 Buyer Date F Buyer 26 IF YOU DID NOT CLAIM AN EXCLUSION IN SECTION 1, YOU MUST FILL OUT THIS SECTION. 27 Section 2 SELLER'S PROPERTY DISCLOSURE STATEMENT Date <— Date E 28 (NOT A WARRANTY) (ORS 105.465) 29 NOTICE TO THE BUYER: THE FOLLOWING REPRESENTATIONS ARE MADE BY THE SELLER(S) CONCERNING THE CONDITION OF 30 THE PROPERTY LOCATED AT "THE PROPERTY." 31 DISCLOSURES CONTAINED IN THIS FORM ARE PROVIDED BY THE SELLER ON THE BASIS OF SELLER'S ACTUAL KNOWLEDGE OF 32 THE PROPERTY AT THE TIME OF DISCLOSURE. BUYER HAS FIVE BUSINESS DAYS FROM THE SELLER'S DELIVERY OF THIS 33 SELLER'S DISCLOSURE STATEMENT TO REVOKE BUYER'S OFFER BY DELIVERING BUYER'S SEPARATE SIGNED WRITTEN 34 STATEMENT OF REVOCATION TO THE SELLER DISAPPROVING THE SELLER'S DISCLOSURE STATEMENT, UNLESS BUYER WAIVES 35 THIS RIGHT AT OR PRIOR TO ENTERING INTO A SALE AGREEMENT. 36 Seller Date F- Seller Date �— This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL +— REQUIRE A SIGNATURE AND DATE Buyer Initials / Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonline.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 1 of 7 Caldwell Banker Morris RXORL# 780100805, 486 Sw Bluff Drive Bend, OR 97702 Phone: 541 948 0997 Fax: 866 7810845 Forms Jim Moran Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www zipLooix com SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address J� 37 FOR A MORE COMPREHENSIVE EXAMINATION OF THE SPECIFIC CONDITION OF THIS PROPERTY, BUYER IS ADVISED TO OBTAIN 38 AND PAY FOR THE SERVICES OF A QUALIFIED SPECIALIST TO INSPECT THE PROPERTY ON BUYER'S BEHALF INCLUDING, FOR 39 EXAMPLE, ONE OR MORE OF THE FOLLOWING: ARCHITECTS, ENGINEERS, PLUMBERS, ELECTRICIANS, ROOFERS, 40 ENVIRONMENTAL INSPECTORS, BUILDING INSPECTORS, CERTIFIED HOME INSPECTORS, OR PEST AND DRY ROT INSPECTORS. 41 Seller ❑ is ❑ is not occupying the property. 1. SELLER'S REPRESENTATIONS: 42 The following are representations made by the seller and are not the representations of any financial institution that may have made or may make a 43 loan pertaining to the property, or that may have or take a security interest in the property, or any real estate licensee engaged by the seller or the 44 buyer. 45 *If you mark yes on items with *, attach a copy or explain on an attached sheet. 46 1. TITLE 47 A. Do you have legal authority to sell the property?............................................................... ❑ Yes ❑ No ❑ Unknown 48 *B. Is title to the property subject to any of the following: ........................................................ []Yes* ❑No []Unknown 49 ❑ First right of refusal ❑ Option ❑ Lease or rental agreement ❑ Other listing ❑ Life estate 50 *C. Is the property being transferred an unlawfully established unit of land? ............................ ❑ Yes* ❑ No ❑ Unknown 51 *D. Are there any encroachments, boundary agreements, boundary disputes or 52 recent boundary changes?................................................................................................ ❑ Yes* ❑ No ❑ Unknown 53 *E. Are there any rights of way, easements, licenses, access limitations or 54 claims that may affect your interest in the property?.......................................................... ❑ Yes* ❑ No ❑ Unknown 55 *F. Are there any agreements forjoint maintenance of an easement or right of way? ............ ❑ Yes* ❑ No ❑ Unknown 56 *G. Are there any governmental studies, designations, zoning overlays, surveys 57 or notices that would affect the property?........................................................................... ❑ Yes* ❑ No ❑ Unknown 58 *H. Are there any pending or existing governmental assessments against the property? ........ ❑ Yes* ❑ No ❑ Unknown 59 *I. 4kft Are there any zoning violations or nonconforming uses? .................................................... ❑ Yes* ❑ No ❑ Unknown 60 *J. Is there a boundary survey for the property?...................................................................... ❑ Yes* ❑ No ❑ Unknown 61 *K. Are there any covenants, conditions, restrictions or private assessments that affect the property? ❑ Yes* ❑ No ❑ Unknown 62 *L. Is the property subject to any special tax assessment or tax treatment that may 63 result in levy of additional taxes if the property is sold? ...................................................... ❑ Yes* ❑ No ❑ Unknown 64 2. WATER 65 A. Household water 66 (1) The source of the water is (check ALL that apply): ❑ Public ❑ Community ❑ Private ❑ Other 67 (2) Water source information: 68 *a) Does the water source require a water permit? ................................................... ❑ Yes* ❑ No ❑ Unknown 69 If yes, do you have a permit?.............................................................................. []Yes ❑ No ❑ Unknown ❑ NA 70 *b) Is the water source located on the property?...................................................... ❑ Yes* ❑ No ❑ Unknown ❑ NA 71 Seller Date <— Seller Date +-- This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <— REQUIRE A SIGNATURE AND DATE Buyer Initials / Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonfine.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 2 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zit)Loaix.com Forms Q SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address 72 *If not, are there any written agreements for a shared water source? ................. ❑ Yes* ❑ No ❑ Unknown ❑ NA 73 *c) Is there an easement (recorded or unrecorded) for your access to or 74 maintenance of the water source?...................................................................... ❑ Yes* ❑ No ❑ Unknown 75 d) If the source of water is from a well or spring, have you had any of 76 the following in the past 12 months?................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 77 ❑ Flow test ❑ Bacteria test ❑ Chemical contents test 78 *e) Are there any water source plumbing problems or needed repairs? .................... ❑ Yes* ❑ No ❑ Unknown 79 (3) Are there any water treatment systems for the property? ............................................. ❑ Yes ❑ No ❑ Unknown 80 ❑ Leased ❑ Owned 81 B. Irrigation 82 (1) Are there any ❑ water rights or ❑ other rights for the property? ................................. ❑ Yes ❑ No ❑ Unknown 83 * (2) If any exist, has the irrigation water been used during the last five-year period?........ ❑ Yes* ❑ No ❑ Unknown ❑ NA 84 * (3) Is there a water rights certificate or other written evidence available? ........................ ❑ Yes* ❑ No ❑ Unknown ❑ NA 85 C. Outdoor sprinkler system 86 (1) Is there an outdoor sprinkler system for the property? .................................................. ❑ Yes ❑ No ❑ Unknown 87 (2) Has a back flow valve been installed?.......................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 88 (3) Is the outdoor sprinkler system operable?.................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 89 3. SEWAGE SYSTEM 90 A. Is the property connected to a public or community sewage system? ................................. ❑ Yes ❑ No ❑ Unknown ❑ NA 91 B. Are there any new public or community sewage systems proposed for the property? ....... ❑ Yes ❑ No ❑ Unknown ❑ NA 92 C. Is the property connected to an on-site septic system?....................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA X93 (1) If yes, when was the system installed?.......................................................................... ❑ Unknown ❑ NA 94 (2) *If yes, was the system installed by permit?................................................................. ❑ Yes* ❑ No ❑ Unknown ❑ NA 95 (3) *Has the system been repaired or altered?................................................................... ❑ Yes* ❑ No ❑ Unknown ❑ NA 96 (4) *Has the condition of the system been evaluated and a report issued? ......................... ❑ Yes ❑ No ❑ Unknown ❑ NA 97 (5) Has the septic tank ever been pumped?....................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 98 If yes, when?................................................................................................................. ❑ NA 99 (6) Does the system have a pump? ❑ Yes ❑ No ❑ Unknown ❑ NA 100 (7) Does the system have a treatment unit such as a sand filter or an aerobic unit? ❑ Yes ❑ No ❑ Unknown ❑ NA 101 (8) Is a service contract for routine maintenance required for the system? ❑ Yes ❑ No ❑ Unknown ❑ NA 102 (9) Are all components of the system located on the property? ❑ Yes ❑ No ❑ Unknown ❑ NA 103 *D. Are there any sewage system problems or needed repairs? .............................................. ❑ Yes* ❑ No ❑ Unknown ❑ NA 104 E. Does your sewage system require on-site pumping to another level? ................................ ❑ Yes ❑ No ❑ Unknown ❑ NA 105 Seller Date <— Seller Date This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <— REQUIRE A SIGNATURE AND DATE Buyer Initials / Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonline.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 3 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLooix.com Forms �=r SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address 106 4. DWELLING INSULATION 107 *A. Is there insulation in the: 108 (1) Ceiling?......................................................................................................................... ❑ Yes ❑ No ❑ Unknown 109 (2) Exterior Walls?............................................................................................................... ❑ Yes ❑ No ❑ Unknown 110 (3) Floors?.......................................................................................................................... ❑ Yes ❑ No ❑ Unknown 111 B. Are there any defective insulated doors or windows?........................................................ ❑ Yes ❑ No ❑ Unknown 112 5. DWELLING STRUCTURE 113 *A. Has the roof leaked?........................................................................................................... ❑ Yes* ❑ No ❑ Unknown 114 If yes, has it been repaired?... ............................................................................................. ❑ Yes ❑ No ❑ Unknown ❑ NA 115 B. Are there any additions, conversions or remodeling?........................................................ ❑ Yes ❑ No ❑ Unknown 116 If yes, was a building permit required?................................................................................ []Yes ❑ No ❑ Unknown ❑ NA 117 If yes, was a building permit obtained?............................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 118 If yes, was final inspection obtained?.................................................................................. []Yes ❑ No ❑ Unknown ❑ NA 119 C. Are there smoke alarms or detectors?................................................................................ ❑ Yes ❑ No ❑ Unknown 120 D. Are there carbon monoxide alarms?................................................................................... ❑ Yes ❑ No ❑ Unknown 121 E. Is there a woodstove or fireplace insert included in the sale? ............................................. ❑ Yes ❑ No ❑ Unknown 122 *If yes, what is the make? 123 *If yes, was it installed with a permit?.................................................................................. ❑ Yes* ❑ No ❑ Unknown ❑ NA 124 *If yes, is a certification label issued by the United States Environmental Protection Agency 125 (EPA) or the Department of Environmental Quality (DEQ) affixed to it? .............................. ❑ Yes* ❑ No ❑ Unknown ❑ NA 126 *F. Has pest and dry rot, structural or'whole house " inspection been done within the last three years? ❑ Yes* ❑ No ❑ Unknown 127 *G. Are there any moisture problems, areas of water penetration, mildew odors 128 or other moisture conditions (especially in the basement)? ................................................. ❑ Yes* ❑ No ❑ Unknown 129 *If yes, explain on attached sheet the frequency and extent of problem and any insurance claims, repairs or remediation done. 130 H. Is there a sump pump on the property?............................................................................... ❑ Yes ❑ No ❑ Unknown 131 1. Are there any materials used in the construction of the structure that are or 132 have been the subject of a recall, class action suit, settlement or litigation? ...................... ❑ Yes ❑ No ❑ Unknown 133 If yes, what are the materials? 134 (1) Are there problems with the materials?......................................................................... ❑ Yes ❑ No ❑ Unknown []NA 135 (2) Are the materials covered by a warranty?..................................................................... ❑ Yes ❑ No ❑ Unknown []NA 136 (3) Have the materials been inspected?............................................................................. ❑ Yes ❑ No ❑ Unknown []NA 137 (4) Have there ever been claims filed for these materials by you or by previous owners?.. ❑ Yes ❑ No ❑ Unknown []NA 138 If yes, when? []NA 139 (5) Was money received?.................................................................................................. ❑ Yes ❑ No ❑ Unknown ❑ NA 140 Seller Date <— Seller Date This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <— REQUIRE A SIGNATURE AND DATE Buyer Initials / Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonline.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 4 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLocix.com Forms 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 L.1 SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address (6) Were any of the materials repaired or replaced?.......................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 6. DWELLING SYSTEMS AND FIXTURES If the following systems or fixtures are included in the purchase price, are they in good working order on the date this form is signed by Seller? A. Electrical system, including wiring, switches, outlets and service ....................................... ❑ Yes ❑ No ❑ Unknown B. Plumbing system, including pipes, faucets, fixtures and toilets ........................................... ❑ Yes ❑ No ❑ Unknown C. Water heater tank.............................................................................................................. ❑ Yes ❑ No ❑ Unknown D. Garbage disposal................................................................................................................ ❑ Yes ❑ No ❑ Unknown ❑ NA E. Built-in range and oven....................................................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA F. Built-in dishwasher.............................................................................................................. ❑ Yes ❑ No ❑ Unknown ❑ NA G. Sump pump........................................................................................................................ ❑ Yes 1 ] No ❑ Unknown ❑ NA H. Heating and cooling systems (1) Heating systems............................................................................................................ ❑ Yes ❑ No ❑ Unknown ❑ NA (2) Cooling systems............................................................................................................ ❑ Yes ❑ No ❑ Unknown ❑ NA I. Security system ❑ Owned ❑ Leased.................................................................................. ❑ Yes ❑ No ❑ Unknown ❑ NA J. Are there any materials or products used in the systems and fixtures that are or have been the subject of a recall, class action settlement or other litigations?.. ❑ Yes ❑ No ❑ Unknown If yes, what product? (1) Are there problems with the product?............................................................................. ❑ Yes ❑ No ❑ Unknown ❑ NA (2) Is the product covered by a warranty?............................................................................ []Yes ❑ No ❑ Unknown ❑ NA (3) Has the product been inspected?................................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA (4) Have claims been filed for this product by you or by previous owners? ......................... ❑ Yes ❑ No ❑ Unknown ❑ NA If yes, when? (5) Was money received?.................................................................................................... ❑ Yes ❑ No ❑ Unknown ❑ NA (6) Were any of the materials or products repaired or replaced? ......................................... ❑ Yes ❑ No ❑ Unknown ❑ NA 7. COMMON INTEREST A. Is there a Home Owners' Association or other governing entity? ........................................ ❑ Yes []No ❑ Unknown Name of Association or Other Governing Entity Contact Person Address Phone Number B. Regular periodic assessments: $ per []Month ❑Year []Other *C. Are there any pending or proposed special assessments? ................................................. ❑ Yes* ❑ No ❑ Unknown D. Are there shared "common areas" orjoint maintenance agreement for facilities like walls, fences, pools, tennis courts, walkways or other areas co -owned in undivided interest with others?... ❑ Yes ❑ No []Unknown E. Is the Home Owners' Association or other governing entity a party to pending litigation or subject to an unsatisfied judgment?..................................................... []Yes ❑No []Unknown ❑ NA 176 Seller Date <-- Seller Date +___ Thisform has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <— REQUIRE A SIGNATURE AND DATE Buyer Initials / Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonline.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 5 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLooix.com Forms 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 93 194 1 5 6 197 198 199 200 SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address F. Is the property in violation of recorded covenants, conditions and restrictions or in violation of other bylaws or governing rules, whether recorded or not?..... 8. SEISMIC A. Was the house constructed before 1974?........................................................................... If yes, has the house been bolted to its foundation?............................................................ 9. GENERAL A. Are there problems with settling, soil, standing water or drainage on the property or in the immediate area?................................................................................ B. Does the property contain fill?............................................................................................. C. Is there any material damage to the property or any of the structure(s) from fire, wind, floods, beach movements, earthquake, expansive soils or landslides?....... D. Is the property in a designated floodplain?........................................................................... E. Is the property in a designated slide or other geologic hazard zone? ................................... *F. Has any portion of the property been tested or treated for asbestos, formaldehyde, radon, gas, lead-based paint, mold, fuel or chemical storage tanks or contaminated soil or water?....... G. Are there any tanks or underground storage tanks (e.g., septic, chemical, fuel, etc.) on the property? H. Has the property ever been used as an illegal drug manufacturing or distribution site? ...... *If yes, was a Certificate of Fitness issued?......................................................................... I. Has the ' ' stland-urban interface? .......................................... 10. *A ❑ Yes ❑ No ❑ Unknown ❑ NA []Yes ❑ No [-]Unknown []Yes ❑ No ❑ Unknown ❑ Yes ❑ No ❑ Unknown []Yes ❑No ❑ Unknown []Yes ❑No []Unknown ❑ Yes ❑ No ❑ Unknown ❑ Yes ❑ No ❑ Unknown []Yes* ❑ No ❑ Unknown ❑ Yes ❑ No ❑ Unknown ❑ Yes ❑ No ❑ Unknown ❑ Yes* ❑ No ❑ Unknown ❑ Yes ❑ No ❑ Unknown -DISCLOSURE BY SELLER(S) Are there any other material defects affecting this property or its value that G a prospective buyer should know about?.......f=./V f%� / .A..... � .. .0..�. U ' s* [] No If yes, describe the defect on attache eet n5d e�ain the freq ency and—extent of the problem and any insurance claims, repairs o remediation? 201 The foregoing answers and attached explanations (if any) are complete and correct to the best of my/our knowledge and I/we have received a copy 202 of this disclosure statement. [Ave authorize my/our agents to deliver a copy of this disclosure statement to all prospective buyers of the property or 203 their agents. (complete even if zero) Number of pages of explanations are attached. 204 Seller Date <— Seller Date <- 5 A. As buyer(s), I/we acknowledge the duty to pay diligent attention to any material defects that are known to me/us or can be known by me/us 206 by utilizing diligent attention and observation. 207 B. Each buyer acknowledges and understands that the disclosures set forth in this statement and in any amendments to this statement are 208 made only by the seller and are not the representations of any financial institution that may have made or may make a loan pertaining to the 209 property, or that may have or take a security interest in the property, or of any real estate licensee engaged by the seller or buyer. A financial 210 institution or real estate licensee is not bound by and has no liability with respect to any representation, misrepresentation, omission, error or 211 inaccuracy contained in another party's disclosure statement required by this section or any amendment to the disclosure statement. This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <— REQUIRE A SIGNATURE AND DATE Buyer Initials ./.Date Copyright Oregon Real Estate Forms, LLC 2018 www.orefonline.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 6 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www,zil)Loaix.com Forms Q SELLER'S PROPERTY DISCLOSURE STATEMENT Property Address 212 C. Buyer (which term includes all persons signing the "Buyer's Acknowledgment" portion of this disclosure statement below) hereby 213 acknowledges receipt of a copy of this disclosure statement (including attachments, if any) bearing seller's signature(s).DISCLOSURES, IF 214 ANY, CONTAINED IN THIS FORM ARE PROVIDED BY THE SELLER ON THE BASIS OF SELLER'S ACTUAL KNOWLEDGE 215 OF THE PROPERTY AT THE TIME OF DISCLOSURE. IF THE SELLER HAS FILLED OUT SECTION 2 OF THIS FORM, YOU, THE BUYER, 216 HAVE FIVE BUSINESS DAYS FROM THE SELLER'S DELIVERY OF THIS DISCLOSURE STATEMENT TO REVOKE YOUR OFFER BY 217 DELIVERING YOUR SEPARATE SIGNED WRITTEN STATEMENT OF REVOCATION TO THE SELLER DISAPPROVING THE SELLER'S 218 DISCLOSURE UNLESS YOU WAIVE THIS RIGHT AT OR PRIOR TO ENTERING INTO A SALE AGREEMENT. 219 BUYER HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THIS SELLER'S PROPERTY DISCLOSURE STATEMENT. 220 Buyer Date < Buyer 221 Agent receiving disclosure statement on buyer's behalf to sign and date: 222 Real Estate Licensee Date received by Licensee 223 Real Estate Firm Date +--- This form has been licensed for use solely by Jim Moran pursuant to a Forms License Agreement with Oregon Real Estate Forms, LLC. LINES WITH THIS SYMBOL <-- REQUIRE A SIGNATURE AND DATE Copyright Oregon Real Estate Forms, LLC 2018 www.orefonfine.com No portion may be reproduced without express permission of Oregon Real Estate Forms, LLC OREF 020 Page 7 of 7 Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www zipLogix.com Forms Companies Face Significant Risk When Handling Transactions Involving Marijuana Money BY JEREMY YOHE IN COLORADO, it's been reported there are more marijuana dispensaries than Starbucks and McDonalds locations combined. The state joined Washington in 2012 to become the first two jurisdictions to legalize recreational The move to legalize pot set ablaze the residential and commercial real estate markets -ky Mountain State to a 1.ealtor.cowt report published in 2016, median price increases across the country. FEBRUARY 2018 U.2 www.alta.org N , y�� , . ' . � :y.y : ' Colorado's law allows counties to determine if they want to legalize and regulate the drug. Digging deeper into the numbers, Realtor.com reported home prices tend to be higher in the roughly 60 Colorado cities and towns where cannabis is legal than the more than 200 where it's not. For example, where cannabis is legal, the median sold price was $302,500 in the second quarter of 2016, according to the Realtor.com analysis. That's 13 percent higher than the $267,200 median sold price in the more than 200 localities where ganga is still prohibited. In addition, since 2014, homes have been appreciating by 12 percent annually in pot -friendly counties. That's compared with just 9% in areas that haven't legalized cannabis. Pot -positive counties have also attracted more homebuyers and jobs. Because of this, Colorado's commercial market has seen a boon as well. According to United States Commercial Real Estate Services, marijuana growers occupied 4.2 million square feet in metro Denver's industrial market in Q4 2016—an expansion of 14 percent since the second quarter of 2015. The downside is that houses in neighborhoods with pot -growing operations are losing value because of the odor. The sharp rise in property prices follows the booming market for legal marijuana. Sales of legal cannabis reached $6.7 billion in the United States last year, and are expected to top $20 billion by 2021, according to Arcview Market Research. Other states have noticed the trend and want a piece of the pot pie. As of January 2018, recreational use of marijuana is legal in eight states and Washington, D.C. California began allowing the sale of recreational marijuana on Jan. 1, joining Alaska, Colorado, Nevada, Oregon and Washington. Massachusetts and possibly Maine are expected to begin sales this year. In all, 29 states and D.C., have at least partly legalized the substance— including for medicinal use. According to press reports, the new cannabis industry in California has a projected value of more than $7 billion. Harshing theHigh? The budding real estate markets where cannabis is kosher may come off their high following a recent policy reversal from the Justice Department. Although cannabis remains prohibited at the federal level, the Justice Department from 2013 to early 2018 tolerated commercial distribution in the states where it has been legalized, under the guidance of the Cole Memorandum. However, on Jan. 4, U.S. Attorney General Jeff Sessions issued a memo shifting federal policy away from the hands-off approach adopted under the previous administration. This change in policy has been perceived as unleashing federal prosecutors to decide how to prioritize resources to crack down on pot possession, distribution and cultivation in s*�iiau ft","Wavt-aam 1 WW1A1W' 12 TITLENews E-22, FEBRUARY 2018 M www.alta.org states where it is ostensibly legal. In the memo, Sessions directed all U.S. attorneys to enforce the laws enacted by Congress and to follow well- established principles when pursuing prosecutions related to marijuana activities. "This return to the rule of law is also a return of trust and local control to federal prosecutors who know where and how to deploy Justice Department resources most effectively to reduce violent crime, stem the tide of the drug crisis, and dismantle criminal gangs;' Sessions said in a memo to all federal prosecutors. "In deciding which marijuana activities to prosecute under these laws with the department's finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions;' the memo said. "These principles require federal prosecutors deciding which cases to prosecute to weigh all relevant considerations of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community." Prior to this announcement, banks were already reluctant to do business with marijuana -related businesses. This may discourage them even more. Don Childears, president of the Colorado Bankers Association, told American Banker that he thinks "it will have a chilling effect' In addition, most title companies would violate their account agreement if they accepted and deposited cash they knew to be from marijuana proceeds. i In all, '4 states and D have at least partly legalize -1 the ! f -! ncludi ng According i o press reports, x new cannabisindustry While more states are legalizing marijuana, the federal government still categorizes marijuana as a controlled substance. This means it's viewed the same as heroin. Because marijuana is illegal under federal law, the title industry faces several challenges. Under federal law: "[A]ny person who violates [the Controlled Substances Act] shall be sentenced as follows: In the case of a violation ... involving ... 1,000 kilograms or more of a mixture or substance containing a detectable amount of marijuana, or 1,000 or more marijuana plants regardless of weight ... such person shall be sentenced to a term of imprisonment which may not be less than 10 years or more than life and if death or serious bodily injury results from the use of such substance shall be not less than 20 years or more than life, a fine not to exceed the greater of that authorized in accordance with the provisions of title 18 or $10,000,000 if the defendant is an individual or $50,000,000 if the defendant is other than an individual, or both." Additionally, anyone who helps another person violate the Controlled Substances Act can face the same penalty as the actual people violating the act. "There's a fine line between growing marijuana, having a warehouse to distribute marijuana and facilitating a transaction to provide the facilities; said a senior underwriter for a national title insurance company. It's helpful to also understand how the courts view this. A recent federal court of appeal decision (Pinkerton v. U.S.) raised an interesting defense to prosecution. For many years, federal appropriations bills have prohibited the Department of Justice (DOJ) from using appropriated funds to prosecute people engaged in state - legalized medical marijuana activities. This doesn't change the fact that marijuana is illegal under federal law; rather, it's simply an appropriations measure that says the DOJ can't spend money prosecuting it. The question in this case was whether a defendant could raise this as a defense. The court said yes. How does this play out in the real world? A footnote in the opinion, however, says that section 542 does not provide immunity for prosecution for federal marijuana offenses. The court wrote, "The CSA (Controlled Substances Act) prohibits the manufacture, distribution and possession of marijuana. Anyone in any state who possesses, distributes or manufactures marijuana for medical or recreational purposes (or attempts or conspires to do so) is committing a federal crime. The federal government can prosecute such offenses for up to five years after they occur." "Congress currently restricts the government from spending certain funds to prosecute certain individuals. But Congress could restore funding tomorrow, a year from now, or four years from now, and the government could then prosecute individuals who committed offenses while the government lacked funding; the opinion continued. The opinion goes on to say that under the Supremacy Clause of the Constitution, state laws can't permit what federal law prohibits. "Thus, while CSA remains in effect, states cannot authorize manufacturing, distribution or possession or marijuana. Such activity remains prohibited by federal law." "That is such a clear and precise summary of the dilemma that we all face when people take the position it's legalized in a state and we should be free to engage in the activity," said Steve Gottheim, ALTAs senior counsel. "The opinion Illustrates the problem with that argument' i With millions of dollars pouring into California for the cannabis industry, REITs are being set up specifically to fund the grow operations. Gottheim, said there's desire to turn Napa Valley into the "champagne region" for marijuana. "Just like only champagne that comes from a certain part of France can be called champagne, they want a similar thing for cannabis grown in the Napa Valley, he added. "Unfortunately, there's no legal way for the title industry to touch it and no way to keep companies safe from potential prosecution' www.alta.org C FEBRUARY 2018 TMENews 13 The federal government can control interstate commerce due to the Commerce Clause of the U.S. Constitution. In Ganzales v. Raich, the U.S. Supreme Court ruled in 2005 that under the Commerce Clause, Congress may criminalize the production and use of homegrown cannabis even if states approve its use for medicinal purposes. California started allowing the medical use of marijuana in the 1990s in response to the AIDS epidemic. The court had to decide whether the federal govermnent had the right to control medical cannabis if it's grown, sold and consumed exclusively in California. Two women were growing marijuana and using it for personal use. A doctor for one of the women said she might die without it. A majority of the court ruled that while the case was personally touching, "we are not going to allow California law to conflict with federal law." The court's argument stemmed from a 1942 ruling in Wickard v Filburn, which held that the government may regulate personal cultivation and consumption of crops because of the aggregate effect of individual consumption on the government's legitimate statutory framework governing the interstate wheat market. In this case, an Ohio farmer grew extra wheat to feed his animals. The 14 TITLENews Lti FEBRUARY 2018 V www.alta.org court held that if every farmer started growing extra wheat it would affect supply and demand throughout the country. The case set a precedent for an expansive reading of the Commerce Clause. The court held: "The parallel concern making it appropriate to include marijuana grown for home consumption in the CSA is the likelihood that the high demand in the interstate market will draw such marijuana into that market. While the diversion of homegrown wheat tended to frustrate the federal interest in stabilizing prices by regulating the volume of commercial transactions in the interstate market, the diversion of homegrown marijuana tends to frustrate the federal interest in eliminating commercial transactions in the interstate market in their entirety. In both cases, the regulation is squarely within Congress' commerce power because production of the commodity meant for home consumption, be it wheat or marijuana, has a substantial effect on supply and demand in the national market for that commodity." According to Gottheim, this means the federal government determines whether marijuana is legal or not. An additional wrinkle involves zoning laws. People often have a "not in my backyard attitude" and don't necessary want a dispensary in their neighborhood. The concern is the odor and the alleged criminal element that retail marijuana shops attract. In California, the city of Riverside has zoning laws that prohibit pot distribution. A person attempting to open a dispensary brought a lawsuit, but the California Supreme Court ruled that cities can enact zoning law that prohibit distribution. With the threat of federal prosecution, many banks avoid lending money to businesses that involve marijuana. Handling proceeds of any marijuana transaction is considered money laundering—even if those proceeds are being used to purchase real estate and not pot. Very few banks are willing to bear that risk and have employees face a potential sentence of a minimum of 10 years. People in the Colorado pot industry created a state - chartered credit union in Denver that operates outside of the banking system, When it was launched in 2014, Fourth Corner Credit Union applied for a master account with the Kansas City Federal Reserve, In 2015, the Federal Reserve rejected the credit union's application. In January 2016, Fourth Corner filed a lawsuit, which was dismissed by a district court. However, in July 2017 the U.S. Court of Appeals for the Tenth Circuit in Denver voided the lower court's decision. This means that the Kansas City Federal Reserve can't assume Fourth Corner intends to violate federal law by serving marijuana businesses, and that the credit union can file a new application for a master account. Other cities are considering creating such financial institutions, including Los Angeles, Oaldand and Santa Rosa in California; Philadelphia and Santa Fe, N.M. The states of Arizona and Maryland are also entertaining the idea. The Bank of North Dakota (BND) is currently the only state-owned public bank in the United States. The Bismarck -based bank was founded in 1919 to serve farmers and small businesses in North Dakota who felt they weren't getting fair treatment from commercial banks. The state insures BND's deposits, while the North Dakota Department of Financial Institutions has oversight. North Dakota started allowing the use of medical marijuana in 2018. It's unclear if the BND will work with the state's new medical marijuana companies. Industry Risk In addition to private lenders, REITs are being established specifically to handle to handle transactions involving money from cannabis. This means title companies must be diligent when handling transactions that could involve cannabis cash. "We have all insured cannabis transactions, (but) we just didn't know it, said one underwriter representative. For the title and escrow industry, it comes down to risk—risk of being prosecuted. Underwriter bulletins clearly prohibit agents from handling escrow funds or issuing CPLs for transactions involving land to be used in some capacity for growing, producing, distributing or dispensing marijuana. The people handling transactions—including the escrow and title officers—are viewed by law enforcement as participating in a criminal enterprise and subject to the same penalties as the people who own the property. "The real risk in these transactions is on the settlement side; Gottheim said. "You're handling money that is tainted in some fashion. You're more directly engaged in facilitating this criminal enterprise. It's easy to identify who the settlement officer was in a transaction. If the U.S. attorney wanted to make a good example, then they would prosecute everyone who touched it" Additionally, most underwriters will not insure the transaction either. The title industry is not the only insurance industry shying away from providing coverage in these cases. In California, many marijuana farms have been destroyed by the fires. Cannabis cultivators who have lost their crop have little recompense because they can't get property and casualty insurance, of if they do, it comes with a pricey deductible. A typical marijuana investment in California ranges from $5 million to $10 million. "Nobody right now has insurance, Nikki Lastreto, secretary of the Mendocino Cannabis Industry Association, told CNN. "They might have insurance on their house, but not on their crop:' The problem is that there are many grey scenarios. What if a client has a buyer for a cannabis growing facility and they want you to handle the transaction, and the buyer wants title insurance? What if another client wants to sell a farm in an area where people are starting to plant pot, but the buyer has not disclosed what they intend to do with farm? What if you are asked to insure a transaction involving land where the state will build a facility to test marijuana quality? Or, what decision do you make in a deal involving a large office budding with a cannabis dispensary on the ground floor? What do you do if ghat tenant's rent makes up half a percent A the income of that building? There's also the question of whether it's )kay to handle the escrow and issue a title ?olicy if there's an exception in the policy hat excludes coverage if there's a violation )r enforcement of any federal, state or local law relating to the use of the land. "This becomes a day-to-day challenge For the industry, one underwriter said. "If we know that a transaction involves illegal activity, we don't want to handle it. From my perspective, if in the normal course of compiling information that you would get in handling the escrow or the settlement for a transaction and doing title research, you know or should know that you are dealing with an illegal transaction and must decline it" JEREMY YOHE is ALTA's vice president of communications. He can be reached at iyohe@alta.org. www.alta.org V FEBRUARY2018 or TiTLENOWS 15 v-rEs c oG �Zi BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Citizen Input or Testimony Subject:' L.'; �,r:w/au �� < Date: Agenda Item Number: Name i � � ( nal Address V-\ , Phone #s ` ` 3 E-mail address �.A P In Favor of Application F—] Neutral/Undecided Opposed to Application Are you submitting written documents as part of testimony? F] Yes No If so, please give a copy to the Recording Secretary for the record. ` ** SUBMIT TO RECORDING SECRETARY BEFORE MEETING BEGINS J-rEs c U� O` BOARD OF COMMISSIONERS' MEETING o � 2 REQUEST TO SPEAK Citizen Input or Testimony Subject: Date: Agenda Item Number: Nameo 4 Address e Phone #s E-mail address 'S (-,(m In Favor of ApplicationNeutral/Undecided gjOpposed to Application Are you submitting written documents as part of testimony? Yes R No If so, please give a copy to the Recording Secretary for the record. ** SUBMIT TO RECORDINGSECRETARY BEFORE MEETING BEGINS �JrEs BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Citizen Input or Testimony Subject:Date: G Agenda Item Number: Z -/7 - Name Address Phone #s E-mail address Z a w 242Wiz" 9l , In Favor of Application F] Neutral/Undecided Opposed to Application Are you submitting written documents as part of testimony? Yes 'No If so, please give a copy to the Recording Secretary for the record. ** SUBMIT TO RECORDING SECRETARY BEFORE MEETING BEGINS Citizen Input or Testimony Agenda Item Number: Name All A w' Address 1� Q Phone #s #s E-mail address _ In Favor of Application �Neutral/Undecideod// pposed to Application Are you submitting written documents as part of testimony? F—] Yes F No If so, please give a copy to the Recording Secretary for the record. ** SUBMIT TO RECORDING SECRETARY BEFORE MEETING BEGINS