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2023-342-Minutes for Meeting October 11,2023 Recorded 10/30/2023Q\3eo s Es G2{ BOARD OF COMMISSIONERS 1300 NW Wall Street, Bend, Oregon (541) 388-6570 Recorded in Deschutes County Steve Dennison, County Clerk Commissioners' Journal 2023-342 BOCC MEETING MINUTES 9:00 AM WEDNESDAY October 11, 2023 CJ2023-342 10/30/2023 1:01:47 PM Barnes Sawyer Rooms Live Streamed Video Present were Commissioners Tony DeBone, Patti Adair and Phil Chang. Also present were County Administrator Nick Lelack; Assistant County Counsel Kim Riley; and BOCC Executive Assistant Brenda Fritsvold. This meeting was audio and video recorded and can be accessed at the Deschutes County Meeting Portal website www.deschutes.org/meetings. CALL TO ORDER: Chair DeBone called the meeting to order at 9:00 a.m. PLEDGE OF ALLEGIANCE CITIZEN INPUT: None CONSENT AGENDA: Before the Board was Consideration of the Consent Agenda. Approval of Resolution No. 2023-059 extending 1.50 limited duration District Attorney FTE within the FY 2023-2024 Deschutes County Budget 2. Approval of Resolution No. 2023-057, adding 2.00 FTEs and increasing appropriations in Health Services and Adult Parole and Probation for use of the Opioid Settlement funds 3. Approval of Board Order No. 2023-042 appointing Health Services Director's Designees BOCC MEETING OCTOBER 11, 2023 PAGE 1 OF 7 4. Approval of a lease with Mosaic Medical to operate a School -Based Health Center at the Sisters Clinic 5. Approval of Chair signature of Document No. 2023-069, a Notice of Intent to Award a contract for the Gribbling Road Bridge #17C30 Replacement Project 6. Consideration of Board signature on letters reappointing Andrew Aasen, Dustin Miller and Hunter Neubauer for service on the Deschutes County Cannabis Advisory Panel 7. Consideration of Board signature on letters reappointing Renee Alexander, Mark Kelley, Jerry Milstead, Kent Vander Kamp, Mark Kneeshaw and Jim Starnes for service on the Deschutes County Facility Project Review Committee 8. Consideration of Board signature on letter of thanks to David Quiros for his service on the Deschutes County Facility Project Review Committee 9. Consideration of Board signature on letters appointing Greg Brady and Tamara Kuntz as alternate members on the Dog Control Board of Supervisors 10. Approval of August 30 and September 6, 13 and 18, 2023 BOCC meeting minutes ADAIR: Move approval of the Consent Agenda as presented CHANG: Second VOTE: ADAIR: Yes CHANG: Yes DEBONE: Chair votes yes. Motion Carried ACTION ITEMS: 11. Public Hearing and Board Order considering the annexation of certain properties totaling approximately 153.61 acres to the Bend Park & Recreation District Kim Riley, Assistant Legal Counsel, explained the request to annex eight parcels to the Bend Park & Recreation District; the parcels are contiguous, together total approximately 153.61 acres, and are sited in the vicinity of Cooley Road, Loco Road, Clausen Drive and Crooked Rocks Road. The public hearing was opened at 9:03 am. There being no one who wished to testify, the public hearing was closed at 9:03 am. BOCC MEETING OCTOBER 11, 2023 PAGE 2 OF 7 Commissioner Chang asked for a map showing how the boundary of the Bend Park & Recreation District compares with Bend's urban growth boundary. CHANG: Move approval of Board Order No. 2023-036 approving the Pahlisch Homes annexation of approximately 153.61 acres into the Bend Park & Recreation District ADAIR: Second VOTE: ADAI R: Yes CHANG: Yes DEBONE: Chair votes yes. Motion Carried 12. Multiple Unit Property Tax Exemption application for 105 NE Franklin Avenue County Administrator Nick Lelack said the Multiple Unit Property Tax Exemption (MUPTE) program was established by the City of Bend to support development and redevelopment goals in designated areas. Proposals are presented to the various taxing districts which may be affected if a property tax exemption is granted —these include the County, the Deschutes County Sheriff's Office, and the County's 9-1-1 District. Cate Schneider, Senior Management Analyst for the City of Bend, shared an overview of the MUPTE program which grants a property tax exemption to qualifying multi -story residential projects. Projects must result in three or more residential units and provide at least three defined public benefits. Caroline Baggott, Development Manager for Project^ PDX, (via Zoom) reviewed details of the proposed project at 105 NE Franklin Avenue along with the proforma and budget showing that the project would not be financially viable without the property tax exemption. The proposal is for two five -story structures, one of which would be solely residential (95 rental units) and the other being mixed -use commercial (5,219 sf) and residential (96 rental units). Schneider said because this project is within the Core Area Urban Renewable District, none of the County's taxing districts would experience financial impacts if the property tax exemption is approved. Responding to questions from the Commissioners, Baggott said all of the units will be rentals and none of the parking will be underground. BOCC MEETING OCTOBER 11, 2023 PAGE 3 OF 7 Commissioner Chang was highly supportive of this project which will add much - needed housing in a key redevelopment area of Bend. CHANG: Move approval of the application from New Zone Business, LLC for a Multiple Unit Property Tax Exemption relating to property at 105 NE Franklin Avenue in Bend ADAIR: Second VOTE: ADAI R: Yes CHANG: Yes DEBONE: Chair votes yes. Motion Carried 13. Update to County Finance Policy No. F-4 Capital Asset Policy Robert Tintle, Chief Financial Officer, explained the proposal to combine three County Finance policies F-4, F-5 and F-6 into one policy while updating two sections to assure appropriate internal controls. One of the updates will clarify when a budget adjustment or budget resolution is needed while the other specifies the tracking procedures for capital and non -capital assets. ADAIR: Move approval of County Administrator signature of revised County Finance Policy No. F-4, Capital Asset Policy, and rescind policies F-5 and F-6 CHANG: Second VOTE: ADAIR: Yes CHANG: Yes DEBONE: Chair votes yes. Motion Carried OTHER ITEMS: • County Administrator Nick Lelack announced the resignation of James Lewis from the board of the Central Oregon Intergovernmental Council (COIC); staff will initiate a recruitment process for this County -appointed position as a community representative for tourism and recreation interests. Commissioner Chang commented on the importance of affordable housing in terms of maintaining a workforce and suggested reaching out to Visit Central Oregon and Visit Bend to alert them to this vacancy. Kristie Bollinger, Property Manager, distributed a draft letter of support for COIC's application for a $25,000 technical assistance grant from the Department of Land Conservation and Development; the grant would be used to seek a Goal 3 exception for 75 acres of the 300-acre CORE3 project in Redmond. BOCC MEETING OCTOBER 11, 2023 PAGE 4 OF 7 Lelack said if awarded, this grant would not compete or conflict with any grants sought by the County. CHANG: Move approval of a letter of support for COIC's application for a technical assistance grant from DLCD for the CORE3 project ADAIR: Second VOTE: ADAIR: Yes CHANG: Yes DEBONE: Chair votes yes. Motion Carried Lelack asked if the Board supports signing a draft letter to Representatives Ken Helm and Mark Owens regarding state groundwater allocation rules, noting it's proposed that the letter be signed by Central Oregon mayors and county commissioners. Adding that this letter came forward at Doug Riggs' request, Commissioner DeBone asked if the County has a position on this subject. Saying he has been tracking this matter fairly closely, Commissioner Chang was not comfortable signing the letter as drafted. He did not believe that all cities in Central Oregon are 100% aligned on this and said he could either write and submit a separate letter on his own, or draft a letter for the County to submit in conjunction with the joint water caucus. Commissioner Chang added that the County has heard from hundreds of people whose wells have gone dry, and it is not known whether a few more feet of groundwater level decline would result in tens, hundreds, or thousands more wells drying up. He said while the draft letter addresses efforts to preserve and restore surface water volumes, groundwater levels have declined by one foot per year over the last 20 years. He objected that the letter does not address the need to slow, stop or reverse the decline of groundwater levels, said this would require conservation efforts across the entire spectrum of groundwater users, and stated his support for a comprehensive approach that considers existing groundwater permits as well as new ones. Discussion ensued regarding domestic and agricultural water use and the need to prioritize municipal water systems such as the City of Redmond's; the effects of reduced precipitation, which is needed to recharge groundwater levels; the risk of allowing the most water -inefficient households to operate exempt wells while restricting others; not wanting existing exempt wells to go dry; whether the BOCC MEETING OCTOBER 11, 2023 PAGE 5 OF 7 rulemaking will curb exempt well permits; and the fact that advances in technology allow people to have much deeper wells than before. Commissioner Adair asked what the County can do to help Redmond meet its municipal water needs. She agreed it is very expensive to re -drill and maintain wells and said sediment can fill in wells over time such that they have to be re -drilled after 30 or so years. Commissioner Chang said the State's Water Resources Department has been issuing new permits for years without verifying whether or not water was available to fulfill each proposed use. Commissioner DeBone said while these permits may be overallocated, they are now constrained such that water rights can only be transferred, not created. Chair DeBone concluded that the Board will not take action on the draft letter as presented at this time. Lelack announced two groundbreaking events next Monday for affordable housing projects: the Housing Works and RooteclHomes groundbreaking on Simpson Avenue in Bend and the Housing Works groundbreaking at the Cleveland Commons project, also in Bend. Commissioner DeBone reported on a roundtable hosted by AOC regarding Measure 110 at which the subject of adult drug treatment courts was discussed. He supported drafting a letter to communicate to the State the effects which Measure 110 has had on Deschutes County and asking that the Legislature make needed changes. Commissioner Adair agreed this would be appropriate. Commissioner Chang agreed that Deschutes County needs resources to re-establish a drug treatment court as this type of program helps move people out of addiction. He said the Board should receive a presentation to learn how BHRN funds are being spent and what they are accomplishing. Commissioner Adair reported that she toured the Ideal Options facility in Bend which receives BHRN funds and allows law enforcement personnel to refer anyone who is willing to receive treatment. Commissioner DeBone shared that he and Commissioner Adair attended the Redmond Patriots meeting on Monday, and he and Commissioner Chang both attended last night's Newberry Regional Partnership event. Commissioner DeBone said he will attend a roundtable on the North Unit Irrigation District Resiliency Project later today. BOCC MEETING OCTOBER 11, 2023 PAGE 6 OF 7 • Commissioner Chang reported that Senator Wyden visited Bend High School to learn about the Healthy Schools Partnership and talk with youth about behavioral health and mental health needs of students. EXECUTIVE SESSION: At 10:38 am, the Board moved into Executive Session under ORS 192.660 (2) (h) Litigation. The Board moved out of executive session at 11:20 a.m. to direct staff to proceed as directed. A break was taken. At 11:40 am, the Board went into Executive Session under ORS 192.660 (2) (i) for an employee evaluation. The Board moved out of executive session at 12:10 p.m. with no action taken. M 1119! 1 Being no further items to come before the Board, the meeting was adjourned at 12:10 pm. DATED this ' day of Commissioners. ATTEST: -,6 0 RECORDING SECRETARY 2023 for the Deschutes County Board of ANTHONY• PHIL CHANG, C MMISSIONER BOCC MEETING OCTOBER 11, 2023 PAGE 7 OF 7 ,'��vS E S COG�a BOARD OF COMMISSIONERS BOARD OF COUNTY COMMISSIONERS MEETING 9:00 AM, WEDNESDAY, OCTOBER 11, 2023 Barnes Sawyer Rooms - Deschutes Services Building - 1300 NW Wall Street - Bend (541) 388-6570 1 www.deschutes.org MEETING FORMAT: In accordance with Oregon state law, this meeting is open to the public and can be accessed and attended in person or remotely, with the exception of any executive session. Members of the public may view the meeting in real time via YouTube using this link: http://bit.ly/3mminzy. To view the meeting via Zoom, see below. Citizen Input: The public may comment on any topic that is not on the current agenda. Alternatively, comments may be submitted on any topic at any time by emailing citizeninput@deschutes.org or leaving a voice message at 541-385-1734. When in -person comment from the public is allowed at the meeting, public comment will also be allowed via computer, phone or other virtual means. Zoom Meeting Information: This meeting may be accessed via Zoom using a phone or computer. • To join the meeting via Zoom from a computer, use this link: http://bit.ly/3h3ogdD. • To join by phone, call 253-215-8782 and enter webinar ID # 899 4635 9970 followed by the passcode 013510. • If joining by a browser, use the raise hand icon to indicate you would like to provide public comment, if and when allowed. If using a phone, press *6 to indicate you would like to speak and *9 to unmute yourself when you are called on. 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, call (541) 388-6572 or email brenda.fritsvold@deschutes.org. Time estimates: The times listed on agenda items are estimates only. Generally, items will be heard in sequential order and items, including public hearings, may be heard before or after their listed times. CALL TO ORDER PLEDGE OF ALLEGIANCE CITIZEN INPUT: Citizen Input may be provided as comment on any topic that is not on the agenda. Note: In addition to the option of providing in -person comments at the meeting, citizen input comments may be emailed to citizeninput@deschutes.org or you may leave a brief voicemail at 541.385.1734. CONSENT AGENDA 1. Approval of Resolution No. 2023-059 extending 1.50 limited duration District Attorney FTE within the FY 2023-2024 Deschutes County Budget 2. Approval of Resolution No. 2023-057, adding 2.00 FTEs and increasing appropriations in Health Services and Adult Parole and Probation for use of the Opioid Settlement funds 3. Approval of Board Order No. 2023-042 appointing Health Services Director's Designees 4. Approval of a lease with Mosaic Medical to operate a School -Based Health Center at the Sisters Clinic 5. Approval of Chair signature of Document No. 2023-069, a Notice of Intent to Award a contract for the Gribbling Road Bridge #17C30 Replacement Project 6. Consideration of Board signature on letters reappointing Andrew Aasen, Dustin Miller and Hunter Neubauer for service on the Deschutes County Cannabis Advisory Panel 7. Consideration of Board signature on letters reappointing Renee Alexander, Mark Kelley, Jerry Milstead, Kent Vander Kamp, Mark Kneeshaw and Jim Starnes for service on the Deschutes County Facility Project Review Committee 8. Consideration of Board signature on letter of thanks to David Quiros for his service on the Deschutes County Facility Project Review Committee 9. Consideration of Board signature on letters appointing Greg Brady and Tamara Kuntz as alternate members on the Dog Control Board of Supervisors 10. Approval of August 30 and September 6, 13 and 18, 2023 BOCC meeting minutes October 11, 2023 BOARD OF COUNTY COMMISSIONERS MEETING Page 2 of 3 ACTION ITEMS 11. 9:10 AM Public Hearing and Board Order considering the annexation of certain properties totaling approximately 153.61 acres to the Bend Park & Recreation District 12. 9:20 AM Multiple Unit Property Tax Exemption application for 105 NE Franklin Avenue 13. 9:50 AM Update to County Finance Policy No. F-4 Capital Asset Policy 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. EXECUTIVE SESSION At any time during the 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 categories. Executive sessions are closed to the public; however, with few exceptions and under specific guidelines, are open to the media. 14. Executive Sessions under ORS 192.660 (2) (h) Litigation and ORS 192.660 (2) (i) Employee Evaluation ADJOURN October 11, 2023 BOARD OF COUNTY COMMISSIONERS MEETING Page 3 of 3 MEETING DATE: October 11, 2023 SUBJECT: Multiple Unit Property Tax Exemption application for 105 NE Franklin Avenue RECOMMENDED MOTION: Move approval of the application from New Zone Business, LLC for a Multiple Unit Property Tax Exemption relating to property at 105 NE Franklin Avenue in Bend. BACKGROUND AND POLICY IMPLICATIONS: In August 2022, the Bend City Council adopted a Multiple Unit Property Tax Exemption (MUPTE) program to support development and redevelopment goals in Bend's core and transit -oriented areas. The program is available for multi -story residential projects in certain areas of Bend that provide three or more units and provide at least three defined public benefits. The New Zone Business project proposes to build two five -story structures, one of which would be solely residential (95 rental units) and the other being mixed -use commercial (5,219 sf) and residential (96 rental units). The 199 residential units would consist of 103 studios, 78 one -bedroom units, and 18 two -bedroom units. For this project, the three public benefits will be: High Standard of Energy Efficiency/Green Building Features through Earth Advantage Platinum Certification (Priority Public Benefit) Enhanced Landscaping- the project will use native and pollinator -friendly plants Electric Vehicle (EV) Charging Infrastructure- the project will provide 50% of its total provided parking spaces with EV charging infrastructure. This will result in 60 total onsite spaces that include EV charging infrastructure of the planned 127 surface parking spaces. According to information submitted by the applicant and reviewed by an independent financial consultant, this project would not be financially viable without the requested property tax exemption. In order for this project to qualify for the tax exemption, it must be approved by the boards which represent at least 51 % of the combined levy of taxing districts. More information is available online at: Multiple Unit Property Tax Exemption Program I City of Bend (bendoregon.gov) BUDGET IMPACTS: Because this exemption, if approved, would only affect the Bend Urban Renewal Agency's Core Area Tax Increment Finance Fund, it would not result in direct budget impacts to any of Deschutes County's taxing districts. ATTENDANCE: Nick Lelack, County Administrator Cate Schneider, Senior Management Analyst, City of Bend STAFF REPORT FOR MULTIPLE UNIT PROPERTY TAX EXEMPTION PROJECT NUMBER: CITY COUNCIL DATE: APPLICANT/ OWNER: PRTX202303730 December 6, 2023 Project^ Caroline Baggott 1116 NW 17th Avenue Portland, OR 97209 OWNER: New Zone Business LLC 1116 NW 17th Avenue Portland, OR 97209 APPLICANT'S REPRESENTATIVE: n/a n LJ CITY OF BEND COMMUNITY AND ECONOMIC DEVELOPMENT LOCATION: 105 NE Franklin Avenue; Tax Lots 171232DA07900, 171232DA08001, 171232DA08200, 171232DA08400, 171232DD09201,171232DD09700, 171232DD09800, Between Franklin and Emerson Avenues, the Railroad, and along NE 1 st Street REQUEST: Multiple Unit Property Tax Exemption (MUPTE), 10-year tax abatement on residential improvements STAFF REVIEWER: Cate Schneider, Senior Management Analyst RECOMMENATION: Approval DATE: September 29, 2023 PROJECT & SITE OVERVIEW: The project site is located at 105 NE Franklin Avenue and is zoned Commercial Limited (CL) and Mixed Employment (ME) within the Bend Central District Special Planned District. The project proposes two new five story multi -family structures at the north and south ends of the site. The north building is proposed to be a mixed -use building with 80,913 gross square feet that includes 100 rental units and 5,219 square feet of commercial space. The southern building is proposed as a 75,383 square foot multi -family building with 99 rental units. In total, the project proposes to build 199 residential units with the following unit mix: 103 studios • 78 1-bedroom units • 18 2-bedroom units (During the site plan review process the applicant slightly modified the unit count. The unit numbers above are what was in land use application approval and differ slightly from the MUPTE application materials.) The three public benefits that the project plans to incorporate, if approved for MUPTE, include: • High Standard of Energy Efficiency/Green Building Features through Earth Advantage Platinum Certification (Priority Public Benefit) • Enhanced Landscaping- the project will use native and pollinator friendly plants • Electric Vehicle (EV) Charging Infrastructure- the project will provide 50% of its total provided parking spaces with EV charging infrastructure. In addition to these public benefits, the project plans to build a public plaza space that will include trees, landscaping, seating alcoves, benches, and an area for pop-up events that will account for more than 10% of the site's area as well as enhance NE 1 st Street through the site with a pedestrian oriented street and provide private amenity space inside the buildings for co - working, fitness and wellness centers and lounge/gathering spaces. The property where the project is proposed was formerly the location of the Les Schwab Tire Center that recently relocated to NE 3rd Street. The site is currently unoccupied. A Type II Site Plan Review application (PLSPR20230059) was approved on September 13, 2023. Figure 1. Site Location som mmiM C-L= f UST Figure 3. Site Plan I 4 INFRASTRUCUTURE NEEDED TO SERVE THE SITE The applicant submitted a sewer and water analysis through their application PRSWA202208184. The City identified preliminary mitigations necessary for this site to be served with infrastructure that will be finalized based on the final design submittal required by the land use approval for this site. The applicant received a letter from City of Bend Private Engineering Division confirming this as part of their application. ELIGIBILITY CRITERIA APPLICATION OF THE CRITERIA: LOCATION/ELIGIBLE ZONE REQUIREMENTS This project is located within the Core Area Tax Increment Finance Area which is an eligible site for the MUPTE Program per BMC 12.35.015(D). MULTI -STORY REQUIREMENTS Projects on lots that are greater than 10,000 sf are required to be three (3) or more stories in height to be eligible for the MUPTE Program per BMC 12.35.015(C). The proposed project is located on a lot larger than 10,000 square feet and is proposing both buildings to be 5 stories and therefore satisfies this requirement. HOTELS, MOTELS, SHORT TERM VACATION RENTALS ON SITE The MUPTE Program requires that projects include a restriction on transient occupancy uses, including use by any person or group of persons entitled to occupy for rent for a period of less than 30 consecutive days (including bed and breakfast inns, hotels, motels, and short-term rentals). If Council approves this project, the applicant will need to demonstrate a restriction of uses on the property for the period of the exemption satisfactory to the City before staff certifies the exemption with the County Assessor's office. DEMONSTRATION OF FINANCIAL NEED The applicant submitted a proforma income statement both with and without the tax exemption to demonstrate that the project would not be financially viable but for the property tax exemption. These proforma were then reviewed by a third party independent financial consultant hired by the City. Johnson Economics completed a review of the proformas in July 2023. A summary of their findings is included as Attachment A. The review confirms that the Platform project is not financially viable on its own; the assumed returns are below what would be necessary for the market to develop this project. The analysis demonstrates that even with the MUPTE benefit, the project is still operating on tight profit margins. Based on the findings of the financial analysis, the applicant was asked to clarify the basis for their construction cost assumptions. They provided copies of the cost estimates they received from three general contractors. JUSTIFICATION FOR ELIMINATION OF ANY EXISTING HOUSING AND BUSINESSES ON THE PROJECT SITE The existing site is vacant and therefore there is no anticipated displacement of housing or businesses by the project and therefore no mitigation is proposed. This meets the requirements of the MUPTE Program. PUBLIC BENEFIT REQUIREMENTS MUPTE requires that applicants provide three public benefits including one priority public benefit to qualify for the MUPTE program, per BMC 12.35.025. Priority Public Benefit The applicant plans to receive Earth Advantage (EA) Platinum certification for both buildings. This requires the applicant to incorporate a high level of sustainable, energy efficient and green building features. The applicant submitted documentation including a preliminary scoring sheet that demonstrates that they are on track to reach EA Platinum certification. Approval will be conditioned on future verification of EA Platinum certification. Additional Public Benefits In addition to the Priority Public Benefit, the applicant is required to provide two additional public benefits. The applicant plans to utilize the following benefits to meet those requirements: 1) Enhanced Landscaping; and 2) Electric Vehicle (EV) Charging. Enhanced Landscaping: The applicant has submitted preliminary landscaping plans developed by Szabo Landscape Architecture that are consistent with Chapter 12 of the Bend Code and Chapter 3.2 of the Bend Development Code. The current plans include no grass areas. Future approval will be conditioned based on future staff verification that the applicant meets Chapter 12 of Bend Code and Chapter 3.2 of the Bend Development Code as well as the submittal and approval of a water budget for the site. The City will monitor water use throughout the 10-year exemption period. The site cannot exceed 20% above the approved water budget during the exemption period. Electric Vehicle (EV) Charging: Applicant is required to provide at least 10 percent more parking spaces with EV charging infrastructure, conduit for future electric vehicle charging stations, than the minimum required. Currently Oregon Building Codes require that multifamily projects provide 40% of provided parking spaces with EV charging infrastructure. Therefore, the applicant is required to provide at least 50% of parking spaces with EV infrastructure. The applicant plans to provide 117 onsite parking spaces for the north and south buildings; therefore, 59 of these spaces must be provided with EV charging infrastructure. The applicant plans to provide 65 parking spaces with EV charging infrastructure. Figure 4. EV Charging Locations ESTIMATED EXEMPTION: This project is estimated to receive a total 10-year tax exemption of approximately $4,400,000 based on an estimated building value of $43,953,675 for only the residential improvements. The total estimated tax collection for this project between fiscal years 2027 through 2036 is estimated to be $5,600,000 without the exemption and $1,200,000 with the exemption. If the project were to not move forward, total tax collection for the 10-year period of the site would be approximately $585,000. The estimated impact of this exemption would only impact the Bend Urban Renewal Agency's Core Area Tax Increment Finance Fund. The project, if approved for the tax exemption, is estimated to generate approximately $11,100,000 in TIF revenue over the 30-year lifetime of the district. Estimates assume that building value, the proportion of the project that is commercial, and timeline are all provided by the developer. The estimate is preliminary and subject to change and is based on a variety of factors including Deschutes County Tax Assessor's assessment of the property and future change property ratio (CPR) rates. Estimates could also vary depending on when the Core Tax Increment reaches the maximum indebtedness established in the Plan ($195 Million). TAXING DISTRICT REVIEW PROCESS All of the Taxing District agencies are being provided with a 45-day comment period to review the application materials and this staff report which will occur between September 29 — November 13, 2023. In order for the tax exemption to apply to the full taxable amount, approval by taxing district agency boards that comprise at least 51 % of the combined tax levy is required. The City is seeking to have the policy of the MUPTE program approved by all of the taxing districts. This application is being considered individually while an approval process for the policy of the MUPTE program is worked on. Expected timeline for taxing district review of 105 NE Franklin • September 29 — November 13, 2023: Review and comment period for all taxing districts • November 14, 2023: Bend -La Pine School District review and decision • December 6, 2023: Bend City Council review and decision on the MUPTE application for 105 NE Franklin CONCLUSION: Based on the application materials submitted by the applicant, and these findings, the proposed project meets all applicable criteria for City Council approval. CONDITONS TO BE MET IF APPROVED, IN ADVANCE OF EXEMPTION CERTIFICATION WITH TAX ASSESSOR'S OFFICE: 1. Applicant must provide proof of a deed restriction that prohibits the use of hotels, motels, and short-term vacation rentals on the site for the period of the exemption. 2. Applicant must demonstrate Earth Advantage Platinum Certification for both multifamily buildings prior to exemption certification. 3. Applicant must demonstrate compliance with Enhanced Landscaping Requirements to be verified by staff. 4. Applicant must submit a water budget to City staff for approval prior to exemption certification. The City will monitor water use throughout the 10-year exemption period. The site can't exceed 20% above the water budget for the site during the exemption period. 5. Applicant must demonstrate that EV Charging infrastructure is provided as approved for the MUPTE Program in future inspections prior to Certificate of Occupancy. ATTACHMENTS • Attachment A: Review of MUPTE Application, Project^, 105 NE Franklin Memorandum prepared by Johnson Economics • Attachment B: Application Materials VIES C MEETING DATE: BOARD OF COMMISSIONERS October 11, 2023 SUBJECT: Update to County Finance Policy No. F-4 Capital Asset Policy RECOMMENDED MOTION: Move approval of County Administrator signature of revised County Finance Policy No. F-4, Capital Asset Policy, and rescind policies F-5 and F-6. BACKGROUND AND POLICY IMPLICATIONS: Staff have reviewed the three capital asset policies and recommend combining policies F-4 (Capital Asset Disposal or Transfer), F-5 (Capital Asset, Capital Outlay Expenditure and Theft Sensitive Asset Thresholds), and F-6 (Capital Outlay Expenditures) into one policy since the topics are related and the three separate policies duplicate topics. Attached is the revised capital asset policy document, a clean draft and a red -lined version. In addition to combing the three policies into one, other updates are summarized as follows: • Removed the requirement for a Capital Asset Form when substituting capital items for purchase. The updated policy sets guidelines of when a budget adjustment is required and when a budget resolution is required. Resolutions would need board approval. This provides additional oversight set in policy. • Clarified capital assets (>$5,000) are tracked by Central Finance in the Tyler (Munis) accounting system. Non -Capital Assets, inventory, and theft sensitive items are tracked by the departments, at their discretion and as required by regulatory agencies. BUDGET IMPACTS: None. ATTENDANCE: Robert Tintle, Chief Financial Officer Deschutes County Administrative Finance Policy No. F-4 (replaces prior policies F-4, F-5, F-6) Effective Date: TBD CAPITAL ASSET POLICY STATEMENT OF POLICY It is the policy of Deschutes County to establish guidelines to account for capital assets and non -capital assets to achieve multiple compliance objectives. These objectives include: • Budgetary classification of capital outlay expenditures • Capital asset financial statement reporting • Physical control over both capital and non -capital items that may be sensitive to theft or loss • Other Federal, State, and local regulations where applicable APPLICABILITY This policy applies to all County departments, offices, and County service districts under the governance of the Board of County Commissioners. DEFINITIONS • Capital Outlay Expenditures (Budget) - Expenditures are classified by character based on the fiscal period when the benefits for those expenditures are realized. Accordingly, capital outlay is classified separately from current expenditures because they are presumed to benefit both present and future fiscal periods. • Capital Asset (GAAP) - With regard to financial statement reporting, the County aligns with the Governmental Accounting Standards Board (GASB) definition from GASB Statement No. 34, "The term capital assets includes land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period." • Non -Capital Asset - A capital -type item acquired for use in the conduct of County business which does not qualify as a capital asset because it falls below the cost or useful life thresholds for capital assets. • Capitalization Threshold - For financial statement reporting in accordance with GAAP, and for budgeting or other internal reporting purposes, Deschutes County establishes a threshold of $5,000 as the minimum individual item cost, and an estimated useful life of more than one (1) year for items accounted for as capital assets (GAAP) and capital outlay expenditures (budget). POLICY 1. Capital Outlay Expenditures Budgetary and purchasing policies for capital outlay items: a. Budget - The estimated cost of an item must be appropriated in the capital outlay category of the department or fund for the fiscal year in which the item will be purchased. In addition, a description of the item must be included in the capital request section of the budget document explaining the need for the item. b. Acquisition - County purchasing rules must be followed in the purchase of the capital item. Purchasing requirements are dependent on the amount and type of purchase. Documentation must be maintained in the County accounting/ procurement systemas evidence that all applicable compliance related to purchasing rules have been met. c. Departments must contact the Central Budget Office for a budget adjustment if: i. The department unintentionally budgeted capital items within the personnel services or the material and services roll up category. ii. The department requests to transfer budget appropriation from the personnel services or the material and services roll up category for the purchase of a non - budgeted additional capital item. iii. The department requests to substitute a budgeted capital item with a different non -budgeted capital item of equal or lesser expense. d. Departments must contact the Central Budget Office for a budget resolution presented before the Board of County Commissioners if: i. The department requests the purchase of a non -budgeted additional capital item that cannot be funded through appropriation savings within the personnel services or materials and services roll up category. ii. The department requests to recognize increased revenue to cover the purchase of a non -budgeted additional capital item. iii. The department requests to substitute a budgeted capital item with a non - budgeted additional capital item of greater expense and cannot cover the expense with appropriation savings within the personnel services or material and services roll up category. e. Additional capital items and capital substitutions are subject to the County's purchasing rules. 2. Capital Assets Capital assets meeting the definition in this policy will be tracked by the County Finance Department in the centralized accounting and control system to protect such assets from the danger of theft or misuse. This control system includes tracking asset serial numbers (or other identifying asset numbers), and recording information pertinent to the asset (cost, date of acquisition, manufacturer, location, and other information as required). To validate the accuracy and completeness of the database, the County Finance Department will coordinate with departments to perform a physical inspection of its capital assets, either simultaneously or on a rotating basis, so that all of the County's capital assets are physically accounted for at least once every two years, and to ensure the asset's continued value, condition and location, and to update any other information required for the asset. Assets subject to cost recovery will be depreciated (or amortized) through the accounting system and will be appropriately reported on the County's annual financial statements. The County aligns financial reporting for specific capital asset classes with pronouncements from the Governmental Accounting Standards Board (GASB). This includes accounting for leases, internally developed software, and subscription -based information technology arrangements. A capital asset disposal/transfer form must be completed when a capital asset is disposed of, taken out of service, or transferred to another location or department. The department initiating the disposal, removal from service or transfer is responsible for completing the disposal/transfer form and submitting it to the Finance Department. Lost or stolen items - If a department is unable to locate an item, or if an item has been stolen, the department will give written notice to Risk Management. The notice will include a description of the effort to locate the item and the determination of the loss. Stolen assets should also be reported to the proper authority and a copy of the report forwarded to Risk Management. A capital asset disposal form must be completed and submitted to the Finance Department. 3. Non -Capital Assets In addition to the Capital Assets for external reporting purposes and Capital Outlay for budgetary and internal reporting purposes, the County will also exercise control over its non - capital assets to ensure accountability, protect property, or to comply with regulatory or granting agencies. At the department's discretion, non -capital assets and theft -sensitive items may be tracked at the department level. The determination of which items must be tracked may vary between County departments based on the risk and compliance environment in which the department operates. For example, a granting agency may require accountability for purchased items below the County's dollar threshold for capitalization. Non -Capital Asset Control - Departments may maintain inventory control systems for non - capital assets and theft -sensitive items which are designed to meet departmental compliance and reporting needs. Capital Asset Accounting - Capital Assets meeting the definition in this policy will be tracked by the Finance Department in the accounting system. Moved to Item #2 JTEs o Deschutes County Finance Policy No. F-4 (replaces prior policies F-4, F-5, F-6) Effective Date: TBD CAPITAL ASSET POLICY STATEMENT OF POLICY It is the policy of Deschutes County to establish guidelines to account for capital assets and non -capital assets to achieve multiple compliance objectives. These objectives include: • Budgetary classification of capital outlay expenditures • Capital asset financial statement reporting • Physical control over both capital and non -capital items that may be sensitive to theft or loss Other Federal, State, and local regulations where applicable APPLICABILITY This policy applies to all County departments, offices, and County service districts under the governance of the Board of County Commissioners. DEFINITIONS • Capital Outlay Expenditures (Budget) - Expenditures are classified by character based on the fiscal period when the benefits for those expenditures are realized. Accordingly, capital outlay is classified separately from current expenditures because they are presumed to benefit both present and future fiscal periods. • Capital Asset (GAAP) - With regard to financial statement reporting, the County aligns with the Governmental Accounting Standards Board (GASB) definition from GASB Statement No. 34, "The term capital assets includes land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period." Non -Capital Asset - A capital -type item acquired for use in the conduct of County business which does not qualify as a capital asset because it falls below the cost or useful life thresholds for capital assets. Capitalization Threshold - For financial statement reporting in accordance with GAAP, and for budgeting or other internal reporting purposes, Deschutes County establishes a threshold of $5,000 as the minimum individual item cost, and an estimated useful life of more than one (1) year for items accounted for as capital assets (GAAP) and capital outlay expenditures (budget). POLICY 1. Capital Outlay Expenditures Budgetary and purchasing policies for capital outlay items: a. Budget - The estimated cost of an item must be appropriated in the capital outlay category of the department or fund for the fiscal year in which the item Policy #F-4, Capital Asset Policy Page 1 of 3 will be purchased. In addition, a description of the item must be included in the capital request section of the budget document explaining the need for the item. b. Acquisition - County purchasing rules must be followed in the purchase of the capital item. Purchasing requirements are dependent on the amount and type of purchase. Documentation must be maintained in the County accounting/ procurement system as evidence that all applicable compliance related to purchasing rules have been met. c. Departments must contact the Central Budget Office for a budget adjustment if: i. The department unintentionally budgeted capital items within the personnel services or the material and services roll up category. ii. The department requests to transfer budget appropriation from the personnel services or the material and services roll up category for the purchase of a non -budgeted additional capital item. iii. The department requests to substitute a budgeted capital item with a different non -budgeted capital item of equal or lesser expense. d. Departments must contact the Central Budget Office for a budget resolution presented before the Board of County Commissioners if: i. The department requests the purchase of a non -budgeted additional capital item that cannot be funded through appropriation savings within the personnel services or materials and services roll up category. ii. The department requests to recognize increased revenue to cover the purchase of a non -budgeted additional capital item. iii. The department requests to substitute a budgeted capital item with a non -budgeted additional capital item of greater expense and cannot cover the expense with appropriation savings within the personnel services or material and services roll up category. e. Additional capital items and capital substitutions are subject to the County's purchasing rules. 2. Capital Assets Capital assets meeting the definition in this policy will be tracked by the County Finance Department centralized accounting and control system to protect such assets from the danger of theft or misuse. This control system includes tracking asset serial numbers (or other identifying asset numbers), and recording information pertaining to the asset (cost, date of acquisition, manufacturer, location, and other information as required). To validate the accuracy and completeness of the database, the County Finance Department will coordinate with departments to perform a physical inspection of its capital assets, either simultaneously or on a rotating basis, so that all the County's capital assets are accounted for at least once every two fiscal years, and to ensure the asset's continued value, condition and location, and to update any other information required for the asset. Assets subject to cost recovery will be depreciated (or amortized) through the accounting system and will be appropriately reported on the County's annual financial statements. The County aligns financial reporting for specific capital asset classes with pronouncements from the Governmental Accounting Standards Board (GASB). This includes accounting for leases, internally developed software, and subscription -based information technology arrangements. Policy #F-4, Capital Asset Policy Page 2 of 3 A capital asset disposal/transfer form must be completed when a capital asset is disposed of, taken out of service, or transferred to another location or department. The department initiating the disposal, removal from service or transfer is responsible for completing the disposal/transfer form and submitting it to the Finance Department. Lost or stolen items - If a department is unable to locate an item, or if an item has been stolen, the department will give written notice to Risk Management. The notice will include a description of the effort to locate the item and the determination of the loss. Stolen assets should also be reported to the proper authority and a copy of the report forwarded to Risk Management. A capital asset disposal form must be completed and submitted to the Finance Department. 3. Non -Capital Assets In addition to the Capital Assets for external reporting purposes and Capital Outlay for budgetary and internal reporting purposes, the County will also exercise control over its non -capital assets to ensure accountability, protect property, or to complywith regulatory or granting agencies. At the department's discretion, non -capital assets and theft -sensitive items may be tracked at the department level. The determination of which items must be tracked may vary between County departments based on the risk and compliance environment in which the department operates. For example, a granting agency may require accountability for purchased items below the County's dollar threshold for capitalization. Non -Capital Asset Control - Departments may maintain inventory control systems for non -capital assets and theft -sensitive items which are designed to meet departmental compliance and reporting needs. Approved by the Deschutes County Board of Commissioners (date) Policy #F-4, Capital Asset Policy Page 3 of 3 <Insert Contact Person> To: Gordon Howard <Insert Organization Grant Program Manager, Department of Land Title, Organization> Conservation and Development RE: Letter of Support for COIC's application to DLCD's Technical Assistance grant for the CORE3 project Dear Mr. Howard, I'm writing in support of COIC's proposal for the CORE3 project. This funding would support critical next steps in land -use planning for this facility, as well as leverage other promising funding opportunities and past work and investment in this process. As an Executive Council member of CORE3, my organization, <insert nave> recognizes that Central Oregon, Oregon, and the Pacific Northwest are facing growing threats from natural disasters and other shocks that severely impact our communities. At the same time, Central Oregon lacks the facilities to meet existing training needs for public safety personnel and a multi -agency coordination center for emergency operations. These facts highlight the need to take collective action to build a more prepared, resilient region to meet these uncertainties and increase our preparedness, coordination, and training capacity. As <insert your role here e.g, the land owner, a public safety organization that woulc recognizes the critical need for the CORE3 project, which will function as a multi -agency coordination center and training facility and help us accomplish our goals of <insert how this helps you accomplish, goals here>. Additionally, the facility would serve a critical function for the state in the event of a major natural disaster like a Cascadia Subduction Zone event, as Redmond and Redmond Airport are envisioned as the staging grounds for rescue and recovery operations. At this time, <org name> is providing <fir ancial support, staff support, etc.> to move this project successfully through the land -use planning process. (<you may include other reas your org is supporting CORES beyond the land use planning phased). With COIC and the other Executive Council members, we share the goal of making this facility a reality for the sake of our communities, and for creating a safe and resilient Oregon. Thank you for your careful consideration of this proposal. Sincerely, <Your Signature,: Name, Title, Organization, and Contact Info> October 6, 2023 Chair Ken Helm Vice Chair Mark Owens House Committee on Agriculture and Natural Resources Salem, Oregon 97301 Dear Chair Helm and Vice Chair Owens, We are urging the legislature to take action to protect the tremendous and collaborative progress on water supply that our basin has made over the past twenty-five years. The current Oregon Water Resources Commission "Groundwater Allocation Rules" are a one size fits all, statewide approach that will damage our existing water conservation, allocation and restoration efforts. The proposed rules attempt to fit a fixed calculation of "reasonably stable groundwater levels" into all basins. The proposed definition of "reasonably stable groundwater levels" apparently relies on water level changes defined by the Water Resources Commission in 1988 in a basin whose hydrogeology bears no resemblance to our basin. The rules also fail to consider five key factors: ✓ Our basin has an existing and productive collaborative regional effort to identify new tools for water use and conservation in the context of the unique characteristics of our large basin and exceedingly deep aquifer. All stakeholders are at the table, and this rulemaking would up -end that effort. ✓ Groundwater levels in our basin are largely driven by precipitation. In addition, certain areas through recent and thoughtful actions - - such as canal piping and lining - - have led to an expected reduction in groundwater levels near these projects. That should come as no surprise, as we are eliminating wasteful and unnatural aquifer recharge. We can expect groundwater levels near these projects to eventually adjust to more natural levels. Yet the Department points specifically to one measurement in this area as justification for their concerns about water level changes in the Deschutes Basin. This is misleading and ignores the detailed studies and information outlining the interaction between agriculture, irrigation and municipal use and water resources in our basin. ✓ The Oregon Legislature has - - on five occasions - - passed legislation to create, codify and renew the Deschutes Basin Mitigation and Conservation statutes. The Oregon Legislature has repeatedly recognized on a bi-partisan basis the unique nature of the Deschutes Basin. Those actions have led to dramatically increased mid -Deschutes flows, restoration of critical areas including Whychus Creek, the ability to respond to federal ESA listings, and a twenty-five year collaborative effort to manage water in a responsible manner. This groundwater rule essentially reverses that long standing precedent. ✓ The basin is not standing still. As mentioned above, the Deschutes Basin Water Collaborative is working to identify issues (including groundwater concerns), review the scientific data, and prepare a game plan for the basin as we move forward. ✓ The region has taken responsible action to ensure that most population growth also comes with water conservation efforts. Every city in the region has a Water Management and Conservation Plan. Cities have adopted responsible landscape standards, alternative watering days, and are pursuing aquifer storage projects. (Bend for example, grew by 26,169 people (34%) over the past 18 years, but has only increased its annual surface and groundwater by 8.5% over that time frame). Cities are required by state statute to maintain a 20-year supply of buildable land, but as drafted, these rules will make it nearly impossible for cities to do that. This will, perversely, push housing and population growth onto rural lands and exempt wells, which are not addressed by the proposed rules. At the very least, the rules should not penalize local governments which have complied with existing statutes, are required to comply with other state statutes regarding housing/economic factors, and are engaged in a sincere effort to address water concerns in their basin. Stakeholders, including those in our basin, are almost universally concerned with the Department's unwillingness to engage in meaningful two-way discussions about these rules. Much of the rulemaking was completed during the prior 2023 Legislative Session, while we were heavily engaged in supporting your comprehensive drought package and ensuring passage of the promising Stream Restoration and Juniper Management Program (which is already getting underway in our region). These are clearly complicated issues, which vary greatly from basin to basin. We would strongly urge your Committee and the Legislature to work with the Governor to direct the Department to extend the process, sit down with our basin in a meaningful way, and protect the collaborative, visionary, and successful track record that the Deschutes Basin has established over the past two decades. Sincerely, Central Oregon Mayors and County Commissioners