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2025-95-Minutes for Meeting February 03,2025 Recorded 4/8/2025Q`Y�3T Es coG�< BOARD OF COMMISSIONERS 1300 NW Wall Street, Bend, Oregon (541) 388-6570 1:00 PM Recorded in Deschutes County Steve Jennison, County Clerk C+��2��^� comrnissioners' Journal 04/08/2025 2:55:47 PM z 2025-95 BOCC MEETING MINUTES MONDAY February 3, 2025 Allen Room Live Streamed Video Present were Commissioners Anthony DeBone, Patti Adair (via Zoom) and Phil Chang. Also present were Nick Lelack, County Administrator; Whitney Hale, Deputy County Administrator; Kim Riley, Senior Assistant County Counsel; and Brenda Fritsvold, BOCC Executive Assistant. 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 1:00 pm. CITIZEN INPUT: None AGENDA ITEMS: 1. Southern Deschutes County Groundwater Monitoring Project Results / Department of Environmental Quality Greg Svelund from the Oregon Department of Environmental Quality (DEQ) provided information about the Southern Deschutes County Groundwater Monitoring Project, which involved collecting samples of groundwater in the southern part of the County. The sampling results detected nitrate in 65 of the tested wells, three of which exceeded the amount deemed to be safe. Svelund BOCC MEETING FEBRUARY 3, 2025 PAGE 1 OF 8 said a full report of the monitoring results will not be published until later this year. Adding that groundwater management is receiving a large amount of attention at the State level, Svelund said DEQ remains concerned about longer -term nitrate contamination in southern Deschutes County, especially as shallower systems are more vulnerable to groundwater contamination. Sean Rochette, Onsite Manager for DEQ, said the recent sampling event did not return any unexpected results. Stressing that the information is merely raw data at this point, he said DEQ is working to update its rulemaking to more specifically address nitrates and allow protective technologies. In response to Commissioner Chang, Rochette said the rulemaking changes address nitrates, the variance process, and ADUs. Sewer availability will be taken into consideration. Responding to Commissioner DeBone, Svelund confirmed that only private domestic wells were tested and said multiple wells have been tested more than once, with some having been tested up to five times. Testing is voluntary, and it can be difficult to secure the participation of private well owners. Commissioner DeBone shared his willingness to strongly advocate for an area - wide Goal 11 exception to allow serving rural properties with sanitary sewer. He referred to previous discussions on this issue as long as 15 years ago, noted that DEQ has taken the lead i►i testing the groundwater, and expressed frustration that addressing these concerns has taken so long. Commissioner Chang noted that over 1,000 households with private septic systems have been moved to nitrate -reducing systems, and La Pine now offers a sanitary sewer system for new developments. He concurred that the County should seriously consider making another attempt for a Goal 11 exception, but in a more focused area as the former 840-square mile proposal with 11,000 lots was unrealistic whereas reducing the area could make it economically feasible. Commissioners DeBone and Chang spoke to working in partnership with the State on this matter. In response to Commissioner DeBone, Svelund said the owners of wells which tested above the actionable level for nitrates were referred to resources at the Department of Health. BOCC MEETING FEBRUARY 3, 2025 PAGE 2 OF 8 Commissioner Chang commented that in the contaminated areas, nitrates are percolating slowly into the groundwater. Commissioner DeBone asked what can be done to address acute health hazards that people are experiencing. Noting that DEQ held 46 public meetings in three years on this matter, Svelund believed that the County will need to address this situation through land use. He said while the State is out of tools at this point, it continues to remain a partner in whatever direction the County wants to go. Commissioner DeBone spoke to the need for Legislative support and State guidance and investment. He envisioned working with areas of 100, 200 or 300 residential properties at a time and referred to problems experienced when needed land use decisions are appealed. Commissioner Chang expected that individual property owners will have to pay for new infrastructure as well as its monthly operation. Because it's not realistic to install sewer in more dispersed areas, older systems will have to be replaced with nitrate -reducing systems. Commissioner Adair said it would be more scientific to test the same wells repeatedly over time. Adding that the County cannot ignore the tests which returned results showing high levels of nitrates, she encouraged promoting testing to the community to gain higher participation. Commissioner DeBone supported the County contributing to funding for well testing, saying that revenues from the groundwater protection fund might be utilized for this purpose. 2. Southern Deschutes County Groundwater. Protection Program / Annual Report Peter Gutowsky, Community Development Director, presented the annual report on the Southern Deschutes County Groundwater Protection Program. Noting that the La Pine subbasin, which extends into northern Klamath County, serves as primary drinking source for thousands of residents south of Sunriver, Gutowsky said groundwater investigations indicate this sole source aquifer is vulnerable to nitrate loading from onsite wastewater systems. Because most homes in the subbasin rely on onsite wastewater systems and domestic wells, Gutowsky said it is critical that the County require higher treatment standards for existing and future septic systems to protect the region's groundwater. BOCC MEETING FEBRUARY 3, 2025 PAGE 3 OF 8 Gutowsky shared information on the number of lots in the subbasin and how many are developed as well as how many of the developed lots rely on conventional onsite septic systems and how many of these have alternative treatment systems (ATTs). Commissioner Adair said ATTs must be 95% effective at capturing nitrates, not just 70% effective. Todd Cleveland, Onsite Wastewater Manager, said the more effective systems lack distributors and installers. Continuing, Gutowsky spoke to emerging opportunities and advised that the County convene a Financial Advisory Committee to determine how to incentivize property owners to switch to ATTs to reduce the nitrate load into the ground. Commissioner DeBone noted that ATTs cost $10,000 more than conventional systems, yet the rebate given to those required to install ATTs was just $3,500. He added that in 2008, the Board of County Commissioners established a local rule which required that all owners of property in Southern Deschutes County having an existing septic system retrofit with an ATT by 2022. In 2009, this regulation was overturned by voter approval of Measure 970. Commissioner Chang agreed it is necessary to determine how to incentivize property owners to upgrade their systems. Cleveland spoke to the cost of upgrading standalone septic systems, saying that some property owners did take advantage of the original offered rebate, but the cost of such upgrades has since doubled. Referencing the suggestion that the County could use proceeds from the sale of County -owned land at Newberry to increase the rebate amount, he said another option would be establishing a loan program through Neighborlmpact. Commissioner DeBone spoke to the Newberry Regional Partnership, which is working to create a community strategic action plan and boost civic engagement and education. He said a plan is needed for reusing ATTs if sewer is put in and said water systems are needed in addition to sewer systems, in part to ensure adequate flows to fight fires. Commissioner Adair said the testing has been inadequate, and the County cannot continue to sit back and hope that the State is doing what it should. Adding she was unsure when the Newberry properties will sell, she said more education is needed on these matters. Commissioner Chang reiterated his interest in looking at a more geographically limited Goal 11 exception than was sought previously. He agreed with the need BOCC MEETING FEBRUARY 3, 2025 PAGE 4 OF 8 to motivate property owners to upgrade their systems and suggested lobbying the Legislature to give DEQ more tools to address these situations. 3. State DLCD Farm and Forest Modernization Project Update Tanya Saltzman, Senior Planner, reviewed that last year, the State Land Conservation and Development Commission (LCDC) initiated the Farm and Forest Modernization Project to improve the clarity and consistency of implementing Oregon's farm and forest program across the state. After new Oregon Administrative Rules (OARS) took effect on January 1, 2025, Planning began working to incorporate these into Deschutes County Code. Commissioner Chang asked if this rulemaking will lead to things being done differently in Deschutes County. Planning Manager Will Groves said the new rules have already taken effect, and everyone is already subject to them. The changes to County Code constitute basic housekeeping only to align with the changes at the State level. Saltzman reviewed specific changes involving: the Farm Impacts Test for Conditional Uses in Exclusive Farm Use Zones; Agri -Tourism and Other Commercial Event Standards in Exclusive Farm Use Zones; Transportation Facilities on Rural Lands; Private Parks; the Preparation of Products on Farmland; Verification of Income for Farm Dwellings and Farm Stands in Exclusive Farm Use Zones; and Home Occupations in EFU Zones. in addition, conforming rule changes require text amendments to various sections, as follows: Replacement Dwelling Requirements, Template Test Provisions, Childcare, Nonconforming Schools, Campsites, Rabbit Processing, and Farm Dwellings in Conjunction with Cranberry Operations. 4. Work Session: Preparation for Public Hearing - Clear and Objective Housing Text Amendments Kyle Collins, Associate Planner, explained that in 2017, the State adopted regulations which require that local governments utilize clear and objective standards, criteria, and procedures when processing applications for housing projects. In 2023, the State expanded this requirement to unincorporated communities, non -resource lands and areas zoned for rural residential use, effective July 1, 2025. Collins provided an overview of what constitutes "clear and objective," e.g., counts and measurements, and said the County has worked since 2023 to modify sections of its Code which were previously not in compliance with this BOCC MEETING FEBRUARY 3, 2025 PAGE 5 OF 8 mandate. Staff is proposing various changes, including to some definitions to address terms which contain ambiguous or contradictory language. Part of the work done included distinguishing between a dwelling unit and an accessory structure and developing a process to ensure that accessory structures are not unlawfully converted to or otherwise used for dwelling. The Planning Commission held a public hearing on January 9th, after which it voted unanimously to recommend approval of the revisions as presented. A second public hearing will be held before the Board on February 12th. Collins noted the changes proposed at this time are the first of multiple grouped revisions which will be needed to conform with the new regulations. County Administrator Nick Lelack commended Saltzman and Collins for their work, saying these changes will provide clarity. In response to Lelack, Collins confirmed that the State's intention for requiring clear and objective standards is to streamline the permitting process with the aim of lowering some of the costs of building new homes. OTHER ITEMS: CDD Director Peter Gutowsky asked that the Board consider issuing a letter opposing House Bill 3013-1, which would define the process by which a permit or zone change that is based on provisions of a comprehensive plan or land use regulation which fails to gain acknowledgment would be voided; further, any resulting improvements or uses would have to be removed or revoked. Gutowsky warned that this legislation would incentivize litigation as any third party who was not a participant in a proceeding could appeal a decision to the Land Use Board of Appeals. Also, because the change risks the revocation of certain investments and would result in those being put back to pre -development status, it could have a chilling effect on the efforts of local governments to address community needs. Saying this proposal is very complicated, Commissioner Chang was not comfortable taking a position. ADAI R: DEBONE: VOTE: BOCC MEETING Move that Commissioners Adair and DeBone sign a letter opposing HB 3013-1 on behalf of the BOCC Second ADAI R: Yes CHANG: (abstain) DEBONE: Chair votes yes. Motion Carried 2 - 1 - 0 FEBRUARY 3, 2025 PAGE 6OF8 • County Administrator Nick Lelack presented a draft letter from the Board regarding Spring Butte Rock's objection to the proposal that the County acquire 40 acres of Deschutes National Forest land near La Pine for the purpose of selling it to a private party. Commissioner DeBone reported the receipt of an email from Congressman Cliff Bentz stating that this transfer is not proceeding at the federal level at this time. Lelack will forward this email to all Commissioners. • Commissioner DeBone shared legislative priorities of the Eastern Oregon Counties Association, in particular support for HB 2410 due to Umatilla County's advocating for a demonstration project for exploring small nuclear reactors, and HB 3173 which would remove the percentage cap on County Fair revenues from video lottery funds. • Commissioner Adair suggested submitting a letter on SB 780. • Commissioner DeBone reported a message from AOC Executive Director Gina Nichol regarding the Recycling Systems Advisory Council. • Commissioner Chang reported on last Thursday's meeting of the Redmond Managed Camp group, saying that work continues on a draft Memorandum of Understanding regarding the development of a camp and its operations. • Commissioner Adair shared that a certain consumer product -"Universal Fire Shield" Fire Code #100 guards against wood burning when applied to fences or other structures every six to seven years. EXECUTIVE SESSION: At 3:41 pm, the Board entered executive session under ORS 192.660 (2) (e) Real Property Negotiations. At 4:34 pm, the executive session concluded and the public was invited to return to the room. The Board then directed staff to proceed as discussed during the executive session. ADJOURN: Being no further items to come before the Board, the meeting was adjourned at 4:34 pm. DATED this Da of C% �t 2025 for the Deschutes Count Board of Commissioners. Y Y ANTHONY DEBONE, CHAIR BOCC MEETING FEBRUARY 3, 2025 PAGE 7 OF 8 ATTEST: may® RECORDING SECRETARY PATTI ADAIR, VICE CHAIR PHIL HANG, C MMISSIONER BOCC MEETING FEBRUARY 3, 2025 PAGE 8 OF 8 E S COG2� BOARD OF COMMISSIONERS BOARD OF COUNTY COMMISSIONERS MEETING 1:00 PM, MONDAY, FEBRUARY 3, 2025 Allen Room - 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 attend the meeting virtually 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 *9 to indicate you would like to speak and *6 to unmute yourself when you are called on. • When it is your turn to provide testimony, you will be promoted from an attendee to a panelist. You may experience a brief pause as your meeting status changes. Once you have joined as a panelist, you will be able to turn on your camera, if you would like to. 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 CITIZEN INPUT: The Board of Commissioners provides time during its public meetings for citizen input. This is an opportunity for citizens to communicate to the Commissioners on matters that are not otherwise on the agenda. Time is limited to 3 minutes. The Citizen Input platform is not available for and may not be utilized to communicate obscene or defamatory material. 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 voicemoil at 541.385.1734.. AGENDA ITEMS 1. 1:05 PM Southern Deschutes County Groundwater Monitoring Project Results / Department of Environmental Quality 2. 1:30 PM Southern Deschutes County Groundwater Protection Program / Annual Report 3. 1:50 PM State DLCD Farm and Forest Modernization Project Update 4. 2:10 PM Work Session: Preparation for Public Hearing - Clear and Objective Housing Text Amendments Regarding Definitions, Dimensional Standards, and Accessory Uses 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. 5. Letter to the House Committee on Agriculture, Land Use, Natural Resources, and Water regarding HB 3013-1 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 192.6606(2)(b), personnel issues; or other executive session categories. February 03, 2025 BOARD OF COUNTY COMMISSIONERS MEETING Page 2 of 3 Executive sessions ore closed to the public, however, with few exceptians and under specific guidelines, are open to the media. 6. Executive Sessions under ORS 192.660 (2) (e) Real Property Negotiations ADJOURN February 03, 2025 BOARD OF COUNTY COMMISSIONERS MEETING Page 3 of 3 BOARD O MEETING DATE: February 3, 2025 SUBJECT: Southern Deschutes County Groundwater Monitoring Project Results / Department of Environmental Quality RECOMMENDED MOTION: Information only. BACKGROUND AND POLICY IMPLICATIONS: DEQ representatives will discuss the results of groundwater monitoring in Southern Deschutes County. In 2022, DEQ announced that they would be testing groundwater for approximately 100 wells for free in Southern Deschutes County as part of a statewide study of groundwater pollution. DEQ collected samples in 2023 and 2024 from a mix of private and public wells for nitrate, arsenic, pesticides and other contaminants. In November, the Community Development Department (CDD) received well sampling data in a tabular format from DEQ. It revealed the following: • Many of the sampled wells are new; • In several well locations there are non -detect (negligible) traces of nitrates; • Certain wells north of Burgess Road and in La Pine showed increases in nitrates; • The well data is a snapshot in time that can be used and referenced in future well sampling events; • The data does not change our understanding of the La Pine subbasin; it is still vulnerable to nitrate loading; and • Nitrate -reducing onsite systems are still necessary to protect the aquifer. BUDGET IMPACTS: None ATTENDANCE: Greg Svelund, DEQ Regional Solutions Center Liaison and others Peter Gutowsky, CDD Director Todd Cleveland, Onsite Wastewater Manager T E S COG�a BOARD OF COMMISSIONERS MEETING DATE: February3, 2025 SUBJECT: Southern Deschutes County Groundwater Protection Program / Annual Report RECOMMENDED MOTION: Information only. BACKGROUND AND POLICY IMPLICATIONS: The La Pine subbasin serves as the primary drinking water source for thousands of residents south of Sunriver. However, groundwater investigations by the U.S. Geological Survey (USGS) and Oregon Department of Environmental Quality (DEQ) indicate that this sole source aquifer is vulnerable to nitrate loading from onsite wastewater systems, posing a long-term threat to public health and the environment. The Southern Deschutes County Groundwater Protection Program Annual Report provides an update on the status, progress, and challenges related to protecting the groundwater in this subbasin. The Community Development Department will update the report annually to identify changes in environmental conditions, development patterns, emerging opportunities, and/or the outcomes of ongoing initiatives. By documenting these efforts, Deschutes County is showcasing its commitment to mitigating the impacts from nitrate pollution. BUDGET IMPACTS: None ATTENDANCE: Peter Gutowsky, CDD Director Todd Cleveland, Onsite Wastewater Manager MEMORANDUM TO: Deschutes County Board of Commissioners FROM: Peter Gutowsky, AICP, Director Todd Cleveland, Onsite Wastewater Manager DATE: February 3, 2025 SUBJECT: Southern Deschutes County Groundwater Protection Program / Annual Report I. INTRODUCTION The La Pine subbasin serves as the primary drinking water source for thousands of residents south of Sunriver. However, groundwater investigations by the U.S. Geological Survey (USGS) and Oregon Department of Environmental Quality (DEQ) indicate that this sole source aquifer is vulnerable to nitrate loading from onsite wastewater systems, posing a long-term threat to public health and the environment. The Southern Deschutes County Groundwater Protection Program Annual Report provides an update on the status, progress, and challenges related to protecting the groundwater in this subbasin.1 The Community Development Department (CDD) will update the report annually to identify changes in environmental conditions, development patterns, emerging opportunities, and/or the outcomes of ongoing initiatives. By documenting these efforts, Deschutes County is showcasing its commitment to mitigating the impacts from nitrate pollution. From 1996 to 2009, stemming from a Regional Problem Solving Project, Deschutes County actively pursued innovative approaches to protect the aquifer. Unexpectedly, in 2009, Deschutes County voters overturned a Local Rule, regulations that would have required upgrading all existing septic systems in Southern Deschutes County to nitrogen -reducing onsite systems by 2022. Immediately afterwards, the Board of County Commissioners (Board) acknowledged that Deschutes County as an agent of the state, had exhausted its efforts on a local level to protect the groundwater and requested that DEQ take the lead. DEQ agreed and this arrangement remains in effect today. CDD currently implements regulatory programs that help mitigate the impacts of groundwater pollution from conventional onsite wastewater treatment systems. It requires the use of onsite wastewater systems because: Deschutes County's permitting authority is limited to onsite systems; Public opinion and Oregon land use law direct the County to avoid using new sewer systems; Dispersed, rural patterns of development are prevalent in the region; 1 Groundwater Protection Program Annual Report I Deschutes County Oregon Models developed by USGS show groundwater quality can be protected by using alternative nitrogen - reducing onsite systems that provide higher levels of wastewater treatment; and Oregon Administrative Rules (OARS) allow Deschutes County to issue permits for nitrogen -reducing onsite systems. II. REPORT FORMAT & WEBLINKS The annual report consists of five sections: • Section 1: Background • Section 2: DEQ Responsibilities • Section 3: Deschutes County Financial Assistance • Section 4: Emerging Opportunities • Section 5: Groundwater Protection Strategies Certain footnotes in the report provide links to USGS, DEQ, and Deschutes County documents. A detailed timeline is provided in Appendix A. It summarizes collective efforts by these three agencies over several decades to protect the groundwater. Appendices B and C contain maps depicting the general locations of DEQ septic system variances and onsite alternative treatment technologies (ATTs). III. EMERGING OPPORTUNITIES The annual report lists three emerging opportunities: U.S. Environmental Protection Agency (EPA) Community Change Grant, Newberry Neighborhood Land Sales, and a Financial Advisory Committee. EPA notified Deschutes County in October that our initial application was rejected. After receiving a debrief in November, Deschutes County and its partners revised the application, and under the terms of the Notice of Funding Opportunity, resubmitted it for consideration. In December, EPA notified Deschutes County that there is limited funding remaining for Community Change Grant awards. They will nonetheless continue reviewing applications into spring of 2025. If awarded, two of the deliverables would upgrade 275 conventional septic systems to ATTs and deepen 24 domestic wells in a subarea of Southern Deschutes County. CDD's Groundwater Partnership fund, Fund 296, protects groundwater quality in Southern Deschutes County and provides financial assistance to property owners not eligible to connect to a sewer system. Deschutes County owns large sections of the Newberry Neighborhood in La Pine; specifically, Quadrants 2a and 2d, and Neighborhoods 3 and 4. Funding comes from Newberry Neighborhood land sales and Pollution Reduction Credits collected on properties owned by Sagebrush Development LLC, located within The Reserve in the Pines (Quadrants 1a, 1b and 1d). In November 2024, Deschutes County's Property Manager listed Quadrants 2a and 2d with NAI Cascades for sale. When Quadrants 2a or 2d sell, CDD will coordinate with the Board to convene a financial advisory committee consisting of a diverse group of stakeholders. The committee's charter will be to provide direction to the Board for strategically investing resources into groundwater protection. -2- IV. GROUNDWATER PROTECTION STRAT EGIES Looking ahead, there are several short and long term strategies that: the Board in partnership with DEQ may want to consider. CDD will continue administering OAR 340-071-130(1), Nitrogen -Reducing Systems by requiring advanced onsite wastewater treatment systems for: • New residential dwellings; • Major septic repairs (repairs to drainfields, not including tank replacements); • Major residential alterations (changes that would cause increases in flows or proposing to connect to a system that doesn't meet minimum sizing requirements for the use); and • Authorization notices for changes in use, additions, new connections or replacement dwellings. Two strategies are listed below: 1. DEQ Rules Advisory Committee CDD's Onsite Wastewater Manager will participate in DEQ's RAC in 2025 and if necessary, 2026. 2. Goal 11 Exception The Board and DEQ could consider lobbying the Oregon Legislature to amend Goal 11 and OARs to allow sewer systems in Southern Deschutes County without having to justify an imminent public health hazard. Attachment: Southern Deschutes County Groundwater Protection Program Annual Report -3- Southern Deschutes County Groundwater Protection Program Annual Report Prepared by: Deschutes County Community Development Department www.deschutes.org/cd ACKNOWLEDGNAINTS Deschutes County Board of Commissioners Anthony DeBone, Chair Patti Adair, Vice Chair Phil Chang, Commissioner Community Development Department Peter Gutowsky, AICP, Community Development Director Todd Cleveland, Onsite Wastewater Manager Will Groves, Planning Manager Sherri Pinner, Senior Management Analyst Tim Berg, Application System Analyst III -1- Table of Contents INTRODUCTION................................................................................................................... 3 SECTION1: BACKGROUND................................................................................................... 4 Geology......................................................................................................................... 4 Historic Development Patterns.................................................................................... 5 Regional Problem Solving for Southern Deschutes County .......................................... 5 Transferable Development Credit Program and Newberry Neighborhood ................ 6 La Pine National Demonstration Project..................................................................... 8 Federal Earmark for Groundwater Protection............................................................ 10 LocalRule and Measure 9-70..................................................................................... 12 South Deschutes County Sewage Collection, Treatment, and Disposal FeasibilityStudy.................................................................................................... 13 SECTION 2: DEQ RESPONSIBILITIES...................................................................................... 14 South Deschutes/North Klamath Groundwater Protection: Report andRecommendations......................................................................................... 15 Goal 11 Exception and Land Use Board of Appeals Remand ..................................... 15 DEQ Variances for Onsite Septic Systems.................................................................. 16 Groundwater Sampling Event.................................................................................... 17 DEQ / Central Oregon Septic Assistance Program ..................................................... 17 DEQDecember 2023 Letter....................................................................................... 18 Onsite Wastewater Management Program / Rulemaking........................................ 18 SECTION 3: DESCHUTES COUNTY FINANCIAL ASSISTANCE.................................................... 19 Groundwater Partnership Fund................................................................................. 19 NewberryNeighborhood Fund................................................................................... 20 SECTION 4: EMERGING OPPORTUNITIES............................................................................... 20 EPA Community Change Grant.................................................................................. 20 Newberry Neighborhood Land Sales......................................................................... 21 Financial Advisory Committee................................................................................... 21 SECTION 5: GROUNDWATER PROTECTION STRATEGIES........................................................ 22 Short-term Strategies................................................................................................. 22 Long-term Strategies.................................................................................................. 23 APPENDICES Appendix A — Southern Deschutes County Groundwater Protection Timeline Appendix B — Approved DEQ Septic Variance Map Appendix C — Installed ATT Systems Map -2- INTRODUCTION The La Pine subbasin serves as the primary drinking water source for thousands of residents south of Sunriver. However, groundwater investigations by the U.S. Geological Survey (USGS) and Oregon Department of Environmental Quality (DEQ) indicate that this sole source aquifer is vulnerable to nitrate loading from onsite wastewater systems, posing a long-term threat to public health and the environment. The Southern Deschutes County Groundwater Protection Program Annual Report provides an update on the status, progress, and challenges related to protecting the groundwater in this subbasin (Figure 1). The Community Development Department (CDD) will update the report annually to identify changes in environmental conditions, development patterns, emerging opportunities, and/or the outcomes of ongoing initiatives. By documenting these efforts, Deschutes County is showcasing its commitment to mitigating the impacts from nitrate pollution. Figure 1 - La Pine Subbasin From 1996 to 2009, stemming from a Regional Problem Solving Project, Deschutes County actively pursued innovative approaches to protect the aquifer. Unexpectedly, in 2009, Deschutes County voters overturned a Local Rule, regulations that would have required upgrading all existing septic systems in Southern Deschutes County to nitrogen -reducing onsite systems by 2022. Immediately afterwards, the Board of County Commissioners (Board) acknowledged that Deschutes County as an agent of the state, had exhausted its efforts on a local level to protect the groundwater and requested that DEQ take the lead. DEQ agreed and this arrangement remains in effect today. CDD currently implements regulatory programs that help mitigate the impacts of groundwater pollution from conventional onsite wastewater treatment systems. It requires the use of onsite wastewater systems because: • Deschutes County's permitting authority is limited to onsite systems; • Public opinion and Oregon land use law direct the County to avoid using new sewer systems; • Dispersed, rural patterns of development are prevalent in the region; • Models developed by USGS show groundwater quality can be protected by using alternative nitrogen -reducing onsite systems that provide higher levels of wastewater treatment; and • Oregon Administrative Rules (OARS) allow Deschutes County to issue permits for nitrogen -reducing onsite systems. -3- Certain footnotes in the report provide links to USGS, DEQ, and Deschutes County documents. A detailed timeline is provided in Appendix A. It summarizes collective efforts by these three agencies over several decades to protect the groundwater. Appendices B and C contain maps depicting the locations of DEQ septic system variances and onsite alternative treatment technologies (ATTs). The La Pine subbasin of the Upper Deschutes River is a region where geology, hydrology, and human development intersect to create unique opportunities and challenges. Underlain by a shallow aquifer, this area serves as the primary drinking water source for its residents, while porous, pumice -based soils facilitate rapid infiltration of precipitation and human -derived discharges. This hydrological setup, coupled with historic patterns of rural development and reliance on conventional onsite wastewater systems, place significant stress on groundwater quality. Over the decades, concerted efforts have aimed to address these challenges. Through state and federal initiatives such as Regional Problems Solving grants, a National Demonstration Project, advanced onsite wastewater treatment technology, and innovative programs like Transferable Development Credits, the region has pioneered strategies to balance environmental protection with rural land use. However, the aquifer's oxic (oxygen rich conditions) upper layers remain susceptible to nitrate contamination, underlining the ongoing need for collaborative, science -driven management to safeguard this critical resource. Geology The La Pine subbasin of the Upper Deschutes River is underlain by a shallow aquifer that supplies the primary source of drinking water for approximately 18,000 residents. The soils in the region are highly porous and permeable with no impervious layer that protects the aquifer from pollution sources. In addition, soils are young, pumice -based (volcanic), and relatively low in organic matter. Recharge from natural (precipitation) or human (residential onsite system discharges or irrigation) sources move rapidly down through surface soils to the aquifer. The water table ranges in depth from less than two feet to approximately fifty feet below land surface. Recharge from infiltration of precipitation averages 2.0 inches per year; the balance of waterfrom precipitation evaporates, transpires, or discharges via surface runoff to the Deschutes and Little Deschutes Rivers. Groundwater discharges in the basin include baseflow contributions to the Deschutes and Little Deschutes Rivers, evapotranspiration by vegetation, and water pumped from domestic wells. Regional groundwater characteristics include temperatures that are among the lowest in the state, generally 42.5 F (6 C) to 48.2 F (9 C) and high dissolved oxygen content (3 mg/L to 6 mg/L). Groundwater velocities are low and, at the water table, groundwater is generally oxic (oxygen rich conditions); however, at depths ranging from near zero to more than fifty feet below the water table, it becomes suboxic (depleted oxygen conditions) and natural nitrate reduction (denitrification) can occur. Denitrification thus keeps deeper portions of the La Pine aquifer -4- essentially nitrate -free, but the oxic portions rernain vulnerable to nitrate contamination from onsite wastewater systems, the primary anthropogenic source. Nitrate contamination of the oxic groundwater is a concern because the shallow oxic aquifer is the desired drinking water supply for individual domestic wells and because of the potential for nitrogen -enriched groundwater to discharge to the nitrogen -limited rivers in the region. Historic Development en Pattern Figure 2 — Bend Bulletin Advertisement Rural development threatens groundwater quality in this region through onsite wastewater system -c discharges. Over eleven thousand lots of one-half to one -acre in size were platted in the 1960s and 1970s prior to the enactment of Oregon's land use planning laws (Figure 2). These lots are located within a 125- square mile corridor near the Deschutes and Little Deschutes Rivers. Developers marketed these residential lots nationally with no promise of infrastructure improvements and without an understanding of the high water table or the aquifer's vulnerability. Currently, there are 10,338 lots in the region: 6,914 are developed and 3,424 are vacant. Five thousand, six hundred and ninety-eight (5,698) rely on conventional onsite wastewater systems and individually owned domestic wells.' Most of these wells draw from the most vulnerable upper fifty feet of the aquifer. One thousand, two hundred and sixteen (1,216) developed lots utilize ATTs. Regional Problem Solving for Southern Deschutes County In 1982, DEQ discovered high nitrate levels in groundwater underlying the core area of the unincorporated community of La Pine.' This led to the installation of a Septic Tank Effluent Gravity community sewer system in 1986. DEQ continued to monitor groundwater resources in the region and, in 1994, found increasing nitrate levels in certain locations outside the areas served by the La Pine sewer system. As a result of these findings and due to other issues resulting from the impacts of poorly planned rural subdivisions, Deschutes County received a $157,250 Regional Problem Solving grant in 1996 from the Oregon Department of Land Conservation and Development (DLCD). The grant, after identifying problems facing South County, evaluated innovative land use solutions to help resolve them. Deschutes County initiated the grant by prioritizing public involvement using Oregon Revised Statute (ORS) 197.650 that provided the legal mechanism for establishing a collaborative process directed toward the resolution of the land use challenges in the region. ORS 197.650 required 1 Approximately 46 mg/L of nitrate reaches the groundwater from each conventional septic system. Z The City of La Pine incorporated in 2006. -5- Governor Kitzhaber to specify which state agencies were obligated to participate, ensuring that the appropriate agencies fully engaged. The project ultimately included more than 50 representatives from local, state and federal agencies, and special districts. They collectively examined the region's rural development patterns and the physical threats that thousands of rural lots placed on a shallow, sole source aquifer, winter deer migration corridors, neighboring federal lands, and the Deschutes and Little Deschutes Rivers. In January 1998, stakeholders, which included concerned citizens, recommended regional goals to the Deschutes County Planning Commission and the Board.' Twelve months later, the Board adopted Comprehensive Plan goals and policies to address groundwater quality, wildlife migration, wildfire hazards, emergency access, substandard roads, and road -related air pollution from dust.4 Water quality -related goals directed Deschutes County to use advanced onsite wastewater treatment systems, instead of relying on sewer systems. This decision, defined in a technical report, was based on an analysis of the social and economic impacts of sewering the regions There were two exceptions, however: Oregon Water Wonderland Unit No. 2's sewer system was upgraded to serve its residents and a Septic Tank Effluent Gravity system serving the La Pine core area was expanded for the Newberry Neighborhood, which is discussed further below. `transferable Development Credit Program and Newberry Neighborhood One of the goals from the Regional Problem Solving Project pertained to developing an equitable, market - driven system that reduced the development potential of existing rural lots in floodplains, wetlands, mule deer migration corridors and areas susceptible to groundwater pollution. This goal referred to a Transferable Development Credit (TDC) Program. Adopted by the Board in 2002, the program transferred development rights from vacant rural lots in the region that require onsite wastewater systems (sending area) to the Newberry Neighborhood (receiving area) served by the La Pine Sewer District (Figure 3). New subdivisions in the Newberry Neighborhood required TDCs prior to tentative plat approval. The program, which was voluntary, encouraged 1,650 property owners of 3,600 "eligible" lots to sell their TDCs based on Newberry Neighborhood's projected buildout. 3 RPS Final Report. 1999. 4 RPS Project Revised Consensus Points. 1998. 5 KCW Cost -Benefit Analysis. 1997 Figure 3 — TDC Sending & Receiving Area Figure 4 — Newberry Neighborhood /Receiving Area I� �42 '� 4b � Nei�harlwod t 44 do r litighWO)d PJeghuuropod � �,,, a3 2, 2d . i Th.e creation of the Newberry Neighborhood relied upon an Act of Congress that allowed Deschutes County to purchase U.S. Department of Interior Bureau of Land Management (BLM) property.6 Upon acquisition in 2000, Deschutes County up -zoned 518 acres of land originally zoned for forest uses to urban uses, including approximately 50 acres of privately owned land represented by the Baldwin Herndon Trust (Figure 4). The property is located between La Pine and Wickiup Junction, west of Highway 97 and east of Huntington Road. These lands were subsequently annexed into the La Pine Sewer and Water Districts so they could be developed as residential neighborhoods. A sewer line runs through the property. Congress awarded an additional $433,000 and Deschutes County loaned $1.1 million for expanding the sewer system to serve the Newberry Neighborhood. The federal grant represented a significant achievement at the time because federal earmarks rarely subsidized sewer service for new development. The effect of up -zoning and including the land in the sewer and water districts raised the property's value from $1,200 per acre to over $25,000 per acre. Proceeds from land sales were dedicated through a Memorandum of Understanding between Deschutes County and the BLM, to reducing rural density and solving water quality challenges in the region. Figure 4 shows the Newberry Neighborhood and its four neighborhoods. The Baldwin -Herndon Trust land was located in Neighborhood 1. The land acquired from BLM encompassed Neighborhoods 2, 3, and 4. Currently, the County retains ownership of Quadrants 2a and 2d and all of Neighborhoods 3 and 4. Quadrants 1a, 1b, and 1d were purchased and ultimately subdivided by Sagebrush Development, LLC in 2020 and 2022.1 Pahlisch Homes acquired and subdivided Quadrants 2c and 2b in 2004, 2005, 2006, 2018, and 2021. As discussed below, the TDC program changed to Pollution Reduction Credits (PRCs) in 2006 because land values in the sending area increased dramatically, 6 BLM Land Purchase Legislation and Resolution 2000-021. 1998 and 2000. Deschutes County acquired Quadrant 1c from the Baldwin -Herndon Trust. It ultimately developed into the La Pine Senior Center (2005), Little Deschutes Lodge 1 (2009), Little Deschutes Lodge 2 (2012), Housing Works — Village Meadow (2017), and Habitat for Humanity — Putney Place (2019). The Board of County Commissioners determined that these projects were not required to contribute to the Groundwater Partnership Fund, Fund 296, due to their commitment to affordable housing and a community gathering place for seniors. -7- making voluntary purchases of 1'DCs from private landowners unaffoidab!e.x in 2019, the Board eliminated the TDC/PRC requirements for developing Quadrants 2a, 2d, and Neighborhoods 3 and 4. To date, those lands remain undeveloped. Proceeds from fair market value sales of these lands will be deposited in CDD's dedicated Newberry Neighborhood Fund (Fund 297) and Groundwater Partnership Fund (Fund 296) for reinvestment in Southern Deschutes County groundwater protection. La PineNational Dernonstrati n Project In the 1990s, Deschutes County and DEQ identified the need for a better understanding of the processes that affect the movement and chemistry of nitrogen in the aquifer underlying the La Pine subbasin. In 1999 Deschutes County, DEQ, and USGS received a $5.5 million National Decentralized Wastewater Demonstration Project (La Pine Project) grant from the U.S. Environmental Protection Agency (EPA) for the purpose of protecting water quality and improving wastewater treatment options for residents. The La Pine Project produced an extensive knowledge base on the hydrogeology of the groundwater system, dynamics of nitrogen fate and transport, and the performance of conventional and new technologies for onsite wastewater treatment. Two groundwater models developed by the USGS in 2003 and 2005, a three-dimensional groundwater nutrient fate and transport model and a Nitrate Loading Management Model (NLMM), demonstrated that Deschutes County must require higher treatment standards for existing and future septic systems to protect the region's groundwater.9 Incorporating development projections, the USGS estimated average nitrate concentrations could triple within forty years if all new homes continued using standard or sand -filter systems.10 Continual reliance on conventional onsite systems would cause nitrate concentrations to exceed state action levels (7 mg/L nitrate as N) and federal drinking water standards (10 mg/L nitrate as N) over large areas within the subbasin. Elevated nitrate in drinking water is linked to various health risks, including methemoglobinemia (blue baby syndrome) in infants and certain cancers in adults. The map below on the left of Figure 5 shows the results of the USGS three-dimensional groundwater and nutrient fate and transport model. It simulated average nitrate concentrations tripling within forty years if all new homes in the La Pine subbasin continued using standard or sand filter onsite wastewater treatment systems. The map on the right of Figure 5 illustrates that, even with the diversion of a maximum 1,600 residences from the sending area as part of the County's TDC program, groundwater quality would exceed state and federal drinking water standards for nitrate (10 mg/L) over large areas. 8 While the program was in place, Deschutes County received 111 TDCs and applied them for development in the Newberry Neighborhood. The majority of TDCs were applied to development in Quadrant 2c. Approximately 3,500 pounds (1,588 kg) per year of nitrogen loading to the aquifer were prevented. 9 https://or.water.usgs.gov/prof/or186/new site/reports.html. http://pubs.usgs.gov/sir/2007/`5237/ 10 The La Pine National Decentralized Wastewater Treatment Demonstration Project. Federal Identification No. X596007801. https://www.deschutescounty•gov/cd/page/la-pine-national-demonstration-prolect F3 Figure 5 —USGS 3-D Groundwater and Nitrate Fate and Transport Model Results The La Pine Project also field-tested nitrogen -reducing onsite wastewater treatment systems. The results were promising, showing that specific groundwater nitrate loading rates could be achieved with them. The NLMM, the second USGS model, allowed the County to understand the minimum nitrate loading reductions that would be required to meet specified constraints on nitrate loading to groundwater and streams that receive groundwater discharge. This model, which expanded the capability of the three-dimensional groundwater and nutrient fate and transport model, allowed Deschutes County to establish water quality and other resource goals for the region and produce management strategies to meet those goals. Instead of establishing scenarios to examine impacts to the aquifer if all wastewater treatment systems were required to meet a specific performance standard, the NLMM supplied the performance standard needed to be met if the groundwater quality is to remain at a specified level. Other constraints to the model could be added, including loading limits to surface water bodies, the cost of systems, and applying minimum performance standards for existing and future development. The La Pine Project found that several systems can substantially reduce nitrogen (and other pollutant) loading and protect the groundwater in a manner that meets adopted Comprehensive Plan goals and policies for Southern Deschutes County. The demonstration project led the DEQ to draft and ultimately adopt rule changes to OARS for onsite wastewater treatment. These rules, which became effective on March 1, 2005, made it easier for property owners in Deschutes County and throughout the state to use onsite ATTs by simplifying the permitting process and requiring the certification of installers and maintenance providers. W Federal Earmark for Groundwater Protection In 2005, Deschutes County received a $400,000 federal earmark to advance decentralized wastewater treatment techniques for Southern Deschutes County. The first phase of the project enabled CDD to: • Use the existing NLMM developed by the USGS to identify maximum nitrate loading rates for subregions/neighborhoods that could provide long term compliance with Oregon's groundwater quality standards; • Develop onsite system performance standards and a local ordinance;11 • Research incentive strategies (financial and regulatory) to retrofit or replace existing • onsite systems; • Perform cost / benefit analyses to understand the opportunity costs for selecting different types of denitrifying onsite systems; and • Conduct public outreach.12 The second phase allowed CDD to develop policy and regulatory approaches and define the organizational capacity required to administer a groundwater protection program. Deliverables included: • Developing an operation and maintenance program for new and existing onsite systems relying on onsite ATTs; • Designing a groundwater monitoring program, and • Identifying financial approaches for providing pollution reduction credits and low -interest loan programs that enable existing property owners to retrofit or replace underperforming septic systems. The final report, produced in September 2008, describes the grant's achievements.13 Three are summarized below: Creation of a Pollution Reduction Credit (PRC) Program In 2006, the Board changed the TDC program to PRCs. The goal was to incentivize onsite system retrofits because they reduce the total quantity of nitrate discharged to the groundwater.14 This 11 Joni Hammond, DEQ Eastern Region Administrator, acknowledged in a 2005 letter, that DEQ supports the use of a local ordinance as the legal mechanism to impose performance standards for septic systems in South County. 12 Deschutes County, DEQ, and USGS conducted several open houses and developed a fact sheet for the public. 13 Protection of Groundwater Resources in the Upper Deschutes Basin. September 2008. 14 In 2019, the Board adopted Resolution 2019-040 and eliminated the TDC/PRC requirements for Quadrants 2a, 2d, and Neighborhoods 3 and 4 of the Newberry Neighborhood. Pahlisch owns two undeveloped lots in Quadrant 2a that have not received a building permit. Sagebrush Development LLC, Reserve of the Pines, Quadrants 1a, 1b, and 1d, owns sixty-six undeveloped lots. Pahlisch has satisfied their PRC obligations. For Sagebrush Development, LLC, they owe $1,500 per lot. Payment is due when a building permit is issued. To date, Sagebrush has paid $150,000 into Fund 296. -10- program required developers of the Newberry Neighborhood to acquire a certain number of PRCs prior to recording a subdivision plat. PRCs were obtained when property owners, with developer assistance, upgraded their existing septic systems to nitrogen -reducing ATTs or when a Newberry Neighborhood developer made a payment into CDD's Groundwater Partnership Fund, Fund 296.11 Local Rule Added to County Code Deschutes County adopted two ordinances and a resolution as a part of a Local Rule in 2008. Ordinance 2008-019 required every property owner in Southern Deschutes County, with or without an existing site evaluation report approval, to install a nitrogen -reducing onsite wastewater treatment system in order to receive a septic system permit for a new residential dwelling; major residential alteration or major repair of an existing septic system; and authorization notices for changes in use, additions, new connections or replacement dwellings.16 • Ordinance 2008-012 required all property owners with conventional onsite septic systems in unsewered areas of Southern Deschutes County to retrofit their systems by November 2022.17 At the time, the estimated cost of upgrading conventional septic systems ranged from $7,000 to $16,000, not including regular maintenance. • Resolution 2008-021 adopted USGS' NLMM to establish performance standards for onsite wastewater treatment systems in Southern Deschutes County. The NLMM identified performance standards for onsite systems that demonstrated they maintain no higher than 7 mg/L nitrate as N average concentrations in the shallow groundwater in accordance with OAR 340-040, Groundwater Quality Protection.18 Financial Advisory Committee The Board convened an advisory committee with a specific charter in 2008 to discuss how financial assistance should be provided to rural homeowners. The committee met eleven times. CDD produced a report, Financial Assistance Overview, that shared data pertaining to demographics, County financial assets, projected costs of meeting groundwater protection goals, and proposed financial assistance programs, including loans and grants.19 15 Ordinance 2006-016 and Resolution No. 2006-043. 16 See Footnote 13. Page 75. 17 Ibid. Page 36. The Local Rule recognized that Deschutes County's permitting jurisdiction is limited to onsite systems. However, the code also specified that other approaches may be used to meet groundwater protection goals, including connection to sewer and innovative techniques as allowed by state law. 18 Id. Page 78. 19 Id. Page 83. -11- Operation and Maintenance Program CDD upgraded its permit tracking database to help homeowners comply with ATT wastewater rules. New software allowed CDD's Onsite Wastewater Division to monitor ATTs for annual maintenance and generate automatic reminders to homeowners and service providers for annual reports. Locaa We and Measure 9©70 As noted above, the Board adopted a Local Rule, Ordinances 2008-019 and 2008-012 in 2008. Commissioners made the following findings when they adopted the ordinances: • USGS and DEQ conducted significant groundwater investigations in the La Pine subbasin, developing a three-dimensional groundwater and nutrient fate and transport model. The results were published in 2007, showing that the groundwater underlying Southern Deschutes County is threatened predominantly by discharges from conventional onsite wastewater treatment. • USGS developed a NLMM as a groundwater quality management tool for use in Southern Deschutes County. The model can identify performance standards for onsite systems that will maintain no higher than 7 mg/L nitrate as N average concentrations in the shallow groundwater in accordance with OAR 340-040, Groundwater Quality Protection. • Nitrogen -reducing onsite wastewater treatment systems are available and effective to reduce pollutants contributing to the public health hazard and protect public waters. • OAR 340-071-0130(1) states that county permitting authorities acting on behalf of the state, such as Deschutes County, may not authorize installation of a wastewater treatment system that is likely to pollute public waters, but rather, must require the installation of a wastewater treatment system that protects public water or public health. • Receipt of testimony from three public hearings in March 2007 and an open written record period from March 27, 2007 to April 18, 2008. • In a January 2008 letter, DEQ determined a public health hazard exists in Southern Deschutes County, caused by pollution discharged by conventional onsite wastewater treatment systems. • Receipt of testimony from a public hearing on July 7, 2008. Throughout the public process and immediately following the adoption of the Local Rule, residents in Southern Deschutes County mobilized to overturn Ordinance 2008-012. Many questioned USGS and its groundwater modeling, asked that DEQ lead the groundwater -12- protection effort, and expressed a preference for sewer systems. Enough voters eventually signed a referendum petition to piace Ordinance 2008-012 on the ballot for March 10, 2009. The overarching question in Measure 9-70 for Deschutes County voters was: Should South Deschutes County residential properties be required to upgrade wastewater treatment systems to reduce nitrogen discharges in regional groundwater? • A "Yes" vote would adopt the Local Rule and require owners of property in designated portions of south Deschutes County by November 2022 to connect to a sanitary sewer system or upgrade existing septic systems to systems that reduce discharged nitrogen by at least 35% and up to 79% depending on location. • A "No" vote would repeal Ordinance 2008-012 and prevent Deschutes County from setting a deadline for property owners with existing septic systems to upgrade to an approved nitrate -reducing system. On March 10, 2009, voters overturned Ordinance 2008-012 by voting "No." "No" carried with 56.99% of the vote.20 South Deschutes County Sewage Coflection, Treatment, and Disposal Feasibility Study In 2008, Sunriver Environmental LLC (SELLC) was in the process of upgrading its sewerage facility to meet DEQ-mandated treatment requirements. Deschutes County and DEQ asked SELLC to consider extending sewer service outside its current area to add a portion of South County. In June 2009, Deschutes County issued a grant to SELLC for $127,595 and received a loan from DEO's Clean Water State Revolving Fund Program for $40,000 to help offset the cost of performing a feasibility study.21 In March 2010, Newton Consultants, WH Pacific Engineers, and Vision Engineering estimated the cost of expanding SELLC's sewer treatment plant and reuse facilities to serve areas south of Sunriver that rely on septic systems.22 The feasibility study included four basic objectives: 20 CDD continues to administer OAR 340-071-130(1), Nitrogen -Reducing Systems by requiring advanced onsite wastewater treatment systems for: 1. New residential dwellings; 2. Major septic repairs (repairs to drainfields, not including tank replacements); 3. Major residential alterations (changes that would cause increases in flows or proposals to connect to a system that doesn't meet minimum sizing requirements for the use); and 4. Authorization notices for changes in use, additions, new connections or replacement dwellings. 21 Order 2009-036, Order 2009-039 and Deschutes County Contract No. 2009-246. Both amounts encumbered CDD's Groundwater Partnership Fund (Fund 296). 22 South Deschutes County Sewage Collection, Treatment, and Disposal Feasibility Study. March 2010. -13- • Determine which areas within the defined study areas are feasible for sewer service within the constraints of DEQ criteria; • Provide a proposed mechanism for dividing costs for sewerage treatment (construction, operation, and maintenance) between current Sunriver customers and the areas to be served outside the current sewer service area; • Evaluate various administrative options and identify one that is most suitable for operating the sewage collection system; and • Evaluate various financing mechanisms and identify one that is most suited for financing construction and operation. The study area was divided into two zones. It considered all the existing lots between Sunriver and State Recreation Road. At the time, there were 3,975 rural lots not served by sewer, with 1,819 of those utilizing septic systems. Extending sewer service necessitated a treatment plant of sufficient size to serve the approximately 5,400 customers currently in the SELLC service area plus the lots south of Sunriver. Due to lirr:ited capacity of the existing sewer trunk lines within Sunriver, a new plant at Lake Penhollow on Cottonwood Road would be required, in addition to expanding existing pond storage and disposal areas. The total capital cost ranged from $39M to $75M. The total capital cost per lot for those living south of Sunriver ranged from $18,000 to $19,000. The project was never further explored in part due to a Land Use Board of Appeals (LUBA) Remand of Deschutes County's Goal 11 Exception application. SEELC ultimately completed the sewer upgrade for their service boundary in 2023. After the Local Rule failed in July 2009, Deschutes County, DLCD, and South County residents met with DEQ in La Pine to discuss next steps. The Board requested DEQtake the lead on groundwater protection, acknowledging that Deschutes County as an agent of the state, had exhausted its efforts on a local level. DEQ agreed and this remains in effect today.23 The following section outlines efforts made by DEQ leadership since 2009, including: • Convening a local citizen Steering Committee; • Initiating a Goal 11 Exception; • Issuing onsite wastewater variances; • Conducting groundwater sampling; and • Providing financial aid for septic assistance. 23 Board of County Commission Meeting Minutes. July 22, 2009. Page 6. While DEQ continues to lead the groundwater protection effort, onsite wastewater permitting remains with Deschutes County and CDD. -14- outggDeschutes/North Kd1m,nath Groundwater Protection. Report and Reconimendations After agreeing to lead the groundwater protection efforts in Southern Deschutes County, DEQ sought volunteers for a local citizen Steering Committee to recommend affordable solutions to protect the region's groundwater. DEQ solicited volunteers through a direct mailing sent to more than 10,500 residences. DEQ interviewed two dozen candidates, ultimately selecting eleven members and three alternates. Members met regularly for nearly three years starting in September 2010, spending considerable time learning and discussing issues related to septic systems and groundwater contamination. The group studied topics including geology, soils, hydrogeology, toxicology, and septic system technology. They also learned about the political, financial and regulatory entities involved in wastewater management. The committee eventually approved ten recommendations to address groundwater contamination in the area.24 One recommendation sought an exception to state planning rules that would allow multi -residence wastewater treatment systems outside of existing urban growth boundaries and sanitary districts. Another recommended establishing a groundwater monitoring program. In June 2013, the committee fulfilled its goal of providing recommendations to DEQ and disbanded. Goal 11 Exception and Land Use Board of Appeals Remand As noted above, the DEQ Steering Committee recommended utilizing sewer systems to address groundwater contamination in South County instead of onsite ATTs. In December 2014, DEQ collaborated with DLCD and submitted draft findings to CDD for a Goal 11 Exception. The findings included a rationale for the exception and a map of the proposed area.25 The Goal 11 Exception would have allowed sewer systems and sanitary authorities in this region. After numerous public hearings with the Planning Commission and the Board; the Board took an exception to Goal 11 and adopted Ordinance 2016-007 in February 2016. Central Oregon Landwatch (COLW) appealed the ordinance to LUBA. COLW argued the record did not demonstrate there was an imminent and significant threat to public health per OAR 660- 011-0060(9). In November 2016, LUBA concurred and remanded the decision back to the County.26 Notable excerpts of their decision included: • Deschutes County, DEQ, and DLCD did not demonstrate there is imminent public health hazard that necessitates extending sewer systems. 24 South Deschutes -North Klamath Groundwater Protection Report and Recommendations. July 2013 2s The exception area encompassed the unincorporated portions of Deschutes County contained in Townships 19S, 20S, 21S, and 22S and Ranges 9E, 10E and 11E, except those areas authorized for sewer. 26 Central Oregon Landwatch v. Deschutes County. LUBA No. 2016-020. -15- • It is the scope of the exception (1.1,000 lots), the area of the exception (180-square miles), and the indefiniteness of the number and location of the lots, if any, that will be connected to the sewer system that makes it improper. • The ordinance impermissibly "established a planning or zoning policy of general applicability" that allows sewer systems in order to facilitate residential development on rural lands in the county. Deschutes County, DEQ, and DLCD need to explain how sewer service that they describe as "necessary to guard against unacceptable levels of pollution in the area's groundwater that would expose citizens to health risks" will correct the problem when connection to the sewer system is entirely optional. Due to the LUBA decision, DEQ, DLCD, and Deschutes County cannot permit new sewer systems until state law changes or DEQ or the Oregon Health Authority declare an imminent public health hazard. DEQ Variances for Onsite Septic Systems Not all parcels in Southern Deschutes County (and elsewhere) are suitable for septic systems. Depth to groundwater, soil types, setbacks, landscape position of the property and local geology are all factors. Property owners must have a site evaluation conducted by an Onsite Wastewater Specialist in CDD to determine if a parcel is suitable for a septic system. If a parcel is deemed unsuitable, the site evaluation report outlines reasons for denial and cites the applicable rules. A property owner or consultant may then submit to DEQ a variance application that includes a copy of the site evaluation report, plans and specifications for the proposed septic system, other supporting documents, and an application fee. The applicant must demonstrate that the variance from each requested state rule is warranted, and that the proposed system would adequately function to safeguard public health and the environment. Variances are approved only when the proposal meets these objectives. A DEQvariance officer reviews the proposal and other application materials, conducts a site visit, considers site -specific conditions and holds a public hearing. The variance officer then issues a decision on the variance within 45 days of the hearing close date. The decision to approve or deny a variance application is based on the information presented in the proposal and the requirements and purpose of DEQ's regulations.27 To date, DEQ has issued 124 variance approvals in Southern Deschutes County. Appendix B shows their locations. Starting in 2024, during each variance proceeding, CDD has submitted a letter to DEQ, expressing concerns about the implications of siting septic systems in this region through a variance process if future impacts to the aquifer cannot be mitigated. Excerpts are below: 27 https://www.oregon.gov/deg/Residential/Documents/ossSepticVariancesFS.pdf -16- Variance approvals on naturally limited properties that dr, not rreet minimum criteria undermine the goal of protecting a sole source aquifer. It also undercuts our collective efforts and public perception that Deschutes County and DEQ are actively protecting the groundwater from nitrate loading. As DEQ approves onsite septic system variances, CDD requests documentation describing the rationale, specifically in relation to DEQ's December 2023 letter to the Board. Groundwater Same ien ve t In 2022, DEQ announced that they would be testing groundwater for approximately 100 wells for free in Southern Deschutes County as part of a statewide study of groundwater pollution. DEQ collected samples in 2023 and 2024 from a mix of private and public wells for nitrate, arsenic, pesticides and other contaminants. In November, CDD received well sampling data in a tabular format from DEQ. It revealed the following: • Many of the sampled wells are new; • In several well locations there are non -detect (negligible) traces of nitrates, • Certain wells north of Burgess Road and in La Pine showed increases in nitrates; • The well data is a snapshot in time that can be used and referenced in future well sampling events; • The data does not change our understanding of the La Pine subbasin; it is still vulnerable to nitrate loading; and • Nitrate -reducing onsite systems are still necessary to protect the aquifer. DEQ. / Central Oregon Septic Assistance Program In 2023, DEQ provided financial aid from American Recovery Act Funds to Central Oregon Intergovernmental Council (COIC) for a Central Oregon Septic Assistance Program (COSAP). The program offered reimbursements to qualified homeowners at or below annual median income levels that are either in need of or have recently completed septic repairs or replacements in Crook, Deschutes and Jefferson counties. COSAP received two rounds of funding from DEQ. The first round of $1,378,418 was administered through a two -month application period. COIC received 102 applications and approved 73 projects (13 for previous work completed and 47 for new work, including 13 septic -to -sewer connections). COSAP received an additional $877,998.00 from DEQ for a second round of funding. Of those funds, approximately $400,000 was set aside for Crook, Deschutes, and Jefferson counties, and $400,000 for the Confederated Tribes of Warm Springs. COSAP launched a one -month application period in March 2024, during which COIC received 143 applications and approved 18 projects. Following outreach and review of applications from Warm Springs, COIC was able to allocate an additional three projects for a total of 21 projects for the tri-county region. Of the 91 approved projects, 16 homeowners received funding in Southern Deschutes County. 3VA 3 On December 19, 2023, DEQ Deputy Director Shannon Davis provided a letter to the Board discussing groundwater pollution concerns from septic systems in Southern Deschutes County.28 It acknowledged, among other topics: • The Sunriver and La Pine area is vulnerable to nitrate contamination from septic systems and private wells are the primary drinking water source for most properties in this area. • Conditions documented from past investigations and outlined in a USGS factsheet are still valid.29 • Testing and research indicate most of the contamination in this region comes from septic systems. This means nutrients from septic systems are seeping into the area's porous, volcanic soil and the aquifer that is used as a primary drinking water source. • Continued unrestricted development in the area will reach a tipping point that may be difficult or impossible to recover from due to groundwater contamination which will then require additional regulation and funding to address. • Even with a septic design capable of producing high quality effluent, the treatment may not sufficiently minimize or eliminate nutrients and pathogens from wastewater or future impacts to the aquifer system as outlined by a USGS model. • Some parcels are not suitable for septic systems. • DEQ still believes that conditions in South Deschutes County are a potential public health and ecological impact issue. • As outlined in previous communications, DEQ understands that there will be further aspects of this process that will require additional work, refinement, clarification and coordination and they stand committed to helping Deschutes County and the citizens in South Deschutes County. Onsite Wastewater Management Program / Rulemaki n DEQ initiated rulemaking and convened a Rules Advisory Committee (RAC) to address sewer availability and accessory dwelling unit issues prompted by bills enacted by the 2023 Legislature. During rulemaking, DEQ is also addressing nitrates, variances, and operation and maintenance for ATTs. CDD's Onsite Wastewater Manager is participating in the RAC. Their first two meetings 28 DEQ DeputV Director Davis Letter to Deschutes County. December 2023. 29 See Footnote #12. -18- occurred on December 3, 2024 and Jaruary 14, 2025. The existing rules for operation and maintenance of ATTs have not been updated substantially since the inception of the program in 2005. SECTION 1 : Spa - TCOUNTY FINANCIAL ASSISTANCE CDD oversees and distributes two funds to protect groundwater quality in Southern Deschutes County: • Groundwater Partnership Fund; and • Newberry Neighborhood Fund. Groundwater Partnership Fund CDD's Groundwater Partnership fund (Fund 296) provides financial assistance to property owners not eligible to connect to a sewer system. Deschutes County owns large sections of the Newberry Neighborhood in La Pine; specifically, Quadrants 2a and 2d, and Neighborhoods 3 and 4. Funding comes from Newberry Neighborhood land sales and Pollution Reduction Credits of $1,500 collected on properties located within The Reserve in the Pines (Quadrants 1a, 1b and 1d). Currently, Fund 296 has an available balance of $44,733. Over the last twenty years, it has funded: • South Deschutes County Sewage Collection, Treatment, and Disposal Feasibility Study; • Goal 11 Exception Application; • Financial assistance (rebates) for property owners installing nitrogen -reducing onsite wastewater systems; and • Neighborlmpact loans to eligible property owners to retrofit or repair conventional septic systems. Nitrogen -Reducing Onsite Wastewater Treatment Rebate Program CDD currently offers a maximum rebate of $3,750 to property owners who retrofit an existing onsite system serving a residence. Properties must be located within Southern Deschutes County and outside an area currently eligible for connection to a sewer system.30 Funding comes from Newberry Neighborhood land sales and is transferred to the Groundwater Partnership Fund. To date, CDD has issued 150 rebates for a total cost of $408,750.31 Appendix C shows the locations of all the 1,216 ATTs installed to date in this region. 30 Order 2010-006. Adopted by the Board, it established a nitrogen reducing onsite wastewater treatment rebate program that is administered by CDD. 31 Previous rebates were $1,875. -19- Neighborlmpact Non -Conforming Loan Program Deschutes County contracts with Neighborlmpact to administer a non -conforming loan program for septic upgrades in Southern Deschutes County. The program aids residents disqualified from conventional loan programs due to mortgage delinquency or inadequate equity. Funded by Newberry Neighborhood land sales, the total contribution of $240,000 occurred in four disbursements between 2011 and 2017. The program has an available balance of $31,000. Sixteen property owners have benefited from this program. Newberry Neighborhood Fund The Newberry Neighborhood Fund (Fund 297) was established for land sale proceeds and loan repayments for the La Pine Special Sewer District's loan, assumed by the City of La Pine through annexation in 2012 to extend sewer services to the Newberry Neighborhood. Deschutes County supported the district through the transfer of federal grant funds and a County loan of $1,130,350. The loan was paid in full in May 2022. In 2019, the Board eliminated TDC/PRC requirements for developing the area. Future land sales will be retained in this fund, with distributions transferred to CDD's Groundwater Partnership Fund (Fund 296) for reinvestment in Southern Deschutes County groundwater protection. Currently, Fund 297 has an available balance of $143,600. SECTION 4: EMERGING OPPORTUNITIES There are several emerging opportunities that will likely present themselves over the next three to five years that will help contribute to groundwater protection. They include: • Grant opportunities that fund domestic well and septic system improvements; • Newberry Neighborhood land sales; and • Convening a Financial Advisory Committee. EPA Community Change Grant In July 2024, CDD applied for an EPA Community Change Grant for a subarea of Southern Deschutes County in collaboration with Neighborlmpact, COIC, and DEQ. Under the Inflation Reduction Act, EPA received $2.8 billion to award grants to help disadvantaged communities address a wide range of environmental and climate justice issues. Seven Census Block Groups within three Census Tracts, 41017000201, 41017000202, and 410170003023, including a significant portion of the city of La Pine qualified. Environmental and socioeconomic indexes produced by the EPA indicate that residents in this subarea have higher senior populations and lower incomes and education levels, among other challenges. -20- The grant application requests $20M to address climate action and pollution reduction strategies. Approximately half that amount, $10.4M, is targeted to retrofit existing septic systems with ATTs that minimize nitrate loading to the groundwater. As proposed, COIC, in partnership with CDD, will oversee the installation of nitrogen -reducing on -site wastewater systems for 275 low income rural homeowners (at or below 200% of federal poverty level), achieving a 75% reduction in nitrogen. If funded, this will result in a decrease of 3,300 pounds of nitrate loading to the aquifer. An additional $960,000 is targeted for domestic well improvements. Neighborlmpact proposes to repair or replace 24 domestic wells in order to restore access to safe drinking water. EPA notified Deschutes County in Octoberthat the initial application was rejected. After receiving a debrief in November, Deschutes County and its partners revised the application, and under the terms of the Notice of Funding Opportunity, resubmitted it for consideration. In December, EPA notified Deschutes County that there is limited funding remaining for Community Change Grant awards. They will nonetheless continue reviewing applications into spring of 2025. Newberry Neighborhood Lard Sales In November, Deschutes County's Property Manager listed Quadrants 2a and 2d with NAI Cascades for sale. The prices are as follows: • Quadrant 2a: List price for 19.57-acres, $1,467,750 ($75,000/acre). • Quadrant 2d: List price for 17.66-acres, $1,324,500 ($75,000/acre). As Neighborhood 2 eventually gets built out, it will be important to coordinate with the Deschutes County Property Manager, City of La Pine, and the Board to prepare quadrant and marketing plans for Neighborhoods 3 and 4. Combined, they consist of 325 acres with a real market value exceeding $24M. Financial Advisory Committee When Quadrants 2a or 2d sell, CDD will coordinate with the Board to convene a financial advisory committee consisting of a diverse group of stakeholders from Southern Deschutes County. The committee's charter will be to provide direction to the Board for strategically investing CDD's replenished Groundwater Partnership Fund into the community. Options include but are not limited to: • Retrofitting septic systems; • Funding a conventional loan program with Neighborlmpact and/or COIC; • Supporting Neighborlmpact's non -conforming loan program for septic upgrades; • Deepening domestic wells; • Coordinating with the Oregon Water Resources Department to understand the terms and conditions for shared domestic well agreements; and/or • Conducting a municipal water service district feasibility study. -21- ION STRATEGIES Looking ahead, there are several short and long term strategies that the Board in partnership with DEQ may want to consider. CDD will continue administering OAR 340-071-130(1), Nitrogen - Reducing Systems by requiring advanced onsite wastewater treatment systems for: • New residential dwellings; • Major septic repairs (repairs to drainfields, not including tank replacements); • Major residential alterations (changes that would cause increases in flows or proposing to connect to a system that doesn't meet minimum sizing requirements for the use); and • Authorization notices for changes in use, additions, new connections or replacement dwellings. Short Term Strategies DEQ Rules Advisory Committee CDD's Onsite Wastewater Manager will participate in DEQ's RAC in 2025 and if necessary, 2026. EPA Community Change Grant If awarded an EPA Community Change Grant, Deschutes County, Neighborlmpact, COIC and DEQ, can begin the tasks immediately. Two of the deliverables would upgrade 275 conventional septic systems to ATTs and deepen 24 domestic wells. Financial Advisory Committee When Quadrants 2a or 2d in the Newberry Neighborhood sell, CDD will coordinate with the Board to convene a financial advisory committee. Newberry Country Plan Update In 2013, the Board adopted an area plan for the southern portion of Deschutes County, The Newberry Country Plan is a chapter of Deschutes County's Comprehensive Plan addressing the unincorporated areas south of Sunriver and near La Pine. It provides guidance on growth, development, and resource protection, among other issues. To maximize community involvement, CDD used online and mailed surveys, small group meetings at convenient locations, a project website, and open houses. The Newberry Country Plan Update is a funded project identified in CDD's FY 2024-2025 Work Plan. The process affords a unique opportunity for public IMPA discourse on current trends, conditions, and needs in the region on a wide variety of topics such as housing, transportation, water resources, economic development, and public facilities. Long Term Strategies Goal 11 Exception The Board and DEQ could consider lobbying the Oregon Legislature to amend Goal 11 and OARS to allow sewer systems in Southern Deschutes County without having to justify an imminent public health hazard. Geographic Rule The Board could request that DEQ establish a local advisory committee, along with a technical subcommittee, to consider a Geographic Rule for Southern Deschutes County. Doing so would require new and existing septic system performance standards within OAR 340-071, to protect groundwater quality. Grant Opportunities CDD, with the Board's approval, could continue to apply for state and federal grants that provide funding to upgrade conventional septic systems to ATTs and deepen domestic wells. Groundwater Management Area The Board could request that DEQ declare Southern Deschutes County a Groundwater Management Area per ORS 468.175.32 Well Monitoring The Board could collaborate with DEQ to continue monitoring groundwater quality. 32 If, as a result of its statewide monitoring and assessment activities under ORS 4686.190, DEQ confirms the presence in groundwater of contaminants suspected to be the result, at least in part, of nonpoint source activities, the department is required to declare an area of groundwater concern. The declaration identifies the substances confirmed to be in the groundwater and all groundwater aquifers that may be affected. After declaring an area of groundwater concern, DEQ, in consultation with other appropriate state agencies, is required within 90 days, (1) appoint a groundwater management committee; (2) Focus research and public education activities on the area of groundwater concern; (3) Provide for necessary monitoring in the area of groundwater concern; (4) Assist the groundwater management committee in developing, in a timely manner, a draft and final local action plan for addressing the issues raised by the declaration of an area of groundwater concern; and (5) If not developed by the groundwater management committee, develop a draft and final local action plan. -23- APPENDICES El -- i- zo Q O E +J U 0 > N � Y i N a1 a) N Q 4-1 c Q E V M +�' N U L vi O +�' a) a) a) E o c �' 4r to ° �- a) o)fII c 'c N N d 'O o a) 00 a- to m v a) L Q a, en 4- c > N a) m J m ai ° C E - a, L a) �; ° L to «s _ a) o W t6 a) L E o c `° 3 �' p v E a) , 0 N u a) ac) r� 3 0 o C v— c _0 a) -0 a) "- N a) U > taA N C E N C ca o o N a L _0 a) A C c � n3 a) ca an C Q 4 a1 v o L 'L a) O N c a) a a) v v > "O +' a) m L a) N E Y L a) O � U U U `n L O ° C> 4. 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O0 Op p pi.bA GJ V 4-1 O S 4 i >.a m E O W N O LOO p A-A9 ft- � O �p 4-m 5 �+NO F -0 N O O N i +� C . p O O N O O �.+ O 0. 0.0 Ow >, Ei� — p Op sp Obo pvf i� NGJu Z3 O i ®t �: N O p O �•— bA N p-= tpil c a �aJ W+ �E QJ Oi •o>, ,race Op ��O l7 u (A ®�� i4. P O r 0 N 00 O O N m O H G1 LL L a� L dA _ �O b�A _ O O O N u m C. E i s z s L 0 a _ c� _ _ V _ 0 z El i H ca JL� Lot tU 'in .0 W Q L O O � N O O O O ® co W > � u — O > u O v 0 M -0 > r O �Q m m W N y r Lrf to W ® ® 11 01 0 0 LJ • • 4 W dJ u .4-J u r-+ O E O O U � O O 4- � O Q i ._ ra to Z vT E S CO G2a o c MEETING DATE: February 3, 2025 SUBJECT: State DLCD Farm and Forest Modernization Project Update RECOMMENDED MOTION: N/A —update only. BACKGROUND AND POLICY IMPLICATIONS: Oregon's zoning -based farm and forest land conservation programs have been in place since 1973. Over the past 10 years, interested parties, the courts, and the Department of Land Conservation and Development have identified a number of issues needing review. In 2024, the Land Conservation and Development Commission (LCDC) initiated the Farm and Forest Modernization Project, which included rulemaking and the appointment of a rules advisory committee. Rulemaking was intended to improve the clarity and consistency of implementing Oregon's farm and forest program across the state. LCDC ultimately adopted new Oregon Administrative Rules on December 6, 2024, which became effective on January 1, 2025. The Community Development Department will initiate housekeeping amendments shortly. Staff is providing a general overview of the project. BUDGET IMPACTS: None ATTENDANCE: Tanya Saltzman, Senior Planner Will Groves, Planning Manager Peter Gutowsky, Community Development Director MEMORANDUM TO: Deschutes County Board of Commissioners FROM: Tanya Saltzman, AICP, Senior Planner Will Groves, Planning Manager Peter Gutowsky, AICP, Director DATE: January 29, 2025 SUBJECT: Department of Land Conservation and Development / Farm & Forest Modernization Program / Rule Changes Oregon's zoning -based farm and forest land conservation programs have been in place since 1973. Over the past 10 years, interested parties, the courts, and the Department of Land Conservation and Development (DLCD) have identified a number of issues needing review. In 2024, the Land Conservation and Development Commission (LCDC) initiated the Farm and Forest Modernization Project, which included rulemaking and the appointment of a rules advisory committee (RAC). Rulemaking was intended to improve the clarity and consistency of implementing Oregon's farm and forest program across the state. DLCD directed the RAC to consider: • Codifying identified case law standards; • Other EFU rule amendments; • Conforming rule changes; and • Providing additional clarity to counties and potential applicants with the intent of reducing unnecessary appeals. LCDC ultimately adopted new Oregon Administrative Rules (OARS) on December 6, 2024 (Attachment). They became effective on January 1, 2025. The Community Development Department will initiate housekeeping amendments shortly. These amendments will apply the changes below into Deschutes County Code, as well as incorporate some minor housekeeping changes from previous rulemaking or legislative changes that have not yet been captured locally. Staff will first provide the Planning Commission with a review per the legislative process outlined in DCC 22.12.040 and will then proceed to a work session and public hearing before the Board of County Commissioners. -1- I. Rule Amendments for Codlf°y+lrtg Case Law Common law (or case law) is the body of law derived from judicial decisions by the courts. In this context, these are interpretations of statutory provisions by the Oregon Land Use Board of Appeals (LUBA), the Oregon Court of Appeals, and the Oregon Supreme Court. A large body of common law exists on aspects of the farm and forest program. While these rulings have not been codified in statute or rule, they are routinely applied to reviews on appeal of land use decisions. County planning departments have varying degrees of ability to apply un-codified common law when reviewing applications. The result, according to DLCD, is local governments unequally implementing case law standards across the state and unnecessary legal challenges. A. Farm Impacts Test for Conditional Uses in Exclusive Farm Use Zones Exclusive Farm Use (EFU) zoning is established at the state level to protect agricultural land for farming. Use of land zoned as EFU is limited to farm use, uses the legislature has determined are compatible with farm and forest operations, or uses which the legislature has determined may be compatible with farm and forest operations, per Oregon Revised Statutes (ORS) 215.283. All conditional uses in EFU zones require a county to exercise discretion: counties must find that the use as proposed will not force a significant change in farm and forest practices and will not significantly increase the cost of farm and forest practices on the surrounding lands. This discretionary review requirement is in ORS 215.296 and is often referred to as the "farm impacts test." Counties routinely apply this test to a wide variety of EFU conditional uses to determine compatibility with farm and forest operations. In case law, there is guidance from the courts on how to conduct a sufficient analysis to provide findings under the farm impacts test. These established case law standards have not been codified in statute or rule and are therefore applied inconsistently by counties throughout the state. RAC members considered several cases on the topic, most notably the Oregon Supreme Court's decision in Stop the Dump Coalition v. Vamhill County, 364 Or 432, 435 P3d 698 (2019).1 LCDC relied on the case's step-by- step guidance to when it adopted the rule amendments. B. "Incidental and Subordinate" and "Necessary to Support" standards as applied to ORS 215 21301) and 215.283(4) the Agri -Tourism and Other Commercial Event Standards in Exclusive Farm Use Zones In 2011, the legislature added a new use to EFU zones that allows for four different levels of agri-tourism events or other commercial events related to a farm use. The first three levels must pass the same standards for approval. The fourth level must meet more rigorous criteria to be approved. The four levels are: 1. Expedited review for a single, smaller event 2. One 72-hour event up to 500 people 'Other cases included: Schellenberg v. Polk County, 21 Or LUBA 425 (1991); Von Lubken v. Hood River County, 118 Or App 246, 846 P2d 1178, rev den 316 Or 529 (1993); Von Lubken v. Hood River County, 28 Or LUBA 362 (1994); Von Lubken v. Hood River County, 133 Or App 286, 891 P2d 5 (1995); and Friends of Marion County v. Marion County Qones/Agritainment), _ Or LUBA _(LUBA No. 2021-088/089, April 21, 2022). -2- 3. Up to six 72-hour events or a month and a lull of long weekend events 4. Up to eighteen 72-hour events or four mor.,ths of long weekend events The requirements for these events are listed in ORS 215.213(11) and ORS 215.283(4). Since 2013, counties have issued more than a hundred agri-tourism event permits under these standards. All four levels of events authorized in ORS 215.213(11)/ORS 215.283(4) must demonstrate that they are "incidental and subordinate" to existing farm use of the property. This means that farm use must remain the predominant use of the property, and the event use should not become the proverbial "tail wagging the dog." For an application under the most intensive category — up to eighteen 72-hour events per year — the proposal must also be found to be "necessary to support" the commercial farm uses or the commercial agricultural enterprises in the area. LCDC codified case law that clarifies "incidental and subordinate" and "necessary to support" standards.2 C. Transportation Facilities on Rural Lands The language in the Transportation Planning Rule (OAR 660-012-0065) that applies to rural transportation improvements applies to rural lands in general, meaning they apply to exception lands and nonresource lands as well as land protected under the farm and forest conservation program. LCDC adopted language that clarifies that when uses listed in OAR 660-012-0065(3) are proposed on land zoned farm or forest, they are subject to the farm impacts test or forest impacts test (as applicable). According to DLCD, this is consistent with the department's guidance on the topic and recent case law.3 D. Private Parks A variety of activities ranging in intensity have been approved as "private parks" in resource zones. Approved private park uses include/have included: frisbee golf, shooting ranges, paintball parks, demonstration gardens, event venues, fish viewing areas, and motocross tracks. The RAC considered the holdings in Central Oregon Landwatch v. Deschutes County, 276 Or App 282 (2016) which addresses this topic, given concerns that current rules do not state when proposals for private parks become inappropriate for a rural environment. LCDC adopted language to clarify that a private park is primarily recreational in nature — where the focus of the recreation is on the enjoyment of the outdoors. DLCD referenced Central Oregon Landwatch v. Deschutes County to clarify that private parks are meant to be low intensity uses. III. Other EFU Rule Amendments A. Preparation of Products on Farmland ORS 215.203 clarifies that the general definition of "farm use" includes the "preparation of products or by-products raised on land employed for farm use." OAR 660-033-0020(7) defines "products or by- products raised on such land" as "those products or by-products raised on the farm operation where the preparation occurs or on other farmland provided the preparation is occurring only on land being 2 Friends of Yamhill County v. Yamhill County (DeBenedetti), 80 Or LUBA 135 (2019), rev'd and rem'd, 301 Or App 726, 458 P3d 1130 (2020). 3 Van Dyke v. Yarnhill County, 81 Or LUBA 427 (2020) -3- used for flee primary purpose iai obi.aining a profit in r-noney from the farm use of the land." Because "farm use of the land" includes pr�,Taration of products or by-products, the current definition contains a confusing, unintended circular reference. As a result, some counties have approved stand-alone, commercial preparation facilities with no associated farm operation as a "farm use." On land zoned for exclusive farm use, farm use is allowed outright with minimal, if any, county review. LCDC adopted rule language that creates a two-part definition for "product or by-products raised on such land." B. Evidentiary Standard for the Verification of Income for Farm Dwellings and Farm Stands in Exclusive Farm Use Zones One of the tests to obtain a permit for primary and accessory farm dwellings involves verifying that a certain amount of income was earned on the farm over a certain period from the sale of farm products produced on the property. According to DLCD, several counties communicated that it can be difficult to verify income in a reliable manner. Their concerns include that accountant statements and Internal Revenue Service (IRS) Schedule F (farm income) tax documents are not specific enough to be definitive, particularly about where the products were produced. County staff also noted that it is difficult to verify if a taxpayer filed the tax documents with the IRS. For dwellings in conjunction with farm use, income verification is only required at the time of application. There is no ongoing requirement to verify that the farming operation is continuing. For farm stands, there is an ongoing statutory requirement that the sales from incidental retail items and event fees not exceed 25 percent of the farm stand income. DLCD stressed that this ongoing limitation on the sale of retail items and fees from promotional activities is an existing statutory requirement that has been in place since the legislature added fee - based promotional activities to allowable farm stand uses in 2001. LCDC adopted rule changes do not alter the income limitation. It only clarifies what method a county may use when it seeks to verify that the farm stand is complying with the income standard. The new language relies on the IRS tax return receipt as the minimum standard for verification of income. It also clarifies that a county may ask for any additional information it believes is necessary to demonstrate compliance with the standard. C. Home Occupations in EFU Zones According to DLCD, home occupations are the most common non -resource use approved in EFU zones. Home occupations are defined in statute as a use that occurs in dwellings or other buildings normally associated with exclusive farm use zones and are operated by a resident or employee of a resident of the property. Home occupations are limited to employing five full-time or part-time persons. Counties may choose to adopt more restrictive standards for this use. Given the ambiguity and breadth of the definition of a home occupation, a very wide variety and intensity of activities are approved as home occupations in EFU zones: hair salons, firearms dealers, tasting rooms, medical offices, events venues, daycares, funeral homes, mechanic repair shops, veterinary clinics, restaurants, among others. Sometimes uses are approved as home occupations instead of being approved under the standards established for a particular activity by the legislature. Proposals that cannot meet the standards established for a particular use by the legislature often seek -4- approval under the more broadly dei i )ed "hofne -iccupation" option, which evades the legislature's specific standards set for that par dcuiar use. LCDC adopted rule clarifies that uses with scale and scope no more intensive than those permitted by legislative standards can be reviewed as home occupations. It also clarifies that certain home occupation businesses must be accessory to a residential use. Conforming Rule Changes According to DLCD, these rule updates adopted by LCDC are necessary to align agency rules with new provisions of law enacted by the legislature that are currently in effect and remove circular references. A. Replacement Dwelling Requirements Changed the requirements for replacement dwellings in forest zones at ORS 215.755 to mirror the new requirements in ORS 215.291 which were previously applicable only to farm zones. Also, modified the requirements for replacement dwellings in farm zones. B. Template Test Provisions Language in Section 3 clarifying effective dates for the new template test provisions has been removed to conform to statute. Section 4 repealed Section 2 on January 2, 2024, which had allowed a one-time opportunity which expired at the end of 2023. C. Childcare Added childcare facilities, preschool recorded programs, or school -age recorded programs as a new use in EFU zones. D. Nonconforming Schools Modified the requirements for expansion of certain nonconforming schools in farm zones. E. Campsites Removed a circular reference. F. Rabbit Processing Adds rabbits and rabbit products to the list of farm products which may be processed at a farm product processing facility under ORS 215.255. -5- G. harm Dwellings in Conjunction; with Cranb�grr�L L)fIerations Section 3 repealed Section 2 on January 2, 2022, removing special provisions for farm dwellings in conjunction with cranberry operations. Attachment: LCDC Rule Changes M Attac innent -- LCDC Rule Changes Underlines represent new rule language and deleted text by StFikethFeugl4. I. Codifying Case Law A. Farm Impacts Test for Conditional Uses in EFU Zones OAR 660-033-0130 (5) Approval requires review by the governing body or its designate under ORS 215.296. Uses may be approved only where such uses: (a) Will not force a significant change in accepted farm or forest practices on surrounding lands devoted to farm or forest use; and (b) Will not significantly increase the cost of accepted farm or forest practices on surrounding lands devoted to farm or forest use. (c) For purposes of subsection (a) and (b), a determination of forcing a significant change in accepted farm or forest practices on surrounding lands devoted to farm and forest use or a determination of whether the use will significantly increase the cost of accepted farm or forest practices on surrounding lands devoted to farm or forest use requires: (A) Identification and description of the surrounding lands, the farm and forest operations on those lands and the accepted farm practices on each farm operation and the accepted forest practices on each forest operation; (B) An assessment of the individual impacts to each farm and forest practice, and whether the proposed use is likely to have an important influence or effect on any of those practices; and (C) An assessment of whether all identified impacts of the proposed use when considered together could have a significant impact to any farm or forest operation in the surrounding area in a manner that is likely to have an important influence or effect on that operation. (D) For purposes of this subsection, examples of potential impacts for consideration may include but are not limited to traffic, water availability and delivery, introduction of weeds or pests, damage to crops or livestock, litter, trespass, reduction in crop yields, or flooding. (E) For purposes of subsection (a) and (b), potential impacts to farm and forest practices or the cost of farm and forest practices, impacts relating to the construction or installation of the proposed use shall be deemed part of the use itself for the purpose of conducting a review under subsections (a) and (b). (F) In the consideration of potentially mitigating conditions of approval under ORS 215.296(2), the governing body may not impose such a condition upon the owner of the affected farm or forest land or on such land itself, nor compel said owner to accept payment to compensate for the significant changes or significant increases in costs described in subsection (a) and (b). B. Agri -Tourism Standards / Incidental and Subordinate and necessary to Support Standards OAR 660-033-0130 (42)(a) A determination under ORS 215.213(11) or 215.283(4) that an event or activity is 'incidental and subordinate' requires consideration of any relevant circumstances, including the nature, intensity, and economic value of the respective farm and event uses, that bear on whether the existing farm use remains the predominant use of the tract. (b) A determination under ORS 215.213(11)(d)(A) or 215.283(4)(d)(A) that an event or activity is 'necessary to support' either the commercial farm uses or commercial agricultural enterprises in the area means that the events are essential in order to maintain the existence of either the commercial farm or the commercial agricultural enterprises in the area. C. Transportation Facilities on Rural Lands OAR 660-012-0065 (5) (a) For transportation uses or improvements listed in subsection (3) within an exclusive farm use (EFU) or forest zone except for transportation uses or improvements permitted under ORS 215.213(1), ORS 215.283(1) or OAR 660-006-0025(1)-(3), a jurisdiction shall find that the proposal will comply with the standards described in ORS 215.296. In addition, transportation uses or improvements in a forest zone, except for transportation uses or improvements authorized under OAR 660-006-0025(1)-(3), must also comply with the standards described in OAR 660-006-0025(5). For transportation uses or improvements listed in subsections (3)(d) to (g) and (o) within an EFU or forest zone, a jurisdiction shall, in addition to demonstrating compliance with the requirements of ORS 215.296: Identify reasonable build design alternatives, such as alternative alignments, that are safe and can be constructed at a reasonable cost, not considering raw land costs, with available technology. The jurisdiction need not consider alternatives that are inconsistent with applicable standards or not approved by a registered professional engineer; ii Assess the effects of the identified alternatives on farm and forest practices, considering impacts to farm and forest lands, structures and facilities, considering the effects of traffic on the movement of farm and forest vehicles and equipment and considering the effects of access to parcels created on farm and forest lands; and 1[0 Select from the identified alternatives, the one, or combination of identified alternatives that has the least impact on lands in the immediate vicinity devoted to farm or forest use. D. Private Parks OAR 660-033-0130 -s- (43) As used in ORS 215.213(2)(e) or 215.283(2)(c), a 'private park' means an area devoted to low - intensity, outdoor, recreational uses for which enioyment of the outdoors in an open space, or on land in its natural state, is a necessary component and the primary focus. II. Other EFU Amendments A. Preparation of Products on Farmland OAR 660-033-0020 (7)(a) "Farm Use" as that term is used in ORS chapter 215 and this division means "farm use" as defined in ORS 215.203. (b) As used in the definition of "farm use" in ORS 215.203 and in this division: (A) "Preparation" of products or by-products includes but is not limited to the cleaning, treatment, sorting, or packaging of the products or by-products; and (B) "Products or by-products raised on such land" means includes; that these p Products or by-products aye raised on the farm operation where the preparation occurs; (ii) Products or by-products raised on other farmland provided: The preparation is occurring only on a tract 4e44g currently employed for a farm use or farm uses other than preparation; and II Such products or by-products are prepared in the same facilities as and in conjunction with products or by-products raised on the farm operation where the preparation occurs. B. Verification of Income Farmworker Dwellings OAR 660-033-0130 (24) Accessory farm dwellings as defined by subsection (e) of this section may be considered customarily provided in conjunction with farm use if: (h) The applicant shall submit to the local government an IRS tax return transcript and any other information the county may require that demonstrates compliance with the gross farm income requirements in paragraph (b)(A) or (B), whichever is applicable. Primary Farm Dwellings OAR 660-033-0135 (3) On land not identified as high -value farmland, a dwelling may be considered customarily provided in conjunction with farm use if: la (e) The applicant shall submit to the local government an IRS tax return transcript and any other information the local iurisdiction may require that demonstrates compliance with the gross farm income requirement. (4) On land identified as high -value farmland, a dwelling may be considered customarily provided in conjunction with farm use if: (e) The applicant shall submit to the local government an IRS tax return transcript and any other information the local iurisdiction may require that demonstrates compliance with the gross farm income requirement. Farm Stands OAR 660-033-0130 (23) A farm stand may be approved if: (f) At the request of a local government with land use iurisdiction over the farm stand, the farm stand operator of a farm stand approved under this section shall submit to the local government evidence of compliance with the annual sales requirement of subsection (a). Such evidence shall consist of an IRS tax return transcript and any other information the local iurisdiction may require to document ongoing compliance with this section or any other condition of approval required by the county. C. Home Occupations in EFU Zones OAR 660-033-0130 (14) Home occupations and the parking of vehicles may be authorized. (a) Home occupations shall be operated substantially in the dwelling or other buildings normally associated with uses permitted in the zone in which the property is located. A home occupation shall be operated by a resident or employee of a resident of the property on which the business is located, and shall employ on the site no more than five full-time or part-time persons. (c) A governing body may only approve a use provided in OAR 660-033-0120 as a home occupation if: (A) The scale and intensity of the use is no more intensive than the limitations and conditions otherwise specified for the use in OAR 660-033-0120, and (B) The use is accessory, incidental and subordinate to the primary residential use of a dwelling on the property. III. Conforming Rule Changes A. Replacement Dwellings in Forest and Farm Zones Forest Dwellings OAR 660-006-0025 -10- (1) Goal 4 requires that forest land be conserved. Forest lands are conserved by adopting and applying comprehensive plan provisions and zoning regulations consistent with the goals and this rule. In addition to forest practices and operations and uses auxiliary to forest practices, as set forth in ORS 527.722, the Commission has determined that five general types of uses, as set forth in the goal, may be allowed in the forest environment, subject to the standards in the goal and in this rule. These general types of uses are: (d) Dwellings authorized by ORS 215.705 to 215.757 (QRS 2 5.75� ; and (o)� : A lawfully established dwelling may be altered restored or replaced if, when an application for a permit is submitted, the county finds to its satisfaction, based on substantial evidence that the dwelling to be altered, restored or replaced has, or formerly had: (Ai) 414te- Intact exterior walls and roof structures; (; H) #as-ilndoor plumbing consisting of a kitchen sink, toilet and bathing facilities connected to a sanitary waste disposal system; (Gill) #a6lnterior wiring for interior lights; and (iv) A heating system. (D) Has a heating d rv-r-r�-a�-rca cirir-system-, ci iii a (E) t the _. N' T�. ' e, neRt is Femoved_ rimy fished nr GGnveged to an - llpy.ga-hle Rpw:neirlon+iol Hie-wit-h*R three FneRths of the p .Item of the dekggll a - (B) An application under this subsection must be filed within three years following the date that the dwelling last possessed all the features listed under paragraph (o)(A). (C) Construction of a replacement dwelling approved under this subsection must commence no later than four years after the approval of the application under this section becomes final. (D) In addition to the provisions of paragraph (o)(A) the dwelling to be replaced meets one of the following conditions: (i) If the value of the dwelling to be replaced was eliminated as a result of destruction or demolition, the dwelling was assessed as a dwelling for purposes of ad valorem taxation prior to the destruction or demolition and since the later of: (1) Five years before the date of the destruction or demolition, or (II) The date that the dwelling was erected upon or fixed to the land and became subject to Property tax assessment; or (ii) The value of dwelling to be replaced has not been eliminated due to destruction or demolition and the dwelling was assessed as a dwelling for purposes of ad valorem taxation since the later of: (1) Five years before the date of the application; or (11) The date that the dwelling was erected upon or fixed to the land and became subject to property tax assessment. (E) For replacement of a lawfully established dwelling under this subsection: (i) The dwelling to be replaced must be removed, demolished or converted to an allowable nonresidential use within three months after the date the replacement dwelling is certified for occupancy pursuant to ORS 455.055. (ii) The applicant must cause to be recorded in the deed records of the county a statement that the dwelling to be replaced has been removed, demolished or converted. -11- As a condition of approval, if the dwelling to be replaced is located on a portion of the lot or parcel that is not zoned for exclusive farm use, the applicant shall execute and cause to be recorded in the deed records of the county in which the property is located a deed restriction prohibiting the siting of another dwelling on that portion of the lot or parcel. The restriction imposed is irrevocable unless the county planning director, or the director's designee, places a statement of release in the deed records of the county to the effect that the provisions of ORS 215.291 and either ORS 215.213 or 215.283 regarding replacement dwellings have changed to allow the lawful siting of another dwelling. (iv) The county planning director, or the director's designee, shall maintain a record of: (1) The lots and parcels for which dwellings to be replaced have been removed, demolished or converted; and (II) The lots and parcels that do not qualify for the siting of a new dwelling under paragraphs (E) and (F), including a copy of the deed restrictions filed under subparagraph (iii) of this paragraph. (F M A replacement dwelling under this subsection must comply with applicable building codes, plumbing codes sanitation codes and other requirements relating to health and safety or to siting at the time of construction. (ii) The replacement dwelling may be sited on any part of the same lot or parcel. (iii) The replacement dwelling must comply with applicable siting standards. However, the standards may not be applied in a manner that prohibits the siting of the replacement dwelling. (iv) The replacement dwelling must comply with the construction provisions of section R327 of the Oregon Residential Specialty Code, if: (1) The dwelling is in an area identified as extreme or high wildfire risk on the statewide map of wildfire risk described in ORS 477.490; or (11) No statewide map of wildfire risk has been adopted. (G) if an applicant is granted a deferred replacement permit under this subsection, the deferred replacement permit: (i) Does not expire but the permit becomes void unless the dwelling to be replaced is removed or demolished within three months after the deferred replacement permit is issued; and 00 May not be transferred, by sale or otherwise, except by the applicant to the spouse or a child of the applicant. (r) Dump truck parking as provided in ORS 215.311;-a444 (s) An agricultural building, as defined in ORS 455.315, customarily provided in conjunction with farm use or forest use. A person may not convert an agricultural building authorized by this section to another use; and Dwellings in Forest Zones OAR 660-006-0027 6) A proposed "template" dwelling under this rule is allowed only if: (c) No dwellings are allowed on other lots or parcels that make up the tract and deed restrictions established under section (97) of this rule for the other lots or parcels that make up the tract are met; -12- (7)(a) , , , Tillame 1, 2921, if; (A) No R;eFe than eRe ether dim.fe-WiRg exists eF has been appFeved A-Im apptheF lot eF parr -el dwelling undeF seetiens (3) and (4) ef this FUIe. (e) Subsection (b) ef this seetien applies; (A) On and V-.mhill f GURties {g)(a� The applicant for a dwelling authorized by paragraph (A) or (B) below shall provide evidence that the covenants, conditions and restrictions form adopted as "Exhibit A" has been recorded with the county clerk of the county or counties where the property subject to the covenants, conditions and restrictions is located. Replacement Dwellings in Farm Zones OAR 660-006-0130 (8)(a) A lawfully established dwelling may be altered, restored or replaced under ORS 215.213(1)(q) or 215.283(1)(p) if, when an application for a permit is submitted, the county finds to its satisfaction, based on substantial evidence that the dwelling to be altered, restored or replaced has, or formerly had: (b) An application under this section must be filed within three years following the date that the dwelling last possessed all the features listed under subsection (a). (c) Construction of a replacement dwelling approved under this section must commence no later than four years after the approval of the application under this section becomes final. In addition to the provisions of subsection (a), the dwelling to be replaced meets one of the following conditions; (A) If the dwelling was remeved, destFeyed 9F demelished; value of the dwelling to be replaced was eliminated as a result of destruction or demolition, the dwelling was assessed as a dwelling for purposes of ad valorem taxation prior to the destruction, or demolition and since the later of: (i) The dwelling's tax Ide-es;t met have a lien fnr deloRquent_ad V ale _ M taxes; and 'ithe &NelliRg is GuFFeRtly iR SUGh a state of disrepair that the d-welliRg is unsafe fGF GGG61PaRGY \—/ ef constitutes an @Waetive nuisanee, the dwelling's tax let dees not have a lien f0F deliRqu ad valeFem taxes; 9F (i) Five years before the date of the destruction of demolition; or (ii) The date that the dwelling was erected upon or fixed to the land and became subject to the property tax assessment; or -13- (B) The value of dwelling to be replaced has not been eliminated due to destruction or demolition, and the dwelling was assessed as a dwelling for purposes of ad valorem taxation since the later of: (i) Per the „peyiews five prepek y tax years; eF (i) Five years before the date of application; or (ii) The date that the dwelling was erected upon or fixed to the land and became subject to property tax assessment. (ee) For replacement of a lawfully established dwelling under ORS 215.213(1)(q) or 215.283(1)(p): (A) The dwelling to be replaced must be removed, demolished or converted to an allowable nonresidential use within three months after the date the replacement dwelling is certified for occupancy pursuant to ORS 455.055 or.. (i) Within eRe yeaF after the date the dwelling is certified for eeeupaney puFsuant +„ noc ACC ncc. r befe—rea a date set by the GOURty that is met less, t.haR 90 days afteF the FeplaGemeRt peFFni sswed; and (B) The applicant must cause to be recorded in the deed records of the county a statement that the dwelling to be replaced has been removed, demolished or converted. (C) As a condition of approval, if the dwelling to be replaced is located on a portion of the lot or parcel that is not zoned for exclusive farm use, the applicant shall execute and cause to be recorded in the deed records of the county in which the property is located a deed restriction prohibiting the siting of another dwelling on that portion of the lot or parcel. The restriction imposed is irrevocable unless the county planning director, or the director's designee, places a statement of release in the deed records of the county to the effect that the provisions of 2019 QFege„ Laws, shapteF nnn section ORS 215.291 and either ORS 215.213 or 215.283 regarding replacement dwellings have changed to allow the lawful siting of another dwelling. (D) The county planning director, or the director's designee, shall maintain a record of: (i) The lots and parcels for which dwellings to be replaced have been removed, demolished or converted; and (ii) The lots and parcels that do not qualify for the siting of a new dwelling under subsection (Ee) of this seai„„, including a copy of the deed restrictions filed under paragraph (C) of this subsection. (4f)(A) A replacement dwelling under ORS 215.213(1)(q) or 215.283(1)(p) must comply with applicable building codes, plumbing codes, sanitation codes and other requirements relating to health and safety or to siting at the time of construction. LJ^weyer, the st.,„d aFds may net be „„lied On manneF that Fehihits the siting of the r Yll'1eepAeRt dwelling. (B) The replacement dwelling may44 be sited on any part of the same lot or parcel: Fiver,Using all 9F paFt ef the feetprint of the FeplaGed dwelling 9F Rear a read, ditGh, -14- MIMI M"MMAIAWMr-M ME. StFWetuFe. C) The replacement dwelling must comply with applicable siting standards. However, the standards may not be applied in a manner that prohibits the siting of the replacement dwelling. (D) The replacement dwelling must comply with the construction provisions of section R327 of the Oregon Residential Specialty Code, if: (A) is a land use deeisian as defined in QRS 197.0!5 ;Aghe.re the dwelling to be Fep!aGed-. /"1 I eligible f ,..laeem...,+ u n d., paFagFaph (b)(B) of this section and (B) I et bjeet to the time to art limits of QRS 215 T17 (i) The dwelling is in an area identified as extreme or high wildfire risk on the statewide map of wildfire risk described in ORS 477.490; or (ii) No statewide map of wildfire risk has been adopted. (11) Subject to the issuance of a license, permit or other approval by the Department of Environmental Quality under ORS 454.695, 459.205, 468B.050, 468B.053 or 468B.055, or in compliance with rules adopted under ORS 468B.095, and with the requirements of ORS 215.246, 215.247, 215.249 and 215.251, the land application of reclaimed water, agricultural process or industrial process water or biosolids, or the onsite treatment of septage prior to the land application of biosolids, for agricultural, horticultural or silvicultural production, or for irrigation in connection with a use allowed in an exclusive farm use zones under this division is allowed. For the purposes of this section, onsite treatment of septage prior to the land application of biosolids is limited to treatment using treatment facilities that are portable, temporary and transportable by truck trailer, as defined in ORS 801.580, during a period of time within which land application of biosolids is authorized under the license, permit or other approval. C. Uses Authorized on Agricultural Lands - Childcare OAR 660-033-0120 High Value Farm Land All Other Uses R5 R5, 40 Child care facilities, preschool recorded programs or school -age recorded programs consistent with ORS 215.213(2)(aa) or 215.283(2)(dd). "R" Use may be allowed, after required review. The use requires notice and the opportunity for a hearing. Minimum standards for uses in the table that include a numerical reference are specified in OAR 660-033- 0130. Counties may prescribe additional limitations and requirements to meet local concerns. -15- D. Schooi Expansions OAR 660-033-0130 (18)(a) Existing facilities wholly within a farm use zone may be maintained, enhanced or expanded on the same tract, subject to other requirements of law. An existing golf course may be expanded consistent with the requirements of sections (5) and (20) of this rule, but shall not be expanded to contain more than 36 total holes. (b) Notwithstanding ORS 215.130, 215.213, 215.283, or any local zoning ordinance or regulation, a public or private school, including all buildings essential to the operation of a school, formerly allowed pursuant to ORS 215.213(1)(a) or 215.283(1)(a), as in effect before January 1, 2010, may be expanded provided: (A) The expansion complies with ORS 215.296; (B) The school was established on or before January 1, 2009; (C) The expansion occurs on a tax lot: (i) On which the school was established; or (ii) Contiguous to and on January 1, 2015, under the same ownership as the tax lot on which the school was established; and (D) The school is a public or private school for kindergarten through grade 12. E. Campsites OAR 660-033-0130 malfilo.L if.. 20. PININMEWMIMM &MINIMIM.N. WIN .. •_ -16- F. Rabbit Processing OAR 660-033-0130 28)(a) A facility for the processing of farm products is a permitted use under ORS 215.213(1)(u) and ORS 215.283 (1)(r) on land zoned for exclusive farm use, only if the facility: (A) Uses less than 10,000 square feet for its processing area and complies with all applicable siting standards. A county may not apply siting standards in a manner that prohibits the siting of a facility for the processing of farm products; or (B) Notwithstanding any applicable siting standard, uses less than 2,500 square feet for its processing area. However, a local government shall apply applicable standards and criteria pertaining to floodplains, geologic hazards, beach and dune hazards, airport safety, tsunami hazards and fire siting standards. (b) A county may not approve any division of a lot or parcel that separates a facility for the processing of farm products from the farm operation on which it is located. (c) As used in this section, the following definitions apply: (A) "Facility for the processing of farm products" means a facility for: (i) Processing farm crops, including the production of biofuel as defined in ORS 315.141, if at least one -quarter of the farm crops come from the farm operation containing the facility; or (ii) Slaughtering, processing or selling poultry or poultry products, rabbits or rabbit products from the farm operation containing the facility and consistent with the licensing exemption for a person under ORS 603.038(2). G. Farm Dwellings in Conjunction with Cranberry Operations OAR 660-033-0135 +h FaiciRg and haFvestiRg of GFaRberrioc• G7:* _• • •• •Tes •• KIPMV i • ••• ot. 1 ...... '... L:_ AT (b) in determining the — ? FeqUiFed by subseetien (a) of this see (A) Only gFeee ineeme fFGFn land n ed net leased Or r_a ted shall be eewnted7 Lltilt -18- vT E S C0 G2a BOARD • • MEETING DATE: February 3, 2025 SUBJECT: Work Session: Preparation for Public Hearing - Clear and Objective Housing Text Amendments Regarding Definitions, Dimensional Standards, and Accessory Uses BACKGROUND AND POLICY IMPLICATIONS: The Deschutes Board of Commissioners will conduct a work session to consider text amendments establishing "clear and objective" housing development standards. Beginning in 2017, the Oregon State Legislature passed a series of bills to encourage efforts to expand the supply of housing statewide. The passage of Senate Bill (SB) 1051 prohibited cities from denying applications for housing developments within urban growth boundaries, provided those applications complied with "clear and objective standards, including but not limited to clear and objective design standards contained in the county comprehensive plan or land use regulations." These provisions require local governments to apply only clear and objective standards, criteria, and procedures to applications for housing projects and may not discourage housing through unreasonable delay. In 2023, House Bill (HB) 3197 was passed, which expanded the clear and objective housing standards mandate to "...unincorporated communities designated in a county's acknowledged comprehensive plan after December 5, 1994, nonresource lands and areas zoned for rural residential use as defined in ORS 215.501." The provisions of HB 3197 will become effective on July 1, 2025. Staff will prepare the Deschutes County Board of Commissioners (Board) for a February 12, 2025, public hearing to consider the first set of proposed clear and objective amendments (file no. 247-24-000705-TA). Within the proposed amendments, added language is shown underlined and deleted shown as strikethrough. BUDGET IMPACTS: None ATTENDANCE: Kyle Collins, Associate Planner and Will Groves, Planning Manager MEMORANDUM TO: Deschutes County Board of Commissioners FROM: Kyle Collins, Associate Planner DATE: January 29, 2025 SUBJECT: Preparation for Public Hearing: Clear and Objective Housing Text Amendments - Definitions, Dimensional Standards, and Accessory Uses The Deschutes Board of Commissioners (Board) will conduct a work session on February 3, 2025 to consider text amendments establishing "clear and objective" housing development standards (file no. 247-24-000705-TA). This work session is in preparation for a public hearing scheduled for February 12, 2025. Attached to this memorandum are the proposed text amendments and a staff report summarizing the changes. Within the proposed amendments, added language is shown underlined and deleted shown as strikethre gl . The public hearing will be conducted in -person, electronically, and by phone.' All record materials can be found on the project website: https://bit.ly/DeschutesClearAndObieci tive I. BACKGROUND Beginning in 2017, the Oregon State Legislature passed a series of bills to encourage efforts to expand the supply of housing statewide. The passage of Senate Bill (SB) 1051 prohibited cities from denying applications for housing developments within urban growth boundaries, provided those applications complied with "clear and objective standards, including but not limited to clear and objective design standards contained in the county comprehensive plan or land use regulations."Z The provisions of SB 1051, along with subsequent bills, modified Oregon Revised Statutes (ORS) 197.286- 197.314. Of relevance to the current project is ORS 197.307(4)3 which was modified to state: (1) Except as provided in subsection (6) of this section, a local government may adopt and apply only clear and objective standards, conditions and procedures regulating the development of housing, including needed housing. The standards, conditions and procedures: 1 See Board of County Commissioners February 12, 2025 Agenda for more information: https•//www deschutes org/bcc/page/board-county-commissioners-meeting-213 2 https://olis.oregonlegislature.gov/liz/201 7RI /Down loads/M easureDocument/SB1 051 /Enrolled 3 httpss•//oregon public law/statutes/ors 197.307 (a) May include, but are not limited to, one or more provisions regulating the density or height of a development. (b) May not have the effect, either in themselves or cumulatively, of discouraging needed housing through unreasonable cost or delay. In 2023, ORS 197A.4004 (formerly ORS 197.307, as referenced above) was established by House Bill (HB) 31975. The newly established ORS 197A.400 will become effective on July 1, 2025, and states the following [emphasis added]: (1) Except as provided in subsection (3) of this section, a local government may adopt and apply only clear and objective standards, conditions and procedures regulating the development of housing, including needed housing, on land within an urban growth boundary, unincorporated communities designated in a county's acknowledged comprehensive plan after Decembers, 1994, nonresource lands and areas zoned for rural residential use as defined in ORS 215.501. The standards, conditions and procedures: (a) May include, but are not limited to, one or more provisions regulating the density or height of a development. (b) May not have the effect, either in themselves or cumulatively, of discouraging needed housing through unreasonable cost or delay (3) In addition to an approval process for needed housing based on clear and objective standards, conditions and procedures as provided in subsection (1) of this section, a local government may adopt and apply an alternative approval process for applications and permits for residential development based on approval criteria that are not clear and objective if - (a) The applicant retains the option of proceeding under the approval process that meets the requirements of subsection (1) of this section; (b) The approval criteria for the alternative approval process comply with applicable statewide land use planning goals and rules, and (c) The approval criteria for the alternative approval process authorize a density at or above the density level authorized in the zone under the approval process provided in subsection (1) of this section. These provisions require local governments to apply only clear and objective standards, criteria, and procedures to applications for housing projects and may not discourage housing through unreasonable delay. Application of typical discretionary standards (e.g. "adequate public facilities," "effective mitigation," etc.) is prohibited. The statute is intended to address the concern that use of discretionary criteria leads to uncertainty, inconsistent administration, and delays that do not serve the goal of efficiently providing an adequate supply of housing stock. 4 https•//www.oregonlegislature.gov/bills laws/ors/ors197a.htm1 5 htt s: /olis oregonlegislature.gov/1iz/`2023R1/DownloadsIMeasureDocument/HB3197/Enrolled -2- 11. OVERVIEW OF AMENDMENTS Numerous sections and language in the Deschutes County Code (DCC) affecting the development of housing do not currently meet the identified thresholds for "clear and objective" standards outlined in HB 3197. The primary focus of the Clear and Objective Code Compliance Project is to ensure the DCC complies with state statute and the objectives of the Deschutes County Comprehensive Plan. With the assistance of consultants from MIG, planning staff have identified areas of the DCC that are not in compliance with statute and drafted packages of text amendments to address each issue. These packages have been broken into distinct segments to provide the public, the Deschutes County Planning Commission, and the Board the opportunityto review and vetthe proposed changes in a more structured and confined way. Where possible, planning staff have endeavored to draft amendments that are a policy -neutral conversion of existing discretionary language to non -discretionary language. This ensures the original intent and desired outcome is preserved. When not possible, in certain limited circumstances alternative standards or criteria have been proposed. Additionally, while not exclusively associated with housing development, as part of this process certain amendments have been proposed to broadly remove ambiguity from implementing sections of the DCC, maintain conformity across all development standards, and ensure review clarity for staff and members of the public. The first amendment package proposed through this process will broadly cover the following areas of the DCC: • Definitions for the Deschutes County Zoning Code (DCC Title 18) and the Bend Urban Growth Boundary Zoning Ordinance (Title 19) • Dimensional standards (e.g. height, structural footprints, setbacks, etc.) for Titles 18 and 19 • Accessory structure standards for Titles 18 and 19 III. METHODOLOGY AND APPROACH As noted above, staff has grouped the first proposed package of amendments to address the DCC definitions, dimensional or measurement standards, and the uses and standards associated with accessory structures. Each of these sections has been addressed as follows: Definitions Definitions are the foundational principle for all areas of the development code. Staff has modified the County's existing land use/planning definitions in the following ways: 1) If an existing term has a definition in the ORS, that existing terminology has been adopted verbatim or by reference. Staff understands that ORS terminology takes precedence over the requirements for clear and objective standards, even if these definitions contain some non- objective language. -3- 2) If an existing definition has subjectiv(L, language (e.g. "adequate," "designed for," etc.) that could be replaced with measurable, quantitative standards, then those new standards have been used. 3) If an existing term has criteria which could reasonably be interpreted in multiple ways (e.g. How should the height of a structure be measured? etc.), then explicit directions on how to interpret the standard have been included within the definition itself or new terms have been added to further clarify inter -definition relationships. 4) If two or more existing terms provided conflicting interpretations (e.g. "lot width versus "lot depth," "yard" versus "setback," etc.), then these terms were simplified into a single term to remove unintentional conflicts. 5) If an existing term has language which has previously been deemed unconstitutional or otherwise unlawful (e.g. Defining a "dwelling unit" based on familial relationships, etc.), then those terms have been modified to remove the offending language. Additionally, certain terms within the existing code have been subject to numerous interpretive challenges over many years (e.g. What types of development constitute "structures"?), and where possible staff has attempted to provide these terms with the broadest possible interpretation and/or align these terms with previous Hearings Officer or Board decisions which have clarified the matter at hand. Finally, as modified definitions could potentially have cascading effects throughout the remaining portion of the DCC, staff has attempted to align all uses of these terms with the new proposed definitions, while maintaining the original intent as much as possible within each corresponding code section. Dimensional Standards Dimensional standards can be categorized as any criteria which require a specific quantitative measurement (e.g. height, setbacks, lot coverage, floor area, etc.). As dimensional standards are another foundational principle for administering the development code, staff has modified several areas of the code dealing with these standards to remove ambiguity and provide explicit directions in how the measurements should be evaluated. To provide specific examples: 1) Nearly all zones have specific height limitations on structures. However, the current DCC is ambiguous in how to evaluate structural height, particularly on properties with sloping or irregular topography. This ambiguity can produce varying height calculations depending on where a specific measurement is taken. Staff has proposed a new definition for "height" which explicitly defines how the height of all structures should be evaluated, regardless of topography, structural design, or other variables. This new "height" definition necessitated the inclusion of other terms which did not previously exist in the DCC to provide clarity for applicants and staff, such as "average grade," "existing grade," and "finished grade." -4- 2) All zones have specific setback standards which outline the distance required between structures and lot lines or other designated features such as the Ordinary High Water Mark of rivers and streams. However, certain features which interact with setback standards such as "front lot lines" are difficult to identify under the current code in certain circumstances. "Front lot line" is currently defined as: "...the lot line separating a lot from a street other than an alley. In the case of a lot that does not front directly on any street, the front lot line shall be that lot line parallel to and facing the same direction as the front lot lines of the majority of other properties in the immediate area." The application of "the majority of other properties in the immediate area," is a subjective standard and could make setback standards for a property difficult or impossible to evaluate. As such, "front lot line" and the corresponding setback standards have been modified to state: "...In the case of a lot or parcel that does not have street frontage, a front lot line shall be any lot line through which driveway access to the property is provided." 3) Most zones have specific standards for lot coverage, which is the amount of area within an individual property which can be developed with structures. However, the existing DCC remained ambiguous on which structures should be counted towards lot coverage requirements, and which structures should be provided an exemption given the general intent of the standard. The proposed amendments clarify that only those structures which exceed 18 inches above finished grade shall be counted toward lot coverage measurements, allowing for structures such as at - grade patios a minor exemption. Accessory Uses Finally, given that clear and objective standards are now required for all housing development, it is important to distinguish between what constitutes a dwelling unit and structures which may be accessory to a dwelling unit or another use on a property. Distinguishing between these various structures and uses requires an explicit set of standards governing what features or uses are allowed within a particular structure. Community Development Department (CDD) staff continually face challenges in implementing the development code when reviewing applications which appear to fall within a definitional transition between dwelling units and accessory structures such as detached garages, storage buildings, shops, etc. Most zones in Deschutes County only allow the establishment of a single (1) dwelling -unit on a particular property (notwithstanding developments such as Accessory Dwelling Units). Applicants commonly propose establishing accessory structures which contain numerous elements which could be construed to allow residential dwelling use, such as kitchens, full bathrooms, and/or laundry facilities. Historically, staff have attempted to limit these uses through land use decisions or recording legal documents for the property warning future owners that such structures cannot be utilized as secondary dwelling units without adequate land use approval. -5- To remove ambiguity for both app!icants and COD staff, pof Lions of the code dealing with accessory structures and uses have been modified in the following ways: 1) Outlining specifically which components, when taken together, constitute a "dwelling unit." As proposed, structures will be considered dwelling units when they contain the following: • One or more persons living together • Provisions for sleeping, cooking, and sanitation • One kitchen ("kitchen" has been further defined in the proposed amendments) • At least one full bath ("baths," including "full baths," have been further defined in the proposed amendments) 2) Outlining which components maybe allowed within accessory structures, and codifying a formal process to ensure accessory structures are not unlawfully converted to, or otherwise use for, dwelling purposes. These proposed changes codify longstanding policies from CDD and provide clear direction for the development of housing and accessory structures, while removing legal risk and uncertainty for future property owners in the County. IV. PUBLIC TESTIMONY & DISCUSSION The following public comments have been received regarding the proposed amendments: 1. Robin Hayakawa, Central Oregon LandWatch: LanclWatch expressed concerns regarding the inclusion of the proposed definition "incidental and subordinate." Specifically, it was noted that the terms "incidental and subordinate" have specific meanings outlined in the Oregon Revised Statutes (ORS) and the Oregon Administrative Rules (OAR) when dealing with resource zoned lands. To ensure consistency with state law, LandWatch recommends that the County amend the proposed definition so that, when applied to resource land uses, so that it aligns with the definition under OAR 660-033-0130(42)(a). OAR 660-033-0130(42)(a) specifically provides that "A determination under ORS 215.213(11) or 215.283(4) that an event or activity is 'incidental and subordinate' requires consideration of any relevant circumstances, including the nature, intensity, and economic value of the respective farm and event uses, that bear on whether the existing farm use remains the predominant use of the tract." 2. Nunzie Gould: Ms. Gould's provided testimony during the public hearing before the Deschutes County Planning Commission (Commission) and in supplementary comments following that process. The testimony broadly covered the following themes: • The necessity of balancing various values such as housing affordability when drafting legislative amendments. 0 A desire to evaluate the entire suite of proposed Clear and Objective Housing amendments collectively that will ultimately be incl+_!ded in the project. A general desire that housing should be located inside Urban Growth Boundaries (UGBs) where it can be served equitably by public transit and multimodal transportation for the safety of dwellers and to reduce climate emissions. A request that additional new terminology be added to the proposed "Grade" definition to distinguish between natural and existing grade, particularly in areas outside of the Landscape Management Combining Zone. 3. Matt Cyrus, Deschutes County Planning Commission Chair: Chair Cyrus requested a revision to the proposed "grade" definitions in DCC Titles 18 and 19. Specifically, Chair Cyrus expressed concern that the proposed "average grade" definition, which determines the point from which the height of a structure would be evaluated, would be prohibitively restrictive when evaluating structures which have development partially below ground elevation, as in a "walkout basement." Commissioner Cyrus proposed the following replacement definition: "Grade, average", for the purposes of calculating structural height, means the average of four points which shall be the highest finished grade abutting the structure and the lowest finished grade abutting the structure for each of the four sides or elevations. V. PLANNING COMMISSION REVIEW & DISCUSSION Staff presented information on the proposed amendments at a Planning Commission work session on December 12, 20241. The Commission held a public hearing on January 9, 20257 and left the written record open until January 16, 2025 at 4:00 p.m. The Commission held deliberations on January 23, 20258, ultimately recommending approval of the proposal with unanimous consent among the Commissioners. During the public hearing and deliberations process, Commissioners discussed the following themes and issues: • A general understanding that the amendments presented during the public hearing represent a "point in time" snapshot of the proposal, and specific language would be subject to changes as additional issues were discovered and addressed by Planning staff and partner Divisions in CDD. Debate surrounding specific language choices related to definitions such as: o Average Grade o Dwelling Unit o Kitchen e https•//www.deschutes.org/bc-pc/page/planning-commission-48 ' htt s: www.deschutes.org/bc pc/page/planning-commission-49 $ httpsj www.deschutes.org/bc-pc/page/planning-commission-55 -7- • Discussion with staff regarding if and when the Commission would be presented the opportunity for further review should any significant changes be necessary in future amendment packages or during the Board review process. Staff assured the Commission that future review of changes to any proposed amendments could be provided if directed by the Board. Additionally, staff addressed many of the public comments submitted and noted where alterations were proposed to address any potential concerns. Outside of scrivener's edits, noteworthy changes are illustrated in the proposed amendments package attached to this memo and broadly cover the following areas: • Alterations to DCC 18.116.040 and 19.92.020, dealing with the provisions of features allowed in dwelling units and accessory structures. Two additional sections, DCC 18.116.045 and 19.92.025, have been proposed to clarify the types of features expressly allowed within dwelling units. Staff has included language which clarifies the following items when evaluating residential developments to ensure consistency in interpretation for both property owners and County staff: 1. Building features which are allowed outright in both dwellings and accessory structures. 2. Building features which are allowed upon recording of a Deschutes County restrictive covenant ensuring that all uses will remain in compliance with the relevant land use regulations. 3. Building features which are allowed upon issuance of an approved land use permit which includes a finding that the proposed use is allowed on the subject lot or parcel. • In response to the comments from Central Oregon LanclWatch discussed above, the following language has been included in the Definitions sections of both Titles 18 and 19: As used in DCC Title 18, the following words and phrases shall mean as set forth in DCC 18.04.030, or, where such words and phrases are defined in applicable Oregon Revised Statutes (ORS) and/or Oregon Administrative Rules (OAR), as defined therein. If there is any conflict between the definitions set forth in DCC 18.04.030 and the definitions of the same words and phrases in applicable ORS and/or OAR, the definitions in ORS and/or OAR shall prevail." As used in DCC Title 19, words in the present tense include the future; the singular number includes the plural and the plural number includes the singular; unless the context clearly indicates the contrary, the word "shall" is mandatory and not discretionary; the word "may" is permissive; the masculine gender includes the feminine and neuter; and the term "this title" shall be deemed to include the text of this title and accompanying zoning maps and all amendments hereafter made thereto. As used in this title, unless the context requires otherwise, the following words and phrases shall be defined as set forth in DCC 19.04.040, or, where such words and phrases are defined in applicable Oregon Revised Statutes (ORS) and/or Oregon Administrative Rules (OAR), as defined therein. If there is any conflict -8- between the definitions set forth in D%f-C: 19.04.040 and the definitions of the same words and phrases in applicable ORS and/or OAR, the definitions in ORS and/or OAR shall prevail. • In response to Chair Cyrus' comments discussed above, the following language has been included in both the Definitions and Exceptions sections of Titles 18 and 19 dealing with "average grade": "Grade, average", for the purposes of calculating structural height, shall be the average of two points which shall be the highest finished grade abutting a structure and the lowest finished grade abutting the structure. For the purposes of calculating structural height, the following method may be used as a discretionary alternative when determining average grade: Perimeter Sampling Method: The average of eight measurements around the entire structural footprint perimeter, with the first measurement point starting at the lowest finished grade abutting the structure, and subsequent measurement points spaced equidistantly along the finished grade abutting the structure. VI. FUTURE AMENDMENTS As noted above, the proposed amendments presented herein are the first of several code modifications which will be proposed over the coming months. Upcoming text amendment proposals will address the following areas, subject to modifications as the process unfolds: • Deschutes County Subdivision and Partition Standards (DCC Title 12 and 17) • Deschutes County Goal 5 Resources - Natural Resources (Landscape Management Combining Zones, Wildlife Area Combining Zones, Wetlands and Riparian Resources, etc.) • Cluster and Planned Development Standards • Additional Sections Most Pertinent to the Development of Housing VII. NEXT STEPS A public hearing with the Board is scheduled for February 12, 2025. Attachments: 1) Staff Report & Proposed Text Amendments -9- FINDINGS CLEAR & OBJECTIVE TEXT AMENDMENTS APPLICABLE CRITERIA: Deschutes County lacks specific criteria in DCC Titles 18, 22, or 23 for reviewing a legislative text amendment. Nonetheless, since Deschutes County is initiating one, the County bears the responsibility for justifying that the amendments are consistent with Statewide Planning Goals and its existing Comprehensive Plan. II. BACKGROUND: Beginning in 2017, the Oregon State Legislature passed a series of bills to encourage efforts to expand the supply of housing statewide. The passage of Senate Bill (SB)1051 prohibited cities from denying applications for housing developments within urban growth boundaries, provided those applications complied with "clear and objective standards, including but not limited to clear and objective design standards contained in the county comprehensive plan or land use regulations."' The provisions of SB 1051, along with subsequent bills, modified Oregon Revised Statutes (ORS) 197.286-197.314.Of relevance to the current project is ORS 197.307(4)2 which was modified to state: (1) Except as provided in subsection (6) of this section, a local government may adopt and apply only clear and objective standards, conditions and procedures regulating the development of housing, including needed housing. The standards, conditions and procedures: (a) May include, but are not limited to, one or more provisions regulating the density or height of a development. (b) May not have the effect, either in themselves or cumulatively, of discouraging needed housing through unreasonable cost or delay. In 2023, ORS 197A.4003 (formerly ORS 197.307, as referenced above) was established by House Bill (HB) 31974. The newly established ORS 197A.400 will become effective on July 1, 2025, and states the following [emphasis added]: https://olis oregonle_gislature gov/liz/2017R1/Downloads/MeasureDocument/SB1051/Enrolled 2 https://oregon public law/statutes/ors 197.307 3 https://www.oregonlegislature.gov/bills laws/ors/ors197a.html 4 https•//olis oregonlegislature.gov/liz/2023R1/Downloads/MeasureDocument/HB3197/Enrolled 1 1 7 NW Lafayette Avenue, Bend, Oregon 97703 1 P.O. Box 6005, Bend, OR 97708-6005 %.1% (541) 388-6575 @a cdd@deschutes.org @www.deschutes.org/cd (1) Except as provided in subsection (3) of this section, a local government may adopt and apply only clear and objective standards, conditions and procedures regulating the development of housing, including needed housing, on land within an urban growth boundary, unincorporated communities designated in a county's acknowledged comprehensive plan after December 5, 1994, nonresource lands and areas zoned for rural residential use as defined in ORS 215.501. The standards, conditions and procedures: (a) May include, but are not limited to, one or more provisions regulating the density or height of a development. (b) May not have the effect, either in themselves or cumulatively, of discouraging needed housing through unreasonable cost or delay (3) In addition to an approval process for needed housing based on clear and objective standards, conditions and procedures as provided in subsection (1) of this section, a local government may adopt and apply an alternative approval process for applications and permits for residential development based on approval criteria that are not clear and objective if: (a) The applicant retains the option of proceeding under the approval process that meets the requirements of subsection (1) of this section; (b) The approval criteria for the alternative approval process comply with applicable statewide land use planning goals and rules; and (c) The approval criteria for the alternative approval process authorize a density at or above the density level authorized in the zone under the approval process provided in subsection (1) of this section. These provisions require local governments to apply only clear and objective standards, criteria, and procedures to applications for housing projects and may not discourage housing through unreasonable delay. Application of typical discretionary standards (e.g. "adequate public facilities," "effective mitigation", etc. is prohibited. The statute is intended to address the concern that use of discretionary criteria leads to uncertainty, inconsistent administration, and delays that do not serve the goal of efficiently providing an adequate supply of housing stock. III. BASIC FINDINGS Numerous sections and language included in the Deschutes County Code (DCC) do not currently meet the identified thresholds for "clear and objective standards." The primary focus of the Clear and Objective Code Compliance Project is to ensure the DCC complies with state statute and the objectives of the Deschutes County Comprehensive Plan. With the assistance of consultants from MIG, planning staff have identified areas of the DCC that are not in compliance with statute and drafted packages of text amendments to address each issue. EXHIBIT XX -Ordinance No. 2025-XX Page 2 of 9 These packages have been broken into distinct sepments to provide the public, the Deschutes County Planning Commission (Commission), and the Deschutes County Board of Commissioners (Board) the opportunity to review and vet the proposed changes in a more structured and confined way. Where possible, planning staff have endeavored to draft amendments that are a policy -neutral conversion of existing discretionary language to non -discretionary language. This ensures the original intent and desired outcome is preserved. When not possible, alternative standards or criteria have been proposed, or, in certain limited cases, the language has been removed with possible replacement language to be included as part of a future code amendment package. Additionally, while not exclusively associated with housing developments, as part of this process certain amendments have been proposed to broadly remove ambiguity from implementing sections of the DCC, maintain conformity across all development standards, and ensure review clarity for staff and members of the public. The first amendment package proposed will broadly cover the following areas of the DCC: • Definitions for the Deschutes County Zoning Code (Title 18) and the Bend Urban Growth Boundary Zoning Ordinance (Title 19) • Dimensional standards (height, structural footprints, setbacks, etc.) for Titles 18 and 19 • Accessory structure standards for Titles 18 and 19 IV. METHODOLOGY: Clear and objective standards use terms, definitions, and measurements that provide for consistent interpretation of the standard. In theory, any two people applying the same standard or criterion to a development would get the same result, and there is no need or ability for the reviewer to exercise discretion in application of the standard. The standards and criteria should provide a predictable outcome for a wide variety of contexts and scenarios. Per state statute, the standards cannot be so strict that they have the effect, either in themselves or cumulatively, of discouraging housing through unreasonable cost or delay. After discussion with County Legal Counsel and review of other jurisdictions which have implemented similar code amendments, staff has determined there are a variety of approaches that can be used to craft clear and objective standards: • True/False Standards - These can be used to evaluate whether a proposed development has satisfied a certain objective criterion. (i.e. - is the structure on a lot or parcel within a rural residential zone?) • Counts and Measurements - These standards are typically based on a minimum value, a maximum value, or an acceptable range of values. (i.e. - maximum building height of 30 feet) • Lists/Menus - Lists and menus provide flexibility for applicants to meet a standard by choosing among several options. Lists can specify a range of acceptable options ("Any of the following...") or can require selection of a minimum number of elements ("At least two of the following five options...") EXHIBIT XX -Ordinance No. 2025-XX Page 3 of 9 Two -Track Systems: L,'#c:r€ denary Review - While a clear and objective review path is required for residentia! develnprn ant, it may not be practical or achievable to write clear and ob}ec ive standards -:mid criteria that work in every development situation. ORS 197 recognizes this and allows local governments to also provide an optional discretionary review path or parallel track. To that end, the amendments proposed as part of this package and future text amendment packages maintain the existing design review and land division standards as an optional, discretionary tract for housing. These discretionary standards would also remain in place for all non-residential development. The advantage of a two -track system is that it offers both certainty and flexibility. Applicants willing to work within the clear and objective standards have the option of a simplified review process that saves time and increases the certainty of approval. Clear and objective standards also offer certainty to reviewers, who can review applications more efficiently with less time devoted to interpreting discretionary/unclear requirements, and to the public, who will benefit from knowing whether a project will or will not be approved. For applicants with creative ideas or unique circumstances that don't meet the objective standards, discretionary review is available, which can provide more flexibility. V. FINDINGS: CHAPTER 22.12, LEGISLATIVE PROCEDURES Section 22.12.010. Hearing Required No legislative change shall be adopted without review by the Planning Commission and a public _hearing before the Board of County Commissioners. Public hearings before the Planning Commission shall be set at the discretion of the Planning Director, unless otherwise required by state law. FINDING: This criterion will be met because a public hearing was held before the Deschutes County Planning Commission (Commission) on January 9, 2025 and a public hearing was held before the Board of County Commissioners (Board) on February 12, 2025. Section 22.12.020, Notice Notice A. Published Notice 1. Notice of a legislative change shall be published in a newspaper of general circulation in the county at least 10 days prior to each public hearing. 2. The notice shall state the time and place of the hearing and contain a statement describing the general subject matter of the ordinance under consideration. EXHIBIT XX - Ordinance No. 2025-XX Page 4 of 9 FINDING: This criterion is met as. notice was pubiished in the Bulletin newspaper on December 15, 2024 for the Commission public hearing and on January 30, 2025 for the Board public hearing. B. Posted Notice. Notice shall be posted at the discretion of the Planning Director and where necessary to comply with ORS 203.045. FINDING: Posted notice was determined by the Planning Director not to be necessary. C. Individual notice. Individual notice to property owners, as defined in DCC 22.08.010(A), shall be provided at the discretion of the Planning Director, except as required by ORS 215.503. FINDING: The proposed amendments are legislative and do not apply to any specific property. Therefore, individual notice is not required. D. Media notice. Copies of the notice of hearing shall be transmitted to other newspapers published in Deschutes County. FINDING: Notice was provided to the County public information official for wider media distribution. This criterion has been met. Section 22.12.030 Initiation of Legislative Changes. A legislative change may be initiated by application of individuals upon payment of required fees as well as by the Board of County Commissioners. FINDING: The application was initiated by the Deschutes County Planning Division at the direction of the Board and has received a fee waiver. This criterion has been met. Section 22.12.040. Hearings Body A. The following shall serve as hearings or review body for legislative changes in this order. 1. The Planning Commission. 2. The Board of County Commissioners. B. Any legislative change initiated by the Board of County Commissioners shall be reviewed by the Planning Commission prior to action being taken by the Board of Commissioners. FINDING: This criterion is met as the Commission held a public hearing on January 9, 2025. The Board held a public hearing on February 12, 2025. Section 22.12.050 Final Decision All legislative changes shall be adopted by ordinance EXHIBIT XX - Ordinance No. 2025-XX Page 5 of 9 FINDING: The proposed legislative changes included in file no. 247-24-000705=FA will be implemented by ordinances upon approval and adoption by the Board. VI. Oregon Statewide Planning Goals: Statewide Planning Goal 1 - Citizen Involvement: This goal outlines the citizen involvement requirement for the adoption of Comprehensive Plans and changes to the Comprehensive Plan and implementing documents. FINDING: The County's citizen involvement program ensures that any amendments to the County's development code are reviewed through a duly noticed public process. This legislative process to review the proposed amendments will require two public hearings, one before the Commission on January 9, 2025 and one before the Board on February 12, 2025. Information was distributed throughout the process via the project website and through social media and email. All Commission and Board work sessions were open to the public and noticed in accordance with the County's rules and regulations. All work session materials, including meeting recordings and summaries, were available on the County's website. All the aforementioned venues provided the opportunity for gathering feedback and comments. As part of the legislative process, public notice requirements for the Commission and Board public hearings were met. The notice was sent to persons who requested notice, affected government agencies, and was published in the December 15, 2024 and January 30, 2025 issues of the Bend Bulletin. The notices invited public input and included the phone number of a contact person to answer questions. The notice also included the address of the County's webpage where the draft of the proposal can be viewed. Statewide Planning Goal 2 - Land Use Planning: This goal outlines the land use planning process and policy framework. The County's Comprehensive Plan was acknowledged by DLCD as being consistent with the statewide planning goals. FINDING: Deschutes County has an acknowledged Comprehensive Plan and enabling ordinances. The amendments to the DCC are being undertaken to bring residential development standards, criteria, and procedures into compliance with state statutes. The amendments are being processed in accordance with the County's adopted procedures, which requires any applicable statewide planning goals, federal or state statutes or regulations, comprehensive plan policies, and the County's implementing ordinances be addressed as part of the decision -making process. The amendments are being processed as a post -acknowledgement plan amendment (PAPA) and noticing requirements have been met. All applicable review criteria have been addressed within this staff report; therefore, the requirements of Goal 2 have been met. EXHIBIT XX - Ordinance No. 2025-XX Page 6 of 9 Statewide Planning Goals 3 and 4 -- Agriculturaw Lands and Fairest Lands: FINDING: The standards of ORS 197A.400 specifically require clear and objective standards for all housing development "...on land within an urban growth boundary, unincorporated communities designated in a county's acknowledged comprehensive plan after December 5, 1994, nonresource lands and areas zoned for rural residential use as defined in ORS 215.501." The identified areas do not include resource zoned lands (i.e. - Exclusive Farm Use, Forest Use, etc.), and staff understands ORS 197A.400 to implicitly exempt resource zoned properties, as those areas are governed by separate statutory standards. Staff finds that these goals do not apply to the proposed amendments. Staff notes that certain proposed changes have been included in portions of the DCC to maintain alignment with other modifications proposed elsewhere in the code. For example, certain definitions (i.e. - building height, setbacks, etc.) would be modified through this proposal and would have cascading effects through many areas of the DCC, including the Exclusive Farm Use and Forest Use Zoning chapters. However, staff notes that these changes do not modify any existing standards within these chapters, but rather provide conformity and clarity throughout the DCC. Statewide Planning Goal 5 - Natural Resources, Scenic and Historic Areas, and Open Spaces: This goal requires the inventory and protection of natural resources, open spaces, historic sites and areas. FINDING: The County is currently in compliance with the State's Goal 5 program. The proposed amendments included in this package do not alter the County's acknowledged Goal 5 inventories or associated land use programs as implemented through DCC Chapter 18.84 (Landscape Management Combining Zone), Chapter 18.88 (Wildlife Area Combining Zone), Chapter 18.88 (Greater Sage -Grouse Area Combining Zone), and Chapter 18.90 (Sensitive Bird and Mammal Habitat Combining Zone). No changes will occur to current natural resource protections. As a result, the amendments are in compliance with Goal 5 process requirements. Statewide Planning Goal 6 - Air, Water, and Land Resource Quality: To maintain and improve the quality of air, water, and land resources of the state. FINDING: The County is currently in compliance with the State's Goal 6 program. The amendments do not alter the County's acknowledged land use programs regarding water quality. The amendments are consistent with Goal 6. Statewide Planning Goal 7 - Areas Subject to Natural Hazards: To protect people and property from natural hazards. EXHIBIT XX - Ordinance No. 2025-XX Page 7 of 9 FINDING: The County is currently in compliance with the state's Goal 7 program through adoption and implementation of the County's INlatural Hazard Mitigation Plar,S. No changes will occur to County programs related to flood management, wildfire mitigation, or other natural hazards. The amendments are consistent with Goal 7. Statewide Planning Goal 8 - Recreational Needs: This goal requires the satisfaction of the recreational needs of the citizens of the state and visitors. FINDING: The proposed amendments do not address or alter any County recreational programs or land use requirements related to parks and recreation. The proposed amendments are in compliance with Goal 8. Statewide Planning Goal 9 - Economic Development: To provide adequate opportunities for a variety of economic activities vital to the health, welfare, and prosperity of Oregon's citizens. FINDING: The County is currently in compliance with the state's Goal 9 program. The proposed amendments do not alter the County's compliance with Goal 9. Statewide Planning Goal 10 - Housing: To provide adequate housing for the needs of the community, region, and state. FINDING: The currently proposed Clear and Objective Code Amendment Package and upcoming code amendment packages will ensure Deschutes County remains in compliance with state statute and administrative rules, and Goal 10 by continuing to allow residential construction to proceed through a Clear and Objective process using clear and objective standards and criteria. Adoption of the proposed amendments will reduce the administrative burden and uncertainty, and therefore remove barriers to housing within areas of the County identified for residential development. Statewide Planning Goal 11 - Public Facilities and Services: To plan and develop a timely, orderly, and efficient arrangement of public facilities and services to serve as framework for urban and rural development. FINDING: The County is currently in compliance with Goal 11 through its acknowledged Comprehensive Plan. The amendments do not alter the County's compliance with Goal 11 and are consistent with this goal. Statewide Planning Goal 12 - Transportation: s https://sheriff.deschutes.org/2021 NHMP.pdf EXHIBIT XX - Ordinance No. 2025-XX Page 8 of 9 To provide and encourage a sai'e: ccri enient, and economic v anspo, talon system. FINDING: The County is currently in compliance with Goal 12 and Metro's Regional Transportation Plan through its acknowledged Comprehensive Plan and TSP as required by Oregon Administrative Rule 660-012 (Transportation Planning Rule - TPR). Additionally, the Deschutes County Senior Transportation Planner reviewed the proposed amendments for potential TPR effects and found that the proposed amendments appear to comply with TPR provisions. As such, the proposed amendments do not alter the County's compliance with Goal 12. Statewide Planning Goal 13 - Energy Conservation: Land and uses developed on the land shall be managed and controlled so as to maximize the conservation of all forms of energy, based on sound economic principles. FINDING: The County is currently in compliance with Goal 13 through its acknowledged Comprehensive Plan. The amendments do not alter the County's compliance with Goal 13 and are consistent with this goal. Statewide Planning Goal 14 - Urbanization: To provide for orderly and efficient transition from rural to urban land use, to accommodate urban population and urban employment inside urban growth boundaries, to ensure efficient use of land, and to provide for livable communities. FINDING: The County is currently in compliance with Goal 14 through its acknowledged Comprehensive Plan and land use regulations. The County also has signed Joint Management Agreements with the cities of Bend, Redmond, and Sisters as required by ORS 195.065. The amendments do not alter the County's compliance with Goal 14 and are consistent with this goal. VII. CONCLUSION: Based on the information provided herein, the staff recommends the Board of County Commissioners approve the proposed text amendments that make changes necessary to conform with state statutory requirements regarding clear and objective standards for housing development. EXHIBIT XX -Ordinance No. 2025-XX Page 9 of 9 February 3, 2025 To: House Committee on Agriculture, Land Use, Natural Resources, and Water Re: House Bill 3013-1 Dear Co -Chairs Helm and Owens, Vice -Chair McDonald, and Members of the Committee: As proposed, HB 3013-1 would amend ORS 197.625 to provide an unprecedented avenue for challenges to final, unappealed land use permits, licenses, agreements, zone changes or other authorizations (collectively "land use decisions") made by local government. Where such land use decisions are based in whole or in part, on an effective but unacknowledged provision of a comprehensive plan or on a land use regulation that fails to gain acknowledgment based on a decision of the commission, this new legislation would provide opponents to the original application the right to bring a case in circuit court under ORS 197,.825 to revoke or declare void the land use decision, to enjoin or require removal of improvements constructed in reliance on the issued land use decision, and to seek actual damages alleged to have been caused by the improvements or use authorized by the approved land use decision. In addition, HB 3013-1 would require the Land Use Board of Appeals or an appellate court to terminate or revoke every such previously issued land use decision on the presumed basis that such decision is void and without further effect. As currently constructed, HB 3013-1 will undermine vested rights, will affect procedural due process rights of applicants and property owners and will subject local governments to lawsuits when they, like Deschutes County, update their Comprehensive Plan. The Deschutes County Board of County Commissioners recently updated its Comprehensive Plan on October 2, 2024. The decision was appealed to the Land Use Board of Appeals (LUBA) by Central Oregon Landwatch and is currently subject to a record dispute. Compounding matters, LUBA is in limbo as two members nominated by Governor Kotek await confirmation from the Senate; the hearings have yet to be scheduled. If HB 3013-1 was in effect today and LUBA, the Court of Appeals, and/or the Oregon Supreme Court determined after several months or years that the Comprehensive Plan update warranted a remand, every land use decision, building permit, and ministerial decision issued from the Comprehensive Plan's local adoption date could be subject to termination. Not only would such result be untenable from a legal and constitutional standpoint, but implementing directives based on HB 3013-1 from LUBA or the appellate courts will wreak havoc on planning staff if they are required to roll back previous land use decisions while simultaneously processing current, pending applications. Code Enforcement staff also will be negatively impacted by a significantly increased workload resulting from the declared illegality of previously approved land use decisions. 1300 NW Wall Street Bend, Oregon 97703 A (541) 388-6572 board@deschutes.org ® www.deschutes.org Deschutes County, through its governing body, requests opposition for HB 3013-1. Later this spring, Deschutes County will update its Comprehensive Plan and zoning code to comply with HB 3197 (2023) to comply with clear and objective standards for housing. It is possible that these amendments will be subject to lengthy appeals. Tying development actions including zone changes to HB 3013-1's enforcement mechanisms are unrealistic and incredibly irresponsible. There is already a private code enf or cement meC lanism in place today. ORS 21 -.1 1 85i. County staff, including Community Development Director Peter Gutowsky are available to further articulate our request. Thank you for your consideration. The Deschutes County Board of Commissioners Anthony DeBone Chair Patti Adair Vice Chair Phil Chang Commissioner CC: Senators Anthony Broadman, Diane Linthicum, and Mike McLane Representatives Emerson Levy, Jason Kropf, E, Werner Reschke, Vickie Breese -Iverson, and Mark Owens Brenda Fritsvold From: Nick Lelack Sent: Monday, February 3, 2025 4:43 PM Cc: Brenda Fritsvold Subject: Rep. Bentz staff email RE: Spring Butte Rock Commissioners: FYI per the Board meeting discussion today. Please see below. dw IES �Cf Nick Lelack w County Administrator Tel: (541) 388-6565 + Nick.Lelack@deschutes.org From: Minear, Joey <Joey.Minear@mail.house.gov> Sent: Thursday, January 30, 2025 11:14 AM To: Tony DeBone <Tony.DeBone@deschutes.org> Subject: RE: Al Shirk Spring Butte Rock letter to BOCC Caution: External email to Deschutes County: If unexpected or unfamiliar, be cautious with links and attachments. Contact your IT Dept if unsure. Commissioner DeBone, Thank you for sharing. As of now the draft bill is not going to be introduced. It has been great working with you on this and I hope to continue to work with you to help Deschutes County, contact me anytime. Thank you, Dr. Joey Minear, Lp.D. PolicyAdvisor Congressman Cliff Bentz (OR-02) (541) 776-4646 — Office 14 N. Central Ave, Suite 112 Medford, OR 97501