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2014-02-05 Business Meeting Minutes
Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 1 of 32 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, FEBRUARY 5, 2014 _____________________________ Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend __________________________ Present were Commissioners Tammy Baney, Anthony DeBone and Alan Unger. Also present were Tom Anderson, County Administrator; Erik Kropp, Deputy County Administrator; Laurie Craghead, County Counsel; and, for a portion of the meeting, Nick Lelack and Paul Blikstad, Community Development; Ed Keith, County Forester; Chris Doty, Road Department; Susan Ross, Property & Facilities; and approximately forty other citizens, including media representat ive Kandra Kent of KTVZ TV . Chair Baney opened the meeting at 10:00 a.m. __________________________ 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT None was offered. 3. Before the Board was Consideration of Board Signature of Order No. 2014-003, Updating the Deschutes County Weed List. Ed Keith said the Weed Advisory Board examines this list each year, and this year there are some recommended changes, including adding some aquatic weeds new to the area. Commissioner DeBone said that these are invasive weeds that are a problem to native plants and agriculture. DEBONE: Move signature. UNGER: Second. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 2 of 32 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 4. Before the Board was a Public Hearing, and Consideration of First and Second Readings by Title Only, and Adoption by Emergency of Ordinance No. 2014-002, Adopting Deschutes County Code Chapter 8.35, Weed Control. Chair Baney opened the public hearing at this time. Mr. Keith explained the background of this item, which recognizes State statutes regarding the spread and treatment of noxious weeds. There have been updates to local Code over the years as statute changed. What was left out was a final step for the Weed Inspector to be able to take, which is issuing cit ations if other means don’t work. The County has to change Code to give the Weed Inspector this capability, which is already in State statute. Noxious weeds cause environmental harm or economic damage and need to be addressed. The enforcement approach is to work with people who have a weed problem on their property. Education comes first, seeking voluntary compliance. As complaints come in, a courtesy letter is sent out to let the property owner know there is a problem, followed by a visit to explain what needs to be done and offer a cost-share option for the work. The Sheriff’s work crews can also help if the people are not able to handle the work themselves. The last resort is issuing a citation if someone refuses to take any action. The County strives for voluntary compliance through education and assistance. Eradication of weeds can take a long time, so his goal is to see forward progress. He expects people to work with him in this regard. The Weed Board’s comments are part of the record as well. Three are strongly in favor, four opposed it initially, but one of them now understands they don’t automatically issue citations, and the others have been advised assistance is available in many cases. The language was previously in the form of an Order, which is now being added as part of the Ordinance changes. Laurie Craghead said the emphasis is on compliance rather than penalty. Most of this is being done already, but this would add enforcement capability if nothing else works. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 3 of 32 Commissioner DeBone stated this is a backstop, the final step in the process. The rest has already been in place for a long time. Mr. Keith said that a landowner who does not want to do anything could be addressed with this change. Ms. Craghead added that enforcement previously was to notify State Agriculture or report it to the District Attorney. This change keeps the process at the local level. No one can enter the property without a warrant or the permission of the property owner, under due process. This language was added to the Code. The emergency adoption clause is to make sure the Weed Inspector can start work before the growing season. Otherwise , it would take several months before it would be effective, when it is too late to address the problem this year. The Board could shorten the effective date if desired. Chair Baney asked how often this might happen. Mr. Keith said in his experience it would be quite rare. Last summer, all complied to some extent and showed some progress. He talked with his counterpart in Klamath County where they already have this law in place, who sends out about 120 letters a year. Out of those, five might receive an initial citation, and most of those are dismissed when the property owner takes appropriate action. Chair Baney stated that there is a long list of people wishing to testify, so asked that they limit their comments to two minutes. __________________________ William Kuhn said there are numerous restrictions in place on his property. He is a member of the Soil & Water Conservation District and notified members of this potential change. Comments came back that this is hypocritical to have the Director of the Road Department being the weed control person. This is what the Ordinance says. He thinks this needs to be outside of the Road Department. Roads are one of the greatest causes of the spread of weeds. There was concern about selective enforcement, meaning that one party might deal with the situation while another won’t, and how that might seem like it is unequally administered. They are dealing with how to send out notices and asking for compliance without saying how to comply. He knows of some instances where people just use a weed whacker or a leaf blower, which spreads the problem. This needs to be sensible. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 4 of 32 __________________________ Whitney Lowe of Sisters commended these efforts since this is a spreading problem. She wants them to educate people on this issue. In the past, some efforts in weed eradication were limited. There needs to be a broader scale of educational options other than using poisons. They need forward movement. and people are trying to work on this, with certified weed free fields but limited control of adjacent properties. __________________________ Elise Wolf of Sisters is in favor of this change. In reality it will involve few properties. Those are probably from complaints from neighborhoods. Code enforcement is a problem with the County overall. It is a good idea and can save money in the long run, by not having to take someone to court. This problem on properties property costs $123 billion a year. Property is lost to fire and other reasons due to this situation. Under section A, she would like to see a control plan of action. She will submit her comments in writing. She said she used the County’s cost-share plan. She got $200 to get rid of weeds and plant native plants. She had goats eat the weeds and they were done quickly. The weeds were then gone, as 80 to 90% of the seed heads die in the goat. The following summer the goats came back for two days. In three years, the weeds were gone. The goat issue was a problem at some point, but goats work. Cattle and sheep make it worse. __________________________ Joshua Gatling of Deschutes River Woods stated he was worried about small acreages, although he understand the agricultural impacts. In the southern part of the County, a lot of properties are not agricultural or near waterways. He is worried that those owners will be negatively impacted by this concept. It is complaint-based and a lot of people don’t understand what they need to do. It is a lot to ask of people. He is concerned about selective enforcement or interaction. He is troubled about the amount of guidance and feels there should be a minimum acreage size, to separate the small acreages from those which have a big financial investment. It won’t be punitive based, but he thinks that there needs to be more information on handling residential type lots. __________________________ Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 5 of 32 Cheryl Howard said she handled the “Let’s Pull Together” events over the past eleven years, recently as Chair, and a member of the Weed Board. These have been very successful. Their focus is on education of the public. The event works collaboratively with cities, counties, the BLM, the USFS and other groups to get the word out. The impacts are tremendous. Most of the general public does not know what a noxious weed is, but they can identify it after these events. They ask about properties where there is no owner and nothing is being done. The general public wants to know if these weeds get into the forests. This is one more tool and can be properly utilized. The community has been very positive about addressing this. __________________________ Robert Marheine, Chair of the Weed Board, stated that there are a tremendous number of non-native species, and some very negative on the economy, ecology and environment. They can cost millions to treat. The ecological impact is huge, and these weeds can permanently change large tracts of land and waterways. This results in lost wages and reduced land values. The commitment should be to do all we can to treat the problems. The key is this includes everyone. They cannot be based on political boundaries or parcel sizes. They need to manage lands to promote a healthy environment, one that is resistant to noxious weeds. This is done through education, prevention and control. The emphasis is always education of landowners. They offer assistance when needed, always seeking voluntary compliance. Complaints about weeds generate a visit, and information is given on weeds and what can be done, and typically people do the right thing. This is a win-win for the County, landowner and environment. A fine would be the last resort. The addition of the ordinance is a valuable tool for this. It is comparable to ordinances in neighboring counties. They need to continue this valuable work. (He provided a handout.) __________________________ John Huddle, president of the Citizens Action Group in the La Pine area, said he is speaking for the group. They are opposed to the emergency clause. The ordinance does not mirror statute entirely and could negatively impact property owners. It first defines noxious weeds, those that are injurious to public health. There is potential to add things to the list in the future. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 6 of 32 Second, regarding an agricultural issue, saying that instead of sweeping and cleaning, they need to pressure wash. He is not sure what that would do to the square baler. This could be onerous on small properties with hay. Another significant issue is that state law says service, while this says post, in the language regarding mailings. There is potential that someone who is not around won’t know about the post. In the language about mailing, it should not be a post by itself. If you can’t serve by registered mail or personal service, you need to address it another way. Another serious concern is that state law says within two to twenty days, and this shortens that to ten days. He feels there need to be some changes or tweaking of the ordinance. __________________________ Walter Norris decided not to testify. __________________________ Julie Craig is the Code Enforcement person with the City of Bend, and supports this ordinance. She explained their enforcement program, which has been on the books for a long time, but the resources to enforce it were not there until last year. They can now combat this growing problem. They have a philosophy of voluntary compliance, an ongoing long-term process, with a citation a last resort. A violation in the City is a class A civil infraction with a maximum fine of $800 per day per lot. Their standard operating procedure is to issue a notice of violation, and give ten days to comply or contact the City for an action plan. It requires owners to have a weed vegetation management plan. If this does not happen, then they issue a citation. They have not gotten to the fine stage yet, and sent out well over 1,000 letters over the past years and citied six owners. They all ended up complying and are working with the City. This is just another tool in the box. Codes are only as effective as enforcement when needed. She supports this and wants them to work together as a team. She is also a technical advisor on the Weed Board. __________________________ Matt Cyrus of the Farm Bureau said he applauds these efforts. The Road Department spread weeds long ago, but now it is more understood. General traffic spread weeds from one property to another. This is a great tool to protect farmers and others, and he appreciates what the City is doing. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 7 of 32 His observation is that public entities are a problem. The parkway is one obvious issue. He feels more attention should be given to public properties, including Forest Service lands. __________________________ Dennis Krakow stated he echoes this regarding public lands. There should be a program for people who have property adjacent to public lands.. He would like to see a citation as a first step, but enforcement held off. A suspended citation could be a stronger first step. He is confused regarding how they visit a site if they need a court order to go onto the property. He said the person from Deschutes River Woods talked about individual lots. However, all those lots together make large parcels and should be treated like any others. He lives in a similar type development and constantly has to pull his neighbor’s weeds. He doesn’t know if a complainant is anonymous so they can maintain relationships. He hopes the postings are put in a way where neighbors can see them, on the street. They need to know they are all in this together. __________________________ Christina Veverka is a botanist with the USFS and a Weed Board member. She is in favor, and explained that from being a member of a natural resource program, she knows the vegetation program here is well respected and well known throughout the state. This is because of the emphasis on public outreach and education. This is not the case with some other weed management programs. Klamath County uses very little public outreach, and sends out a lot of letters instead. This is a different approach. She respect this program for the emphasis on public education. People should be aware that education is first and foremost, and enforcement is only utilized as a last resort. It is a needed step for the few who don’t care. Most will be compliant. The weed manager can’t do much without it and it is a valuable ordinance. This is not a radical step. At least fifteen other counties have an ordinance with enforcement actions. This will help in the continuing fight against invasive weeds here. __________________________ Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 8 of 32 Brenda Pace of the Weed Advisory Board stated that when they first talked about enforcement and citations, several years ago, she did a survey of counties with weed districts. Enforcement is seldom used once people know it is possible.. Among the fifteen counties with districts and fourteen that have enforcement capabilities, some of whom have been around for decades, of those that can fine or lien, ten counties had done none. They got that much cooperation. Fines were rarely collected in three counties. Only two counties cover this with the Sheriff, which is expensive. Overall the ordinance is effective in helping to control these weeds. __________________________ Ronald Radabaugh said he is active in getting rid of weeds, and appears to be educating people to do this with his tax dollars. He feels 70% don’t have the initiative or skills. The ordinance and a law that goes after them is all that will work. You start with carrots, education and initiative. If this does not do it, they should be fined. They are at that point now. He sprays some areas if they can’t be cut. He has done this in Deschutes, Crook and Klamath counties. This cuts down biennial weeds and get rid of them, as they will be gone in two or three years. Perennials need to be dealt with annually. The area between properties and roads is the responsibility of the property owner, since it just a right of way. The same thing applies along irrigation ditches. People think others will take care of it. They have to change that attitude through education. However, he thinks ten years of education is not giving enough return for his dollar investment, so they should be doing citations. __________________________ Kim Campbell of Sisters asked about the classification of citation. Laurie Craghead said it is a Class A violation. Ms. Campbell said the issue is separation of authority. She does not want one more situation where someone has to fight a county bureaucracy. The Sheriff has the authority to issue citations and he thinks this should be where this is handled Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 9 of 32 The Sheriff is required to handle all law violations in the county, and those against state law. This is where the authority should lie. She hates to see a situation where a bureaucracy leader has authority. They should separate these powers. The Sheriff is accountable to people by vote, so will be careful about how this is done. The next group might have a different criteria and need to be accountable to people. She agrees that public entities are a violator, and an example is Smith Rock State Park, with has a huge problem with poison hemlock and knapweed. She has had to stop people from eating it. It is all government land. The County needs to take care of their issues and the State theirs, along with having the public take care of theirs. She wants this to be considered, and make sure they stick with the verbiage of State law and not vary from it. The State went through legislative process with elected people and what they say is defendable. __________________________ Tony Aceti said they need code enforcement, but it takes a village. He believes is it a property owner responsibility. As Matt Cyrus said, the road system is a distribution factor. He can attest to this, as what happened when an overpass went through his property. He has to go out and control the knapweed. Road improvements do bring in traffic and weeds. The road systems contribute and something should be considered for properties around the roads. __________________________ K. J. Phillips said she represents herself and some absentee owners of property in southern Deschutes County. Her response equals 62% of the owners associated with her subdivision, Deschutes River Recreation Homesites, so she feels 1,230 people oppose this. They are for weed control, but this is a weed, plant and vegetation management ordinance. They are changing from what they have done and are incorporating the County to assess and use this to control weeds on public property. Going after them is a good term. As a native Oregonian and a member of a pioneer family, she dealt with these types of regulations through Polk County at her farm, and in Benton County. People pack into the wilderness and are careful. In their area, there was a dump site started through the Forester, and she has pictures of this debris, which included landscape materials from a lot of places. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 10 of 32 She urged the Board to vote against this today and come back with something that adheres to the real ordinance. She heard about this issue from someone in Polk County. They spray there and you can’t go on the property afterwards. A couple of complaints a month is not enough to do this. The County is drawing on a few citizens, and absentee owners have to travel to testify. It is hidden in the agenda that this is a hearing. This needs to be re-thought and go through a normal hearing process. __________________________ Commissioner DeBone said the Road Department was mentioned. He understands the concept of disturbing ground or putting in new roads. Ed Keith noted that there is an expectation that the County follow the ordinance as well. Chris Doty said the transportation system in general is a conduit, and spreads seeds. Deschutes County has put a lot of effort into roadside management. They don’t run around spreading seeds but try to handle this. They use best management practices and try to be responsive. They are aware of their role and ownership in new road projects. Commissioner Unger asked about ‘serve’ versus ‘post’. Ms. Craghead said when you cannot serve, you post. This is the same language that is found in statute. Commissioner Unger asked about the ten versus twenty days. Ms. Craghead stated that statute says no more than twenty days and not less than two. The Weed Board wanted a shorter time frame, as twenty days is a lot of time for weeds to propagate here. Chair Baney asked about the reference to public health. Ms. Craghead noted that it is “human health” per statute, and “public health” per the ordinance. Commissioner Unger asked about separation of power, the weed manager and the Sheriff. Mr. Keith said that the vegetation manager used to work under the Road Department, but the desire was to split out those duties. The Road Department has maintained vegetation management along roads, but there is a separation now, and he does not work directly for the Road Department. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 11 of 32 The Board can say if they want the Sheriff to enforce this, and ask him to do so. However, it is time-consuming, and if they except success starting with education and cost sharing options, there will not be continuity with landowners if the Sheriff has to start out cold doing this. There is likely already a hi story with the landowner regarding weed issues. Commissioner DeBone stated he never thought of it that way. The Weed Control Inspector was designated the Road Director, but the County Administrator can delegate this to whomever. This person works for t he Board, not the Road Department. Ms. Craghead said that the original creation of the ordinance in 2002 has not been changed; it is already a district and the Road Director was appointed as Weed Inspector at that time. It was a starting point. Others can be designated to do this. If the Board wishes, the ordinance can be changed so the County Administrator can handle the appointment. Chair Baney noted that 78% of the lands in the County are public lands. She asked how well other agencies comply, and how well Deschutes County is doing. Mr. Keith said there is work to do on the County-owned land. They acquire properties through tax foreclosure and trades, and inherit problems with them. The process is to alert the property manager and Road Department, and contract out if needed to treat property. It does get treated, and he just toured an area in La Pine that had been disturbed by earthwork, which will be treated in the spring. Regarding public lands, he understands that there is no jurisdiction ove r State, city and federal lands. They have a good relationship and two members of the Weed Board are from the USFS, and one from Bend Park & Recreation. They realize the responsibility. They try to affect positive change, but everyone needs to work together. Ms. Craghead stated there is the issue of taxes. With a Weed Control District, the Board could seek a local option levy for weed control purposes. This would have to happen by vote of the people. This ordinance simply maintains status quo with an option to enforce. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 12 of 32 Mr. Keith stated that there were multiple comments regarding methods. He left some information on the table regarding the cost share program, and how to promote an integrated vegetation management approach through pulling, spraying and grazing. The landowner has a choice. This does not dictate the method. Ms. Craghead stated that pressure washing was added. The Weed Board wanted this option to properly clean farm equipment. Regarding the plants list, these are all on the state list and the County adopted the information from that. Mr. Keith said that pressure washing addresses the fact that equipment used on sites is moved to other sites. Brushing does not get it all. Pressure washing may be more effective and is a more successful way to do this. Regarding the weed list, the County list does not have to mirror the State’s. The Department of Agriculture notices new or emerging weeds. The County can add the locally important ones from the Department of Agriculture list that are not necessarily on the State list. Ms. Craghead commended the Weed Board, who took this work seriously and dedicated a lot of time to do it. Their recommendations were given a lot of thought. This follows statute except for a few things that are more suitable to this area. Commissioner Unger asked about complaints remaining anonymous. Ms. Craghead replied that while an investigation is ongoing, it can be kept anonymous, but not after the case is closed. Commissioner DeBone asked again about cleaning machinery before moving it. Ms. Craghead said this is in the State law. Mr. Keith noted that this applies only if it is moved from one property to another. People may not know they have weeds on it. A single knapweed can produce thousands of seeds that can be in caged-on mud. Prevention is by far the cheapest and most effective way to deal with weeds, rather than treating after it is spread. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 13 of 32 Commissioner DeBone asked if there is an inspection process. Pressure washing in a far field may not be practical. He is surprised he had not heard about this. Mr. Keith said that it is challenging. They did not make up this section; it is something carried over from State law and has been there since 2002. Commissioner Unger said there is a standard to help with controlling weeds. Enforcement and daily operations are something else. Some will be difficult to enforce. This is part of the education piece. Chair Baney added that personal ownership of the problem is important. Ms. Craghead advised the Board that there was no requirement for a public hearing on this ordinance, but the Board had asked for public input so it was noticed as a hearing and conducted as such. The Board closed the hearing to oral testimony. They kept the written record open for a week, until 5:00 p.m. on Wednesday, February 12. There will be a work session to address the details before this is on another business meeting agenda The group took a short break at 11:30 a.m. 5. Before the Board was Consideration of Approval of Document No. 2014- 045, a Notice of Intent to Award Fuels Treatment Services Retainer Contracts from the Qualified Pool. Mr. Keith explained the process, which is consistent with previous years. The pool allows for one formal process and contractors are then on the list so they can solicit final bids. This allows the County to enter into a retainer agreement with the contractors. DEBONE: Move signature of Document No. 2014-045. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 14 of 32 6. Before the Board was Consideration of Chair Signature of Document No. 2014-046, an Intergovernmental Agreement with the Oregon Department of Transportation regarding the Allocation of 2013-15 Special Transportation Funds. UNGER: Move Chair signature. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 7. Before the Board was Consideration of Chair Signature of Document No. 2014-049, a Change Order to Contract with Apex Companies to Include Additional Environmental Consulting in the Scope of Work Related to the “Demo Landfill” in Bend and the “Redmond Shooting Range” in Redmond. UNGER: Move Chair signature. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 8. Before the Board was a De Novo Public Hearing on an Application for a Plan Amendment and Zone Change from Exclusive Farm Use to Multiple Use Agricultural for Approximately 171 Acres Adjacent to Butler Market Road. This item was addressed after item #5. Chair Baney read the opening statement at this time. (A copy is attached for reference.) Regarding ex-parte contacts, prior hearing observations, biases and conflicts of interest, Commissioner DeBone said that he previously had lunch with Steve Hultberg, who mentioned that the Newland issue would be coming up, but they did not discuss it at length. Commissioners Unger and Baney said they had nothing to disclose. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 15 of 32 There were no challenges from the audience. The hearing was opened. Paul Blikstad stated he brought the aerial photo used at the work session, showing Butler Market Road, Hamby and the area towards the Bend Airport. The complete record was made available at this time. There were some letters of opposition that are now a part of the record. The applicants submitted additional letters in response to letters and the decision. A PowerPoint presentation will be done by Mr. Hultberg and Liz Fancher. Mr. Blikstad added that this property consists primarily of class 6, 7 and 8 soils. The soils analysis was reviewed by LCDC as required. Since this involves agricultural designated land, the application requires a de novo hearing before the Board without the necessity of someone filing an appeal. The decision was made on October 4, 2013. It was denied, noting the appropriate unit of land for the predominate soils analysis should be parcel by parcel and not as a tract. The Sage West analysi s was for the entire 171 acres as a tract of land under the same ownership and contiguous. There are nine tax lots but eight legal lots of record. The Hearings Officer felt that parcel by parcel was appropriate instead. OAR language says they need to look only to the soil within the lots, some of which have class 6 or better soils. The overall soils analysis was not considered, the tract as a whole. Three previous cases were quoted. The applicant was correct that these were not on a parcel by parcel basis, but based on the overall tract. The Hearings Officer found that even if the appropriate determinant is as a tract, the poor class 7 and 8 soils needed to be examined under the factors listed under OAR. (He referred to his staff report at this time.) As part of the original submittal there was an agricultural study and additional information regarding costs and profitability. The Hearings Officer did find that the application was in conformance with zoning standards. The applicant maintains that there is a change in circumstances since the property was last zoned. Chair Baney said that the Board will hear testimony, and can either keep the record open for oral or written testimony; or close the hearing and deliberate now or later. Staff says there are no time constraints and they are not subject to the 150-day timeframe. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 16 of 32 __________________________ Steve Hultberg of Bend, representing the applicant, said he will give an overview and will be followed by Liz Fancher, attorney, and Roger Borine, a soils scientist. Mr. Hultberg then gave a PowerPoint presentation. He spoke about the burden of proof under the two County policies in the comprehensive plan, agriculture section. This allows changes as appropriate. To inventory land properly, they have to treat it otherwise if it does not fit the criteria, as non-resource land. A number of property owners have gone through this process. Fundamentally, they will demonstrate that this property does not qualify as agricultural land under State law and rule. If it does not fit, it can be rezoned. There is a two-part test – soils and suitability for farm use. The soils test shows it is not in classes 1 through 6. This demonstrates it is not feasible and does not qualify as agricultural land. Regarding de facto agricultural land soils, this process does not apply to their efforts. Concerns have been raised regarding all land being potentially rezoned. They would have to meet the soils part first. The second part of the test shows the predominate soils are classes 7 and 8. Soils are shallow, non-productive, sandy, infertile and not quality; as 67% of the soils are class 7 or worse. There is no question the soils are not suitable. The next test is suitability for farm use and whether you can employ the land for this primary purpose, including making a profit. The question is, would a reasonable farmer feel this can be profitable. Testimony at the Hearings Officer’s stage from Mr. Hamby indicated there is a long history of this land losing money. To support this, they went through a detailed study of typical farming operations for this property. They concluded that there is no way to profitably farm it. They used a very conservative estimate in this study. Irrigation water will make things grow, but it can’t be done profitably. They met the burden of proof, with evidence that the land does not qualify with agricultural land soils. The next issue is showing evidence that it can’t be farmed profitably. There is nothing in the record contrary to this. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 17 of 32 Several issues were raised by the Hearings Officer. The first was soils. The Hearings Officer concluded that it was looked at lot by lot. If it was examined as a tract, they would have to look at all of it as a whole. The County can examine this on an individual basis, but State law says there is no lot by lot analysis required. The question is whether to look at separate lots or the entire tract. The results are the same either way. The key piece is the definition of agricultural land. The land in question is based on this language. The Hearings Office cited an administrative rule. However, Mr. Hultberg said that in his view it says that you have to look at the whole lot or parcel, and nothing bigger or smaller. So this does not apply in this case. Case law says you look at the whole. They can’t carve out part and use it to examine the whole. One reason he is concerned with the Hearings Officer’s approach is that it does not make practical sense. The lots are lines on a piece of paper, artificial lines that do not demarcate and can be changed. The Hearings Officer wanted a lot by lot soils analysis, so they did that as well. Most met the test. There are two parcels in the northwest corner that don’t meet the same predominance test. Another map shows the tax lot basis, which meets the test with the same result. The reason the lot by lot analysis does not make sense is that they could move lot lines around, replat, etc. They could have done this differently but meet the test for the tract. The practical approach is a finding that the entire tract does not meet this. It is a simple finding that it does not meet standards in eight out of ten lots, and they could have adjusted the lots lines or consolidated them as well. They touched on the DSL application, in which 380 acres were approved to be rezoned about a year ago. They were subject to the two -part test for soils and feasibility. The DLCD gave them a free pass on this, and they did not get the normal treatment. The County did not require an evaluation with irrigation applied or a farm suitability analysis. It was concluded the land was not suitable for farming. There was no parcel by parcel soils test and no economic feasibility study done. The applicant has done all this with their properties. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 18 of 32 Newland was a participant in the DSL application to watch how law and code were applied. The primary concern was knowing what to expect in the process, which was an expectation of similar treatment. There was a different Hearings Officer and different treatment as well. This applicant deserves the same treatment as the DSL got. All said, they are not asking for special treatment. They have met all the questions. However, another applicant got different treatment and a different approach was used. The Newland property, even if irrigated, is class 7 or 8 soils primarily. There is no evidence that this property can be farmed profitably. They have met their burden of proof. __________________________ Roger Borine, soils scientist, said he completed the soils survey and report. It is a technical document but does not stand alone, as it is supported by research and experience. There seems to be a lot of misunderstandings and disconnect regarding agricultural lands and suitability. He gave a history of the process. This is a simple area. Originally there were lava flows, blisters, ridges and rimrocks. Mt. Mazama spread ash throughout. Bend has sand-sized material distributed in the area. There are shallow soils at the high points and deeper soils at the low points. It was a dust bowl in the 1930’s. The Soil Conservation District came about then, and the land capability classification system was created in the 1950’s. The USDA agricultural handbook #210 was issued in 1961 and is the basis of the system used today. It categorizes soil mapping units. In the early 1970’s, through Senate Bill 100, land use laws were created, with 19 goals. Agricultural was the third. Prior to that, everyone was scrambling to identify agricultural lands. They came to the Soil Conservation District for help, as this was found to be the best approach. Eight soil classes were created, and 1 through 6 are agricultural lands in eastern Oregon. To localize the national system, a guide was developed in the 1960’s and 1970’s. This was las t revised in June 1977. This was frozen when land laws came into place, and the methodology has not changed. This is what was used in this project. Land capacity classifications were developed to help identify erosion issues. Otherwise it was a statewide decision. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 19 of 32 Soils surveys here and in adjacent states are assigned by this guide. It is a simple, one page guide with 8 categories and 12 criteria. After it is narrowed down, it has 3 criteria: soil depth, texture and the capacity to hold water. In th e 1950’s when this was developed, two inches of available water was found to be critical. That is key for this project. He referred to the soils survey and soils map. So much water needs to be held per inch of soil. Ten inches of soil will hold 1.2 inches of water. Any soil depth less than that holds less water. Evaporation is about ¼ inch per day in the summer. The irrigation schedule is a 14-day passage over fills, so most water runs off. With that, nutrients cannot be held in place since there is little organic matter. Also, low water capacity depletes the water level and plants die. Pasture grasses cannot grow throughout the season. Rangelands start in April or May, and the water is used up before the 14-day irrigation cycle or before seasonal rain. The average soil depth is 0 to 17 inches. Half the time, equipment will hit bedrock. Soils on this project are shallow, sandy, infertile and mostly a class 7 or 8. Irrigation water is documented as ground water recharge. It could instead be staying in the river. A House Bill in 2010 created a process to challenge soils surveys regarding agricultural lands. This requires a certified soils scientist. His report was submitted to them, and approved. __________________________ Liz Fancher gave a PowerPoint presentation at this time. She discussed State law regarding land protected as agricultural land, and that land of a certain quality should be protected. The County’s original decisions were based on incomplete information, which has been developed since then. NRCS mapping is different from Mr. Borine’s study. The NRCS looks at the landscape level based on a few test plants. Mr. Borine had holes dug to determine soil types; this was a very detailed analysis. He found that the soils expected by NRCS are in different proportions and the classifications vary widely. The agricultural lands definition for this area is predominately soils 1 through 6. Western Oregon is 1 through 4. This report was established as reliable. They are required to submit it to DLCD, who determined it was appropriate and can be used. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 20 of 32 Goal 3 says land in other classifications can also be considered as agricultural land. The Hearings Officer found that there were no adjacent lands requiring this. On two sides of the property are MUA-10 parcels, and a densely developed area at the southwest corner. There are churches across the road and MUA-10 to the south. The land to the southeast was changed to MUA-10 years ago. The soils there were found to be bad as well. They are trying to play catch-up with adjacent properties with similar soils. Part of the Hearings Officer’s ruling indicated insufficient evidence and that he was not convinced the land is not suitable for farm use. This should take into consideration a lot of factors. Farm use is a part of the definition and the Shelley Wetherell case said if it looks green, it is agricultural land, regardless if the owner can make a profit. The Supreme Court disagreed, saying it needs to be profitable. In Central Oregon it is considered farmland if it has class 6 or better soils even if the owners can’t make a profit. This Supreme Court ruling seems to apply only if soils are class 7 or 8 non-agricultural. There is evidence that this land has not been profitable for decades. The Hambys owned a dairy farm there and testified they divided it into parcels and sold it because it was not profitable. If you observe farm activities in the area, it shows that most failed at making a profit. Allowing this property to change zoning won’t change the face of agriculture in most of the County. Looking at the big picture, 83% of Deschutes County farms lose money, per the 2007 census of agriculture. People try but can’t make money. This farm is at the bottom of the profitability scale. The question is whether a reasonable farmer feels this can be profitable. It is not, due to the predominate soils. Even the part with a majority of class 6 soils that look better was not considered agricultural by Mr. Hamby. Ms. Fancher went over the list of types of soils in the profitability pie. These make up the vast majority of agricultural lands here. Methods were not precise but reflected what was on the ground in farm use. The Hearings Officer agreed that attempts at profitability had failed. The Deschutes County comprehensive plan says the net is a negative. Agricultural activity in the area is generally not profitable. Mr. Hamby said it has not been profitable for the past fifty years. Other owners have said the same thing. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 21 of 32 The applicant got a farm budget analysis from a specialist, using an OSU agricultural budget template as the basis. Only a fraction of capital costs were deducted, over the useful life of the equipment. They used numbers more conservative than those used by the IRS. They spread this out over thirty years. Not even counting the irrigation system, it was still a loss. The budget did not include all the costs of farming, either. The January 2014 budget analysis was updated to respond to the Hearings Officer’s concerns, and costs adjusted to show used equipment. Mr. Borine was involved to double-check the work being done. These costs are accurate. Mr. Borine stated that the Hearings Officer thought that $150,000 was a lot of money for the irrigation system. Mr. Borine did what a reasonable farmer would do, design a system that is efficient and will meet standards for quality and quantity. That design is in this document, and is simple and uses a pond and a pump. That system new on the NRCS cost list is $175,000. When incorporating used equipment on site, the prices from Cascade Pump and Thompson Pump show the cost at $171,000. You could try to shop more, but the $150,000 estimate is more than accurate. This did not include fencing for livestock, cattle or horses, which are different types. Chair Baney asked if Mr. Borine typically helps set up irrigation systems. Mr. Borine replied that he does provide some work like this. He has helped farm planning for fencing and irrigation. Ms. Fancher said that they have findings of a farm budget analysis for horse boarding or training. Income could be $99,000 for that use, but there would be no pay for the horse trainer. If someone was paid, there would be a significantly greater loss. The logical conclusion is that farming there would not be profitable. This is corroborated in many ways. She said that regarding suitability factors, the Hearings Officer followed the wrong approach, analyzing the lots individually. That is not how it is done. They over-engineered the application and presented them individually, which was an error when it should have been done as a whole. Considering all the limitations and the good points of the land, farming is not the best use of this land since it is not profitable. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 22 of 32 Regarding soil fertility, expert evidence shows the soils are non-productive and infertile, with 67% being class 7 and 8. Fertilizing is not the answer. No reasonable farmer would incur this expense, and the average farm loses money every year. The farm budget analysis assumes fertilizing for livestock operations. Regarding suitability for grazing, the Hearings Officer thought it should include existing assets. Only a small percentage was deducted for the truck or other equipment. They took these concerns seriously and inventoried existing buildings and adjusted budgets, but it was still not profitable. They reduced the trailer/truck expense by making it used. It is basically the same using new or used equipment. They used the NRCS to estimate the cost of systems, and the numbers are conservative and defensible. The Hearings Officer found that the climate is challenging. The short season adds to the non-profitability. There is a five-month growing season, so they have to feed for seven months. Because of the low rainfall, they have to irrigate and it is costly. The County’s comprehensive plan agrees with this. The Hearings Officer felt that climate alone would not dissuade farming. However, a farmer would not want to try it with this property unless they are farming for something other than a profit. The soils study is based on irrigation rights. Even with irrigation, most of the soil is class 7 or 8, with a limited ability to grow crops. The rest with irrigation is class 6. There are certain negative impacts of irrigating. This is inconsistent with Goal 6, quality of resources. They have to use pesticides and herbicides, with a high potential to pollute. There is a strong concern this is possible given the types of soil. Mr. Borine added that the water has to go somewhere, and it is down if not absorbed by the soil and plants. They can’t adjust a system to apply various levels of water over a big parcel. They can’t go over it fast enough before it dries out. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 23 of 32 Ms. Fancher stated that this is consistent with Goal 5. This is the wrong property to irrigate. The water belongs on good farmland and can be made available to other properties over time. If it is not possible to take up the wate r rights, they can leave it in stream. It is leased in stream now because it is not good to try to use it. There is a lot of interest in protecting stream flow. In the event of a drought, water rights are assigned in priority, and this one takes it early. The Hearings Office felt that the rural residential development nearby could affect the use. Most of the Hearings Officer’s concerns were addressed. Cattle grazing, blue grass seed and alfalfa hay production are acceptable, but not profitable. Ms. Fancher went over the value of the land and the costs to farm. This does not include even minimum wage for the farmer, or a place to live. There was no value assigned to the structures included. It was still a loss. Chair Baney asked about amending the soil; for instance, some are doing this with brewery waste. Because of the soils here and other elements, there is significant interest in this product for nutritional value. However, some are worried about the odor. She asked how they might factor this in. Mr. Borine said if it is from sewage sludge, there are some restrictions. Chair Baney stated they are spraying it on fields to increa se the value outside the market. Mr. Borine said that as a liquid, it has high quality nutrients. It contains phosphorus, organic matter, and nitrogen, which is a factor. A concern would be monitoring it per DEQ rules and continuous soils testing, to make sure there is not a buildup of something that should not be in it, such as heavy metals. There are a lot of uses for byproducts. For instance, dairies have sewage lagoons but those have to be closely monitored. __________________________ The hearing was then opened for public testimony. Chair Baney asked that people limit testimony to three minutes each. The Board wants to hear their comments and can continue the hearing if appropriate. __________________________ Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 24 of 32 Denora Coslett owns ten acres on the northeast corner of Butler Market Road. She is opposed to the project, and believes the applicant is going for a bigger development. They are being reined in by the City now, and these are absentee owners. She feels there needs to be more notice as well. __________________________ Guy Hamby lives nearby on Butler Market Road. He is not here on behalf of the applicant. He has done soils tests as a layman. Large areas of the property have had the rocks removed. After his family lost most of the property due to the lack of profitability, the rock piles were removed to be able to do irrigation work, and soil was brought in. Some areas have shallow dirt. There can be fertilizer pollution due to the permeability of the soil. Most wells are 500 feet deep and three are three on the property. However, the water table is more shallow in some places, under thirty feet down. In regard to profitability, many people have tried to make a living there and failed. It is expensive to farm. It was marginally profitable years ago when labor was much cheaper. Rocks destroy equipment and generally it is too expensive to remove rocks on an ongoing basis. While it may appear to be prime agricultural land, it is not. It will now sit there and grow weeds. It should be used for something more suitable. Regarding brewery waste, the side problem to this is the odor. The neighbors have a major problem with this. Even with the right to farm laws, this is an issue. __________________________ Ken Hadlock said he would present his comments in writing. __________________________ Hilary Garrett had to leave but left written testimony. __________________________ Tony Aceti said he has been a farmer with large farms in Oregon his whole life. He came to Central Oregon and bought property twenty years ago, thinking it would be better here. It was a mistake. He then tried to go commercial. He has no dog in this particular show, but sees this problem in Central Oregon all the time. The law says was it says, and if you meet that criteria, that is then the standard. You cannot intermingle. The climate and soils are poor and there are better uses for the water being used. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 25 of 32 Regarding this land, there is the Bend UGB on one side, MUA on another, and even if they took out parts of the land, a small piece would be comingled with urban uses. Is it feasible to have this? No. They will hear resistance from people who like having farm land next door. This is an ongoing conversation. People want to keep other people’s land tied up for open space. They cannot hold private land hostage for open space just because people like to look at it. They can buy the adjacent land if they want to leave it that way. Much of the County is already public lands. He feels in this situation they have met State law, followed the process, and should be allowed to proceed. __________________________ Stuart Garrett said he is against the request. It is clear the applicant wants a bail-out. It is a large corporation and they want to put 1,000 homes there. They bought it in 2007 at a bad time. He does not see why the County should bail them out. A lot of people have suffered from the bad economy, and these folks don’t need it. Soils seem to be the big issue. Mr. Borine shot himself in the foot with his testimony. The lava here is consistent. Some ash soil is 12 to 24 inches deep. Look at the map south, west and east. It is used for agriculture. He thinks there is an opportunity for community-supported agriculture. A shallow water table is possible. He is able to garden on his own land. He would like to see another soils scientist refute some of the testimony. Seven of nine parcels are on farm deferral and there is COI water. This request violates the spirit and letter of land use planning. There is evidence in testimony that they have violated various goals. Republican Governor Tom McCall would have laughed at this. It is against everything they should stand for here. This company encourages sprawl, with impacts on roads and schools. He urged a no vote. He also said the Board should allow more time for the others to testify and not so much for the applicant. __________________________ Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 26 of 32 Paul Lipscomb said he went through whole package during the past two hours. He has a background in land use and legal matters. He was a Hearings Officer in Salem and Keizer, and a judge for twenty-two years. He has seen a lot of fancy legal footwork. The plain facts are that the DLCD, the Oregon Department of Agriculture and the Hearings Officer looked at this matter in detail and concluded it violates Goal 3 under the current legal standards. The Wetherell decision is the last one out. Profitability can be a consideration but is a relatively minor one. This distracts from the primary considerations. It seems odd that this applicant will say that 83% of farms are not profitable. This is the wrong test. Others feel the same. Even if property in this County is not profitable today, it used to be and may be again in the future. It loses this potential forever when it becomes urbanized. Goals 3 and 14 are in place for this reason. He suggested that this application violates Goal 14 under the DLCD and the Department of Agriculture. If it is rezoned to MUA, it will qualify for a conditional use as a cluster development. That is what they expect to see. Since the land is immediately outside the UGB, when it is brought in, that 65 % open space can be redeveloped to city standards. There will be no ability then to impact how this is developed regarding water, sewer and roads, as the city will have to provide those. This violates Goal 14, allowing sprawl to benefit one developer. All should comply to the same laws and no exception should be made for this developer. __________________________ Jeremiah Fender of Central Oregon Irrigation District provided information on the long-time water history on the tax lots corresponding with the yearly water application, since 2004. He also provided a map showing the area and irrigated lands. __________________________ Steve Johnson, COID District Manager, said the dates on the sheet are significant. There are water rights on the majority of the parcels since the founding of the water district, at least 100 years. This is org anized by quarter- quarters and not just this property. There has been a net change of five acres of water rights during that time. The chart shows the use of the water over the past decade. Lately, the majority is partially used or in stream. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 27 of 32 Going back to its original founding, the land is farm land. Decades ago potatoes were a farm crop, then alfalfa, and now seed crops and nurseries. People are involved in lifestyle farming, working the land and raising crops. It is not necessarily commercial, but is appropriate for farm deferral. If it was so tough, why would anyone do it. There are thousands of acres in farm use in the region. There is one clarification on page 3 of the Hearings Officer’s decision, on a footnote. There is 104.75 acres of water on these parcels. He looks at this as a transition zone, with urban development nearby along with existing farm uses. The Planning Commission said this is a classic example of the area growing and having to manage transition, and this is not the time to make this kind of change. It is farmland and has been for 100 years. __________________________ Liz Dickson, general legal counsel for COID, said she opposes this approval, and believes the land is symbolic of farmland here. Although it is not the most profitable, it has been used this way for 100 years. It should continue under Goals 3 and 14. The MUA-10 designation is intended for transition areas if land is not suitable for farming. This is the first candidate for urbanization. This land was mostly green before the last purchase. There has been significant discussion regarding technology, and the COID board has taken an interest in this. It preserves farm land. The profitability analysis is tricky. They looked at what is agricultural land and found that profitability should not be ruled out. It is a possible factor but should not be the applicant’s entire case. The 2004 map speaks for itself. She wants to see this land preserved. In regard to suitability factors, the idea of looking at all the lots makes sense. This has an effect on adjacent farmland. They have the same problem elsewhere, with marginal lands being farmed. Sometimes there is an incompatibility issue when they don’t like farming next door. It is the status quo in this area, and it is important to consider the domino effect. This could set a significant precedence. If 87% of farms are not profitable, does this mean they should be converted. This factor cannot be used on this basis. __________________________ Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 28 of 32 Pamela Burry stated her biggest comment is in regard to the uniqueness of Central Oregon, and how people live, farm and sustain. Profitability is a variable. Most are not farmed for this reason alone. Many times people work outside the farmland. An organic farm can be very successful. They understand they have to look beyond mere profit. It is a way of life and people sacrifice to do it. It is a value and uniqueness in this area, to keep lands green and open and continue to try. Maybe they can’t grow something, but they can do raised beds, hydroponics, nurseries and more. She wants to keep the value of farmland. The County is barely out of the recession. She does not want to see more land brought into the UGB and another boom, with too many properties like before. They need to tighten up development outside the UGB and watch families work this land. __________________________ Jerry Norquist of Sisters is opposed to the conversion and urged a no vote. Oregon land use laws are the strongest in the country and continue to be attacked. A new farm bill recognizes the value of farm land. Experts can testify and good people can disagree. Regarding non-resource lands, an expert in agriculture indicates Oregon has 280 diverse crops. A lot of the land that had no value at one point is now high value agricultural, with grapes and other products. This is in comparison with Idaho, where there are just four major crops. The Board needs to send a message, that if you purchase this kind of land with the intent to change it, it is a bad investment. Farmland is part of the roots here. Sisters has 960 lots available, but a developer wants to create rural sprawl there. He assumes the City of Bend has a lot of vacant lots already, and he sees no reason to convert this land. Rural subdivisions don’t grow food. __________________________ Elise Wolf of Sisters said that as of 2009, a lot of rural residential exception areas exist. The County has more to consider than COID’s comments. The comprehensive plan maintains the rural character of Deschutes County. The economy is based on this and its natural resources. As the area recovers from the bad economy, a larger number of people are coming here and bringing small businesses. This is an economic issue. The Board needs to protect natural resources and follow the goal of preserving rural lands. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 29 of 32 Policy requires incorporating farm and housing reports. A key goal is to maintain a stable and compatible rural lifestyle. They are busy now but she is concerned about another recession, boom and bust, with transient workers coming here when it is busy. She thinks this could already be happening. The investors are at it again. By 2005 most builders were from elsewhere. It used to be the other way around. What happened was boom and bust. They can’t just blame Wall Street. They need to consider the long-term impact of converting EFU land to urban. __________________________ Whitney Lowe of Sisters stated this is a similar pattern, chipping away at land use laws to make up for the bad economy. There is a temptation to see what can be done to address this. The Board spent a lot of time hearing about the problems with this parcel and its ability to be profitable. It was purchased for $7 million in 2007 and they intended to build 1,000 homes. They bought it when it was zoned for farm use. She feels it is farmable and is opposed to a zone change. __________________________ Gale Snyder asked if testimony would be continued to another date. Chair Baney said it is likely. __________________________ Tygh Redfield, who lives off Goodrich Rd., Sisters, submitted written testimony and said he is opposed to the application. It is not the land that is responsible for production, but the owners’ stewardship. Farmers are ingenious and can find many ways to make a profit. __________________________ Ms. Craghead noted that a decade ago, the Lorenz case won on appeal, showing that a greenhouse was found to be a farm use. __________________________ Chair Baney asked for rebuttal comments from the applicant. Mr. Hultberg said that they have not had an opportunity to review written comments, and would like to do rebuttal at a later date. __________________________ The Board continued the hearing to March 12, 2014 and 10:00 a.m., at which time it will be open for all testimony. People can also submit comments in writing prior to that hearing. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 30 of 32 Before the Board was Consideration of Approval of the Consent Agenda. UNGER: Move approval. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Consent Agenda Items 9. Board Signature of Document No. 2014-002, an Amendment to an Agreement with Telecare Mental Health Services regarding a Six-month Extension 10. Approval of Economic Development Discretionary Grant Requests: Leadership Redmond to Sponsor County Day - $600 CERF’s Annual Request (Center for Economic Research and Forecasting) – $1,500 NeighborImpact for its Annual Homeless Count Program - $2,000 OSU/Deschutes County Extension – Living on a Few Acres Conference (LOAFA) - $2,000 High Desert Makers – Tax Exempt Application - $1,500 (fundraising category) NOVA – Volunteer of the Year Event - $1,500 American Red Cross – Preparedness Pals - $1,000 Sunriver Anglers – Educational Brochure - $930 Family Access Network – Luncheon for Children - $2,500 (fundraising category) La Pine High School Junior ROTC - La Pine Veteran’s Park - $600 11. Approval of Minutes: Business Meeting: January 29, 2013 Work Sessions: January 22 and 29, 2013 CONVENED AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 12. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District in the Amount of $11,862.78. DEBONE: Move approval, subject to review. UNGER: Second. Minutes of Board of Commissioners’ Business Meeting Wednesday, February 5, 2014 Page 31 of 32 VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. CONVENED AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 13. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for the Extension/4-H County Service District in the Amount of $1,726.91. DEBONE: Move approval, subject to review. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. RECONVENED AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 14. Before the Board was Consideration of Approval of Weekly Accounts Payable Vouchers for Deschutes County in the Amount of $607,260.45. DEBONE: Move approval, subject to review. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 15. ADDITIONS TO THE AGENDA None were offered. Being no further items addressed, the meeting adjourned at 1:55 p.m. DATED this )1/::-Dayof ~ 2014 for the Deschutes County Board of Commissioners. Tam ~ A~ ATTEST: Alan ~~o!±t: ~~ Recording Secretary Minutes of Board of Commissioners' Business Meeting Wednesday, February 5, 2014 Page 32 of32 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org BUSINESS MEETING AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., WEDNESDAY, FEBRUARY 5, 2014 Commissioners' Hearing Room -Administration Building -1300 NW Wall St., Bend 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT This is the time provided for individuals wishing to address the Board, at the Board's discretion, regarding issues that are not already on the agenda. Please complete a sign-up card (provided), and give the card to the Recording Secretary. Use the microphone and clearly state your name when the Board calls on you to speak. PLEASE NOTE: Citizen input regarding matters that are or have been the subject ofa public hearing will NOT be included in the official record ofthat hearing. 3. CONSIDERATION of Board Signature of Order No. 2014-003, Updating the Deschutes County Weed List -Ed Keith, County Forester Suggested Action: Move Board signature ofOrder No. 2014-003. 4. A PUBLIC HEARING, and Consideration of First and Second Readings by Title Only, and Adoption by Emergency of Ordinance No. 2014-002, Adopting Deschutes County Code Chapter 8.35, Weed Control-Laurie Craghead, County Counsel; Ed Keith, Forester Suggested Action: Open hearing and take testimony; move first and second readings by title only; move adoption by emergency ofOrdinance No. 2014-002. 5. CONSIDERATION of Approval of Document No. 2014-045, a Notice of Intent to Award Fuels Treatment Services Retainer Contracts from the Qualified Pool Ed Keith, Forester Suggested Action: Move Chair signature ofDocument No. 2014-045. Board of Commissioners' Business Meeting Agenda Wednesday, February 5,2014 Page 1 of7 6. CONSIDERATION of Chair Signature of Document No. 2014-046, an Intergovernmental Agreement with the Oregon Department of Transportation regarding the Allocation of2013-15 Special Transportation Funds Judith Ure, Administration Suggested Action: Move Chair signature o/Document No. 2014-046. 7. CONSIDERATION of Chair Signature of Document No. 2014-0419, a Change Order to Contract with Apex Companies to Include Additional Environmental Consulting in the Scope of Work Related to the "Demo Landfill" in Bend and the "Redmond Shooting Range" in Redmond -Susan Ross, Property & Facilities Suggested Action: Move Chair signature o/Document No. 2014-049. 8. A DE NOVO PUBLIC HEARING on an Application for a Plan Amendment and Zone Change from Exclusive Farm Use to Multiple Use Agricultural for Approximately 171 Acres Adjacent to Butler Market Road -Paul Blikstad, Community Development Suggested Actions: Open hearing, take testimony, and close hearing if appropriate. CONSENT AGENDA 9. Board Signature of Document No. 2014-002, an Amendment to an Agreement with Telecare Mental Health Services regarding a Six-month Extension 10. Approval of Economic Development Discretionary Grant Requests: · Leadership Redmond to Sponsor County Day -$600 • CERF' s Annual Request (Center for Economic Research and Forecasting) $1,500 • NeighborImpact for its Annual Homeless Count Program -$2,000 · OSUlDeschutes County Extension -Living on a Few Acres Conference (LOAFA) -$2,000 • High Desert Makers Tax Exempt Application -$1,500 (fundraising category) • NOVA -Volunteer of the Year Event -$1,500 • American Red Cross Preparedness Pals -$1,000 Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 2 of7 • Sunriver Anglers Educational Brochure -$930 • Family Access Network -Luncheon for Children -$2,500 (fundraising category) • La Pine High School Junior ROTC -La Pine Veteran's Park -$600 11. Approval of Minutes: · Business Meeting: January 28,2013 · Work Sessions: January 22 and 29,2013 CONVENE AS THE GOVERNING BODY OF THE 9-1-1 COUNTY SERVICE DISTRICT 12. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the 9-1-1 County Service District CONVENE AS THE GOVERNING BODY OF THE EXTENSION/4-H COUNTY SERVICE DISTRICT 13. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for the Extensionl4-H County Service District RECONVENE AS THE DESCHUTES COUNTY BOARD OF COMMISSIONERS 14. CONSIDERATION of Approval of Weekly Accounts Payable Vouchers for Deschutes County 15. ADDITIONS TO THE AGENDA Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible, please call (541) 388-6572, or send an e-mail to bonnie.baker@deschutes.org. Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 3 of? PLEASE NOTE: At any time during this meeting, an executive session could be called to address issues relating to ORS 192.660(2) (e), real property negotiations; ORS 192.660(2) (h), litigation; ORS 192.660(2)(d), labor negotiations; ORS 192.660(2) (b), personnel issues; or other executive session items. FUTURE MEETINGS: (Please note: Meeting dates and times are subject to change. All meetings take place in the Board of Commissioners' meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. Ifyou have questions regarding a meeting, please call 388-6572.) Tuesday, February 4 3:30p.m. Public Safety Coordinating Council Meeting Wednesday, February 5 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session could include executive session(s) 7:30 a.m. Legislative Update (Conference Call) Thursday, February 6 9:00 a.m. Performance Management Meeting/Update Property & Facilities (there) Tuesday, February 11 9:00 a.m. Performance Management Meeting/Update Information Technology Wednesday, February 12 7:30 a.m. Legislative Update (Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session -could include executive session(s) Monday, February 17 Most County offices will be closed to observe Presidents' Day Wednesday, February 19 7:30 a.m. Legislative Update (Conference Call) Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 4 of7 Friday, February 21 5:30 p.m. Sisters Area Chamber of Commerce Mardi Gras Event -Five Pine Lodge Monday, February 24 10:00 a.m. Board of Commissioners' Business Meeting 1 :30 p.m. Administrative Work Session -could include executive session(s) Tuesday, February 25 1 :00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, February 26 7:30 a.m. Legislative Update (Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session could include executive session(s) Thursday, February 27 9:00 a.m. Performance Management Meeting/Update Clerk's Office Friday, February 28 and Saturday, March 1 8:00 5:00 Interviews Health Services Director candidates Monday, March 3 10:00 a.m. Board of Commissioners' Business Meeting 1 :30 p.m. Administrative Work Session -could include executive session(s) Tuesday, March 4 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, March 5 7:30 a.m. Legislative Update (Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1 :30 p.m. Administrative Work Session -could include executive session(s) Board of Commissioners' Business Meeting Agenda Wednesday, February 5, 2014 Page 50f7 Tuesday, March 11 7:30 a.m. Real Estate Forecast Breakfast, at the Riverhouse 10:30 a.m. National Public Health Advisory Board Meeting at Health Department 5:30 p.m. Joint Meeting with the City of Redmond Council, Redmond City Hall Wednesday, March 12 7:30 a.m. (tentative) Legislative Update (Conference Call) 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session could include executive session(s) Monday, March 17 10:00 a.m. Board of Commissioners' Business Meeting 1:30p.m. Administrative Work Session -could include executive session(s) Tuesday, March 18 8:00 a.m. Performance Management Meeting/Update -Adult Parole & Probation (at P&P) Monday, March 24 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session -could include executive session(s) Tuesday, March 25 1 :00 p.m. Employee Benefits Advisory Committee Meeting Wednesday, March 26 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session -could include executive session(s) Thursday, March 27 9:00 a.m. Performance Management Meeting/Update -Human Resources Board of Commissioners' Business Meeting Agenda Wednesday, February 5,2014 Page 6 of7 Monday, March 31 10:00 a.m. Board of Commissioners' Business Meeting 1:30p.m. Administrative Work Session could include executive session(s) Tuesday, April 1 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, April 2 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session could include executive session(s) Thursday, April 3 8:00 a.m. Joint Meeting with City of Sisters Council Sisters City Hall 10:30 a.m. Performance Management MeetinglUpdate Assessor's Office Deschutes County encourages persons with disabilities to participate in all programs and activities. This event/location is accessible to people with disabilities. If you need accommodations to make participation possible, please call (541) 388-6572, or send an e-mail to bonnie.baker@deschutes.org. Board of Commissioners' Business Meeting Agenda Wednesday, February 5,2014 Page 7 of7 Introduction This is a public hearing on applications for a Plan Amendment and Zone Change, to amend the comprehensive plan designation on 171 acres from agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agricultural (File Nos. PA-13-1, ZC-13-1) submitted by NNP IV-NCR, LLC aka «Newland." These applications were previously considered by the Deschutes County Hearings Officer in the written decision mailed on October 24, 2013. Deschutes County Code 22.28.030 requires that for lands which are designated farm or forest use, a de novo hearing shall be conducted by the Board of County Commissioners. This hearing constitutes the required de novo hearing. Burden of proof and Applicable criteria The applicant has the burden of proving that they are entitled to the land use approval sought. The standards applicable to the applications are listed in the previously issued Hearings Officer's decision. Failure on the part of any person to raise an issue, with sufficient specificity to afford the Board of County Commissioners and parties to this proceeding an opportunity to respond to the issue precludes, appeal to the Land Use Board of Appeals on that issue. Additionally, failure of the applicant to raise constitutional or other issues relating to the proposed conditions of approval with sufficient specificity to allow the Board to respond to the issue precludes an action for damages in circuit court. Hearings Procedure The procedures applicable to this hearing provide that the Board of County Commissioners will hear testimony, receive evidence and consider the testimony, evidence and information submitted into the record, and will be the basis for their decision. The record as developed to this point is available for public review at this hearing. Order of Presentation The hearing will be conducted in the following order. The staff will give a staff report of the prior proceedings. The applicant will then have an opportunity to make a presentation and offer testimony and evidence. All others will then be given a chance to testify. After both proponents and opponents have testified, the applicant will be allowed to present rebuttal testimony, but may not present new evidence. At the Board's discretion, if the applicant presented new evidence on rebuttal, opponents may be recognized for a rebuttal presentation. At the conclusion of this hearing, County staff will be afforded an opportunity to make any closing comments. Cross-examination of witnesses will not be allowed. A witness who wishes, during that witness' testimony, however, to ask a question of a previous witness, may direct the question to the Chair. If a person has already testified but wishes to ask a question of a subsequent witness, that person may also direct the question to the Chair after all other witnesses have testified, but prior to the proponent's rebuttal. The Chair is free to decide whether or not to ask such questions of the witness. Continuances: The grant of a continuance or record extension shall be at the discretion of the Board. If the Board grants a continuance or record extension, it shall continue the public hearing or leave the written record open to a date certain. If, at the conclusion of the hearing, the Board leaves the record open for additional written evidence or testimony, the Board shall establish the time period for submittal of new written evidence or testimony and for additional for response to the evidence received while the record was held open. If the hearing is continued or the record left open, the applicant shall also be allowed time after the record is closed to all other parties to submit final written arguments but no new evidence in support of the application. Pre-hearing Contacts. Biases. Conflicts of Interests Do any of the Commissioners have any ex-parte contacts, prior hearing observations, biases, or conflicts of interest to declare? If so, please state the nature and extent of those. Does any party wish to challenge any Commissioner based on ex-parte contacts, biases or conflicts of interest? (Hearing no challenges, I shall proceed.) Community Development Department Planning Division Building Safety Division Environmental Soils DIvision P. O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ NOTICE OF PUBLIC HEARING The Deschutes County Board of Commissioners will hold a Public Hearing on Wednesday, February 5, 2014 at 10:00 P.M. in the Barnes and Sawyer Rooms of the Deschutes County Services Building located at 1300 NW Wall Street in Bend, to consider the following request: FILE NUMBERS: PA-13-1/ZC-13-1 SUBJECT: Applications for a Plan Amendment to change the comprehensive plan designation of certain property from Agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agriculture (MUA-10). A total of 171 acres is proposed to be rezoned. This is a de novo hearing as required under DCC 22.28.030. APPLICANT: NNP IV-NCR, LLC LOCATION: County Assessor's Map 17-12-24, tax lots 206, 300, 301, 302, 304, 305, 401, 405 and 406 ALL INTERESTED PERSONS MAY APPEAR, BE HEARD, BE REPRESENTED BY COUNSEL, OR SEND WRITTEN SIGNED TESTIMONY. ALL WRITTEN REPLIES MUST BE RECEIVED BY THIS DEPARTMENT PRIOR TO THE HEARING DATE OR SUBMITIED AT THE HEARING. ANY PARTY TO THE APPLICATION IS ENTITLED TO A CONTINUANCE OF THE INITIAL EVIDENTIARY HEARING OR TO HAVE THE RECORD LEFT OPEN IN ACCORDANCE WITH SECTION 22.24.140 OF THE DESCHUTES COUNTY CODE. Recipients of this notice may request a copy of the Hearings Officer's decision (25 cents a page). Any person submitting written comment or who presents testimony at the hearing will receive a copy of the decision. Failure to raise an issue in person at the hearing or in writing precludes appeal by that person to the Land Use Board of Appeals (LUBA). Failure to provide statements of evidence sufficient to afford the decision-maker an opportunity to respond to the issue precludes appeal to LUBA based on that issue. Copies of the application, all documents and evidence submitted by or on behalf of the applicant and applicable criteria are available for inspection at the Planning Division at no cost, and can be purchased for 25 cents a page. i I Quality Services Perfonned with Pride STANDARDS AND APPLICABLE CRITERIA: Title 18 of the Deschutes County Code, the County Zoning Ordinance Chapter 18.16, Exclusive Farm Use Zone Chapter 18.32, Multiple Use Agricultural Zone Chapter 18.136, Amendments Title 23 of the Deschutes County Code, Deschutes County Comprehensive Plan Chapter 2, Resource Management Chapter 3, Rural Growth Appendix C, Transportation System Plan Oregon Administrative Rules, Chapter 660 Division 12, Transportation Planning OAR 660-012-0060, Plan and Land Use Regulation Amendments Division 15, Statewide Planning Goals and Guidelines Division 33, Agricultural Land NOTICE TO MORTGAGEE, LIENHOLDER, VENDOR OR SELLER: ORS CHAPTER 215 REQUIRES THAT IF YOU RECEIVE THIS NOTICE, IT MUST PROMPTLY BE FORWARDED TO THE PURCHASER. Please contact Paul Blikstad, Senior Planner, with the County Planning Division at (541) 388 6554 if you have any questions; Email address: paul.blikstad@deschutes.org Dated this __ day of January, 2014 Mailed this ___day of January, 2014 ------------------------------------------------- ------------------------------------------------- BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest l} IV 0 X "0 U f, wee J7 Date lo I ~02. t> S" . ) Name W~Hl.O-.., (Zu~ Address Phone #s D In Favor kiJ NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest * 7/4117/ 1 4w~;~Date Pj ls Name wit, -/"'-7 A" v<-'~ Address t 97 06 .A& /C~ h . s;-~T..£-Z 5 612 Phone #s St/J -?;;L ~-gr0 ") L/ D In Favor ~utra1lUndecided [A-opposed Submitting written documents as part of testimony? 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D Yes No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest _-L~'£;'~a.'.L2a.,..1'-L-[~/ftJrN --)~'fZ#.~~~--b~....:::..L.!..:::.....luC.a::L-Date ____ Name __________~~~~~~r.~~~~-~~~~~~"~~f/,4~d~~~b/~______________ Phone #s _________~~(()~o ~_____________:!:::.......=_.::..-~3___=::....:::....Jo/ E-m~I~~ss_~~A~~~~~. .~~/~~~~~~~A~A·/~~~~~~~~~ ~In Favor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes [iJ No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ~G~£.~~ Date ~(1 Name !3oherT 1110. ["he I v8 Address Q e ~0IlC.Z&~ G v J// i / I rA/c r Q Phone#s S?/! ?/6Q ~eZ8 E-mail address Cc2b( (I -MfA tit e f ~l eJ ~C'tU. C ct--v\ ~ In Favor D NeutrallUndecided D Opposed .~ Submitting written documents as part of testimony? ~Yes 0 No / . ---------------------------------------------- BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest -II f r No >< .If U C LJ.L l-f I Phone #s ?2 g -;,t( 0 5 E-mail address dI60/ edt/;JoAkt(lile ! !. d M D In Favor D NeutrallUndecided Submitting written documents as part of testimony? 1 ~I"Yes 0 No // BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest COU.lAfM (odL f:3S Vveed Date 2.. -!:)' f CDvl+VVl Name J \;l\l-€ ere\{ £1 ----------------~,-------------------------------_J Address Phone #s Cjl(l-~q<6 -S C; :2-J E-mail address d e vo.J'Pj @ b6V0 0 1{"eIjOVI 1DV lZJ In Favor D NeutrallUndecided D Opposed ,Submitting written documents as part of testimony? 0 Yes ill No / 0. -------------------------------------- ------------------------------------------- BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest _ ......tA!.o.......:;;e_e:O----'----,'7".4--______ Date 7-:,/-:5)ZoI'l Phone #s __....J:t:.Jl3::I';III!!:r!!!l::...·__--i::.3L~~-~·~::::::-.:-_·_LfL··-=7~O::...:g~_______ E-mail address o In Favor ~utrallUndeCided o Opposed Submitting written documents as part of testimony? DYes "' ~ I I BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item ofInterest ....::l.t:..J~-=~~~::...!::..-~::....________ Date ::z/s)'I Name Yl1atf ~h"'S Address Jk4:zs; ~rr.m-"b~~ a "Sfs+~ I OJ? q77 ~q Phone#s o In Favor o NeutrallUndecided D Opposed Submitting written documents as part oftestimony? D Yes )KINO BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda Item of Interest kk {J J '] f fAr! ( }Date 'iJ1/..()/y Name 'J) f \;I '"' d )Z t g,)C-v V Phone #s ( J2-tf) 'i2-<7-&> -,CI I E-mail address_....;.\(...;;;...;...-_c.......... ________ /L--.v.--.w..:......;...c+?--.t\:..........>.:@....;....-.~7JI..-..\N\.~t:l_._I._r_~ B In Favor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes []"No v BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item ofInterest tJ.Q.J OctXfosn'Cg Date \ Is l'LfI Name c.."'-0('" i So t '-'("""\. ~ \j e...;'.f e r:¥>S\ 9'11 0 <' Phone#s S:\ \ -4 c ~--\~CQ E-mail addressc..\.Ie..\Je. ~o.. @ £s"f'.ed,vS Qi( In Favor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes D No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest Ve.e£L~() .(,(., =e-. ) Date "\ ~f~[ I '-l t ~ Name -~r--~~V ~~ Address LP 0 ~""38 Phone#s 5ltl -3Bo BQ0~- E-mail address .~€.--Qo...ye..-@ . \v "f-A.L Q ~y G ~ ~InFavor D NeutrallUndecided D Opposed /'_Submitting written documents as part of testimony? 09 Yes 0 No -< BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Irv E-mail address _____________________ D In Favor D NeutrallUndecided D Opposed Submitting written documents as part of t e stimony? D Yes ~ ------------------------------ ----------------------- BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest _L.1~/.....lo-(....:.rL..J<%~~!"",/:"",,-________ Date .2 -~-.-/Lz Name k(:.,. C. 'fl( £ Address q ~-q <J NvJ &<:'1 it ~ d!.1 -:t. E-mail address _--======-_________________ D In Favor ,[2J NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes D No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ----'U )£-e,,Ar5 Date '2. -~-/f~___-=~_______ Name P::tSAcel -/ Address ) j}///( Phone#s E-mail address ~InFavor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes D No -------------------------------------------- BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK ~L]-.-c/O 2-Date ~~~~~~~~-------------- Name --r-----~--~~~~~--r_~~---------------- Phone#s E-mail address ________ -_~____"'~________ ~ \('-e._L_._ D In Favor D NeutrallUndecided WOpPOsed Submitting written documents as part of testimony? DYes DNo Deschutes County Noxious Weed Program Summary The Deschutes County Weed board was formed in 1999. Its composition includes members of the public, city, state, and federal govemments. They meet once a month from September through June. In 2002 a full time vegetation manager was hired to implement a noxious weed control strategy. An Integrated Weed Management Strategy was written and implementation has been ongoing. This strategy consists of three main approaches; Education, Prevention and Control. Each of these is summarized below: Education • Presentations on Integrated Weed Management. • Cost share program to help land owners with the cost of treating weeds. This program is funded by Federal grants. • Consultation and advice to landowners wanting to treat and restore their lands to a weed resistant plant community. • Numerous television, radio and newspaper interviews about noxious weeds. • Weed Wagon Educational Trailer. A mobile weed education trailer packed with brochures and information about weeds and weed management. • Annual weed awareness I weed pull event held in June. Prevention • Weed free forage program: local growers producing weed free forage in the county. This weed free certification means a higher price for their product. • Cooperative agreement with the Deschutes Basin Native Plant Seed Bank, which sells native seeds from the basin to landowners for restoration efforts. • Early detection and rapid response training. • Consultation and advice to landowners on how to prevent the establishment of noxious invasive species. Control • Treatment contracts with BPA to control target weeds along their right-of-ways • Treatment contract with the BLM, Forest Service, City of Bend and Bend Parks and Rec. for infestations on their lands. • Assisting ODA with bio-control treatments. • Consultation and advice to landowners on how to treat noxious weeds present on their property. • Seeding treatment areas around the County where weed control efforts have reduced the weed populations to a point where seeding can help establish a weed resistant plant community. • Assist the Irrigation Districts with weed management. • Numerous letters have been sent to land owners notifying them that their property contains listed weeds and that the land owners are responsible for control of them. Along with the notification is information about the different programs and resources available to assist the land owner with the problem. This includes the cost share program. The vast majority of these contacts result in a very positive outcome. The Deschutes County Vegetation Management Program has received both state and national recognition for its efforts in the battle with noxious and invasive plant species. This recognition is something that all of the residents of the County should feel ownership in and proud of. This program is on the cusp of becoming enormously effective, and there is always room for improvement. Official ordinance state that landowners are responsible for treating noxious weeds on their lands. If this ordinance is to be truly effective there needs to be enforcement. Man and our activities move a tremendous number of species around the world, many for our benefit, a few to our detriment. A few of these are having a tremendous negative impact on our economy, ecology, and our environment. History is full of horror stories of introductions gone awry. Once established these invaders cost millions just to treat. That's treatment, not control, not manage, or eradicate. The ecological impacts of invasive species both plant and animal are huge. These invaders have the potential to permanently change large tracts of land and waterways. These changes in the landscape can cost millions of dollars, not just in treatment cost but also in lost wages, lost productivity, lost opportunities, and reduced land values. Successfully treating infestations starts with a commitment. That commitment states we will do all we can to control and treat the problem. Everybody needs to participate in order for the treatments to be successful. The key is everybody. Weeds see no political boundaries. For treatments to be successful they cannot be stopped by political boundaries either. The goal of the Deschutes County Vegetation Management Program is to manage vegetation to promote a healthy plant community that is resistant to invasion by noxious weeds. To achieve this goal three strategies are used simultaneously; public education, prevention and control. The emphasis of the Weed Management Program has always been first and foremost to provide education to landowners with weed issues, offer assistance when it is needed, and hopefully achieve voluntary compliance through a landowner willing to work towards eradicating weeds over time. In Deschutes County complaints received from the public about "neighbors weeds" generate a site visit by the Vegetation Manager. Armed with educational brochures which include the impacts of these invaders, and information on the cost share program, the land owner usually does the right thing. Many times the land owner has better understanding on why the weeds need to be controlled, and how best to treat them. Now we have another recruit in the battle against weeds. It's a win win situation for the county, the land owner and the environment. However, there are those few situations where the landowner refuses to cooperate in any way. The county fine would then be used as a last resort to get the landowner to control the noxious weed problem on their property. The addition of a county weed ordinance would be a valuable and much needed tool for the Vegetation Management Program in combating invasive weeds within our county. This type of ordinance would be comparable to county ordinances already in place in within Oregon, including neighboring Klamath and Jefferson Counties. I request that the County Commissioners 'adopt' this ordinance as part of the continuing effort to control noxious weeds in Deschutes County and preserve the beauty and economic viability of this area. Robert Marheine, Deschutes County Weed Board Chairman Weed Enforcement Status Oregon Counties Experience with Weed Ordinance-2010 Counties Interviewed-15 Gilliam Baker Sherman Marion Crook Malheur Harney Grant Klamath Umatilla Hood River Union Morrow Jefferson Wallowa Status Have ordinance-14 Have district-14 Have enforcement through district-13 Have enforcement through nuisance ordinance-1 District includes cities-6 Enforcements Methods Fines-11 Enter Property to Remove-9 Most require entry either with owner approval or approval from Commission Lien to pay for removal-9 District Tax-3 Cost Share-9 Revenue/Expense Collected Fine or Lien-None 10 Collected Fine or Lien-Rarely 3 Enforcement Program Expense-None-10 Sheriffs Office Expense-2 Comments on Enforcements Continued education is very important. Enforcement is a tool to make weed inspector more effective. Landowner seldom needs more than information of the potential violation. Good faith efforts should be recognized. Recommendations Would like to see disclosure of weed issue upon sale. Would like more interaction with zoning and building departments. First letter should include a specific time for compliance. Cities Bend-Working on new ordinance. Redmond-Has a fire ordinance for vegetation. Some council members interested in noxious weeds. Staff Interested. Sisters-Has weed ordinance but doesn't include requirement to not seed if noxious. Ed Keith From: judy <jmeredit@bendnet.com> Sent: Thursday, January 23, 2014 8:13 AM To: Ed Keith Subject: weed issue Dear Mr. Keith, I live in Deschutes County and have been a resident for 40 years. My neighborhood has problems with Spotted Knapweed. Some of us have voluntarily pulled weeds on empty lots and common property and have also tried to inform other residents of what to do, how to identify noxious weeds etc. What it comes down to perhaps is that some people don't act unless there is a penalty for inaction. There are 2 lots now that have heavy infestations and the seeds blow to other lots etc. I believe the proposal to levy fines is the next step and may be more effective for those who do not act by information and education alone. I encourage strong action before May, when it can start to be dry and knapweed already has a long taproot and is difficult to pull. I discourage the use of herbicides because the seeds continue to germinate for 7 or 8 years and the person just has to go out and pull the small ones each spring before any can go to seed. Please understand that I support the county proposal to levy fines. I believe that large tracts of cheat grass and knapweed choke out native species and that wildlife have less natural habitat. There are so many reasons to be strong about weed control. Thank you, Judy Meredith, jmeredit@bendnet.com, 63460 Bridle Lane, Bend,Oregon,97701 I I 1 1 Ed Keith From: Terry Kerrigan < praetor@ykwc.net> Sent: Thursday, January 23, 2014 8:13 AM To: Ed Keith Subject: Weeds My wife and I support the fine process. We have written several times to "weed dept." concerning Nape weed growing throughout the city. Terrence and Janice Kerrigan 1 Ed Keith From: Gwenn Levine <gwenn97702@hotmaiLcom> Sent: Thursday, January 23, 2014 8:34 AM To: Ed Keith Subject: Objection to the new weed ordinance! Importance: High "The new Weed Ordinance gives the County's weed inspector enforcement tools to prevent the growth of noxious weeds, and establishes a penalty fee of $2,000 for a landowner's failure to eradicate noxious weeds on their land. " Dear Mr. Keith, As a native Oregonian I appreciate our beautiful lands as much as anyone. I fully understand the impact to our native species when noxious weeds are allowed to take over and smother the native species. However, to fine a landownerlhomeowner $2,000 for failure to comply will not make a true difference. Those that can afford to pay the fine will do so over the cost of eradicating large lands and those who get fined will suffer undo hardship. As an example, Mrs. Smith, in her late 60's, has had 3 major back surgeries, lives alone, and has a monthly income of less than $600 a month. She is not able to perform the work or pay for the work to be done, yet alone pay a huge fine for not complying. The fine will not make Mrs. Smith do a better job, will it? It makes more sense to find a way to be supportive and help people get the job done -not punish them. I know people who have asked the County for help in removing weeds and did not get any assistance and in some cases not even as much as a call back. Most people want to do the right thing, they just don't have the knowledge, ability or the resources. Increasing or imposing a fine is not the solution! I encourage you to explore other solutions before being hasty with a fine that could destroy our most vulnerable citizens, financially and emotionally, rather than the weeds. Thank you for your time. Gwenn Levine 59687 Navajo Road Bend, OR 97702 (541) 410-0617 1 Ed Keith From: charles baughman <big-bird@q.com> Sent: Thursday, January 23, 2014 9:23 AM To: Ed Keith Subject: WEEDS AND CHEMICALS I am wondering the method that will be used to eradicate weeds. Forcing people to use large amounts of chemicals would be disastrous to our health and water supplies. Would the rules cover many acres and a lot of chemicals? Who decides what are weeds? Charles Baughman 1 Ed Keith From: Robert Northrup <lapinebob@gmaiLcom> Sent: Thursday, January 23, 2014 11:39 AM To: Ed Keith Subject: Noxious weeds After reading the article at KTVZ online, and you should read the comments. I would suggest rather issue fines, a 30 day ticket to remove the problem, and a fine if not complied with. I worked for a public agency and on occasion we would use juvenile delinquents in removing brush along right of ways. They jumped at the chance to get outdoors and it also helped the community. I am sure there are seniors and disabled that can It afford to pay someone and are not able to do it themselves.And it would put the county in a better light to offer assistance to those in need. Bad44 1 Ed Keith From: John Baker <john@nedbaker.com> Sent: Thursday, January 23, 2014 11:42 AM To: Ed Keith Subject: Weed Inspector Dear Sir, Please pass on my lack of support to spend our tax dollars for a weed inspector. I would also suggest that legal counsel for the county review existing laws regarding trespassing as I do not think the county wants to be spending money defending a weed inspector who is entering on to private property without permission. Sincerely, John Baker John Baker 18160 Cottonwood Rd PMB 149 Sunriver, Or 97707-9317 John@nedbaker.com 1 Ed Keith From: Calvin Arkanon <calvinarkanon@gmail.com> Sent: Thursday, January 23, 2014 11:56 AM To: Ed Keith Subject: Deschutes County Weed Ordinance Hi, I read about the proposed ordinance. I am 100% in support of adding a possible fine. The reason is in Redmond and areas around Redmond there are large areas of invasive weeds as listed by the State of Oregon. Like for instance in the vacant lot south of Big R farm store was one of the healthiest looking stands of what appeared to be purple knapweed I'd ever seen. We need to get serious about these invasive plants, and hopefully this proposal will get some press so people are informed about it. I moved here from Lincoln County and I was surprised to see so little enforcement here in Deschutes co. You won't find one of these weeds on my farm, but adjacent to my farm along the irrigation canal it's all infested with several invasive weeds, and every year the seeds come onto my farm from the irrigation water! THAT is something I've never seen and I've farmed all over the west. Thank you Calvin Arkanon Redmond, Oregon 1 Ed Keith From: paul skegman <wetlandboggs@live.com> Sent: Saturday, January 25, 2014 8:20 AM To: Ed Keith Subject: weeds hello---if you folks pass this weed law it will come back to haunt you. all we need is one more law!! well if it passes i will get maps that show all the county owned poperty (citys also) in deschutes county. i will scour these pieces of land looking for noxious weeds. i will photograph the evidence and document the area then demand the county gets $2.000 tickets sent to them.{citys also). i have friends in all parts of deschutes county----they will be out looking also. please pull your head out----there has got to be a better way. thank you for your time. 1 Ed Keith From: disneyhomes@aol.com Sent: Tuesday, January 28, 2014 11:49 AM To: Ed Keith Cc: Tony DeBone Subject: Re: draft ordinance ( County Public Meeting) Hi Ed &Tony, I have reviewed this Draft Ordinance and have several questions that I hope you can bring up at this meeting. I will not be able to attend this meeting due to previous scheduled appointments. Question 1 : There is no mention of the County Road Department or the County Forester to control these weeds in the County Right A Way on our County Roads and Public Right A Way Roads. This includes roads that are not yearly maintained by the County or State. I believe the County should include there participation in this Ordinance. Question 2 : There is no mention of the County Road Department or Forester to offer public assistance to assist land owners to abate these weeds on the owner's land. There are many Elderly Citizens, Disabled and Semi Disabled Citizens in our County that this physical activity would be very hard on them to accomplish. Question 3 : Some of our land owner's border the Deschutes National Forest and USA Bureau of Land Management along with Oregon State Lands. There is no mention of these Agencies being included in this Ordinance. Most private land owners are responsible for their lands fire reduction program; or make a good effort in doing so. I would like to see some type of responsibilities on these Government Agencies to be included in this Ordinance. These Agencies have been very poor in their weed abatement program and their so called weed seeds flow on to private land owners which makes it even more time consuming to get rid of these weeds and their tree diseases like Missile Toe. To conclude, I hope that you can address these issues in your Public Meeting and give me some type of response after your discussions. Thank you for serving our Community. Best regards, Dave Disney Real Estate Broker 541-41 0-8557 Disneyhomes@aol.com 1 -----Original Message---- From: Ed Keith <Ed.Keith@deschutes.org> To: disneyhomes <disneyhomes@aol.com> Sent: Fri, Jan 24, 201410:10 am Subject: draft ordinance Here is a copy of the draft ordinance. What may not come through in the ordinance is that as a matter of County policy we always seek voluntary compliance first, with the enforcement step being the last resort reserved for people that refuse attempts to work with them. There has been more coverage focused on the fine amount, so I have been trying to emphasize that we wish to work with people to help them achieve voluntary compliance. More information on the weed program is located here: www.deschutes.org/weeds Ed Keith Deschutes County Forester 61150 SE 2ih Street Bend, OR 97702 541-322-7117 -0 541-408-8862 -c 2 Ed Keith From: Tom Anderson Sent: Wednesday, January 29, 2014 6:43 PM To: Ed Keith; Laurie Craghead Subject: FW: testimony regarding noxious weed proposal From: Pam & Pat [mailto:sunrise3@coinet.com] Sent: Wednesday, January 29, 20142:27 PM To: Tony DeBone; Tammy Baney; Alan Unger Cc: Board Subject: testimony regarding noxious weed proposal January 30, 2014 Dear Comm.issioners Tony DeBone, Tammy Baney and AI Unger, You may know me from CAG. But, today, I am not representing CAG. I write from a stance of Ceres, the position I hold at the Little Deschutes Grange in La Pine. Ceres was the Roman goddess of agriculture and motherly love. At the Grange, my duty is to report on local gardening and animal husbandry. I write because localized food production is my passion. I have worked with the La Pine Coop and Garden Tour since the beginning. My husband and I have composted and gardened and raised chickens and rabbits for the eight years that we have lived in La Pine. You might enjoy the website www.lapinecoopandgardentour.com. I write in response to the proposal regarding noxious weed control. When I read that "Every Owner or Occupant of land shall destroy or prevent the reproducing by any manner or spreading on the Owner's land or land occupied by Occupant of any Weed classified as a Noxious Weed by the Board using the most efficient and practical means available. " I am afraid that "the most efficient and practical means available" will mean using picloram or Round Up or any other toxic pesticides that will destroy the land's ability to grow food. The same goes for inSisting on weed-free feed for horses. The manure from those horses is no longer fit be used for fertilizer to grow food. What is a horse owner to do with the manure? What is the gardener to do without it? Well, gee .... I guess they'd have to purchase commercial fertilizer. And, who makes that? Uh, that would be Monsanto Corporation, the makers of Round Up and genetically altered seeds which have their pesticides engineered into them. 1 And, say, didn't the State Legislature just vote to approve the Monsanto Protection Act? That act makes it impossible to sue Monsanto for any damage that they cause. In fact, our own representative, Mike McLane voted for it. Good timing. Speaking of timing, what's the emergency? Is there a sudden attack of noxious weeds? Or, is there some sort of resistance to getting rid of them? I think not. I just saw a brochure that had pictures of these weeds and some facts about them. That's the very first time I have seen them. Why haven't they been included in our tax forms or in some direct mail? I would inspect every inch of my property and dig them up and burn them. Who wouldn't want them gone? No, the emergency would be declared so as to not allow due process and input from the community, as we would have no recourse. After all, we could have been informed of this last year. The danger from weeds was the same then as it is now. But, the Monsanto Protection Act hadn't been passed yet. Hummm .... It goes to the classic question, "Who Benefits?" And, $2,000 fines! Whether you are a land owner or a renter? Really? Is the fine the same for a person on one acre or 1,000 acres? And, what if the people can't afford to pay the fine? Will a lien be placed on their land? Will there be a bounty on these weeds? Who gets the money? Will it be used to educate the public or help to clear the land? Or, will it be used to pay the inspectors? Once again, "Who benefits?" There is a bigger threat, you know. The drought in California is the worst in their history. It is bad in most of the Western states, where most of the food is grown in this country. Vegetables, fruits, and grains will all be in short supply, and therefore very expensive. The high priced grain will drive up the price of meat as well. We already know that food is in short supply for too many Oregonians. And the SNAP funds just got reduced. Once again, great timing. We are going to have to subsidize our food supply with locally grown produce if we are to mitigate this disaster. You could be setting up tool banks if you want to respond to the real emergency coming this summer. I believe that if you go about dealing with noxious weed control in the way that it is proposed, you will be enabling the commercial food corporations to further garner control of the food supply. There is a war going on that's making me crazy. On the one hand we've got the First Lady advocating for her 2 nice organic garden at the White House. Meanwhile, SWAT teams are invading family dairies and vegetable stands, arresting farmers and driving them out of business. I don't know what is paranoid and what is prudent anymore. But, I know it is not right. Do not do this. At the very least, make certain that toxic chemicals are not used in places that will affect gardening or animal feed or the general supply of water. And, please educate yourselves regarding the destructive track record Monsanto and Dow Chemical have in the world. I will be happy to send links to you if you are interested. With Respect, Pam Cosmo, Ceres Little Deschutes Grange #939 3 Ed Keith From: K.J.Phillips <rrconstdev@comcast.net> Sent: Wednesday, February 05,20147:29 AM To: Tony DeBone; Tammy Baney; Ed Keith; Alan Unger Cc: Ed Criss, Plan'g Commissioner Subject: Ord.2014-002-Public Testimony Submittal-New Weed Dist& Injurious Ordinance Attachments: Odr2014-002_k-Phillips-l.pdf; ORD 20l4-002-KPhillips-2.pdf TO: Deschutes Employee Ed Keith & County Commissioner Unger County Commissioner Baney County Commissioner DeBone RE: Ord. 2014-002 w/ 3-part testimony submittal i-Email 2-Attch. file of ORD 2014-001-KPhillips 3-Attch. file of ORD 2014-002-KPhillips Hello, ... Mr. Keith, Commissioner Unger, Commissioner Baney, Commissioner DeBone I urge the Board to NOT APPROVE the proposed Ordinance 2014-002, awaiting BOCC action at Feb. 5th 'Business Meeting', because .. .it is injurious to Deschutes landowners and renters, because •..•it causes 'formation' of a New District without due process for the citizens, and, because ... it purposefully, uses deceptive language to give both, a Title, and, create a comparison-similarity to the old Weed Control Chapter, and, additionally, emphasizes past amendments to imply this adoption a similar needed update action, that only corrects a (old Chapter) deficiency, by just adding 'enforcement methods'....as new chapter. This Ord.2014-002 is admittedly injurious per County legal Dept. stated 'FISCAL IMPLICATIONS', as it increases County costs, and, is planned to be dependent on 'monetary penalties'. A re-write with full public disclosures, and, a proper District hearing process is needed, because proposed text creates a New District with a different & expanded 'Principle Act' with Weeds and/or Noxious Weeds as only small, incidental to this New Chapter. I support Oregon 'Noxious Weed' education and rules administered by Oreg.Ag Dept., or, County Soil & Water Conservation Districts, or, Federal FSA,...but, NOT this 'fake' Deschutes County Weed Control ordinance. My personal experience is based on 'Noxious Weed' rules & statutes applied to my Polk County farm by FSA, and, my Benton County farm by Oreg Ag Dept inspections related to that farm's State Nursery and Landscape License. The 'real' Noxious Weed statutes are Oregon Industry-based, and, intended to preserve productiVity/markets/marketing of land or aqua-culture, business products or commodities .... The Deschutes Weed Control Ordinance 2014-002, is NOTI! It is deceptively worded to hide, new taxes, additional assessments, and, planned citation-revenue for Road Dept. maintenance activities, and, also attempts to conceal formation of a NEW County-wide Vegetation-maintenance District, .... via the wrongful label, Weed Control District, from the old chapter. Most disturbing, Chris Doty and Tom Anderson, made a forceful/Road Dept Needs Revenue' presentation at a Weed Meeting (2/14/2013)' and, announced a looming funding loss due to a huge drop in Timber Revenues, and, their sudden change of County Noxious Weed Control into a sub-section of, and, merger with, the Road Dept. This Ord. 2014-002 is unnecessary and injurious to citizens, and, misrepresents legislation as Weed 1 Contro" but, it will not aid and promote the County's affected industries or products, as intended by State Noxious Weed rules and statutes. It is largely, the Road Dept's, New District, and, Maintenance Revenue legislation. Please oppose this deceptive Ordinance and send it back for a re-write and further review by legal staff. Sina-rUy.l ~p~ F.Y.1. '" 569.435 Dlsaolutlon of WMd control dJ.trtct; disposition of fund •• If In the Judimllftt of the court the .I'lfo~ment of OR$ "'.560 to 569.495 tn any county which h ..bull d~I.,.d • we.d control dtttna s.ems Impracticable or likely to worlc Injury to the ,.ople of the dlstr~It may after II lMarlna d~I.N that .~h weed control d'strtet no lonce' e._n. AnV tMCI.! wttd control dl!$ttst."'" be dtd.t!d termlNted by the county court when II majority of ,."downeR In the district. by petition or by pubac ....ri ate that th d...,. IlUCh district terminated for an weeds declared nol(iom in the dlnrict. 569,515 legislative findiflls. ThE-legislative Assembly finds and declares that: 11) Noxious weeds pre'Sent a serious threat that adversely affects industries vitat to the Orecon economy, including but not limited to the 6sriculture, forestry, fishinl and tourism industries; ill Failure to control the spread of noxious weeds in Orelon will reduce the productivity of OrE~.on industries and adversely affect marketins by those industries, rrsultif'ii in it loss of business and tM 1055 of existifll jobs.; (3, The use of .Wt-ssiv€' mnsures to control the spread of noxious weeds will improve the actuai and perceived quality of Oregon products and further the promotion and expansion of market! for thole products; ~nd {4l The control of noxious weeds throUI" county weed control distriCt programs will beneflt Orqon's economy bV preventing the loss of f'lti1.tins jobs, bv promotins ..nd eXP6ndfn, Orelon btAsineu and by preventins the dedne of Oreson businfls. (2011 ~.392 §l) This email is free from viruses and malware because avast! Antivirus protection is active. " 2 Date: Feb. 3, 2014 ATTN: Deschutes Board of Commissioners RE: Mis-directed Submittals: BOCC Public Hearing Testimony-Ord 2014-002 FROM: K. J. Phillips, taxpayer/landowner The 1/23/2014,'Date Change' announcement, for a proposed ordinance hearing by the BOCC (elected governing body), also directed related written comment testimony to be submitted to a Deschutes Road Dept. employee, Ed Keith, not the County Board's office conducting the Public Hearing. This is an improper submittal designee, as any Ordinance comment testimony is closely tied to Dept. funding and the staffer'S employment. The Road Dept. is not an impartial party to this* funding issue and the Dept. should not manage the Ordinance Hearing submittals. There is NO assurance 'opposition testimony' will become Public Record, because, it can be lost, or, as Anderson's COD staff explained the loss of my past testimony,... Opposing opinions .... may /was 'inadvertently destroyed' during moving of office documents. [Per* comments ofTom Anderson & Chris Doty, 2/14/13, noting Noxious Weed Program would be merged/changed to aid Dept. budget deficiencies due to PERS increases, and, mega drop of State Timber Revenue.] BOCC should note; No past Weed Control Violations & complaints average ""'2/mo. http://www.desch utes.org/Med la-Release s/Weed-Control-Ordi na nce-Date-Cha nge.a spx Weed Control Ordinance Date Change 1/23/2014 Hearing takes place Feb. 5 A public hearing to hear local resident comments about a proposed Deschutes County Weed Ordinance, will take place on Wednesday, February 5. This is a revised meeting date. Due to scheduling conflicts, the hearing cannot take place on the originally proposed date of January 22. The public is welcome to attef)d and speak at the public hearing, or submit written comments before and/or during the hearing. The public hearing will take place at the Deschutes County Board of Commissioners' Business Meeting at 10:00 a.m. in the Deschutes Services Building-Barnes Room, first floor, at 1300 NW Wall St. in Bend. The new Weed Ordinance gives the County's weed inspector enforcement tools to prevent the growth of noxious weeds. and establishes a penalty fee of $2,000 for a landowner's failure to eradicate noxious weeds on their land. An emergency clause is proposed for the new ordinance in order to be proactive prior to weed growth season. A new ordinance usually has a waiting period of 90 days to go into effect. Waiting the traditional period of time for the Weed Ordinance to take effect would be problematic and less proactive for the weed growing season. Without the emergency clause, the ordinance would take effect in late May, after weed season begins. Initiating the new ordinance earlier, will help in the early eradication of weeds and cost less than later eradication, when weeds in Deschutes County are more widespread, To read the proposed Deschutes County Weed Ordinance prior to the hearing. please visit wwwdeschutes,org/weeds and look for the document under "The Law". Testimony cannot be submitted by phone. To submit written comments, or for more information about the hearing, please send email toEd.Keith@co.deschutes.or.us or call (541) 322~7117. http://www.deschutes.org/ What's Happening in Deschutes County Deschutes County News Board Meetings Requests for Proposals Media Releases 1/28/2014 -Sisters Volunteer Needed for Planning Commission Seat 1/23/2014 -Weed Control Ordinance Date Change 1/23/2014 -Shots for Tots Comes to a Close Your County Government Deschutes County reinvests your local tax dollars in your community, your family and you. We are proud to provide you with professional and efficient local services that are vital to your quality of life, Date: feb. 3, 2014 AnN: Deschutes Board of Commissioners & Legal Counsel RE: l-Frauldent Misrepresentation of Ord 2014'()02 as: similar /same as 2002-037 Noxious Weed Control 2-Failure to Conduct Dist. Formation Hearing on NEW Weed AND Plant/VEGETATION Control Dist. 3-Fallure of 'socc Board Business Meeting' posting to note 'Publlc Hearing' for separate Items Any continuation of current planned Ord. 2014-002 discussions, hearing or, 'BOCC Business Meeting' actions, including 'Emergency Adoption' of Exhibit "Au is legally wrongful, and, the only actions that should be considered, ASAP, are corrective actions to conform with Oregon Statues, either, 1), immediately (today) & voluntarily by smart BOCC minds, or, 2) later, per legal recourse by any affected landowner In the newly formed Weed and Plant/Vegetation District. The old Noxious Weed District (DRS Chap. 569) will cease, and, per your frauldently-worded Ordinance, an adoption causes formation of the new 2014-002 District, with a new Principal Act,( by truthful language), that shall be control of ALL vegetation, weeds & plants, in Deschutes County. The unnecessay 'emergency declaration' for formation of this new District, with It's boundary inclusions of cities, will violate city citizen ORS-rights. In addition, the legal staffs... casual declaration, "Noxious weed means any plant which is determined by the County Commission.:, Is degrading to, and, a blantant conflict with, governing DRS 569-Noxious Weed. The State Ag. Dept's careful consideration of any addition to State 'Noxious Weed List', must also have coordinated support of, or, an Inclusion recommendation from, Oregon State University's Plant experts, and, all Deschutes landowners deserve that same high agriculture standard, to preserve their land assets, not a local weed determination by politlcally-motoviated, homegrown, nit-pickers. The 'minimal & generalized text' is a willfully deceptive effort by the County to create a new Ordinance with a broadly subjective 'weed' category, that makes every plant a candidate for a 'Weed Violation', via County's Vegetation Control. Per past Comp Plan discussions/testimony, intended use of this New Weed District and Ord. 2014-002 is to 'make people clean-up their yards (esthetics, not weeds), and, 'make absentee owners clear properties to 'defensible space fire standards' (while the County Inhibits/restricts them from having anything to defend). PLEASE fix this flawed ordinance, by rewriting with language to eradicate any & all Weed Districts, and, allow high-quality Weed Control to continue under leadership of knowledgable State Dept Agr staff. Respectfully submitted I>y KI1#vy p~ All ordhmm;e AdOlJllfll1 pClichulQ Count)' Cude Chl\l~C;1 WC!C(I (::on'rol MlUll.lechumM IUl HItl~f~fl(:Y ORf>INAN('li NO 2ilt4·0()2 WHHJU!AS. IhnlUsh Onlet l()fi2~Ol1, I~.chut(}s ('OURly ".wblhthClld 1M-~llIlrl:ll!oUllty ties Ilw Coonl), Woed Cumrul DI!I;trh:j (hUIiQrM;I") • Ilth)Jned the Il.t or nO)CI(lUIi weed. 10 bn crndicnlll.-d It'om wilhiu dll,ll J)lttrict "1M! t1"".IMl1luod Ihe tlaJi.l,JhulQ Coun'y kultu l.)c~uunen, lltrel.-rot 8. lhe Oel..:hut"" CuunlY WctC'(II"_p¢Clcr("Wccd lhapoetur"); nnd WHF..REAS. Order 2002-0:l1I!:doplocllhe "Iule \\lced control ),wcC!durc1l Itl O~s: ('haplC( 569; and WflHMnI\S. when Male ,"tIUle. t:hunJ"d. the Bmm1 Comml'''lIltltlr" ("flnnrd") '''lIued Otder 2010·01410 upc.lillt.l Iheauu\f\ol')' mfolclJgl. ",ld tit" nO.lou. llJH U(),I\Rl) 01; t'OlINTY t'OMMfSSJONHMS OF IJESCHtrl hSo t'Ol/Nl"Y. otu-.GON. ORDAINS ,,_ folhlWtt: :i*""UQJl L AllOI)TION, IXT Chuvtcr JJ,\5 I. ildopl~d 100 re.d 1:1• ..tolWnhed III E-'hlhll "A," "Unchcsd hemlo And 11)' thilt rofonlm;;e incntllOrftled IU:lfciu (""tv'"r 8.3$. WEEI> CONTROL 8,3!\.O)O. T'rllt' ,nul PU'1*0t .. , 8.3!\.OlO. D,nultlou•• 8 . .3'!I.030. Autbority to E'I"bU&b ,,'..d COlltl'ol Dh:'riC"t Mud n"t'hu.. PlnnU: Aft Noxkun W.od•• 8.35.030 AUlbotily 10 Establish WHd C"ntrol Distrld, Dodoro PlAn.s., Noxlolls W••ds alld Appoint W ••d lo.p...lo." Post Office Box 1038 La Pine, Oregon 97739 Commissioner Alan Unger Commissioner Tammy Baney Commissioner Tony DeBone Board of County Commissioners Deschutes County 1300 NW Wall Street, Suite 200 Bend, Oregon 97701 February 4,2014 Re: Draft Ordinance 2014 002, Noxious Weed Control. Dear Commissioners: Thank you for the opportunity to give testimony about this draft ordinance. We are opposed to this draft for the following reasons: 1. The Deschutes County Weed Board and county staff recommend adoption of this ordinance through the emergency clause powers, however, no impending threat to public health or safety exists to warrant the use of such powers. This draft has serious problems that need careful vetting through public hearings; using the emergency clause silences the voice of the people who will pay the consequences for such an hasty action by the Board of Commissioners. 2. The draft ordinance claims to replicate ORS 569, however, there are serious and disturbing departures: 1. The definition of noxious weed expands to include "injurious to public health," a dangerous expansion of powers. The intent of ORS 569 is to address invasive weeds; this draft could potentially expand those powers to include native plants that cause allergies. We fail to see the need to expand the state noxious weed definition. 2. The definition expands cleaning of agriculture equipment to "means pressure washing the sides, tops, wheels and undercarriages ofall machinery in order to remove all seeds, plants, plant fragments, dirt and other debris." This places a burden on the small farmer and rancher, where ORS 569 simply requires "thoroughly swept and cleaned' (ORS 569.445). Continually pressure washing hay bailing equipment is probably not beneficial, nor is it practical in the field. 3. The draft expands the compliance notice requirement to "post," when ORS 569.380(b) states "service," a significant departure (8.35.050(D) and 8.35.060(B)). Landowners in the hospital or on vacation could return to find themselves out of compliance without ever receiving notice. 4. The draft shortens the time period for compliance once notice is posted to "10 days" (8.35(D)(3)), where ORS 569.380(b) provides "20 days," a significant and unreasonable departure. 1 In summary, no immediate threat to public health or safety exists. No rational exists to expand the powers ofORS 569 as the framers of this draft ordinance desire. We urge the Board of Commissioners to reject the emergency clause and re-frame the draft to mirror ORS 569. Respectfully submitted, John Huddle, Ed.D. President Deschutes County Citizen's Action Group 2 Bonnie Baker From: Pam & Pat <sunrise3@coinet.com> Sent: Wednesday, January 29, 20142:27 PM To: Tony DeBone; Tammy Baney; Alan Unger Cc: Board Subject: testimony regarding noxious weed proposal January 30,2014 Dear Commissioners Tony DeBone, Tammy Baney and AI Unger, You may know me from CAG. But, today, I am not representing CAG. I write from a stance of Ceres, the position I hold at the Little Deschutes Grange in La Pine. Ceres was the Roman goddess of agriculture and motherly love. At the Grange, my duty is to report on local gardening and animal husbandry. I write because localized food production is my passion. I have worked with the La Pine Coop and Garden Tour since the beginning. My husband and I have composted and gardened and raised chickens and rabbits for the eight years that we have lived in La Pine. You might enjoy the website www.lapinecoopandgardentour.com. I write in response to the proposal regarding noxious weed control. When I read that "Every Owner or Occupant of land shall destroy or prevent the reproducing by any manner or spreading on the Owner's land or land occupied by Occupant of any Weed classified as a Noxious Weed by the Board using the most efficient and practical means available. " I am afraid that "the most efficient and practical means available" will mean using picloram or Round Up or any other toxic pesticides that will destroy the land's ability to grow food. The same goes for insisting on weed-free feed for horses. The manure from those horses is no longer fit be used for fertilizer to grow food. What is a horse owner to do with the manure? What is the gardener to do without it? Well, gee .... I guess they'd have to purchase commercial fertilizer. And, who makes that? Uh, that would be Monsanto Corporation, the makers of Round Up and genetically altered seeds which have their pesticides engineered into them. And, say, didn't the State Legislature just vote to approve the Monsanto Protection Act? That act makes it impossible to sue Monsanto for any damage that they cause. In fact, our own representative, Mike McLane voted for it. Good timing. 1 Speaking of timing, what's the emergency? Is there a sudden attack of noxious weeds? Or, is there some sort of resistance to getting rid of them? I think not. I just saw a brochure that had pictures of these weeds and some facts about them. That's the very first time I have seen them. Why haven't they been included in our tax forms or in some direct mail? I would inspect every inch of my property and dig them up and burn them. Who wouldn't want them gone? No, the emergency would be declared so as to not allow due process and input from the community, as we would have no recourse. After all, we could have been informed of this last year. The danger from weeds was the same then as it is now. But, the Monsanto Protection Act hadn't been passed yet. Hummm .... It goes to the classic question, "Who Benefits?" And, $2,000 fines! Whether you are a land owner or a renter? Really? Is the fine the same for a person on one acre or 1,000 acres? And, what if the people can't afford to pay the fine? Will a lien be placed on their land? Will there be a bounty on these weeds? Who gets the money? Will it be used to educate the public or help to clear the land? Or, will it be used to pay the inspectors? Once again, "Who benefits?" There is a bigger threat, you know. The drought in California is the worst in their history. It is bad in most of the Western states, where most of the food is grown in this country. Vegetables, fruits, and grains will all be in short supply, and therefore very expensive. The high priced grain will drive up the price of meat as well. We already know that food is in short supply for too many Oregonians. And the SNAP funds just got reduced. Once again, great timing. We are going to have to subsidize our food supply with locally grown produce if we are to mitigate this disaster. You could be setting up tool banks if you want to respond to the real emergency coming this summer. I believe that if you go about dealing with noxious weed control in the way that it is proposed, you will be enabling the commercial food corporations to further garner control of the food supply. There is a war going on that's making me crazy. On the one hand we've got the First Lady advocating for her nice organic garden at the White House. Meanwhile, SWAT teams are invading family dairies and vegetable stands, arresting farmers and driving them out of business. I don't know what is paranoid and what is prudent anymore. But, I know it is not right. Do not do this. At the very least, make certain that toxic chemicals are not used in places that will affect gardening or animal feed or the general supply of water. And, please 2 educate yourselves regarding the destructive track record Monsanto and Dow Chemical have in the world. I will be happy to send links to you if you are interested. With Respect, Pam Cosmo, Ceres Little Deschutes Grange #939 3 Bonnie Baker From: Tom Anderson Sent: Sunday. January 12.20142:20 PM To: Ed Keith; Laurie Craghead; Chris Doty Cc: Board Subject: RE: noxious weed fines FYI -----Original Message---- From: pandg [mailto:pandg@nwlink.com] Sent: Sunday, January 12, 2014 12:48 PM To: Board Subject: noxious weed fines Dear County Commissioners- We are delighted to learn that you may consider fining county land owners who do not adequately control their noxious weeds. The two of us have worked very hard at a considerable expense to control weeds on our property, but seeds from neighboring properties make it extremely difficult to keep our land in good condition. Just knowing that there could be fines might provide incentive for violators to do the right thing by managing their land more responsibly. We encourage you to approve any policies that will result in fines. Sincerely, Robert and Gretchen Pederson 18925 Pinehurst Rd. Bend, OR 97701 1 Introduction This is a public hearing on applications for a Plan Amendment and Zone Change, to amend the comprehensive plan designation on 171 acres from agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agricultural (File Nos. PA-13-1, ZC-13-1) submitted by NNP IV-NCR, LLC aka "Newland." These applications were previously considered by the Deschutes County Hearings Officer in the written decision mailed on October 24, 2013. Deschutes County Code 22.28.030 requires that for lands which are designated farm or forest use, a de novo hearing shall be conducted by the Board of County Commissioners. This hearing constitutes the required de novo hearing. Burden of proof and Applicable criteria The applicant has the burden of proving that they are entitled to the land use approval sought. The standards applicable to the applications are listed in the previously issued Hearings Officer's decision. Failure on the part of any person to raise an issue, with sufficient specificity to afford the Board of County Commissioners and parties to this proceeding an opportunity to respond to the issue precludes, appeal to the Land Use Board of Appeals on that issue. Additionally, failure of the applicant to raise constitutional or other issues relating to the proposed conditions of approval with sufficient specificity to allow the Board to respond to the issue precludes an action for damages in circuit court. Hearings Procedure The procedures applicable to this hearing provide that the Board of County Commissioners will hear testimony, receive evidence and consider the testimony, evidence and information submitted into the record, and will be the basis for their decision. The record as developed to this point is available for public review at this hearing. Order of Presentation The hearing will be conducted in the following order. The staff will give a staff report of the prior proceedings. The applicant will then have an opportunity to make a presentation and offer testimony and evidence. All others will then be given a chance to testify. After both proponents and opponents have testified, the applicant will be allowed to present rebuttal testimony, but may not present new evidence. At the Board's discretion, if the applicant presented new evidence on rebuttal, opponents may be recognized for a rebuttal presentation. At the conclusion of this hearing, County staff will be afforded an opportunity to make any clOSing comments. Cross-examination of witnesses will not be allowed. A witness who wishes, during that witness' testimony, however, to ask a question of a previous witness, may direct the question to the Chair. If a person has already testified but wishes to ask a question of a subsequent witness, that person may also direct the question to the Chair after all other witnesses have testified, but prior to the proponent's rebuttal. The Chair is free to decide whether or not to ask such questions of the witness. Continuances: The grant of a continuance or record extension shall be at the discretion of the Board. If the Board grants a continuance or record extension, it shall continue the public hearing or leave the written record open to a date certain. If, at the conclusion of the hearing, the Board leaves the record open for additional written evidence or testimony, the Board shall establish the time period for submittal of new written evidence or testimony and for additional for response to the evidence received while the record was held open. If the hearing is continued or the record left open, the applicant shall also be allowed time after the record is closed to all other parties to submit final written arguments but no new evidence in support of the application. Pre-hearing Contacts, Biases, Conflicts of Interests Do any of the Commissioners have any ex-parte contacts, prior hearing observations, biases, or conflicts of interest to declare? If so, please state the nature and extent of those. Does any party wish to challenge any Commissioner based on ex-parte contacts, biases or conflicts of interest? (Hearing no challenges, I shall proceed.) Community Development Department Planning Diviston Building Safety Division Environmental SolIs Dlvlslon P.O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 {541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ MEMORANDUM To: Deschutes County Board of Commissioners From: Paul Bllkstad, Senior Planner Date: November 26, 2013 Re: PA-13-1/ZC-13-1, De novo hearing on applications for a Plan Amendment and Zone Change from Exclusive Farm Use (EFU-TRB) to Multiple Use Agricultural (MUA-10) for approximately 171 acres adjacent to Butler Market Road in Bend. BACKGROUND: The applicant, referred to as Newland, applied for a Plan Amendment to amend the comprehensive plan designation from agriculture to rural residential exception area, and a Zone Change from Exclusive Farm Use (EFU-TRB) to Multiple Use Agricultural (MUA-10) for approximately 171 acres. The 171 acres consists of 9 tax lots, and 8 legal lots of record (parcels). The status of these parcels is outlined in the Hearings Officer written decision on pages 2-3 of the decision. Newland submitted the two applications after the Board's final decision on the Department of State Lands (DSL) plan amendment/zone change for the same type of change. As you may recall, the DSL plan amendment/zone change was for 380 acres out of an approximately 640 acre parcel on property zoned EFU-TRB. An initial hearing date of April 2, 2013 was scheduled. Based on a joint transmittal (letter) from the Oregon Department of Land Conservation and Development, and the Oregon Department of Agriculture, the applicant requested a continuance of the hearing to July 16, 2013. Testimony and evidence were submitted at that July hearing. By an order dated August 27, 2013, the Hearings Officer reopened and extended the written evidentiary record to September 13, 2013 for the purpose of allowing the applicant to submit written additional evidence concerning soils on the individual parcels comprising the subject property, and for opponents to submit evidence rebutting any such soils evidence. By a letter dated September 5, 2013, the applicant declined to submit additional soils evidence and made additional legal argument. Staff mentions this as the "individual parcels versus the entire tract" soils analysis ended up being one of the two main reasons the Hearings Officer denied (recommending denial of) the applications. Because these applications involve lands designated for agricultural use, Deschutes County Code 22.28.030(C) requires that the applications be heard de novo before the Board without the Quality Services Performed with Pride I i I necessity of filing an appeal, regardless of the determination of the Hearing Officer.1 i Consequently, staff has scheduled the matter before the Board. I The Hearings Officer's decision includes a summary of her decision on pages 7-8 of the decision. This summary states the following: I The Hearings Officer has found the applicant's proposed plan amendment and zone change must be denied because the application failed to demonstrate the subject property is not Ilagricultural land" as defined in statute and administrative rule.I Specifically. I have found that under the unique circumstances of this case, where the I subject property is a tract with multiple parcels, the applicant must demonstrate each parcel consists of predominantly Class VII and VIII soils rather than simply analyzing the tract as a whole. The applicant did not provide sufficient evidence from which the I predominant soils analysis could be conducted as to each parcel. In addition, I have found that even assuming it is appropriate to conduct the I.predominant soils" analysis on the entire tract, the applicant failed to demonstrate the entire subject property is unsuitable for farm use considering profitability and other factors set forth in the administrative rule. That;s because the applicant's agricultural economic analysis, on which it relies heavily, is based on questionable assumptions. I have attached to this memo copies of the Hearings Officer's decision, the OLCO/OOA transmittal letter, and the applicant's agronomic study. There is an extensive file on these applications, most of which includes the applicant's submittals (from Liz Fancher). Feel free to contact me at your convenience. Staff will be scheduling a work session in January, and we are looking at February 5, 2014 as the de novo hearing date. Community Development Department Planning Division Building Satwty Division Environmental Soils DIvision P. O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ NOTICE OF PUBLIC HEARING The Deschutes County Board of Commissioners will hold a Public Hearing on Wednesday, February 5, 2014 at 10:00 P.M. in the Barnes and Sawyer Rooms of the Deschutes County Services Building located at 1300 NW Wall Street in Bend, to consider the following request: FILE NUMBERS: PA-13-1/ZC-13-1 SUBJECT: Applications for a Plan Amendment to change the comprehensive plan designation of certain property from Agriculture to Rural Residential Exception Area, and a Zone Change from Exclusive Farm Use to Multiple Use Agriculture (MUA-10). A total of 171 acres is proposed to be rezoned. This is a de novo hearing as required under DCC 22.28.030. APPLICANT: NNP IV-NCR, LLC LOCATION: County Assessor's Map 17-12-24, tax lots 206, 300, 301, 302, 304, 305, 401, 405 and 406 ALL INTERESTED PERSONS MAY APPEAR, BE HEARD, BE REPRESENTED BY COUNSEL, OR SEND WRITTEN SIGNED TESTIMONY. ALL WRITTEN REPLIES MUST BE RECEIVED BY THIS DEPARTMENT PRIOR TO THE HEARING DATE OR SUBMITTED AT THE HEARING. ANY PARTY TO THE APPLICATION IS ENTITLED TO A CONTINUANCE OF THE INITIAL EVIDENTIARY HEARING OR TO HAVE THE RECORD LEFT OPEN IN ACCORDANCE WITH SECTION 22.24.140 OF THE DESCHUTES COUNTY CODE. Recipients of this notice may request a copy of the Hearings Officer's decision (25 cents a page). Any person submitting written comment or who presents testimony at the hearing will receive a copy of the decision. I Failure to raise an issue in person at the hearing or in writing precludes appeal by that person to the Land Use Board of Appeals (LUBA). Failure to provide statements of evidence sufficient to afford the decision-maker an opportunity to respond to the issue precludes appeal to LUBA based on that issue. I Copies of the application, all documents and evidence submitted by or on behalf of the applicant and applicable criteria are available for inspection at the Planning Division at no cost, and can be purchased for 25 cents a page. 1 I I Quality Services Perfonned with Pride STANDARDS AND APPLICABLE CRITERIA: Title 18 of the Deschutes County Code, the County Zoning Ordinance Chapter 18.16, Exclusive Farm Use Zone Chapter 18.32, Multiple Use Agricultural Zone Chapter 18.136, Amendments Title 23 of the Deschutes County Code, Deschutes County Comprehensive Plan Chapter 2, Resource Management Chapter 3, Rural Growth Appendix C, Transportation System Plan Oregon Administrative Rules, Chapter 660 Division 12, Transportation Planning OAR 660-012-0060, Plan and Land Use Regulation Amendments Division 15, Statewide Planning Goals and Guidelines Division 33, Agricultural Land NOTICE TO MORTGAGEE, LIENHOLDER, VENDOR OR SELLER: ORS CHAPTER 215 REQUIRES THAT IF YOU RECEIVE THIS NOTICE, IT MUST PROMPTLY BE FORWARDED TO THE PURCHASER. Please contact Paul Blikstad, Senior Planner, with the County Planning Division at (541) 388 6554 if you have any questions; Email address: paul.blikstad@deschutes.org Dated this __day of January, 2014 Mailed this ___ day of January, 2014 __ _ _ 23 T17S. R12E Section 24 N Y. Deschutes Co, OR 17 12 24 SECTION 24 T.17S. R. 12E. W.~. & INDEXDESCHUTES COUNTY l ' .i~ I I I I I I I I ~ ~ I ..... •! Jfl , \ \ \ \ " " , \ q-( ~1I 12 1l • ~' " I I I • 1-3I •t •, I\ " IoL. ". :E !II ~' l :~ .... SEE ItIAP 17 12 240 i •_:::1 Il ,. 18 19 I Cuul .clIIo,. ;o l 1 ~~ I~ ~ I :g: 40 1 I ~' '' SCI I I j . " !oj1\ 17 12 24 & INDEX rborine@bendbroadband.com Sage W est, LLC (541) 610-2457 Roger Borine Bend. OR Print Map Page 1 of 1 Scale 1:8,312 1 in =693 ft http://lava5.deschutes.org/mox5/indexintranet.cfm?action=mox52_ vi ew ---'prin ta blemap 11126/2013 \ DECISION OF DESCHUTES COUNTY HEARINGS OFFICER FILE NUMBERS: PA-13-1/ZC-13-1 APPLICANTI PROPERTY OWNER: NNP IV-NCR, LLC 2660 N.E. Highway 20, Suite 610-369 Bend, Oregon 97701 APPLICANT'S ATTORNEYS: Liz Fancher 644 N.W. Broadway Bend, Oregon 97701 Steven P. Hultberg Radler White Parks &Alexander LLP P.O. BOK2007 Bend, Oregon 97709 REQUEST: The applicant requests approval of a plan amendment from Agriculture to Rural Residential Exception Area and a zone change from EFU-TRB to MUA-10 for a 171-acre parcel located near the intersection of Butler Market and Hamby Roads east of Bend. STAFF REVIEWER: Paul Blikstad, Senior Planner HEARING DATES: April 2 and July 16, 2013 RECORD CLOSED: September 5, 2013 I. APPLICABLE STANDARDS AND CRITERIA: A. Title 18 of the Deschutes County Code, the Deschutes County Zoning Ordinance 1. Chapter 18.16, Exclusive Farm Use Zone 2. Chapter 18.32, Multiple Use Agricultural Zone * Section 18.32.010, Purpose * Section 18.32.040, Dimension Standards SC.A~Tl...... 3. Chapter 18.136, Amendments ~4.I..J.Y".lU) I* Section 18.136.010, Amendments - I* Section 18.136.020, Rezoning Standards OCT 24 2013 B. Title 22 of the Deschutes County Code, the Land Use Procedures Ordinance '"""'--- 1. Chapter 22.20, Review of Land Use Action Applications * Section 22.20.040, Final Action in Land Use Actions C. Title 23 of the Deschutes County Code, the Deschutes County Comprehensive Plan NNP IV-NCR. LLC -PA-13-1/ZC-13-1 Page 1 of 39 1. Chapter 2. Resource Management * Section 2.2. Agricultural Lands Policies * Section 2.5, Water Resource Policies 2. Chapter 3, Rural Growth * Section 3.3. Rural Housing * Section 3.7. Transportation System Plan D. Oregon Administrative Rules. Chapter 660 1. Division 12, Transportation Planning * OAR 660-012-0060, Plan and Land Use Regulation Amendments 2. Division 15, Statewide Planning Goals and Guidelines 3. Division 33. Agricultural Land * OAR 660-033-0010. Purpose * OAR 660-033-0020. Definitions * OAR 660-033-0030, Identifying Agricultural Land E. Oregon Revised Statutes, ORS Chapter 215. County Planning 1. ORS 215.010, Definitions II. FINDINGS OF FACT: A. Location: The subject property is located near the intersection of Butler Market and Hamby Roads east of Bend. Five of the nine tax lots comprising the subject property have dwellings, each of which has an address on either Butler Market or Hamby Road. The subject property is identified as Tax Lots 206, 300, 301, 302, 304, 305, 401, 405, and 406 on Deschutes County Assessor's Map 17-12-24. B. Zoning and Plan DeSignation: The subject property is designated Agriculture on the Deschutes County Comprehensive Plan map and is zoned Exclusive Farm Use Tumalo/Redmond/Bend Subzone (EFU-TRB). C. Site Description: The subject property consists of nine contiguous tax lots comprising approximately 171 acres 1 with 103 acres of irrigation water rights.2 Seven of the nine tax lots are receiving farm tax deferral. Five of the nine tax lots are developed with dwellings. The topography is varied with level areas interspersed with some rock outcrops. The undisturbed portions of the property have a vegetative cover of juniper trees and native brush and grasses. Cultivated areas have native and pasture grasses. Following are descriptions of each of the nine tax lots, based on evidence in the record including Assessor's data, and the applicant's burden of proof and post-hearing submissions. Tax Lot 206. This tax lot is 29.92 acres in size, undeveloped and has no irrigation. It has a vegetative cover of juniper trees and native brush and grasses and is not receiving special assessment for farm use. 1 The Assessor's records show the total acreage as 174.33 acres. However, the applicant's burden of proof states the applicant's engineer estimated the property is 171 acres in size. 2 The Assessor's records for the subject property show somewhat less than 100 acres of irrigation. However, the applicanfs burden of proof states there are 103 acres of irrigation. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 2 of 39 Tax Lot 300. This tax lot is 4.52 acres in size and is developed with a 1,188-square-foot manufactured home approved as a farm dwelling (CU-8S-61) and an accessory structure. The Assessor's records show this tax lot has 3.52 acres of irrigation water rights. It has a vegetative cover of juniper trees, native brush and pasture grasses. It is receiving special assessment for farm use. Tax Lot 301. This tax lot is 5 acres in size and is development with a 2,236-square-foot dwelling built in 1935 and accessory structure. The Assessor's records show this tax lot has 3 acres of irrigation water rights. It has a few scattered trees and an irrigated pasture area. It is receiving special assessment for farm use. Tax Lots 302/305. These tax lots comprise a single legal lot. Together they are 20.21 acres in size, are undeveloped, and have 15.07 acres of irrigation water rights. They have a vegetative cover of juniper trees, native brush and pasture and are receiving special assessment for farm use. Tax Lot 304. This tax lot is 13.84 acres in size and developed with a 2,653-square-foot replacement dwelling built in 2005 and accessory structure. The Assessor's records show this tax lot has 4.87 acres of irrigation water rights. It has a vegetative cover of juniper trees, native brush and pasture and is receiving special assessment for farm use. Tax Lot 401. This tax lot is 20.13 acres in size and is developed with a 1,699-square foot dwelling built in 1992 and approved as a farm dwelling, and an accessory structure. The Assessor's records show this tax lot has 19.13 acres of irrigation water rights. Vegetation consists mostly of pasture with a few widely scattered trees. This tax lot is receiving special assessment for farm use. Tax Lot 405. This tax lot is 4.9 acres in size and developed with a 3,140-square-foot dwelling built in 1975 and an accessory structure. The Assessor's records show this tax lot has no irrigation water rights. Vegetation consists of native grasses. This tax lot is not receiving special assessment for farm use. Tax Lot 406. This tax lot is 75.81 acres in size and undeveloped. The Assessor's records show it has 52.46 acres of irrigation water rights. The western approximately two-thirds of the tax lot is irrigated pasture. The eastern one-third of the tax lot consists of a cleared area as well as juniper trees and native brush. This tax lot is receiving special assessment for farm use. D. Soils: The Natural Resources Conservation Service (NRCS) maps identify three soil units on the subject property: Soil Units 36A and 36B, Deskamp loamy sand 0 to 3/3 to 8 percent slopes; and Soil Unit 58C, Gosney-Rock outcrop-Deskamp complex, 0 to 15 percent slopes. Soil Units 36A and 36B soils are considered high value soils when irrigated. Soil Unit 58C soils are considered nonhigh value soils. The subject property has 103 acres of irrigation water rights. As discussed in detail in the findings below, the applicant submitted a site-specific "Agricultural Soils Capability Assessment" of the subject property, also referred to as an "Order 1 soil survey" (hereafter "soil study"). The soil study is dated July 11. 2012. was prepared by Roger Borine of Sage West. LLC. and is included in the record as Exhibit NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 3 of 39 «A" to the applicant's burden of proof. The soil study identifies the same three soil units on the subject property. E. Surrounding Zoning and Land Uses: The applicant's burden of proof states at pages 3-4: 'The subject property is almost entirely surrounded by nonresource land and nonfarm uses. The property adjoins rural residential exceptions areas (MUA-10 zoning) on the west and south. The majority of lands to the east are zoned MUA with intermixed EFU-TRB lots. Lands to the north and northeast are zoned EFU TRB and MUA-10 in areas that have been divided into small rural residential lots. A color copy of Page 17-12 of the County's zoning atlas, Exhibit B, illustrates the zoning pattern. The following is a description of the development pattern in the area surrounding the subject property: West: There are two small tax lots on the west side of the subject property, Tax lots 400 and 403. These lots are surrounded by the subject property. These lots are not employed in farm use. Tax lot 400 is owned by the Hamby Trust. It is zoned EFU but is developed with an industrial door manufacturing company and three residences. These uses are lawfully established nonconforming nonagricultural uses of the property. Tax Lot 403 is developed with a nonfarm dwelling on land that is generally unsuited for farm use. The owner keeps a couple of horses on Tax Lot 403 for recreational use. All land immediately west of the subject property across Butler Market Road is zoned MUA-10 and is developed with single-family residences and two churches. This MUA-10 area adjoins residential lands zoned UAR-10 that adjoin the City of Bend. The Pine Nursery Park, a community park and offices for the US Forest Service are in close proximity to the subject property. The USFS property was recently annexed to the City of Bend. Southwest: The property that touches the southwest corner of the subject property is developed as the East Villa, East Villa First Addition and East Villa Second Addition subdivisions. This area adjoins and lies west of the Los Serranos subdivision that adjoins the southern boundary of the subject property. The East Villa area is zoned MUA-10 and is developed with 67 urban-sized lots that are approximately one half acre in size. South: All land to the south of the subject property is zoned MUA-10. Most of the land to the south is located in the Los Serranos rural residential subdivisions (Los Serranos and Los Serranos First Addition). The area of the Los Serranos First Addition subdivision that adjoins the subject property was initially zoned EFU-20 by Deschutes County in 1979 and 1980. The County rezoned the property MUA-10 in the early 1980's because the property was predominantly scabland that is not suitable for agricultural uses (File Z-80-37, Exhibit C). All other lands in Section 17-12-24D not included in the Los Serranos First Addition subdivision were also rezoned MUA-10 from EFU-20 zoning. The southwest quarter of Section 24D was rezoned MUA-10 because the predominant soil type is, according to the Assessor, Class VII soils and the property had not been farmed (File Z-80-28, Exhibit D). The east half of Section 24D was rezoned EFU because the property was predominantly Class VI or VII soils suited only for NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 4 of 39 grazing (File Z-81-14, Exhibit E). These MUA-10 properties are now developed with single-family residences and some hobby farms. East: The properties that adjoin the eastern boundary of the subject property are all nonfarm properties that do not receive farm tax deferral and all contain lands that are not suitable for farm use. The northernmost property is Tax Lot 201, Assessor's Map 17-12-24. It is developed with a nonfarm, single-family dwelling on 12.55 acres. This home was approved by Deschutes County in CU-92-84 as shown by DIAL Report, Exhibit F. Tax Lot 203, Assessor's Map 17-12-24, is approximately 20 acres and is owned by Central Electric Cooperative. It is developed with four power lines and does not receive farm tax deferral. The power lines extend across and dominate the southernmost property, Tax Lot 200. Tax Lot 200 is part of a tract that includes Tax Lot 205 that is owned by the Culvers. The tract contains the foundation of a nonfarm dwelling. See, DIAL Report for Tax lot 205, Exhibit G. Neither Culver property is tax deferred. Land to the west of the Culver property is zoned MUA-10. There are two EFU-zoned lots east of the CEC property that adjoin Butler Market Road. One is developed with a dwelling on a five-acre lot. This home does not receive farm deferral (Tax Lot 100) (see Exhibit H). The other, Tax Lot 101, is developed with a farm dwelling on a 35-acre lot. Tax Lot 101 contains an irrigated farm field. It is separated from the subject property by Tax Lots 100, 201 and 203 that include a rock ridge and two major power lines and two smaller power lines. The land to the west of Tax Lots 101 and 205 is zoned MUA-10. North: Butler Market Road divides the subject property from EFU-zoned lands found to the north of the subject property. The westernmost lot is a 1. 15-acre lot, Tax Lot 500, Assessor's Map 17-12-13. This lot is developed with a single-family nonfarm dwelling (no farm tax deferral). Two small to medium-sized farm parcels (37.15 acres and 38.88 acres), Tax Lot 400 and 402, Assessor's Map 17-12-13, are located east of Tax Lot 500. These lots were created by Partition Plat 1993-42. These parcels have a common owner but each lot contains its own dwelling. The westernmost lot, Tax Lot 402 received approval for a land division and nonfarm dwelling in 1997 (MP-97-37ICU-97-137). The easternmost lot contains a dwelling that is located near Butler Market Road. These properties are irrigated and are used to grow field crops. The eastern part of Tax Lot 400 contains poor soils that are not a part of the farm operation. This ridge and the poor soils extend to the south onto the subject property. Land to the north of the Butler Market Road farm properties described above is zoned EFU and MUA-10. The MUA-10 zoning applies to two large areas that are unrecorded residential subdivisions. Northeast: To the northeast along Butler Market Road is a small farm parcel (19.26 acres), Tax Lot 600, Assessor's Map 17-12-13 zoned EFU-TRB and a neighborhood area of small lots (2.2 to 8.4 acres) that are zoned MUA-10. The poor soils found on the subject property extend across the east part of Tax Lot 600 and separate lands to the east from the subject property. This part of Tax Lot 600 is not used for farm use. " The Hearings Officer did not conduct a site visit to the subject property and vicinity and therefore cannot confirm the applicant's surrounding area descriptions. However, the staff report states staff believes the applicant's descriptions are accurate, with the NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 5 of 39 exception of the "east" description. The staff report states the reference in this section to the area west of the Culver property and Tax Lots 101 and 205 should be to the area to the east. F. Land Use/Property History: The record indicates that in 1981 the C-5 Company, one of the applicant's predecessors in title, applied to rezone a portion of the subject property from Exclusive Farm Use (EFU-20) to MUA-10. The application was withdrawn following planning staff's recommendation that the application be denied based on soils information. Between April and December 2007 the applicant purchased the subject property through six separate deeds. In 2009 the applicant received approval of a lot line adjustment between Tax Lot 206, part of the subject property. and the adjacent Tax Lot 201, resulting in an increase in the size of Tax Lot 206 from 28.63 to 34.91 acres. G. Procedural History: The subject applications were submitted on January 29, 2013. The request includes a comprehensive plan amendment, and therefore under Section 22.20.040(0) of the county's land use procedures ordinance the applications are not subject to the 150-day period for issuance of a final local land use decision under ORS 215.427. A public hearing was scheduled for April 2, 2013. Bya letter dated April 1, 2013, the applicant requested a continuance of the hearing to a date in July. Because the continuance request was submitted after notice of the public hearing was published, the Hearings Officer opened the hearing on April 2, 2013 and continued it on the record to July 16, 2013. One member of the public testified at the initial hearing. At the continued public hearing, the Hearings Officer received testimony and evidence, left the written evidentiary record open through July 30, 2013. and allowed the applicant through August 6.2013 to submit final argument pursuant to ORS 197.763. The applicant submitted final argument on August 6, 2013, and the record closed on that date. By an order dated August 27, 2013, the Hearings Officer reopened and extended the written evidentiary record to September 13, 2013 for the purpose of allowing the applicant to submit additional evidence concerning soils on the individual parcels comprising the subject property, and for opponents to submit evidence rebutting any such soils evidence. By a letter dated September 5, 2013, the applicant declined to submit additional soils evidence and made additional legal argument. Because there was no additional evidence for opponents to rebut, the extended record closed on September 5, 2013. H. Proposal: The applicant requests approval of a plan amendment from Agriculture to Rural Residential Exception Area and a zone change from EFU-TRB to MUA-10. The applicant is not requesting an exception to Statewide Planning Goal 3, Agricultural Land, and argues the requested plan amendment and zone change are warranted because the subject property is not agricultural land protected by Goal 3. I. Public/Private Agency Comments: The Planning Division mailed notice of the applicant's proposal to a number of public and private agencies and received responses from: the Deschutes County Transportation Planner and Road Department; the City of Bend Planning Department; the Oregon Department of Land Conservation and Development (DLCD); the ·Oregon Department of Water Resources, Watermaster District 11 (Watermaster); the Oregon Department of Agriculture (ODA); and Pacific NNP IV-NCR. LLC -PA-13-1/ZC-13-1 Page 6 of 39 Power. These responses are set forth verbatim at pages 6-7 of the staff report and are included in the record. The following agencies did not respond to the request for comments or gave a "no comment» response: the Deschutes County Environmental Soils Division and Assessor; the City of Bend Fire Department; the Bend-la Pine School District; the Oregon Department of Environmental Quality (DEQ); the Oregon Department of Transportation (ODOT); Central Oregon Irrigation District (COlD); Cascade Natural Gas; Central Electric Cooperative (CEC); and CenturyLink. J. Public Notice and Comments: The Planning Division mailed individual written notice of the applicant's proposal and the initial public hearing to the owners of record of all properties located within 750 feet of the subject property. The record indicates these notices were mailed to 58 property owners. In addition. notice of the initial public hearing was published in the Bend "Bulletin" newspaper. and the subject property was posted with a notice of proposed land use action sign. Notice of the continued public hearing was given on the record at the initial hearing. As of the date the evidentiary record in this matter closed. the Planning Division had received one written comment from the public in response to these notices. In addition. three members of the public testified at the two public hearings. K. Lot of Record: The staff report states the Planning Division previously determined the legal lot status of the nine tax lots comprising the subject property based on partitions (MP). lot line adjustments (ll). lot-of-record determinations (lR). and deeds. as follows: I ~ ! 'I t 1 I I I As the applicant notes in its burden of proof, this Hearings Officer previously has held ! the provisions of Chapter 18.136 of the Deschutes County Code governing plan I ! amendments and zone changes, discussed in detail in the findings below, do not require I that land consist of a legal lot of record in order to be re-designated and/or rezoned. I E.g., City of Sisters (PA-08-21ZC-08-2/MA-08-8)., I , ~ III. SUMMARY:I I The Hearings Officer has found the applicant's proposed plan amendment and zone change must be denied because the applicant failed to demonstrate the subject property is not "agricultural land" as defined in statute and administrative rule. Specifically, I have found that under the unique circumstances of this case, where the subject property is a tract with multiple parcels, the applicant must demonstrate each parcel consists of predominantly Class VII and VIII soils rather than simply analyzing the tract as a whole. The applicant did not provide i.~,;E';;"', ,-r. :.,' ;~t:>:t;,t,~~g'g',r~?i:,< ,"'.,' 206 1,,:;;~\i;i;"C~~";;i;;h ~,~ ,:~y.~,. :~ ,j"l!}~;n LL-09-22 300 MP-79-204 304 MP-79-204 301 LR-97-45 302/305 one legal lot together LR-97-45 401 CU-91-101, Legal deed 1970 405 LR-89-41 406 LR-89-90 NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 7 of 39 sufficient evidence from which the predominant soils analysis could be conducted as to each parcel. In addition, I have found that even assuming it is appropriate to conduct the "predominant soils" analysis on the entire tract, the applicant failed to demonstrate the entire subject property is unsuitable for farm use considering profitability and other factors set forth in the administrative rule. That is because the applicant's agricultural economic analysis, on which it relies heavily, is based on questionable assumptions. IV. CONCLUSIONS OF LAW: PLAN AMENDMENT AND ZONE CHANGE STANDARDS AND PROCEDURES A. Title 18 of the Deschutes County Code, the Deschutes County Zoning. Ordinance 1. Chapter 18.136, Amendments a. Section 18.136.010, Amendments DCC Title 18 may be amended as set forth in DCC 18.136. The procedures for text or legislative map changes shall be as set forth in DCC 22.12. A request by a property owner for a quasi-judicial map amendment shall be accomplished by filing an application on forms provided by the Planning Department and shall be subject to applicable procedures of DCC Title 22. FINDINGS: The applicant requests a quasi-judicial map amendment and submitted applications for a plan amendment and zone change. The applications are being reviewed under the procedures of Title 22 of the Deschutes County Code. In their March 18, 2013 written comments on the applicant's proposal, DLCD and aDA argued that where, as here, the applicant is not requesting a goal exception, and despite the language in this section, the county cannot consider a quasi-judicial plan amendment to change the designation of resource land (EFU) to non-resource land (MUA-10). T hey argue the county can only make such a change through a legislative process. The agencies rely for this proposition on the following policy language in Chapter 2 of the comprehensive plan: Section 2.2, Agricultural Lands Policies 2.2.4, Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. Section 3.3, Rural Residential Exception Areas In Deschutes County most rural lands are designated for farms, forests or other resources and protected as described in the Resource Management chapter of this Plan. The majority of the land not recognized as resource lands or Unincorporated Community is designated Rural Residential Exception Area. The County had to follow a process under Statewide Goal 2 to explain why these lands did not warrant farm or forest zoning. The major determinant was that many of these lands were platted for residential use before Statewide Planning was adopted. In 1979 the County assessed that there were over 17,000 undeveloped Rural Residential Exception Area parcels, enough to meet anticipated demand for new rural housing. As of 2010 any new Rural Residential Exception Areas need to be justified NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 8 of 39 through taking exceptions to farm, forest, public facilities and services and urbanization regulations. and follow guidelines set out in the OAR. (Underscored emphasis added.) The agencies assert the above-underscored language signifies no EFU-zoned parcels can be re-designated and rezoned to non-resource lands through a quasi-judicial application process, without taking an exception to Goal 3, unless and until the county adopts criteria and code provisions establishing under what circumstances EFU parcels may be converted to non resource designations. However, DLCD and ODA acknowledge this argument was rejected by this Hearings Officer in my previous decision in Pagel (PA-07-1/ZC-07-1), as well as by Hearings Officer Ken Helm and the Deschutes County Board of Commissioners (hereafter "board·) in their decisions in DSL (PA-11-7/ZC-11-2). Copies of these decisions are included in the record as Exhibits avo and OW," respectively, to the applicant's burden of proof. In approving a plan amendment and zone change for the 380-acre EFU-zoned DSL (Department of State Lands) parcel, the board stated in relevant part: "Newland raised questions about whether the County must adopt a nonagricultural land designation in the Comprehensive Plan, and perhaps an associated zone under the development code before the application can be approved. Those concerns appeared to be most closely associated with this policy [Policy 2.2.4]. e1 The record shows that no such Comprehensive Plan designation or zone exists currently. The recently adopted policy acknowledges this fact and provides a general directive that requires the County to at least consider such a Comprehensive Plan deSignation at some point in the future. The policy sets no deadline for doing so. The policy also does not dictate any consequences for failing to do so. More specifically, from a statutory construction perspective, the policy does not state that quasi-judicial Comprehensive Plan amendment applications cannot be processed and approved until such a non-resource designation is established. To read this requirement into the policy would be to violate the most basic rule of construction which is to not add words or phrases which have been omitted from the text. ORS 174.010. This being the case, the Hearings Officer found and the Board concurs that the current application presents essentially the same facts as were present in PA-07-1 (Pagel) in which Hearings Officer Karen Green found that a proposal to amend land from 'Agriculture'to 'Rural Residential Exception Area' could be allowed regardless of the fact that the application was not seeking a Goal 3 exception, and that no non-resource Comprehensive Plan designation existed to accommodate land that was determined to be nonagricultural. The Hearings Officer found that the current circumstances with regard to the requirements of the Comprehensive Plan are essentially the same as when Hearings Officer Green reached her decision in 2007 on Pagel. Although the above policy indicates the desired direction for the County, that work has not yet been accomplished, 3 In response to the Hearings Officer's question about Newland's arguments in the DSL case, which are contrary to the applicant's position in this case, the applicant's (and Newland's) attorney Liz Fancher stated Newland questioned the effect of the plan's EFU lands policies in order to obtain a ruling interpreting these policies to guide the applicant's anticipated efforts to change the EFU plan designation and zoning of the subject property. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 90f39 and the Board finds that it was not intended to impose a moratorium on the type of quasi-judicial Comprehensive Plan amendment applications such as the one currently proposed." The Hearings Officer notes the comprehensive plan includes policies in Chapter 23.120 addressing the designation of "exception areas," identified in part as lands throughout the county that are committed to non-resource uses including rural residential uses. However, I find these policies are not applicable to the applicant's proposal because the applicant is not requesting a "committed" or other exception to Goal 3, and the applicant does not argue that the subject property is committed to non-resource uses. For the foregoing reasons, the Hearings Officer adheres to the board's and my previous interpretations of the plan policies concerning conversion of EFU land to a non-resource designation. Accordingly, I find there is no merit to OLCO's and OOA's argument, and the applicant's proposal is properly before me. b. Section 18.136.020, Rezoning Standards The applicant for a quasi-judicial rezoning must establish that the public interest is best served by rezoning the property. Factors to be demonstrated by the applicant are: A. That the change conforms with the Comprehensive Plan, and the change is consistent with the plan's introductory statement and goals. FINDINGS: The proposed plan amendment is being reviewed under the applicable comprehensive plan provisions. The staff report notes the county's recently adopted plan no longer contains an "introductory statement and goals," and therefore the Hearings Officer finds that language in Paragraph A no longer is applicable. Chapter 2, Resource Management Section 2.2, Agricultural Lands Policies 2.2.2 Exclusive Farm Use SUb-zones shall remain as described in the 1992 Farm Study shown in the table below, unless adequate legal findings for amending the sub-zones are adopted or an individual parcel is rezoned as allowed by Policy 2.2.3. FINDINGS: The applicant is not requesting an amendment to the subzone (EFU-TRB) that applies to the subject property. Therefore, the Hearings Officer finds the applicant's proposal is consistent with this policy. 2.2.3 Allow comprehensive plan and zoning map amendments for individual EFU parcels as allowed by State Statute, Administrative Rules and this Comprehensive Plan. FINDINGS: The applicant has requested a quasi-judicial plan amendment and zone change to remove the EFU deSignation and zoning from the subject property without requesting an exception to Goal 3. As discussed in the findings above, the Hearings Officer has found this request is authorized by policies in the comprehensive plan. I find it also is permitted under state law. In Wetherell v. Douglas County (Great American Properties), 52 Or LUBA 677 (2006), the Land Use Board of Appeals (LUBA) stated in relevant part: NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 10 of 39 1 j 1 i 1 "As we explained in OLCO v. Klamath County, 16 Or LUBA 817, 820 (1988) there are two ways a county can justify a decision to allow nonresource use of land previously designated and zoned for farm or forest uses. One is to take an exception to Goal 3 I j (Agricultural Lands) and Goal 4 (Forest Lands). The other is to adopt findings which I demonstrate the land does not qualify either as forest lands or agricultural lands under the statewide planning goals. When a county pursues the latter option, it must demonstrate that despite the prior resource plan and zoning designation, neither Goal 3 nor Goal 4 applies to the property. Caine v. Tillamook County, 25 Or LUBA 209, 218 (1993); OLCO v. Josephine county, 18 Or LUBA 798, 802 (1990)." I The applicant's burden of proof states at pages 8-9: "LUBA's decision in Wetherell was appealed to the Oregon Court of Appeals and the I Oregon Supreme Court but neither court disturbed LUBA's ruling on this point. n4 The Hearings Officer concurs with the applicant that the subject applications are consistent with I LUBA's and the courts' holdings on this issue. Therefore, I find the applicant's proposal is consistent with this policy. I 2.2.4 Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. ] FINDINGS: As discussed in the findings above, incorporated by reference herein, the Hearings Officer has found the county's failure to adopt comprehensive plan policies and code provisions describing the circumstances under which EFU-zoned land may be converted to a non-resource designation and zoning does not preclude the county from considering the applicant's quasi judicial plan amendment and zone change applications. Therefore, I find the applicant's proposal is consistent with this policy. Section 2.5 Water Resource Policies 2.5.24 Ensure water impacts are reviewed and, if necessary, addressed for significant land uses or developments. FINDINGS: The Hearings Officer finds it is not clear from this plan language what "water impactsU require review --impacts to water supplies from use or consumption on the subject property, or impacts to off-site water resources from development on the subject property. Therefore, I will address both issues. The applicant has not proposed any particular land use or development, and any subsequent applications for development of the subject property would be reviewed under the county's land use regulations which include consideration of a variety of on-and off-site impacts. The applicant's requested zone change to MUA-10 would allow a variety of land uses on the subject property on 10-acre lots. As discussed in the Findings of Fact above, much of the land surrounding the subject property is zoned MUA-10 and developed with rural residences and "hobby farms" --Le., small-scale, non-commercial farm activities subsidized by non-farm income. Consequently, the Hearings Officer finds it likely similar development would occur on the subject property if it were re-designated and rezoned. The record indicates the area 4 Wetherell v. Douglas County (Great American Properties), 204 Or App 778, 132 P3d 50 (2006); 342 Or 666, 160 P3d 614 (2007). NNP IV-NCR, LLC -PA-13-1fZC-13-1 Page 11 of 39 surrounding the subject property is served by Avion Water Company which submitted a "willing to-serveD letter for the subject property. Therefore, I find future development of the subject property under MUA-10 zoning will have adequate domestic water service. The applicant's proposal, if approved, likely will result in the permanent removal of the subject property's irrigation water rights.5 The applicant's burden of proof states some of those water rights already have been leased for in-stream use within the Upper Deschutes River basin, based on the applicant's choice not to irrigate land it considers unproductive for farm use. Nevertheless, this plan policy does not prohibit transfer of water rights, but simply requires that water impacts be reviewed and addressed as done through this decision. For the foregoing reasons, the Hearings Officer finds the applicant's proposal is consistent with this policy. Section 3.3, Rural Housing Rural Residential Exception Areas In Deschutes County most rural lands are designated for farms, forests or other resources and protected as described in the Resource Management chapter of this Plan. The majority of the land not recognized as resource lands or Unincorporated Community is designated Rural Residential Exception Area. The County had to follow a process under Statewide Goal 2 to explain why these lands did not warrant farm or forest zoning. The major determinant was that many of these lands were platted for residential use before Statewide Planning was adopted. In 1979 the County assessed that there were over 17,000 undeveloped Rural Residential Exception Area parcels, enough to meet anticipated demand for new rural housing. As of 2010 any new Rural Residential Exception Areas need to be justified through taking exceptions to farm, forest, public facilities and services and urbanization regulations, and follow guidelines set out in the OAR. FINDINGS: As discussed in the findings above, incorporated by reference herein, the Hearings Officer has found the board's DSL decision makes clear that applications for plan amendments and zone changes to convert EFU land to non-resource designation and zoning, without an exception to Goal 3, are not precluded by this policy language. Therefore, I find the applicant's proposal is consistent with this policy. Section 3.7, Transportation System Plan Executive Summary Arterial and Collector Road Plan Goal 4 5 In the Watermaster's comments, he stated if new homes are developed on the subject property, the applicant will be required to consult with COl D regarding transfer of water rights. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 12 of 39 I I ! I 4. Establish a transportation system, supportive of a geographically distributed and diversified economic base, while also providing a I safe, efficient network for residential mobility and tourism. I Policies 4.1 Deschutes County shall: ! a. Consider the road network to be the most Important and valuable component of the transportation system. I 4.3 Deschutes County shall make transportation decisions with consideration of land use impacts, including put not limited to, adjacent land use patterns, both existing and planned, and theirI i designated uses and densities. I 4.4 Deschutes County shall consider roadway function, classification and capacity as criteria for plan map amendments and zone changes. This shall assure that proposed land uses do not exceed the planned capacity of the transportation system. (Emphasis added.) FINDINGS: The Hearings Officer finds the above-underscored language indicates these plan I I policies provide direction to the county but do not create approval criteria for a quasi-judicial plan amendment and zone change. In any case, as discussed in detail in the findings below concerning compliance with the Transportation Planning Rule (TPR), the applicant submitted a traffic impact analysis (hereafter "traffic study") prepared by Kittleson & Associates, Inc., included in the record as Exhibit "Y" to the applicant's burden of proof. The traffic study 1 concludes traffic generated by development at the reasonable "worst-case" density under the proposed plan amendment and zone change will not significantly affect a transportation facility and therefore will comply with the TPR. B. That the change in classification for the subject property is consistent with the purpose and intent of the proposed zone classification. FINDINGS: Section 18.32.010 states the purpose of the MUA-10 Zone is: * * * to preserve the rural character of various areas of the County while permitting development consistent with that character and with the capacity of the natural resources of the area; to preserve and maintain agricultural lands not suited to full-time commercial farming for diversified or part-time agricultural uses; to conserve forest lands for forest uses; to conserve open spaces and protect natural and scenic resources; to maintain and Improve the quality of the air, water and land resources of the County; to establish standards and procedures for the use of those lands designated unsuitable for intense development by the Comprehensive Plan, and to provide for an orderly and efficient transition from rural to urban land use. The applicant's burden of proof at page 12 addresses this criterion as follows: 'The subject property is not suited to full-time commercial farming. The MUA-10 (zoning) will allow part-time unprofitable hobby farming to occur where appropriate. The low NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 13 of 39 density of development allowed by the MUA-10 zone will conserve open spaces and protect natural and scenic resources. The cluster or planned development aI/owed by this zone currently requires a developer to set aside 65% of the land area as open space. This low level of development will also help maintain and improve the quality of the air, water and land resources of the county by encouraging future owners of the property to return irrigation water to area waterways or to more productive farm ground elsewhere in the county rather than to waste it on unproductive lands. The subject property is located a short distance outside of the City of Bend and was included in the Bend UGB adopted in 2009 that has been remanded to the City by OLCO. The MUA-10 zoning provides a proper transition zone from EFU to the City zoning that could be applied to this property in the future -whether in this or subsequent rounds of urban growth by the City of Bend. The zone imposes a large lot size that creates lots suited for redevelopment and further division at such time as the property is added to the Bend UGB. In addition, the property adjoins MUA-10 zoned properties on two sides. This rezoning will therefore create a logical extension of the MUA-10 zone." The Hearings Officer concurs with the applicant that rezoning the subject property to MUA-10 would be consistent with the purpose and intent of that zone because it would be consistent with the character of much of the surrounding area where there is significant MUA-10 zoning and a number of small-scale farms, and also because it would provide a transition between EFU zoned lands and the Bend UGB. C. That changing the zoning will presently serve the public health, safety and welfare considering the following factors: 1. The availability and efficiency of providing necessary public services and facilities. FINDINGS: The applicant's burden of proof at page 13 addresses this criterion as follows: "Necessary public facilities and services are available to serve the subject property as shown by the following evidence: (1) Will-serve letters from PacifiCorp and Avion Water Company, Inc., Exhibits P and Q of this application, show that electric power and water services are available to serve the property; and (2) the Transportation System Plan Analysis prepared by Kittelson and Associates, Inc., Exhibit Y, shows that the street network in the area of the property can accommodate the reasonable worst case development scenario that might occur after the property is rezoned; and (3) the property receives police services from the Deschutes County Sheriff; and (4) the property is in a rural fire protection district and the nearest fire station is just a little over a mile from the subject property. It is efficient to provide necessary services to the property because the property is already served by these service providers and the property is close to the corporate limits of the City of Bend and adjacent large tracts of land zoned MUA-10 and UAR-10 that has been extensively developed with rural and urban density residences. 11 The Hearings Officer concurs with this analysis and finds the applicant's proposal satisfies this criterion. 2. The impacts on surrounding land use will be consistent with the specific goals and policies contained within the Comprehensive Plan. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 14 of 39 FINDINGS: The applicant's burden of proof at page 13 addresses this criterion as follows: "The MUA-10 zoning has been shown to be consistent with the specffic goals and policies of the comprehensive plan discussed above. The MUA-10 zoning will create a consistent and logical zoning pattern and make the zoning of the subject property the same as the properties south and east of the subject property. MUA-10 zoning allows residential uses that are similar to the nonfarm dwellings approved for properties that adjoin the eastern boundary of the subject property, Tax Lots 201 (Ryba) and 2001205 (Culver). The zone change will not impose new impacts on farm land to the north because (a) these lands are separated from the subject property by a rural arterial road; and (b) the area along and on both sides of Butler Market Road has been developed with a number of single-family homes. JI The Hearings Officer concurs with the applicant's analysis because I find the proposed plan amendment and zone change, in and of themselves, will not have any impact on surrounding farm land. No specific development has been proposed in conjunction with the subject applications, and as discussed in detail in the findtngs below, I have found the subject property is not necessary for the continuance of farm uses on adjacent or nearby lands. Therefore, I find the applicant's proposal satisfies this criterion. D. That there has been a change in circumstances since the property was last zoned, or a mistake was made in the zoning of the property in question. FINDINGS: 1. Mistake. The applicant argues the proposed plan amendment and zone change are justified because they will correct a mistake made in the original EFU zoning of the subject property allegedly due to inaccurate soil classification on the property. However, the Hearings Officer concurs with staff's observation that in light of the soils information that was available to the county in the late 1970's when the comprehensive plan and map were adopted, the subject property's EFU designation and zoning were appropriate. The applicant also argued in its July 15, 2013 submission that in 1982 the county again erred in not changing the designation and zoning of the subject property from agriculture to MUA-10 on Tax Lot 206 based on soils information that showed the tax lot consisted predominantly of Class I-VI soils. The record indicates the applicant's predecessor withdrew that application. In any case, I find that based on the soils information available to the county in 1981, the disposition of that application was not a mistake. 2. Change in Circumstances. The applicant's burden of proof at pages 13-15 argues the following changes justify the proposed plan amendment and zone change: U1. The area of the Los Serranos First Addition subdivision that adjoins the subject property was initially zoned EFU-20 by Deschutes County in 1979 and 1980. The County rezoned the property to MUA-10 in the early 1980's after the EFU zone was applied to the subject property. (File Z-80-37, Exhibit C). This area has been developed with single-family rural residences. 2. All lands in Section 17-12-240 outside the Los Serranos subdivisions were rezoned MUA-10 from EFU-20 zoning. See File Z-80-28, Exhibit 0 and File Z-81 NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 15 of 39 14, Exhibit E due to poor soils. These properties were subsequently developed with residences and hobby farms. 3. A large amount of new residential development has occurred on the MUA-10 and UAR-10 zoned lands that lie between the City of Bend and the subject property. 4. Two churches were developed on an MUA-10 zoned lot that adjoins the western boundary ofthe subject property (west of Butler Market Road). 5. The City of Bend included the subject property in its unacknowledged 2009 UGB boundary. The decision was remanded for reconsideration by the City and is still pending. 6. The City of Bend and FAA have made substantial financial investments in expanding the Bend Airport to seNe as a regional employment center for aircraft related activities and manufacturing. In 1979 and 19BO, the airport was a small local airport that provided hangar space for the planes and local residents. The airport is located a short distance to the east of the subject property. Allowing additional homes in close proximity to this new employment center is logical. 7. A detailed, Order 1 soils sUNey has been conducted on the subject property and has determined that the subject property is predominantly Class VII nonagricultural soils. B. Avion Water Company, Inc. has upgraded its water seNice to the northeast area of Bend and now provides water seNice to the subject property that can seNe urban or rural residential development. " The Hearings Officer finds some of the circumstances described above are not really changes in circumstance since they reflect the type and density of development contemplated by the county's comprehensive plan and zoning ordinance -i.e., the increase in rural residential development and the establishment of churches in the surrounding MUA-10 Zone. However, I agree with the applicant that the plan amendments and zone changes approved for some of the surrounding MUA-10 zoned property based on site-specific soils analyses, coupled with the applicant's submitted soil study, constitute changes in circumstance of the type that can justify a plan amendment and zone change. However, as discussed in detail in the findings below, I have found the applicant's soil study does not justify the proposed plan amendment and zone change to MUA-10 because it analyzed soils on the entire subject property rather than as to each parcel. For the foregoing reasons, the Hearings Officer finds the applicant's proposal satisfies the applicable prOVisions of the comprehensive plan. STATEWIDE LAND USE PLANNING GOALS B. Oregon Administrative Rules, Chapter 660, Land Conservation and Development Commission 1. Division 15, Statewide Planning Goals and Guidelines NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 16 of 39 FINDINGS: Goal 1, Citizen Involvement. The Planning Division has provided notice of the proposed plan amendment and zone change to the public through individual mailed notice to nearby property owners, publication of notice in the Bend "Bulletin" newspaper, and posting of the subject property with a notice of proposed land use action sign. In addition, two public hearings were held before the Hearings Officer on the proposed plan amendment/zone change, and a public hearing on the proposal will be held by the Board. Goal 2, Land Use Planning. Goals, policies and processes related to plan amendment and zone change applications are included in the county's comprehensive plan and land use regulations in Titles 18 and 22 of the Deschutes County Code and have been applied to the review of these applications. Goal 3, Agricultural Lands. Goal 3 is "[t]o preserve and maintain agricultural lands." The applicant argues the goal does not apply to the subject property because the property does not constitute "agricultural land" based upon a site-specific soil study. As discussed in detail in the findings below concerning compliance with the applicable administrative rules governing agricultural land, incorporated by reference herein, the Hearings Officer has found the applicant's soil study is not adequate because it does not demonstrate the parcels comprising the subject property are predominantly Class VII and VIII soils, and the applicant has failed to demonstrate the subject property is unsuitable for farm use considering profitability and factors in the Goal 3 administrative rules. Therefore, I find the applicant's proposal is not consistent with Goal 3. Goal 4, Forest Lands. The Hearings Officer finds this goal is not applicable because the subject property does not include any lands that are zoned for, or that support. forest uses. Goal 5, Open Spaces, Scenic and Historic Areas and Natural Resources. The Hearings Officer finds this goal is not applicable because the record indicates there are no identified GoalS resources on the subject property. Goal 6, Air, Water and Land Resources Quality. The Hearings Officer finds the applicant's proposal to rezone the property from EFU-TRB to MUA-10 will not impact the quality of the air, water, and land resources of the county because it would allow the subject property to be developed in accordance with the provisions of the MUA-10 Zone, including small hobby farms and low-density rural residences similar to development on surrounding land. Goal 7, Areas Subject to Natural Disasters and Hazards. The Hearings Officer finds this goal is not applicable because the subject property is not located in a known natural disaster or hazard area. Goal 8, Recreational Needs. The Hearings Officer finds this goal is not applicable because the proposed plan amendment and zone change do not affect recreational needs, and no specific development of the property is proposed. Goal 9, Economy of the State. This goal is to provide adequate opportunities throughout the state for a variety of economic activities. The Hearings Officer finds the proposed plan amendment and zone change will have little impact on the economy of the state. Approval of the proposal will remove approximately 171 acres of land inventoried for farm use. However, as NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 17 of 39 discussed in detail in the findings below, the record indicates that for the last several decades agriculture on the subject property has consisted primarily of small-scale, non-commercial farming that has not contributed significantly to the agricultural economy of the county. Goal 10, Housing. The Hearings Officer finds the applicant's proposal is consistent with this goal because it has the potential to increase housing density and therefore the supply of needed housing. Goal 11, Public Facilities and Services. The Hearings Officer finds the applicant's proposal will have no effect on the provision of public facilities and services to the subject site and the surrounding area. As discussed in the findings above, incorporated by reference herein, public facilities and services necessary for development of the subject property in accordance with MUA-10 zoning are available and adequate. Goal 12, Transportation. As discussed in the detail in the findings below concerning compliance with the TPR, incorporated by reference herein, the Hearings Officer has found the applicant's proposal will not significantly affect a transportation facility and therefore complies with the TPR. Accordingly, I find it also is consistent with Goal 12. Goal 13, Energy Conservation. The Hearings Officer finds the applicant's proposed plan amendment and zone change, in and of themselves, will have no effect on energy use or conservation since no specific development has been proposed in conjunction with the subject applications. Goal 14, Urbanization. Goal 14 is "[t]o provide for an orderly and efficient transition from rural to urban land use." The staff report states Goal 14 is not applicable to the applicant's proposal because it does not affect property within an urban growth boundary and does not promote the urbanization of rural land. OLCO and OOA dispute that conclusion. In their comments on the applicant's proposal, they argue Goal 14 is applicable, and the applicant failed to demonstrate compliance with the goal, for the following reasons: "OAR 660-004-0040 provides guidance for planning and zoning new rural residential exception areas. Specifically, OAR 660-004-0040(7) requires new rural residential exception areas to have a minimum lot size of at least 10 acres. The subject proposal does not seek to create a new rural residential exception area. Instead, it attempts to demonstrate that the subject property is nonresource land and not deserving of protection under statewide planning goal 3. Nonresource areas are specifically excluded from the provisions of OAR 660-004-0040. We believe that in most cases nonresource lands should be placed in a plan and zone category that requires at least a 20-acre minimum lot size." The Hearings Officer finds this argument is connected to OLCO's and OOA's claim that the county cannot remove a resource land designation without first, through a legislative process, creating a specific new plan designation and zone for such lands. As discussed in the findings above, incorporated by reference herein, the board and the county's hearings officers have rejected that argument. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 18 of 39 I The Hearings Officer also finds the agencies' reliance on OAR 660-004-0040 is misplaced. OAR Division 660, Chapter 4. addresses the Goal 2 exceptions process -i.e., the taking of an exception to one of the goals, thereby creating an -exception area." As DLCD and ODA acknowledge, the applicant is not requesting an exception to Goal 3 and therefore is not seeking to create a new exception area. Finally, DLCD and ODA do not explain, nor do they cite authority for, the proposition that non resource land must be placed in a plan and zone category with a 20-acre minimum lot size. The applicant has requested that the subject property be rezoned to MUA-10 which is the predominant non-resource zone in the surrounding area. This zone has a 10-acre minimum lot size, with the potential for a 7.5 dwelling unit per acre density within a cluster development that also includes 65 percent open space. In either case, the Hearings Officer finds the proposed rezoning would not result in the "urbanization" of the subject property because it would allow low-density development typical in the surrounding area. Therefore, I find the applicant's proposal is consistent with Goal 14. Goals 15 through 19. The Hearings Officer finds these goals, which address river, ocean, and estuarine resources, are not applicable because the subject property is not located in or adjacent to any such areas or resources. For the foregoing reasons, the Hearings Officer finds the applicant's proposal is not consistent with all of the statewide goals because it does not comply with Goal 3. 2. Division 12, Transportation Planning Rule a. OAR 660-012-0060, Plan and Land Use Regulation Amendments. (1) If an amendment to a functional plan, an acknowledged comprehensive plan, or a land use regulation (Including a zoning map) would significantly affect an existing or planned transportation facility, then the local government must put in place measures as provided in section (2) of this rule, unless the amendment is allowed under section (3), (9) or (10) of this rule. A plan or land use regulation amendment significantly affects a transportation facility if it would: (a) Change the functional classification of an existing or planned transportation facility (exclusive of correction of map errors in an adopted plan; (b) Change standards implementing a functional classification system; or (c) Result in any of the effects listed in paragraphs (A) through (C) of this subsection based on projected conditions measured at the end of the planning period identified in the adopted TSP. As part of evaluating projected conditions, the amount of traffic projected to be generated within the area of the amendment may be reduced if the amendment includes an enforceable, ongoing requirement that would demonstrably limit traffic generation, including, but not limited to, transportation demand management. This reduction may diminish or completely eliminate the significant effect of the amendment. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 19 of 39 (A) Types or levels of travel or access that are inconsistent with the functional classification of an existing or planned transportation facility; (B) Degrade the perfonnance of an existing or planned transportation facility such that it would not meet the performance standards identified in the TSP or comprehensive plan; or (C) Degrade the perfonnance of an existing or planned transportation facility that is otherwise projected to not meet the perfonnance standards identified in the TSP or comprehensive plan. FINDINGS: The Hearings Officer finds the TPR is applicable to the applicant's proposal because it requests an amendment to an acknowledged plan. The applicant submitted a traffic study, included in the record as Exhibit "Y" to the applicant's burden of proof. In order to evaluate potential traffic impacts from conversion of the subject property from EFU to MUA-zoned land, the traffic study assumed the "worst-case" scenario for density of development -Le., a total of 30 dwellings on the subject property (including the five existing dwellings). The traffic study then compared traffic impacts from the existing EFU-zone development (5 dwellings) and MUA-10 zone development (30 dwellings) on the affected intersections -i.e., a net increase of 25 dwellings. The traffic study predicted that MUA-10 density residential development would generate 201 additional average daily vehicle trips (ADTs) of which 25 would be during the p.m. peak hour (4:30 to 6:30 p.m. weekdays). The traffic study found that both affected intersections would continue to function at acceptable levels of service under the county's transportation system plan standards with the addition of this traffiC. Based on the above-described analysis, the traffic study concluded the applicant's proposal would not Significantly affect a transportation facility, and that no changes to the affected intersections or to the county's transportation plan would be required. In his February 19, 2013 comments on the applicant's proposal. the county's Senior Transportation Planner Peter Russell stated he agreed with "the methodology, conclusions, and recommendations of the submitted traffic study. It (4) Determinations under sections (1)-(3) of this rule shall be coordinated with affected transportation facility and service providers and other affected local governments. FINDINGS: As discussed in the Findings of Fact above, the Planning Division sent written notice of the applicant's proposal to a number of public and private agencies, including the City of Bend Engineering and Fire Departments, the county road department and ODOT. as well as Pacific Power, Cascade Natural Gas, CEC, and CenturyLink. The staff report states, and the Hearings Officer agrees, this notice provided adequate opportunity for coordination with affected transportation and service providers and local governments. For the foregoing reasons, the Hearings Officer finds the applicant's proposal complies with the TPR. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 20 of 39 AGRICULTURAL LAND STANDARDS AND PROCEDURES 3. Division 33, Agricultural Land FINDINGS: The applicant is requesting approval of a plan amendment and zone change for the subject property on the basis that it does not constitute "agricultural land P requiring protection under Goal 3. The standards and procedures for identifying and inventorying agricultural land are found in OAR Chapter 660, Division 33. a. OAR 660-033-0010, Purpose The purpose of this division is to preserve and maintain agricultural lands as defined by Goal 3 for farm use, and to implement ORS 215.203 through 215.327 and 215.438 through 215.459 and 215.700 through 215.799. FINDINGS: Goal 3 defines "agricultural land" in relevant part as follows: Agricultural Land -* * * in eastern Oregon is land of predominantly Class I, II, III, IV, V and VI soils as identified in the Soil Capability Classification System of the United States Soil Conservation Service, and other lands which are suitable for farm use taking into consideration soil fertility, suitability for grazing, climatic conditions, eXisting and future availability for farm irrigation purposes, existing land-use patterns, technological and energy inputs required. or accepted farming practices. Lands in other classes which are necessary to permit farm practices to be undertaken on adjacent or nearby lands, shall be included as agricultural land in any event. More detailed soil data to define agricultural land may be utilized by local governments if such data permits achievement of this goal. FINDINGS: Under this definition, which is mirrored in the Goal 3 administrative rules (OAR 660 033-0020), "agricultural land" consists of: • Land that is predominantly Class I-VI soils (in Eastern Oregon) unless a goal exception is merited; • Land that is predominantly Class VII and VIII soils and that is "suitable for farm use" considering the factors set forth in OAR 660-033-0020(1 )(a)(8); • Land that is necessary to permit farm practices on adjacent or nearby agricultural lands; and • Class VII and VIII land that is adjacent to or intermingled with Class I-VI land within a farm unit. The applicant argues the subject property does not constitute "agricultural land" under any of these categories, each of which is discussed in the findings below. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 21 of 39 Predominantly Class I-VI Soils (1 ) (a) "Agricultural Land" as defined in Goal 3 includes: (A) Lands classified by the U.S. Natural Resources Conservation Service (NRCS) as predominantly Class I-IV soils in Western Oregon and I-VI soils in Eastern Oregon; FINDINGS: Appropriate Unit of Land The "predominant soils" prong of the agricultural land definition cannot be applied until a unit of land is selected for analysis. Wetherell v. Douglas County (Standley), 50 Or LUBA 71 (2005). The applicant argues the entire 171-acre subject property is the appropriate unit of land for this analysis. The staff report questions whether the proper analysis requires that each parcel comprising the subject property be evaluated. OAR 660-033-0030 sets forth the process by which a county identifies "agricultural land." Subsection (2) of that rule states in relevant part: When a jurisdiction determines the predominant soil capability classification of 2 lot or parcel it need only look to the land within the lot or parcel being inventoried. However, whether land is "suitable for farm use" requires an inquiry into factors beyond the mere identification of scientific soil classifications..• This ·inquiry requires the consideration of conditions existing outside of the lot or parcel being inventoried. (Emphasis added.) OAR 660-033-0020(12) states that for purposes of OAR 660-033, the term "parcel" has the meaning set forth in ORS 215.010(1} -i.e. a unit of land lawfully created by a partition or by a deed or contract if no land use regulations were in place. OAR 660-033-0020(13) defines "tract" as ·one or more contiguous lots or parcels in the same ownership." Under these definitions, the subject property is a tract and not a parcel. The text of OAR 660-033-0030(2) makes clear the "predominant soils" and "suitable for farm use" analyses are applied to different units of land. The language of the former focuses on the "parcel" whereas the language of the latter includes the parcel and certain lands outside it. This rule language has been addressed and applied in a handful of Land Use Board of Appeals (LUBA) and court cases. However, as discussed below, most of these cases involve very different circumstances than those presented here. In 1000 Friends of Oregon v. Wasco County Court, 299 Or 34, 703 P2d 207 (1985), the Supreme Court upheld the county's decision to re-designate and rezone 2,135 acres of the 64,000-acre EFU-zoned Rancho Rajneesh on the basis of the "predominant soils" analysis, rejecting opponents' arguments that soils on the entire ranch must be considered. However, in its decision in Wetherell (Standley) cited above, LUBA questioned the effect of the court's decision since it did not state whether the 2,135 acres at issue represented one or more parcels or rather whether they represented part of an existing parcel. LUBA also noted the court had mischaracterized one of the LUBA cases on which it relied. As a result, LUBA concluded it was unclear whether court's holding in Wasco County Court dealt with evaluating a "parcel within a tract" or a "portion of a parcel within a parcel." NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 22 of 39 i I I Turning to the facts before it in Wetherell (Standley), LUBA reversed the county's non-resource designation and zoning of 55 acres of a 135-acre EFU-zoned parent parcel, which decision was based on the county's finding that soils on the 55 acres were not predominantly agricultural. With respect to OAR 660-033-0030(2), LUBA stated: "While the above rule language admittedly does not expressly mandate inventorying agricultural land by lot or parcel and does not expressly prohibit inventorying agricultural land at a sub-parcel or sub-lot level, it appears to assume that such inventories will examine whole lots and parcels rather than portions of lots or parcels." (Underscored emphasis added.) LUBA noted that unlike the "predominant soils" analysis language in OAR 660-033-0030(2), the "general unsuitability· test for nonfarm dwellings under ORS 215.283(3)(d) expressly allows approval based on a determination that a "portion of a lot or parcel" is generally unsuitable. LUBA ultimately held in Wetherell (Standley) that in applying the "predominant soils class" prong of the "agricultural land" definition: "With that context, we do not beJieve OAR 660-033-0030(2) allows portions of existing parcels that are predominantly class I-IV soils to be analvzed on a sub-parcel basis so that sub-areas within that parcel can be eliminated from the county's acknowledged inventory of agricultural land. "(Underscored emphasis added.) Thus, LUBA did not address the "parcel within a tracr question presented here -Le., whether OAR 660-033-0030(2) allows or requires tracts or individual parcels within the tract to be evaluated for the "predominant soils" analysis. Similarly, previous county decisions re designating and rezoning non resource land have not addressed this question. That is likely because prior county cases involved single parcels rather than tracts comprised of multiple parcels. For example, the Pagel and DSL decisions cited above involved, respectively. a 17 acre parcel and a 380-acre portion of a 640-acre parent parcel.6 In a supplemental memorandum dated March 20, 2013, the applicant's attorney Steven Hultberg stated OAR 660-033-0030(2) permits the county "to consider the entire tract of land in common ownership.· Mr. Hultberg argued that had LCDC intended the focus of the "predominant soils" analysis to be on each individual parcel within a tract it would have said so explicitly. However, one could argue that is exactly what LCDC said by using the term "parcel" rather than "tract" in the administrative rule. Mr. Hultberg also argued that as a practical matter, focusing on individual parcels rather than the entire tract makes little sense since parcel lines can be adjusted or vacated to meet the predominance test. While in theory such adjustments could be made -assuming they would not conflict with previous land use decisions such as farm dwelling approvals --the Hearings Officer finds that fact does not justify interpreting the term "parcel" in the administrative rule to mean "tract." Moreover, the Hearings Officer is concerned about the result of such parcel manipulation. It could have a negative effect on preserving and protecting agricultural land comparable to that addressed in LUBA"s Wetherell (Standley) decision resulting from removing a portion of a parcel from the inventory of agricultural land. 6 The County's approval in DSL may not have been consistent with LUBA's holding in Wetherell since it I may have approved the re-designation of part of a parcel. NNP IV-NCR, LLC -PA-13-1IZC-13-1 Page 23 of 39 t. In response to the Hearings Officer's concerns about parcel manipulation and aggregation, Ms. Fancher stated in the applicant's final argument: "In the pending case, NNP did not acquire the property or adjust property lines to create a farm unit with a predominance of Class VII and VIII soils. Rather, the lot configuration is simply the layout of NNP's land. The NNP land was acquired because it was a good candidate for inclusion in the Bend UGB, not because NNP was seeking to create a tract of land that would qualify as nonagricultural/and. * * * Oregon law requires the County to look at all of NNP's property, regardless of property lines, to assess whether it is suitable for farm use. See, Meyer v. Lord, 37 Or App 59, 586 P2d 367 (1978). This and other similar provisions of State law are written to make it difficult to remove areas of poor soils from large units of farm land. State law does not prohibit the aggregation of lots and parcels into a farm unit. In fact, the aggregation of EFU land into larger tracts is an activity that supports profitable farm use and is encouraged by State law. With respect to the concern raised by the Hearings Officer regarding the removal of farmland from production by adding to a tract composed of poor soils, NNP believes that it is unlikely that owners of EFU-zoned land with poor soils will acquire good farm land and combine it into a single farm unit for the purpose of obtaining MUA zoning for the combined property. * *. 7 'I< The Hearings Officer finds this argument misses the mark. First, Meyer v. Lord does not address the ·predominant soils class" prong of the "agricultural land" definition but rather the "suitable for farm use" prong. As discussed above, the appropriate unit of land for the "suitability" test expressly includes land beyond the parcel to be inventoried. Second, the applicant misunderstands the issue I raised. My concern is not about an applicant acquiring good farm land to facilitate rezoning poor quality farmland. Rather, my concern is for the opposite scenario -i.e., the applicant acquiring and blocking up parcels with poor quality soils (e.g., Tax Lots 206,300 and 304) with parcels with irrigated high value soils, thereby potentially tipping the balance on the tract to nonagricultural soils and resulting in the removal of irrigated farmland with high value soils from the county's inventory of agricultural land. Finally, while I agree state law does not prohibit the aggregation of parcels "into a farm unit" as described by Ms. Fancher, that is not what the applicant did here. The applicant acquired the parcels comprising the subject property because they had been identified for inclusion in the Bend UGB, and as discussed in the findings below, the applicant argues the subject property is not, and cannot become, a farm unit. In the absence of clear direction from the courts, LUBA or the board concerning application of the language in OAR 660-033-0030(2) to the unique circumstances of this case -i.e., a tract consisting of multiple parcels -the Hearings Officer finds it is reasonable to conclude the rule gives the county discretion to choose the appropriate unit of land for the "predominant soils" analysis. In other words, the county can choose either to evaluate the soils on an individual parcel basis or as to the entire tract. I find that choice should be informed by the purpose of Goal 3 to preserve and maintain agricultural lands for farm use. 7 As discussed in the findings below, the applicant argues the subject property is not a "farm unit" in part because it is an aggregation of multiple parcels. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 24 of 39 As discussed in the Findings of Fact above, the 171-acre subject property has 103 acres of irrigation water rights, and seven of the nine tax lots are receiving farm tax deferral. Although the "Revised Soil Map" at page 24 of Mr. Borine's soil study shows that significant parts of Tax Lots 206, 300 and 304 are composed of Class VII and VIII soils, the soil map also shows the remaining six tax lots have large areas of Class III-VI soils which are considered high value soils when irrigated. Two of these tax lots have dwellings approved as farm dwellings. Under these circumstances, the Hearings Officer finds it likely at least some of the parcels comprising the subject property contain predominantly Class I-VI soils. Therefore, I find that in this case, the tract is not the appropriate unit of land for the "predominant soils" analysis because it may not preserve and maintain agricultural land for farm use. Rather, I find the appropriate unit of land for this analysis is each individual parcel within the tract. The applicant declined the Hearings Officer'S request to submit soils information for each parcel, thereby precluding me from conducting the "predominant soils· analysis for the individual parcels comprising the subject property. Therefore, I find the applicant has not met its burden of proof for the proposed plan amendment because it has not demonstrated the parcels making up the subject property are not "agricultural land" under the "predominant soils" analysis of OAR 660-033-0030(2). The Hearings Officer anticipates the applicant will appeal this decision to the board under Section 22.28.030(0). Therefore, to assist planning staff and the board in the event of an appeal, I make the following alternative findings assuming the appropriate unit of land for the "predominant soils" analysis is the entire subject property. Predominant Soils The NRCS soils maps for the subject property show it is composed of three soil units: Soil Units 36A and 36B, Oeskamp loamy sand 0 to 3/3 to 8 percent slopes; and Soil Unit 58C, Gosney Rock outcrop-Oeskamp complex, 0 to 15 percent slopes. Soil Units 36A and 36B soils are designated Class III when irrigated and Class VI without irrigation and are considered high value soils when irrigated. Soil Unit 58C soils are considered non high value soils. The Gosney and rock outcrop components of Soil Unit 58C soils are designated Class VII and VIII, respectively, with or without irrigation. As discussed above, the subject property has 103 acres of irrigation water rights. The NRCS maps show Soil Units 36A and 36B comprise 56.4 percent and Soil Unit sac soils comprise 43.6 percent of the subject property. Therefore, according to the NRCS data, the subject property is predominantly Class I-VI soils. As discussed above, the applicant submitted a site-specific "Agricultural Soils Capability Assessment» of the subject property, also referred to as an "Order 1 soil survey".8 The soil study is dated July 11, 2012, was prepared by Roger Borine of Sage West, LLC, and is included in the record as Exhibit "A" to the applicant's burden of proof. The record indicates that in July of 2012 Mr. Borine submitted the soil study to OLCD for certification pursuant to OAR 660-033 0030(5). By an electronic mail message dated July 20, 2012, from Katherine Daniels of DLCD to Oeschutes County Planning Director Nick Lelack, DLCD certified the study. Mr. Borine's 8 The soil study explains there are three levels of soil analyses: (1) Order 3 map units which are "mainly complexes;" (2) Order 2 map units which are more detailed but still identify mainly consociations and complexes; and (3) Order 1 soil studies that provide more detail about soils within the large mapping units shown in the NRCS maps. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 25 of 39 submission and the certification document are included in the record as Exhibits "I" and "J: respectively, to the applicant's burden of proof.9 DLCD's certification states in relevant part: "The department has reviewed the attached soils assessment prepared by a professional soil classifier under OAR 660-033-0030 and 0045, as well as the submittal, release and report requirement fonns. A completeness check indicates that the soils assessment is consistent with reporting requirements, and may therefore be considered to be certified. The County may make its own determination as to the accuracy and acceptability of the soils assessment. II The soil study identified the same three soil units on the subject property that are identified on the NRCS maps. However, Mr. Borine conducted an on-site investigation to provide a more detailed analysis and mapping of the soils. His analysis methodology is described at page 5 of the soil study as follows: 'There were one hundred forty five (145) soil data points of which seventy two (72) were excavated with a backhoe and seventy three (73) with a shovel/auger. These data points were not randomly selected, but located to accurately verify soil and landscape relationships. Where soils and landscapes have been modified semi-grid pattern was used. Ten (10) transects were completed during the mapping process to detennine soil boundary placement and map unit composition. Each transect point had three investigations with a tile probe within a 5 foot radius to determine average soil depth. There were one hundred thirteen (113) obseNation points with approximately 3 probes each to determine soil depth for a total of over 325 observations. In addition, non recorded obseNations using the tile probe, shovel and auger were made to accurately . locate soil boundaries. II Mr. Borine explained that in the study area, soil depth and available water capacity are the primary criteria for identifying soils and their classifications. Based on his analysis, Mr. Borine found that in both Soil Units 36A and 36B there were contrasting inclusions with very shallow soils which he characterized as "Zeta" soils for purposes of the soil study. Based in large part on soil depth information, Mr. Borine divided the three NRCS soil units into five "Soil Survey Map Units." They are: (A) Deskamp loamy sand, 0-3 % slopes; (B) Gosney, deep-Deskamp complex, 0-8% slopes; (C) Gosney-Zeta complex, 0-3% slopes; (D) Gosney-Rock outcrop complex, 0-15% slopes; and (E) Gosney extremely stony loamy sand, 0-3% slopes. Mr. Borine concluded that because of inadequate soil depth, Map Unit C soils do not constitute Class I-VI soils. Table 2 of the soil study shows that of the 170.88 acres comprising the subject property, Map Units A and B comprise 57.04 acres (33.38%), and Map Units C, D and E comprise 113.84 acres (66.62%). Therefore, based on his on-site investigation and analysis, Mr. Borine concluded the subject property consists of predominantly Class VII and VIII soils and therefore is not "agricultural land." In their March 18, 2013 comments on the applicant's proposal, DLCD and ODA stated in relevant part: "The applicant has presented additional site specific soils information to supplement the NRCS data which indicates that the subject tract is actually 9 DLCD's certification indicates Mr. Borine is a "qualified soils professional." NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 26 of 39 composed predominantly of Class VII soils. The departments find the conclusion that level, irrigated land would be considered Class VII is surprising. Should the county agree with the applicant's soils report addition [sic] provisions of the definition of agricultural land must be considered. " The agencies did not submit any evidence challenging Mr. Borine's methodology or analysis or rebutting his conclusions. The Hearings Officer finds Mr. Borine is a qualified soils expert and his soil study is detailed and comprehensive. Therefore, in the absence of competent evidence to the contrary, I find Mr. Borine's analysis and conclusions constitute substantial, credible evidence that the subject property is composed predominantly of Class VII and VIII soils. (8) Land in other soil classes that is suitable for farm use as defined in ORS 215.203(2)(a), taking into consideration soil fertility; suitability for grazing; climatic conditions; existing and future availability of water for farm irrigation purposes; existing land use patterns; technological and energy inputs required; and accepted farming practices; and (Underscored emphasis added.) FINDINGS: Because the applicant's soil study shows the subject property, evaluated as a tract, is predominantly Class VII and VIII soils, the next question under this administrative rule is whether the predominant Class VII and VIII soils on the subject property nevertheless constitute "agricultural land" because they are suitable for farm use based on the seven factors listed in the rule. OAR 660-033-0020(7)(a) states "farm use" as used in the rule has the meaning set forth in ORS 215.203 which provides: As used in this section, "farm use" means the current employment of land for the primary purpose of obtaining a profit in money by raising, harvesting and selling crops or the feeding, breeding, management and sale of, or the products of, livestock, poultry, fur-bearing animals or honeybees or for dairying and the sale of dairy products or any other agricultural or horticultural use or animal husbandry or any combination thereof. "Farm use" includes the preparation, storage and disposal by marketing or otherwise of the products or by-products raised on such land for human or animal use. "Farm use" also includes the current employment of the land for the primary purpose of obtaining a profit in money by stabling or training equines including but not limited to providing riding lessons, training clinics and schOOling shows. "Farm use" also includes the propagation, cultivation, maintenance and harvesting of aquatic species and bird and animal species to the extent allowed by the rules adopted by the State Fish and Wildlife Commission. "Farm use" includes the on-site construction and maintenance of equipment and facilities used for the activities described in this subsection. "Farm use" does not include the use of land subject to the provisions of ORS chapter 321, except land used exclusively for growing cultured Christmas trees as defined in subsection (3) of this section or land described in ORS 321.267(1)€ or 321.415(5). (Underscored emphasis added.) LUBA and the courts have found the above-underscored means the county may consider "profitability" in addition to the seven factors listed in the administrative rule -i.e., whether a NNP IV-NCR, llC -PA-13-1/ZC-13-1 Page 27 of 39 reasonable farmer would be motivated to put the land into agricultural use for the primary purpose of obtaining a profit in money. Wetherell (Foley 11/), 62 Or LUBA 80 (2010). However, in Foley III, LUBA gave the following guidance and caution in considering profitability: "In our view, while profitability is a permissible consideration in determining whether land is agricultural land under the rule definition, it is a relatively minor consideration, and one with a large potential for distracting the decision maker and the parties from the primary considerations listed in the rule definition -soil fertility, suitability for grazing, climatic conditions, existing and future availability of water for farm irrigation purposes, existing land use patterns, technological and energy inputs required, and accepted farming practices. Because an economic analysis such as the Day report yields hard numbers, it is easy to assign unwarranted significance to the analysis, and fail to appreciate that it is based on highly variable assumptions regarding hypothetical farm uses, and that its conclusions are only as reliable as its assumptions. " Therefore, the Hearings Officer finds it is appropriate for me to consider profitability in the context of the seven factors in the administrative rule, but that it is not the determining factor in the "suitability" analysis. Each of the seven factors is discussed in the findings below. 1. Soil Fertility. The applicant argues the subject property is not suitable for farm use because the Class VII and VIII soils are not fertile. In support of its argument, the applicant relies on Mr. Borine's soil study, which states at page six: "One soil sample from this parcel was collected and analyzed by Agri-Check, Inc. (attached). Comparative lab analyses by Agri-Check, Inc. of similar soils in this same region were studied and analyzed to develop this assessment. Organic matter for these sites is extremely low to non-measureable and clay content is less than five percent, resulting in very low Cation Exchange Capacity (CEC); the higher the CEC the higher potential fertility. CEC is important because it provides a reseNoir of nutrients for plant uptake. Sample sites have low levels of nitrogen, phosphorus, potassium, and sulfur. High levels of fertilization are required for a grass crop to be produced. Without an ability of the soil to attract and absorb nutrients (low CEC) they are readily leached out of the soil by irrigation and precipitation thus becoming unavailable for plant use and lost into the surface and ground water. The pH (acidity/basicity) for most soils in this region is adequate for plant growth. The pH in soils with a low CEC can quickly be reduced by additions of nitrogen and sulfur fertilizers resulting in the reduction of nutrient availability to plants. Lime as a soil amendment must be added to raise soil pH to an acceptable range for plant nutrient uptake. To maintain a minimum level of essential nutrients for proper crop growth multiple yearly applications of very high rates of fertilizer and soil amendments are required. Without soil sampling, lab analyses, proper fertilization and soil amendments these soils are non productive and infertile." OLCO and OOA dispute the applicant's assertion. However, they do not challenge Mr. Borine's qualifications or findings or the results of the Agri-Check analysis. Rather, they argue soil fertility can be improved through the application of lime, manure and fertilizers. They also argue some types of agriculture -e.g., confinement livestock and poultry operations, and horse breeding and raising facilities -are not "strictly dependent" on soil fertility but merely need suitable space and topography which the subject property has. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 28 of 39 In her July 16, 2013 response to OLCO's and OOA's comments, the applicant's attorney liz Fancher noted that the NRCS considers Class VII and VIII soils as having significant limitations for cultivation or raising of livestock, describing them as follows: "Class VII (7) soils have very severe limitations that make them unsuited to cultivation and that restrict their use mainly to grazing, forestland, or wildlife. I Class VIII (8) soils and miscellaneous areas have limitations that preclude their use for commercial plant production and limit their use to recreation, wildlife, or water supply or for esthetic purposes. It I In addition, Ms. Fancher argues a reasonable farmer would not incur the costs associated with amending and fertilizing the soil. However, the applicant's submitted agricultural economic analysis, prepared by Stephen Caruana and discussed in detail in the findings below, shows no fertilizer expenses at all in the annual budget for a cattle grazing operation, identified as one of the most likely farm uses of the subject property. The annual budgets for a bluegrass seed operation and an alfalfa hay operation show fertilizer costs of $10,712 and $3,970, respectively. Thus, the fertility of the Class VII and VIII soils on the subject property could be improved with fertilizer to a sufficient degree to sustain a grass seed or grass hay operation. The applicant does not explain why a reasonable farmer would not be willing to incur these relatively low fertilizer expenses for such operations. 2. Suitability for Grazing. The applicant argues the subject property is not suitable for farm use because it cannot be profitably managed for livestock grazing. In support of its argument, the applicant relies in part on Mr. Borine's soil study. which states at page six: "Soil, vegetation, climate and landscape are determinant factors for the suitability for grazing of livestock. Limitations that are recognized on this site include very low available water for plant growth. Restricted depth limits seeding only to drought tolerant species, and rock outcrop limits the areas suitable for grazing. The cold climate and soil temperatures delay growth of forage and low water retention in the soil and no summer moisture shortens the growing season. Re-establishment of the native vegetation is likely impossible due to the pumice ash surface layer and past land alterations. Restricted depth limits seeding only to drought tolerant species, and rock outcrop limits the areas suitable for grazing. " In their comments on the applicant's proposal, OLCO and OOA argued the subject tract is suitable for livestock grazing. either on its own or operated in conjunction with other properties, for the following reasons: ". • • [1]lTigated pasture in Central Oregon is generally assumed to be able to support one cow-calf pair for a grazing season running roughly from May 15 through October 15, or about five AUMs [animal unit month] per acre. [10] Dry land pasture has a much lower capability. The applicant's materials suggest that dry land on the subject tract could support one pair per acre for 30 days, or about one AUM per acre. Added together, 103 acres of irrigated pasture and 68 acres of dry land 10 The record indicates an AUM is the amount of forage or feed required to feed one animal unit such as one cow-calf pair for 30 days. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 29 of 39 I pasture would result in 583 AUMs capable of supporting about 117 pairs for a five-month grazing season. Other grazing alternatives could include for higher stocking rates for a shorter period. If cattle were not the selected livestock the same number of AUMs could support about 580 sheep or goats for the same amount of time. If property configuration and other factors were to limit utilization to 75% of the total potential, the subject tract would still be capable of running over 80 pairs for a grazing season. In most Central Oregon cow-calf operations calves will be born between January and March and weaned at around 205 days. Seven month old calves from most traditional beef breeds should weigh about 500 Ibs. If the weaned calves are then sold rather than held through the winter the subject property could produce 80 or more calves for market each Fall. For the week of March 11, 2013, 400-550 lb. calves sold for between $152 and $181 per hundred weight ($1.51-1.81 per pound) at the Central Oregon Livestock Auction in Madras, Oregon. Eight 500 lb. calves fetching $1.66 per pound would result in a gross return of $66,400. A high number of weaned calves available in the Fall could result in lower market prices. " In support of their argument, the agencies submitted into the record information on weaning beef calves from Oregon State University (OSU) Extension Service, and a September 2002 "Livestock Update" from Virginia Cooperative Extension dealing with beef breed differences. In her July 16, 2013 response, Ms. Fancher challenged OLCO's and OOA's assumptions and conclusions, stating that while it is possible to graze cattle on the subject property "there is no ability to do so with any expectation of obtaining a profit in money." Ms. Fancher cited NRCS data indicating the specific soils on the subject property could not support more than 1.5 ALiMs per acre and therefore could not support 80 cow-calf pairs. She also noted OLCO's and OOA's analysis and projections for a 7-month grazing season appear not to have considered the cost of feeding and maintaining the retained mother cow herd the remaining five months of the year. However, Ms. Fancher did not explain why a seasonal grazing operation would not be a reasonable use of the subject property. Finally, Ms. Fancher relied on the July 11, 2013 "Budget Analysis Study" attached to her July 16th submittal and prepared by Stephen C. Caruana of Agronomic Analytics.ll This study concluded the subject property is not suitable for farm use because it could not be operated profitably if the full costs of the agricultural operation were considered. Mr. Caruana analyzed the economics of five potential farm enterprises on the subject property: (1) a horse breeding operation for 14 horses; (2) a llama breeding operation with 28 llamas raised for the pet market and wool production; (3) a full-year cow-calf operation with 40 cow/calf pairs that retains the mother cow herd; (4) a bluegrass crop for seed; and (5) an irrigated alfalfa hay operation. Mr. Caruana's analysis projected total revenues and expenses for each farm operation, but did not include as costs the land purchase price,12 debt service, or property tax payments. 11 The "Statement of Qualifications" attached to the study as Exhibit "C" states Mr. Caruana has a BS in Agronomy from OSU, did post-graduate work at the University of Oregon in Landscape Architecture, and founded Agronomic Analytics in 1997 for agricultural consulting among other areas. 12 The Hearings Officer notes Table 2 of Mr. Caruana's report shows the Assessors assigned real market values of the tax lots comprising the subject property and not their actual purchase prices which are significantly higher according to the deeds included in the record. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 30 of 39 Mr. Caruana's report explains the five farm enterprises in his analysis were chosen based on the soils present on the subject property and "the types of farm uses that might be considered for the property by a prudent farmer who hopes to make a profit by farming the land." With respect to livestock grazing in particular, Mr. Caruana stated: "For the livestock operations, the starting point to determine herd size was the number of animals that can be fed directly from the hay and pasture grown on the property. Then additional animals were added based on the ability to purchase feed and, where typical and likely to be cost effective, to operate a confined operation. The accepted farm practice is to graze on pasture or range during the growing season (typically seven months) and fed during the winter months. " He also stated the AUMs used in his analysis were derived "utilizing aggressive estimates of the maximum carrying capacity of both the pasture and hay land in an improved condition." Mr. Caruana developed a budget for each of the five agricultural enterprises. With respect to I l livestock grazing with 40 cow/calf pairs, he included in the budget expenses for: construction of a bam and 10.000 feet of fencing; purchase of farm equipment such as a new truck and trailer and a used tractor and manure spreader; purchase of an irrigation system. He also included annual expenses for: insurance; supplies; farm help; supplies; utilities; and veterinary medicine. Based on his analysis, Mr. Caruana concluded none of the five agricultural enterprises he evaluated, including livestock grazing, would produce a profit. Table 9 of the study shows the amount of projected loss for each enterprise, and indicates the grazing operation would have a net annual loss of $20,767. I Mr. Caruana's analysis is very detailed. However, the Hearings Officer questions what weight it 1 should be given in general, and for a grazing operation in particular, because of its expense assumptions. The livestock operation budget includes expenses for a start-up operation without apparent consideration of existing assets. The budget includes almost $60,000 for a bam and fcattle equipment although the record indicates there are existing buildings on the subject iproperty that may be suitable for cattle and storage of supplies. The budget also includes Jnearly $20,000 for fencing without indicating whether or to what extent existing fencing on the subject property was accounted for. The budget identifies over $50,000 for the purchase of equipment. including $42,000 for a new truck and trailer without explaining why less expensive used truck and trailer would not be adequate. Finally, Mr. Caruana's budget for the livestock grazing operation lists $150,000 in expenses for the initial investment in an irrigation system. As discussed in the findings above, the subject property has 103 acres of irrigation water rights that previously were delivered to and applied on ! the subject property, presumably through an irrigation system. A photograph of the subject property attached to Mr. Caruana's study shows irrigation pipe lying in a field. The record also indicates there are one or more irrigation ponds on the property. It is unclear from this record I how much of the original irrigation system remained on the subject property after the applicant purchased the property and to what extent it was considered by Mr. Caruana. In her response to DCLD's and ODA's comments, Ms. Fancher stated with respect to the t irrigation system: I f "Improvements to the existing irrigation system are needed to operate the property as a single farm unit -the most efficient way to operate the property. Even with such improvements -which would come at some costs -the property remains unsuitable for tNNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 31 of 39 I ~ I farm use. Furthermore, the state of the existing ilTigation system is not highly relevant. A farmer will need to pay for the cost of purchasing the irrigation system whether it is purchased with the land or whether it is purchased after a farm is acquired. Either way, the cost of purchasing the system is a cost that must be paid for [sic] from gross income." The Hearings Officer disagrees that the state of the existing irrigation system is not relevant where, as here, the cost for an irrigation system represents the single largest expense. Because Mr. Caruana's budget calculations appear not to account for the value and utility of existing irrigation equipment and infrastructure, I am not persuaded his projected expenses for irrigation in particular, and for a grazing operation in general, are accurate. Inasmuch as the projected loss for the grazing operation was approximately $21,000, the Hearings Officer finds elimination of or reduction in the projected costs of buildings, fences, equipment, and irrigation system easily could exceed that amount, thereby making the cowlcalf operation profitable. I find that without additional information explaining the basis for such high expenses, and in light of the property's historical use for cattle grazing, the applicant has not met its burden of proving the subject property is unsuitable for livestock grazing. 3. Climatic Conditions. The applicant argues the subject property is unsuitable for farm use because the climate in Central Oregon is cold and dry. In support of its argument, the applicant relies on Mr. Borine's soil study which states at pages 6-7: "This parcel is located very close to the Bend Weather station. Climatic data is available from 1) AgriMet BEWO (2003-present) and, 2) Bend Weather Station (1971-2000). The Soil Survey of the Upper Deschutes River Area, OR cites the Bend Weather Station for analysis. Pertinent conditions for this parcel using this weather station data show that 5 years in 10 the freeze (killing frost -28 degrees F.) dates are later that June 1h and earlier than September 15th with the growing season of 91 days, and growing degree days are 1,493. Average annual precipitation is 11.7 inches at 3,600 ft. elevation. The Madras area, also in Central Oregon, will be used for comparison as it is known to produce a variety of field crops successfully. The Madras Weather Station data show that 5 years in 10 the freeze dates are later than May 6th and earlier than October 1ih with the growing season of 184 days, and growing degree days of 1,745. Average annual precipitation is 11.4 inches at 2,400 ft. elevation. Comparison of data shows the Madras area, which is known to successfully produce a large variety of field crops, has greater than 60 days with less chance of having a killing frost, has twice the growing season, and 117% greater number of growing degree days as the Bend weather station and this parcel. Climatic conditions that exist on this parcel greatly restrict production of field crops. " oLCo and OoA state in response, and the Hearings Officer agrees, that Central Oregon climatic conditions "are not ideal for commercial agriculture." Nevertheless, as the agencies note, the conditions existing at the subject property are similar to areas in the region that support hay and cattle production, such as the Fort Rock and Christmas Valley areas to the south in Lake County that are at higher elevation than the subject property. I find the Central Oregon climate certainly makes farm use more challenging, but I am not persuaded by the applicant's evidence that climatic conditions would dissuade a reasonable farmer from putting the subject property into agricultural use. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 32 of 39 4. Existing and Future Availability of Water for Farm Irrigation Purposes. The applicant argues the subject property is not suitable for farm use because the soils are too poor to justify irrigating them. As discussed above, the subject property has 103 acres of irrigation water rights and is located within COlD's boundaries. Therefore, it is considered "irrigated" under OAR 660-033-0020(9).13 The applicant's burden of proof states most of these water rights currently are being leased for in-stream use to improve water levels in the Deschutes River. The applicant argues the existence of these water rights is not important to the suitability analysis because: "Placing this water back in-stream rather than squandering it to irrigate nonagricultural soils is a far better use of limited water resources. Selling the irrigation water rights for use on more productive farm grounds is also far more beneficial than applying the water to the subject property ... The Hearings Officer finds this argument unpersuasive. The record indicates water is available for the subject property now and in the future for farm irrigation purposes. 5. Existing Land Use Patterns. As discussed in detail in the Findings of Fact above, the existing land use pattern in the area surrounding the subject property consists of both EFU zoned land engaged in agriculture and MUA-10 zoned land developed with rural residences and small-scale "hobby" farms. The applicant argues the subject property is unsuitable for farm use in light of the surrounding area for the following reasons: "The close proximity of so many nonfarm uses limits the type of unprofitable agricultural activities that could reasonably be conducted on the subject property. The subject property would not be suitable for raising animals that are disturbed by noise. Any agricultural use that requires the application of pesticides and herbicides would be very difficult to conduct on the property given the numerous homes located on adjoining properties in the area due to aerial drift of these chemicals ... DLCD and aDA argue, and the Hearings Officer agrees, that there is nothing about this land use pattern that would limit "responsible farming practices" or serve to reduce the property's value for agriculture. 6. Technological and Energy Inputs Required. The applicant argues the subject property is unsuitable for farm use because it would require excessive technological and energy inputs to be productive. The applicant again relies on Mr. Borine's soil study which states at page 7: 'This parcel requires technology and energy inputs over and above that considered acceptable farming practices. Excessive fertilization and soil amendments; very frequent irrigation applications pumped from a pond with limited availability; and marginal climatic conditions restrict cropping alternatives." In their response, DLCD and aDA argue: "The subject property appears to have been neglected and untended for some time. Recovering neglected properties takes effort but it can be done and is not uncommon. 13 That paragraph defines "irrigated" as having irrigation water rights, and states an area once irrigated in an irrigation district shall continue to be "irrigated" after a transfer of water rights. NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 33 of39 The soils can be amended and fertilized. The irrigation pond(s) can be improved. Irrigated lands in Central Oregon typically receive about 2.5 acre-feet of water per irrigation season. The water applied to the subject property would not be in excess of what is applied to other lands in the Central Oregon Irrigation District. The property has had irrigation systems and equipment that either remain in place or have been removed by prior operators or the current owner. Any shortcomings with the irrigation system are a function of management and not a problem with the subject property. " In her response to DLCD and ODA, Ms. Fancher argued that although the subject prope~ "has not been used for agricultural purposes for quite some time" it has not been "neglected." 4 She asserts the cost of amending, fertilizing and irrigating the soils on the subject property "is a cost that contributes to making it unprofitable to farm the subject property." As discussed in the findings above, the Hearings Officer has found Mr. Caruana's annual budget for a cattle grazing operation does not include any expenses for amending or fertilizing the soil. The annual budgets for grass seed and alfalfa hay operations amount to only approximately $10,000 and $4,000, respectively. And I have questioned the accuracy of the cost Mr. Caruana projections for the irrigation system. Based on these findings, I am not persuaded the technological and energy inputs required to put the subject property to profitable farm use are excessive. 7. Accepted Farming Practices. The applicant argues the subject property is unsuitable for farm use because: "Farming lands comprised of soils that are predominantly Class VII is not an accepted farm practice in Central Oregon. Dryland grazing, the farm use that can be conducted on the poorest soils in the County, n typically occur on Class VI non-irrigated soils that have a higher soils class if irrigated. Crops are typically grown on soils in Classes 11/ and IV." The applicant again relies on Mr. Borine's soil study, which states at page 7: "Accepted farming practices in Central Oregon to raise forage crops generally require and include a relatively flat to gently sloping parcel that has a moderately deep soil with readily available irrigation water in adequate amounts. Irrigation begins in April and ends in October. The site will produce 2 to 3 cuttings of hay or continuous rotational grazing by limited numbers of livestock. Fertilization with multiple yearly applications is required to sustain the plants and produce a crop." In their response, OLCO and OOA state: "Common and accepted farming practices include, but are not limited to, efforts involving hay and livestock production, some cereal grain production, and boarding and training equines. Nothing about the subject property indicates that it could not operate with accepted farming practices common in the area. " Ms. Fancher responded to OLeo and ODA as follows: 14 In his public hearing testimony, Guy Hamby stated there had been no agricultural use on SUbject property for approximately five years. NNP IV-NCR. LLC -PA-13-1/ZC-13-1 Page 34 of 39 ! "OLCO and aDA have failed to properly frame the issue. The issue is not whether accepted farming practices common in the area can be conducted on the subject property. The issue is whether they are conducted with the primary purpose of making a profit in money. If not, the NNP property is not suitable for farm use. The farm practices mentioned by OLCO and aDA are the accepted farm practices/operations in this part of the agricultural community. Mr. Caruana has studied each of these operations and has shown that they will not be profitable on the NNP property. Whether a property can 'operate' is not the determinative issue -the issue is whether the property would be operated with the intention to make a profit in money." (Emphasis added.) The applicant acknowledges cattle grazing, bluegrass seed and alfalfa hay production are accepted farming practices in the county and in the area surrounding the subject property, but argues on the basis of Mr. Caruana's study that these practices are not profitable. As discussed above, the Hearings Officer has questioned the accuracy of Mr. Caruana's projected expenses for these operations. For the same reasons, I also question the projected losses, which are $20,767, $6,727, and $10,373, respectively for the livestock grazing, grass seed and alfalfa hay operations. I find only minor adjustments to projected expenses could put these operations in the profit column. For example, cutting the projected $45,000 expense for a new truck and trailer for the cow/calf operation would wipe out the projected losses for that operation. Reducing the $150,000 expense for the irrigation system by 15% would wipe out the projected losses for all of the operations requiring· irrigation. For these reasons, and considering past livestock grazing and hay production on the subject property, I find the applicant has failed to demonstrate that a reasonable farmer would not put the subject property to farm use with one of more of these three accepted farming practices. For the foregoing reasons, the Hearings Officer finds the subject property is suitable for farm use considering the seven factors in the rule as well as profitability. (C) Land that is necessary to permit farm practices to be undertaken on adjacent or nearby agricultural lands. FINDINGS: The applicant's burden of proof at pages 20-21 : "The subject property is not land necessary to permit farm practices to be undertaken on adjacent or nearby lands. The following facts are shown by the applicant's discussion of surrounding development in Section 0 of this application, above, which is discussed further below. " As set forth in the Findings of Fact above, the area surrounding the subject property is comprised of both MUA-10 zoned land that is developed with rural residences and "hobby farms" and EFU-zoned land either that is not engaged in farm use or supports small-scale agricultural activities. Under these circumstances, the Hearings Officer concurs with the applicant that the subject property is not land necessary to permit farm practices on any of the adjacent or nearby EFU-zoned parcels. (b) Land in capability classes other than I-lVII-VI that is adjacent to or intermingled with lands in capability classes I-lVII-VI within a farm unit, shall be inventoried as agricultural lands NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 35 of 39 I even though this land may not be cropped or grazed. (Emphasis added.) FINDINGS: The record shows the Class VII and VIII soils on the subject property are intermingled with the Class I-VI soils. The remaining question under this paragraph is whether these soils are intermingled ·within a farm unit.» The term "farm unit" is not defined by statute or administrative rule. The Hearings Officer has reviewed LUBA and court cases addressing this prong of the "agricultural land" definition for guidance on how to interpret this term and has found the analysis focuses on the property's history of use as part of, or in conjunction with, farm use on other adjacent or nearby parcels. E.g.: Wetherell (Great American Properties), 60 Or LUBA 131 (2009) (on remand from the Supreme Court based on its decision in Wetherell v. Douglas County (Wetherell 11/), 342 Or 666, 160 P3d 614 (2007»; Wetherell v. Douglas County), 58 Or LUBA 101 (2008); Wetherell v. Douglas County, 50 Or LUBA 167 (2005). At the public hearing, Guy Hamby, who lives on a four-acre EFU-zoned parcel surrounded by the subject property, testified that in the 1950's and 1960's most the subject property was part of his family's large dairy operation, but that the family lost much of the land to creditors when the dairy ceased to be profitable. The applicant's burden of proof indicates that prior to its purchase of the subject property, the property was engaged in what the applicant describes as several "hobby farms" including cattle grazing on approximately 62 acres, llama raising on 5 acres, hay production on 77 acres, and growing of ornamental trees on approximately 26 acres. The applicant's burden of proof at pages 21-22 states in relevant part: tiThe subject property is not and has not been a part of a farm unit that includes other lands. A part of Tax Lot 206 was once owned by the Culvers, owners of Tax Lot 200 and Tax Lot 205, but these properties have no known history of being used for farm use and contain poor soils that make it generally unsuitable for farm use as confirmed by the fact that the owners of Tax 205 received approval of a nonfarm dwelling for that property and none of the properties are tax deferred. Another part of Tax Lot 206 was owned by Mr. Ryba, the owner of Tax Lot 201. Tax Lot 201 is developed with a nonfarm dwelling. The land now a part of Tax Lot 206 that was formerly owned by Ryba was a part of the nonfarm parcel that was found generally unsuited for farm use when the nonfarm dwelling was approved. Compare, Exhibit AA (map used for approval of nonfarm dwelling) and Exhibit BB (current tax map). All parts of the subject property were studied by the applicant's soils analysis, Exhibit A. The analysis shows that the predominant soil type found on the property is Class VII, nonagricultural land with or without irrigation water rights. Some Class VI soils are intermingled with the nonagricultural soil not vice versa. As a result, this rule does not require the Class VII soils to be classified agricultural lands. " In their comments on the applicant's proposal, DLCD and ODA stated: "The applicant's materials and the attached aerial views clearly show that these areas [Class I-VI and Class VII and VIII soils] have been managed together as irrigated units. Therefore, the lands in this area should be inventoried as agricultural lands. " The Hearings Officer finds the agencies' response is off the mark. The question is not whether these intermingled soils are part of "irrigated units." Rather, the question is whether the soils are located on a "farm unit." -i.e., whether the subject property is or has been a "farm unit" or NNP IV-NCR, LLC -PA-13-1/ZC-13-1 Page 36 of 39 t part of a "farm unit.» I find the evidence in the record indicates the subject property has not been managed by itself, or in conjunction with other lands, as a single farm unit since the 1960's, and therefore the agricultural and nonagricultural soils on the subject property are not intermingled on within a "farm unit. D (c) "Agricultural Land" does not include land within acknowledged urban growth boundaries or land within acknowledged exception areas for Goals 3 or 4. FINDINGS: The subject property is not within an acknowledged urban growth boundary or acknowledged exception area. b. OAR 660-033-0030. Identifying Agricultural Land (1) All land defined as "agricultural land" in OAR 660-033-0020(1) shall be inventoried as agricultural land. (2) When a Jurisdiction determines that the predominant soli capability classification of a lot or parcel it need only look to the land within the lot or parcel being inventoried. However, whether land is "suitable for farm use" requires an inquiry into factors beyond the mere identification of scientific soil classifications. The factors are listed in the definition of agricultural land set forth at OAR 660-033-0020(1 )(a)(8). This inquiry requires the consideration of conditions existing outside the lot or parcel being inventoried. Even if a lot or parcel is not predominantly Class I-VI soils or suitable from farm use. Goal 3 nonetheless defines as agricultural "lands in other classes which are necessary to permit farm practices to be undertaken on adjacent or nearby lands." A determination that a lot or parcel is not agricultural land requires findings supported by substantial evidence that addresses each of the factors set forth In 660-033-0020(1). FINDINGS: The interpretation and application of these provisions is discussed in detail in the findings above, incorporated by reference herein. As discussed in those findings, incorporated by reference herein, the Hearings Officer has found the applicant has demonstrated the subject property is not "agricultural land" based on being necessary to permit farm practices on adjacent or nearby lands, or because it is a farm unit within which agricultural soils and nonagricultural soils are intermingled. However, I have found the applicant has failed to demonstrate the subject property does not fall within the definition of "agricultural land" based on its suitability for farm use. (3) Goal 3 attaches no significance to the ownership of a lot or parcel when determining whether it is agricultural land. Nearby or adjacent land, regardless of ownership, shall be examined to the extent that a lot or parcel is either "suitable for farm use" or "necessary to permit farm practices to be undertaken on adjacent or nearby lands" outside the lot or parcel. FINDINGS: The Hearings Officer finds my analysis has attached no significance to ownership of lots or parcels surrounding the subject property in determining whether the property is NNP IV-NCR. LLC -PA-13-1/ZC-13-1 Page 37 of 39 suitable for farm use or is necessary to permit farm practices on adjacent or nearby lands, therefore satisfying this criterion. (5) (a) More detailed data on soil capability that in contained in the USDA Natural Resources Conservation Service (NRCS) soil maps and soil surveys may be used to define agricultural land. However, the more detailed soils data shall be related to the NRCS land capability classification system. (b) If a person concludes that more detailed soils information that that contained in the Internet soil survey of soil data and information produced by the National Cooperative Soil Survey operated by the NRCS of the USDA as of January 2, 2012, would assist a county to make a better determination of whether land "qualifies as agricultural land, the person must request that the department arrange for an assessment of the capability of the land by a professional soil classifier who is chosen by the person, using the process described in OAR 660-033-0045. FINDINGS: As discussed in detail in the findings above, the applicant submitted a soil study prepared by Roger Borine of Sage West, LLC. DlCD found Mr. Borine is a qualified soils expert and certified his study. Therefore, the Hearings Officer finds these criteria have been met. (c) This section and OAR 660-033-0045 apply to: (A) A change to the designation of land planned and zoned for exclusive farm use, forest use or mixed farm-forest use to a non-resource plan designation and zone on the basis that such land is not agricultural land; FINDINGS: The applicant requests approval of a plan amendment and zone change from Agriculture to Rural Residential Exception Area, and from EFU to MUA-10. respectively. on the basis that the subject property is not agricultural land. (d) This section and OAR 660-033-0045 implement Oregon laws 2010, chapter 44, section 1, effective on October 1, 2011. After this date, only those soils assessments certified by the department under section (9) of this rule may be considered by local governments in land use proceedings described in subsection (c) of this section. However, a local government may consider soils assessments that have been completed and submitted prior to October 1, 2011. (e) This section and OAR 660-033-0045 authorize a person to obtain additional information for use in the determination of whether land qualifies as agricultural land, but do not otherwise affect the process by which a county determines whether land qualifies as agricultural land as defined by Goal 3 and 660-033-0020. NNP IV-NCR, LLC PA-13-1/ZC-13-1 Page 38 of 39 FINDINGS: As discussed in the foregoing findings, the applicant submitted a soil study that was certified by DLCD under OAR 660-033-0045, therefore satisfying this criterion. For the foregoing reasons, the Hearings Officer finds the applicant has not demonstrated the subject property falls outside the definition of "agricultural land." The applicant has not shown that the parcels comprising the subject property are predominantly Class VII and VIII soils. Even assuming the appropriate unit of land for the "predominant soilsH analysis is the entire subject property rather than the individual parcels, the applicant has failed to demonstrate the subject property is not suitable for farm use considering profitability and the seven factors in the administrative rule. Accordingly, I find the subject property is "agricultural land," and the applicant has not met its burden of proof for the proposed plan amendment and zone change from agriculture to non-resource land. V. DECISION: Based on the foregoing Findings of Fact and Conclusions of Law, the Hearings Officer hereby DENIES the applicant's proposed plan amendment from Agriculture to Rural Residential Exception Area, and zone change from EFU-TRB to MUA-1 0, for the subject property. Dated this 23rd day of October, 2013. Mailed this 24th day of October, 2013. Karen H. Green, Hearings Officer NNP IV-NCR, LLC -PA-13-1fZC-13-1 Page 39 of 39 Community Development Department Planning Division Building Safety Division Environmental Soils Division ,": ,:.... : .~. "...'::' :. :·~v .... '"....:". . P.O. Box 6005 117 NW Lafayette Avenue Bend, Oregon 97708-6005 (541)388-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ CERTIFICATE OF MAILING FILE NUMBERS: PA-13-1, ZC-13-1 DOCUMENT/S MAILED: Hearings Officer's Decision MAPfTAX LOT NUMBERS:17-12-24, 206, 300, 301, 302, 304, 305, 401,405,406 I certify that on the 24th day of October, 2013 the attached Hearings Officer's Decision dated October 24, 2013, was/were mailed by first class mail, postage prepaid, to the persons and addresses set forth on the attached list. Dated this 24th day of October, 2013. COMMUNITY DEVELOPMENT DEPARTMENT By: Sher Buckner NNP IV-NCR, LLC 2660 NE Highway 20, Suite 610-369 Bend, OR 97701 Liz Fancher, Attorney 644 NW Broadway Street Bend, OR 97701 Jon Jinings Dept. of Land Conservation & Devel. Bend RSC, Millpoint Building 650 SW Columbia Street, Suite 7100 Bend, OR 97702 Guy and Mary Jo Hamby 21633 Butler Market Road Bend, OR 97701 1000 Friends of Oregon 115 NW Oregon Ave #21 Bend, OR 97701 Steven P. Hultberg P.O. Box 2007 Bend, OR 97709 John Scarborough 21626 NE Butler Market Road Bend, OR 97701 Buck Dyer 63223 Hamehook Road Bend, OR 97701 Quality Services Performetl with Pride Plan Amendment from Agriculture to Rural Residential Zone Change from EFU-TRB to MUA-10 •Mary Ruby—Vice President, General Manager •Steven Hultberg—Land Use Attorney •Liz Fancher—Land Use Attorney •Roger Borine—Soil Scientist, Sage West LLC •Stephen Caruana—Agronomic Analytics •Applicant’s Burden of Proof •Overview of Hearings Officer Decision •Lot configuration •Soils Analysis—Roger •Farm Suitability—Liz •Policy 2.2.3: “Allow comprehensive plan and zoning map amendments for individual EFU parcels as allowed by State Statute, Oregon Administrative Rules and this Comprehensive Plan.” •Policy 2.2.13 “Identify and retain accurately designated agricultural lands.” •Existing County policy to accurately identify and map agricultural land. •Existing County policy to allow zone change if land is not agricultural land. •Present application consistent with existing County policy. •Not asking County to make new policy, merely adhere to its existing Agricultural Land policies. •Demonstrate that the underlying property is not “Agricultural Land” as defined by state law. •If we are able to demonstrate that land is not “Agricultural Land” we have met our burden of proof. •Because we have met our burden of proof, consistent with the County’s Agricultural Lands policies, the property is entitled to be rezoned. •Two Part Test: Soils and Farm Suitability •Lands classified by the U.S. Natural Resources Conservation Service (NRCS) as predominantly Class I-VI soils in Eastern Oregon. •Land in other soil classes that is suitable for farm use, taking into consideration soil fertility; suitability for grazing; climatic conditions; existing and future availability of water for farm irrigation purposes; existing land use patterns; technological and energy inputs required; and accepted farming practices. •If land is predominantly Class I to VI soils it is de facto Agricultural Land •No ability to rezone even if land not suitable. •Practical Implications •If land is predominantly composed of Class VII and VIII Soils determine whether “suitable for farm use.” •Two part test: Soils and Suitability. •Shallow, nonproductive, highly permeable, sandy and infertile. •Not adjectives associated with good soils. •67% Class VII and VIII Soils. •No contrary evidence in record. •Move to next step: Suitability for farm use. •Test: Current employment of land for the primary purpose of obtaining a profit in money through traditional farming practices such as raising crops, cattle, livestock, etc… •Property has long history of losing money. •Detailed agronomic studies conclude that it is impossible to farm property profitably. •Conclusion: Land not suitable for farm use. •Substantial evidence in the record demonstrating that land is predominantly Class VII Soils. •No contradictory evidence in the record. •Substantial evidence in the record to show that land is not suitable for farm use. •Met burden of proof on both elements of test. •First Prong of Test: Soils •Evaluate soils on entire property or each lot of record? •Hearings Officer: “Where the subject property is a tract with multiple parcels, the applicant must demonstrate each parcel consists of predominantly Class VII and VIII soils rather than simply analyzing the tract as a whole.” •Hearings Officer: “The County can choose either to evaluate the soils on an individual basis or as to the entire tract.” •No dispute that the subject property as a whole is comprised of predominantly Class VII soils. •Issue for the Board is whether you look at overall property or 10 separate lots. •We believe that Hearings Officer misapplied law both for legal and practical reasons. •Definition of Agricultural Land uses the term “land.” •Does not require that a farm unit be examined on a lot by lot basis. •No State or County regulation mandates the county examine each lot. •Hearings Officer improperly relied on OAR 660-033-0030. •Merely says that when you are looking at a single parcel for rezoning, you don’t have to look beyond the parcel in question. •Hearings Officer turned this rule on its head. •Current Law: Do not evaluate less than an entire parcel. •This does not mean look at each parcel within a tract. •No law, administrative rule or regulation requires the County to evaluate on a lot by lot basis. •County has not required lot by lot analysis in other cases. •Hearings Officer ruling: Form over substance •Recall: No dispute that overall property is comprised predominantly of Class VII Soils. •Solution: Consolidate lot to make single legal lot of record. •Solution: Lot line adjust individual lots so that each meets predominance test. •Although not required, analyzed each lot for soil type. •Results: 8 Lots meet predominant soils test. 2 Lots do not meet predominant soils test. •Results: TL 401 19.63 acres 3.34 acres Class III 12.56 acres Class VI 3.73 acres Class VII TL 405 4.88 acres .83 acres Class III 2.49 acres Class VI 1.56 acres Class VII •TL 401 and 405 don’t meet predominance test. •Hearings Officer decision not practical because of simple solution. •Lot Consolidation or Property Line Adjustment. •Either could be used to have TL 401 and TL 405 meet predominance test. •Form over substance: Makes little sense to examine lot by lot when the boundaries can be changed. •Follow state law and base your analysis on the “land” in question. •Entire Property: Used for suitability test; should be used for soils test as well. •Hearings Officer: “The County can choose either to evaluate the soils on an individual basis or as to the entire tract.” •Map shows that it is feasible to meet standard either on a lot by lot basis or by the entire tract. •Approve as is – consistent with state law and consistent with the Hearings Officer’s conclusion that either analysis is proper. •380 Acre portion of larger DSL tract rezoned one year ago. •Two Part Test: Soils & Feasibility •“Free Pass” from sister agency DLCD •County did not require evaluation of soils with irrigation water applied. •County did not require any substantive farm suitability analysis. •Did not require soils test on parcel by parcel basis. •No economic feasibility reports prepared. •Newland participated in DSL application primarily to see how County would apply County Code and State law. •Primary concern was to ensure that we knew what to expect in this application process. •Expectation of similar treatment. •Even when irrigated, vast majority of soils are Class VII. •Extensive economic feasibility study prepared. •No evidence that subject property can be farmed profitably. •Met burden of proof. •Above and beyond what County required of DSL. Paul Blikstad From: Jinings, Jon <jon.jinings@state.or.us> Sent: Wednesday, March 20,201312:27 PM To: Paul Blikstad Subject: Correction to DLCD/ODA Comments on PA-13-1 & ZC-13-1 Paul, Our comment letter sent bye-mail on Monday, March 18, 2013 at 4:42 PM indicates that Deschutes County may not have considered language included in Section 3.3 of the county plan in previous land use decisions. It has come to our attention that this language has been considered and addressed by a Deschutes County Hearings Officer and the Deschutes County Board of Commissioners. This discovery does not change the state agencies (ODA & DLCD) position on the matter. However, we would like the record to show our recognition that questions surrounding the above language have been considered and decided by the county in at least one previous decision. Please add this e-mail message as a supplement to our original comments in the record. Sincerely, Community Services Specialist Department of Land Conservation and Development 1 Paul Blikstad From: Jinings, Jon <jon.jinings@state.or.us> Sent: Monday, March 18,20134:42 PM To: Paul Blikstad Subject: NNP IV-NCR, LLC Attachments: Newland Comments 3-18-13.pdf Hey, Paul. Here are our comments regarding local files PA-13-1 &ZC-13-1. Please include this letter in the record of this case on behalf of the Department of Land Conservation and Development (DLCD) and the Oregon Department of Agriculture (ODA). The following individuals are receiving blind copies of this message: Liz Fancher, Attorney Karen Swirsky, DLCD Katherine Daniels, DLCD Jim Johnson, ODA Please consider this your copy of the attached comments. Jon 1 Department of Land Conservation and Developmentregon Bend RSC, Millpoint Building John A Kitzhaber. MD, Governor 650 SW Colwnbia St, Ste 7100 (541) 322-2032 www.lcd.state.or.us March 18, 2013 Paul Blikstad Deschutes County Community Development Oregon Department of Agriculture 117 NW Lafayette 635 Capitol Stree NEt Bend, OR 97701 OR 97301-2532 QIIggnRE: Local File PA-13-1 & ZC-13-l. ~t til AgrlculnnDLCD File: ADESC 015-08. Mr. Blikstad: This letter includes the joint comments ofthe Oregon Department of Agriculture (ODA) and the Oregon Department of Land Conservation and Development (DLCD). Both departments would like to thank Deschutes County for the opportunity to review and comment on the land use proposal referenced above. The subject proposal seeks to convert about 171 acres from an Agricultural Plan designation and Exclusive Farm Use Zoning district (EFU-TRB) to a Rural Residential Exception Area Plan designation and Multiple Use Agriculture Zoning district (MUA-lO). The request is based on ajustification that the property does not qualify as "Agricultural Land" pursuant to OAR 660-033-0020(1). No exception to statewide planning goal 3 is proposed. It is our understanding that the subject property is a tract composed of multiple parcels that are now in one ownership. Several homes are present, including at least two that have been approved under the nonfarm dwelling provisions in the county code. The tract consists of some dry land and has over 100 acres of irrigation water rights. According to Deschutes County records, only those parcels including nonfarm dwellings have been removed from farm tax deferral. Our initial observations have been that the subject tract appears capable to be managed as agricultural land and is not an obvious candidate for redesignation to Rural Residential. Our comments and concerns are as follows. j Agricultural Land vs. Nonresource Land The most common way for land to be converted from an Agricultural designation is to pursue an exception to statewide planning goal 3. The exceptions process is identified atI ORS 197.763 and interpreted by OAR Chapter 660, Division 4. Three exception 1 I ,~ i I 1 I J . Descbutes County -1-March 18.1013 I ( i I f opportunities are described in the administrative rule. Showing that lands are either "physically developed" or "irrevocably committed" to uses not allowed by the applicable goal are the two opportunities most applicable to the creation ofa new rural residential exception area. However, as mentioned above, the applicant is not pursuing an exception. Instead, the i applicant is attempting to demonstrate that the subject tract fails to satisfy the definition of agricultural lands. Areas that do not qualify as agricultural or forest lands are often referred to as "Nonresource Lands." Nonresource lands are fundamentally different from rural residential exception areas. Exception areas display an existing settlement pattern and have the characteristics of a rural residential neighborhood, including the presence of public services. Nonresource lands are often large, undeveloped tracts that do not include an existing settlement pattern. Nonresource lands are more likely to exist in remote areas and are usually not complemented with a full range of public services. Statewide planning goal 3 and OAR 660-033-0020(1) provide a definition of agricultural land. The definition states: (1)(a) "Agricultural Land" as defined in Goal 3 includes: (A) Lands classified by the U.S. Natural Resources Conservation Service (NRCS) as predominantly Class I-IV soils in Western Oregon and I-VI soils in Eastern Oregon; (B) Land in other soil classes that is suitable for farm use as defined in ORS 215.203(2)(a), taking into consideration soil fertility; suitability for grazing; climatic conditions; existing and future availability of water for farm irrigation purposes; existing land use patterns; technological and energy inputs required; and accepted farming practices; and (C) Land that is necessary to permit farm practices to be undertaken on adjacent or nearby agricultural lands. (b) Land in capability classes other than I-IV II-VI that is adjacent to or intermingled with lands in capability classes I-lVII-VI within a farm unit, shall be inventoried as agricultural lands even though this land may not be cropped or grazed; Materials from the Natural Resource Conservation Service identify the subject tract as predominantly Class I-VI soils. On this basis, the property is correctly defined as agricultural land. The applicant has presented additional site specific soils information to supplement the NRCS data which indicates that the subject tract is actually composed predominantly of Class VII soils. The departments find the conclusion that level, irrigated land could be considered Class VII surprising. Should the county agree with the applicant's soils report addition provisions ofthe definition of agricultural land must be considered. Descllutes County March 18.2013 Even ifthe subject tract is viewed as predominantly composed of Class vn soils, available evidence shows that it is certainly suitable for farm use as defined in ORS 215203(2)(a). Further comments on this topic are offered below. Farm Use The definition of farm use is very broad and everything from crop production to livestock grazing to selling dairy products to aquaculture is included. Honey bees, raising poultry, mink farms, feedlots, aquaculture and, stabling or training equines, included in the definition of "farm use." A site comprised ofmostly levelland with over 100 acres of irrigation water rights is entirely capable of being used for any number of legitimate farm uses. Profitability is an important aspect in agriculture and any business venture. Past perfonnance is one thing to consider when factoring profitability for farming. Future potential is another. Success in agriculture requires the right management at the right time with the right crop or commodity. This management may be applied by the property owner or it may be applied by a tenant who leases the land and incorporates it into a larger agricultural enterprise. The applicant's materials describe past uses ofthe subject tract. However, this is an assessment built from individual properties managed independently by multiple different operators who are generally not commercial farmers or ranchers. Managing the property as a single 171 -acre unit for commercial purposes is likely to yield different results. The attached aerial views obtained from Google Earth show the subject property on a number of different dates going back to 1994. This photographic history shows that for nearly 20 years there has been some level of ongoing farm or ranch activity on the tract. Although the property has been neglected it still retains substantial potential for commercial agriculture. This evidence strongly supports a conclusion that the subject property is suitable for fann use, especially when that term is so broadly defined and could include crops and practices yet to be considered. Soil Fertility We appreciate that soil fertility can be a limitation to agriculture, especially when a property has been neglected. However, applying lime and manure as well as fertilizers to recover soil capacity and boost production are common practices in central Oregon and elsewhere. We also recognize that entire categories offarm uses are not strictly dependent on soil fertility. For instance, boarding and training horses requires space and topography conducive to facility development but soils are not an absolute requirement. Many horse breeding and raising facilities in central Oregon operate on dry, often rocky ground. Confinement livestock or poultry operations require building locations but not necessarily deep soil. Members of central Oregon's growing Community Supported Agriculture (CSA) might say that they create their own soil and all they need is a place to produce their commodities. Deschutes County -4-March 18.1013 According to the applicant's materials the subject tract has adequate soH fertility for· pasture, hay production and growing Christmas trees. The attached aerial views do not appear to show lands so compromised in soil fertility that they are unable to support a farm use of any type. Suitability for Grazing The subject tract is suitable for livestock grazing. It is also large enough to be commercially significant either on its own or in conjunction with other properties. The Animal Unit Month (AUM) method for calculating grazing ability is described in the applicant's materials so we will not restate it here. What we will offer is that irrigated pasture in central Oregon is generally assumed to be able to support one cow-calf pair for a grazing season running roughly from May 15 through October 15, or about five AUMs per acre. Dry land pasture has a much lower capability. The applicant's materials suggest that dry land on the subject tract could support one pair per acre for 30 days, or about one AUM per acre. Added together, 103 acres ofirrigated pasture and 68 acres of dry land pasture would result in 583 AUMs capable of supporting about 117 pairs for a five-month grazing season. Other grazing alternatives could include for higher stocking rates for a shorter period. If cattle were not the selected livestock the same number ofAUMs could support about 580 sheep or goats for the same amount oftime. If property configuration and other factors where to limit utilization to 75% ofthe total potential, the subject tract would still be capable of running over 80 pairs for a grazing season. In most central Oregon cow-calf operations calves will be born between January and March and weaned at around 205 days. Seven month old calves from most traditional beefbreeds should weigh about 500 lbs. If the weaned calves are then sold rather than held through the winter the subject property could produce 80 or more calves for market each FalL For the week ofMarch 11,2013,400-500 lb calves sold for between $152 and $181 per hundred weight ($1.52-1.81 per pound) at the Central Oregon Livestock Auction in Madras, Oregon. Eighty 500 lb calves fetching $1.66 per pound would result in a gross return of$66,400. A high number of weaned calved available in the Fall could result in lower market prices. Please see the attached documents for additional information regarding weaning beef cattle. Climatic Conditions The subject property is in the rain shadow ofthe Cascade Mountain Range on the edge of the Oregon High Desert. In other words, the area is dry with cold winters and the potential for frost nearly every month. These climatic conditions are not ideal for commercial agriculture. However, commercial agriculture is active in similar settings in the local area and throughout the mountain and intermountain regions ofthe United States. For example, the hay and cattle producing regions ofFt. Rock and Christmas Valley share similar precipitation constraints and are located at an elevation of 4,699 and 4,318 feet above sea level, respectively, compared to an elevation of3,623 at Bend, Oregon. The hay and cattle I I I Desebutes County -5-Marcb 18. 2013 producing region of the Big Hole basin near Wisdom, Montana sits at an elevation of over 6,000 feet above sea level. Existing and future availability of water for fann irrigation purposes The subject property has over 100 acres of irrigation water rights. It has been irrigated in the recent past and is considered "irrigated" pursuant to OAR 660-033-0020(9). Therefore,' .. _. water for fann irrigation purposes is existing and available now and in the future. Existing land use patterns We generally agree with the applicant's description of the existing land use pattern. We do not believe that the presence of surrounding land uses would limit responsible fanning practices or serve to reduce the property's value for commercial agriculture. Technological and energy inputs required The subject property appears to have been neglected and untended for some time. Recovering neglected properties takes effort but it can be done and is not uncommon. The soils can be amended and fertilized. The irrigation pond(s) can be improved. Irrigated lands in central Oregon typically receive about 2.5 acre-feet of water per irrigation season. The water applied to the subject property would not be in excess of what is applied to other lands in the Central Oregon Irrigation District. The property has had irrigation systems and equipment that either remain in place or have been removed by prior operators or the current owner. Any shortcomings with the irrigation system are a function of management and not a problem with the subject property. Accepted farming practices Common and accepted fanning practices include, but are not limited to, efforts involving hay and livestock production, some cereal grain production and boarding and training equines. Nothing about the subject property indicates that it could not operate with accepted fanning practices common in the area. Land necessary to permit fann practices on adjacent or nearby agricultural lands The applicant discusses why the subject property is not necessary to permit fann practices to be undertaken on nearby and adjacent lands. We do not necessarily agree or disagree with this assessment. Other Capability Classes The definition offann use includes, "Land in capability classes other than I-lVII-VI that is adjacent to or intermingled with lands in capability classes I-IV II-VI within a farm unit, shall be inventoried as agricultural lands even though this land may not be cropped or grazed." t I Deschutes County -6-March 18.2013 I I • In this situation the NRCS soils information shows the subject property as predominately class I-VI soils while the applicant's private soils study claims that the subject property is predominantly class VII soils. The primary difference, as we understand it, between the two different soils assessments is that the private study identifies inclusions ofclass vn soils within the irrigated lands. In other words, there is capability class vn soil intermingled with capability class I-VI soils. The applicant's materials and the attached aerial views clearly show that these areas have been managed together as irrigated units. Therefore, the Jands in this area should be inventoried as agricultural lands. The result is essentially a return to the beginning and a conclusion that the property is correctly designed as Agriculture and Exclusive Farm Use. Goal 14 Based on the above and in light of the attached aerial views we believe this property satisfies the definition of agricultural land and should retain an Agricultural Plan designation and an Exclusive Farm Use Zoning district. However, even if we agreed that the property did not deserve to be protected under statewide planning goal 3, we would still have concerns that the proposal may not be compliant with statewide planning goal 14. OAR 660-004w0040 provides guidance for planning and zoning new rural residential exception areas. Specifically, OAR 660-004-0040(7) requires new rural residential exception areas to have a minimum lot size of at least 10 acres. The subject proposal does not seek to create a new rural residential exception area. Instead, it attempts to demonstrate that that the subject property is nonresource land and not deserving of protection under statewide planning goal 3. Nonresouce areas are specifically excluded from the provisions of OAR 660-004-0040. We believe that in most cases nonresource lands should be placed in a plan and zone category that requires at least a 20 acre minimum parcel size. At a minimum, the applicant must address how the proposal is compliant with goal 14. County Plan The Deschutes County Comprehensive Plan does not address or contemplate land found to be "nonresource." There is no basis in the plan to designate "nonresource land" for rural residential or any other use. Statewide planning goal 2 states: All land use plans shall include identification ofissues and problems, inventories and other factual information for each applicable statewide planning goal, evaluation of alternative courses of action and ultimate policy choices, taking into consideration social, economic, energy and environmental needs. Section 2.2 ofthe Plan identifies Agricultural Lands Policies and least three are applicable to the subject proposal. Deschutes County -7-March 18.2013 2.2.2 Exclusive Farm Use sub-zones shall remain as described in the 1992 Farm Study shown in the table below, unless adequate legal findings for amending the sub-zones are adopted or an individual parcel is rezoned as allowed by Policy 2.2.3 . . 2.2.3 Allow Comprehensive Plan and zoning map amendments for individual EFU parcels as allowed by State Statute, Administrative Rules and this Comprehensive Plan. 2.2.4 Develop comprehensive policy criteria and code to provide clarity on when and how EFU parcels can be converted to other designations. In addition to the policies of Section 2.2 the Deschutes County Plan does includes clear and· unambiguous language that identifies that new Rural Residential Exception Areas to be established through the appropriate exceptions process. Section 3.3 of the Rural Development Chapter of the Plan expressly states: Rural Residential Exception Areas In Deschutes County most rural lands are designated for fanns, forests or other resources and protected as described in the Resource Management chapter of this Plan. The majority of the land not recognized as resource lands or Unincorporated Community is designated Rural Residential Exception Area. The County had to follow a process under Statewide Goal 2 to explain why these lands did not warrant farm or forest zoning. The major determinant was that many of these lands were platted for residential use before Statewide Planning was adopted. In 1979 the County assessed that there were over 17,000 undeveloped Rural Residential Exception Area parcels, enough to meet anticipated demand for new rural housing. As of2010 any new Rural Residential Exception Areas need to be justified through taking exceptions to farm, forest, public facilities and services and urbanization regulations, and follow guidelines set out in the OAR. (emphasis added) The subject proposal clearly runs contrary to the plain language cited above because the applicant is attempting to designate lands Rural Residential Exception Area without taking an exception to the applicable goals. Reading all of the relevant together language is clear that the county desires to establish provisions regarding converting agricultural land and, that until such policy has been established, nonresource designations are not available under the Plan. We understand that this issue has been before Deschutes County decision makers in a previous case. However, we did not see that the language in Section 3.3 was considered. We would also say this language creates a fundamental difference between similar proposals submitted under the previous county plan, which was silent on the matter of exception vs. nonresource designation. I Deschutes County -8- March 18.2013 In sum, The Deschutes County Plan does not evaluate alternative courses of action or ultimate policy choices with regards to planning and zoning of nonresource lands. We . concede that there may be lands in the county that do not satisfY the definitions of fann or . forest land, but that determination, and the consideration of alternatives and policy choices regarding proper plan and zone designations for such land, must be a deliberate, legislative. . decision by the county, not left to ad hoc quasi-judicial actions like this one. The department believes that Deschutes County does not have the authority to designate nonresource lands until and unless the planning work anticipated by Plan Policy 2.2.4. is done to create a local Nonresource Lands Planning Program. The county completed a significant update of its plan as recently as 20 II and chose not to include any reference to nonresource land. This indicates a deliberate decision to retain the Rural Residential designation for exception areas only. Conclusion In conclusion, the department believes that the subject property satisfies the definition of agricultural land regardless of which soils information is used. Further, we believe the plain language in the county's own plan makes a nonresource land determination unavailable. Finally, any lands that can be justified for conversion from an Agricultural designation based on a nonresource determination are subject to Goal 14 regarding appropriate lot size regulations. It is our recommendation that the existing Plan and Zoning provisions remain intact and that the county decline to process additional nonresource lands proposals until a local non resource lands planning program has been developed. Again, thank you for this opportunity to comment. We request that this letter be entered into the record of these proceedings and that we receive a copy of the decision. If additional information is provided at the hearing, we ask that the hearing be continued, pursuant to ORS 197.763(4)(b), to allow us time to review the new information and respond if necessary. Respectfully, Jon Jinings James W. Johnson Community Services Specialist Land Use and Water Planning Coordinator Cc: Liz Fancher, Esq. Karen Swirsky, OLCO Katherine Daniels, OLCD Deschutes County Attachment A Attachment B Attachment C -9-March 18. 2013 Aerial Photos From Google Earth Recent View September 29.2006 August 17,2003 July 24. 2000 May 7. 1994 Weaning Beef Calves, Oregon State Extension Service Beef Breed Differences: Preliminary Results from the U.S. Meat. Animal Research Center, Virginia Cooperative Extension. IATTACHMENT B I , : ..,. ;., ... ._ _.....:;~. ..!..:. --: i.. ;:. ,.. ._~ _ " I,·' Circular No. RegL&FOS03.. 1~>,};:'~'Extension Revised August 2011 ;,Oregon State Service· UNIVERSITY :. ,. , ; .. ~ '! ", : Courthouse Annex, 1134 SE Douglas Ave., PO Box 1165, Roseburg, OR 97470 Phone: 541-672-4461 or 800-883-7568 Weaning Beef Calves By Shelby Filley ·Regional Livestock & Forage Specialist Introduction . :;;:.~~-.:~-. Weaning time for many spring-born calves is just around the comer. We all know that weaning :Vi{ . ,. is the removal ofa suckling calf from the cow. But, what might not be so obvious are all the stressors and impacts associated with weaning, both for the calf and the cow. Weaning can also be stressful for the owner of the animals, especially if the weaned calves are placed in a pen near a .. , _. ._...: person's bedroom window. As animal managers, we should try and make weaning as stress-free as we can, while keeping productivity and profitability in line with our goals. . There are many considerations for weaning, including time of weaning, preparation for weaning,: <.' method of weaning, and post-weaning management. Different strategies of weaning affe<:t •..', . performance of the calf (market weight, health, etc.) and the cow (reproductive efficiency, cull ··· .:...:..0..'-.... _.. .. weights, health, etc.), and therefore can affect profitability. The information below is a summary of ' . several publications (see references on page 3). Full benefit to the agricultural producer comes from : study of the materials and in-depth consideration of incorporating them into the ranch management .plan. ... . .:,.:: .~---. Time of Weaning '. ' ..'. '. ". · Several factors can influence time of weaning, including loss of dam, forage resources and cow body condition, sale time, other ranch activities. Calves can be weaned any time after their rumens : ../": ' .'. become functional, that is, when their digestive system can process whole feeds. Ifa newborn calfis ~: ,:,:~~ unable to nurse its dam, use of a surrogate cow may be the best way to rais·e the calf until weaning.:··· .~-. ~: ... :.. ~ Bottle-fed calves can be weaned after one month of age, while calves nursing cows are weaned between 3 and 8 months of age. It is usually best to wean at the older age. For comparing weight of calves weaned at different ages, a 205-day weaning weight is sometimes calculated. This "205-day~ WW" is the calf weight adjusted for birth date and weaning date, and does not infer that calves should necessarily be weaned at that age. One potential management tool for the breeding program ."'. that is related to weaning is a practice called 48-hr calf removal. This temporary removal of calves from cows 48 hours prior to breeding has been shown to improve first service conception rates.. Ifforage is in short supply or cow body condition is low, calves can be weaned "early (before 8'~ ~':-:':~ -: mo). This preserves cow energy reserves to allow for development of the new calf inside her and " '.' .' .... . keep her in good shape for timely re-breeding after that calf is born. Studies have shown, that in times of forage shortages, it can be economical to wean calves early. In those cases, the cost of Fence-line weaning is a method of low-stress weaning. ' i.' '.'. Photo: Dan Dmke, Univ. of CA Cooperative Extension. " ;;: ... .•.... Oregon State University Ext8f1sion SeMce offers educallonal programs , activiOes, and mater1als-w~hout regard to race, color, ff/liglon, sex, sexual orientation, . national origin, age, marital status. disab#ity, and disabled veteran or Vietnam-era veteran status-as required by Title Viol the elva R1ghlS Act ot 1964. nUe IX of \he ..•. Educatioo Amendments of 1972, and Section 504 ollila Rehabilitation Act of 1973. Oregon State University Extension Service Is an Equal Oppor1unity Employer, .. . , ... .. -,_ . ---...,-._' . ;". feeding early-weaned calves was more than offset with improved reproductive perfonnariceofc6Ws M.;: . that were kept in a body condition that favored efficient reproductive performance. , . .,' (;,j;C', . . Most calves are born in the spring and weaned in the fall. This causes the supply ofweaned;2~-,:·t:~·.:.,:~·:,. calves to be highest in the fall. This high supply leads to seasonally low oalfprices. Consider how;:;;:~:~:~:;;"" changing calf weaning date can affect sale weight and price. Although weaning date may revolve .' around other routines, consider making weaning a higher priority. Preparation for Weaning Preparing calves well in advance to actual weaning time has benefits well worth the -effort.•.... t. :f" . Because immune function and response is lower in times of stress, and weaning can be stressful~T<" };~:. many veterinarians suggest that vaccinations be given 3-4 weeks prior to weaning and that ' ',Y ·t~~~;· . deworming be done after weaning. This not only lessens the stress at weaning. but iilso improvesFdH:~;'::=:-:' immune response to the vaccines and anthelmintics. Other management procedures, such as ";. ~':f:l:{8\F'; ...... branding, castrating, and dehorning should be done we]] in advance of weaning. Also, it is a good . idea to make sure that, before weaning, calves are use to eating the intended post-weaning diet You can feed that diet to both cows and calves for a short period of time, about two-weeks, or provide it in a creep feeder -narrow passages into a feeding area are set up so the calves creep in, but larger cows cannot. Although creep feeding can be used to acclimate calves to a post-weaning diet, it's .' primarily use is to provide supplemental feed to nursing calves in order to increase weaning weight.) . It is ofbenefit to calves, but not a direct benefit to cows. Economically, a good rule of thumb is that):;:. calf prices at sale time ($l1b) should be 10 times the cost of the creep feed ($l1b). See referencesforh:;'-,'~-' more detail. ' ': .' ,«' Make sure that the post-weaning diet is appropriate for the age ofcalf. including forage quantity and quality, and contains a vitamin/mineral mix and plenty of fresh, accessible water. For the very young calf, this means a special calf starter diet, either bagged or specially formulated feed.-For ~~-' older calves, good quality forage (fall pasture re-growth, irrigated summer pasture, or very good quality haylbalage) will suffice, depending on target performance. Make sure they can safely reach water and know how to drink it. If the calves are unfamiliar with drinking water from a trough, let the water over-flow a bit so that it makes a trickling sound. Work with a nutrition consultant or veterinarian to provide a vitamin/mineral mix. Weaning Method Whether your weaning consists of total separation of cows and calves or the relatively new, low stress technique offenceline weaning, make sure you address nutrition and health measures:Total---.. separation weaning can be accomplished with good success if pre-weaning and post-weaning management address stress, health, and nutritional management sufficiently. For traditional weaning, . it is best to have cows and calves together in the place where calves will stay. Remove cows to a " . . new location out of sight and sound from calves. Leave calves in familiar surroundings. It is normal for cattle to haw 1for several days. . .. ". --'-r'-,.... -,.. In fenceline weaning, cows and calves are placed on opposite sides of a strong fence (woven wire or multiple-strand, high-tensile wire). As with total separation weaning. cows are moved and calves remain in the initial pasture. Although the cattle are seldom seen challenging the fence, they have some nose-to-nose contact, but spend the majority of time grazing away from the fence. . Fenceline visits gradually decrease over the first five days and the weaning process is complete within a week. Studies have shown these calves bawled less and gained more weight during the weaning process than with complete separation weaning. ",' . Post-weaning Management. ..) .• ' r,; Much information is available on post-weaning management Preconditioning is a nutrition aiid -; .~: .,. ~, health management practice that prepares calves as stocker/feeder cattle in the next phase of.'. " production. Study the information on this important topic and consider having a preconditionmg period for calves before they are moved to their next destination. A 45-day post-weaning period . before shipping has been shown to be beneficial in comparison to shipping calves immediately' after ..,. . weaning. If you cannot provide this preconditioning period, make sure newly weaned calves are rested, fed, and watered before shipping. . .;... Glenn Selk, Oklahoma State University, has some good advice on being pro-active with '. ,' •... marketing strategy. He suggests you provide buyers with the details of your preconditioning .:·:~;L-·L~L_.~.. program and let them know where your calves can be purchased He said, "Whether you participater-.~·~ .•.. in an organized Value-Added Calfprogram or whether you simply sell your calves on the regular .;'{'.' sale date at the closest market, it makes good business sense to tell buyers that your good calves are available for sale. Don't just rely on others to tell your story. This fall promote the good quality, . healthy cattle that you raise. They deserve iU!" .. References for Further Study Raising Newborn Calves. F. Rulofson, M. Gamroth, and D. Hansen. Oregon State University Extension Service publication No. EC 1418 , .. http://ir.1ibrary.oregonstate.edulxmluilbitstreamlhandlelI957/14257/ecI418.pdf?seguence=1 :.' ~ : Creep Feeding Beef Calves. F. Rulofson and B. Zollinger. Oregon State University Extension . Service publication No. EC 935 (http://ir.library.oregonstate.edulxmluilbitstreamlbandlelI957113842/ec93 5.pdf?soouence=1) .. Weaning Management for Calves. G. Pirelli and B. Zollinger. http://www.csubeef.com/dmdocumentsl748.pdf Time of Weaning and Cow Condition. Jack C. Whittier, Colorado State Extension Beef Specialist Ron C. Torell and Ben Bruce, University of Nevada. CL 747 in: Cow-calfManagement: Guide and Cattle Producers Library http://www.csubeef.comldmdQCumentsl747.pdf. Fenceline contact ofbeef calves with their dams at weaning reduces the negative effects of . separation on behavior and growth rate. E. O. Price, J. E. Harris, R. E. Borgwardt, M. L Sween, and J. M. Connor. J. Anim Sci. 2003 81: 116-121. bttp:llextension.oregonstate.eduldouglaslsitesldefaultlfilesldocumentsllflfenceline.pdf The effects of weaning beef calves in two stages on their behavior and growth rate. D. B. Haley, D. W. Bailey, and J. M. Stookey. J Anim Sci, September 1,2005; 83(9): 2205 -2214. http://extension.oregonstate.eduldouglas/sitesldefaultlfiles/documentsllflfenceline2.pdf . Buyer Survey to Determine Desired Production Practices for Value-added Program for Beef Calves : .. in california. VM Castro, GMVeserat, and JW Oltjen. 1998. Proceedings, Western Section,--.._·· Am. Soc. Anim. Sci. 49:332. http://extension.oregonstate.eduldouglas/sites/defaultlfilesldocumentsllflBuyersurvey.pdf Nutrition and Management Considerations for Preconditioning Home Raised Beef Calves. D. Lalman, et. al. Oklahoma Cooperative Extension Service publication No. F-3031 http://pods.dasnr.okstate.eduldocushareldsweb/GetIDocument-19571F-3031 web,pdf I r Beef Breed Differences: Preliminary Results from the u.s. Meal Page] of4 .. i'" . ATIACHMENT C , ! I ··""-L..~-. .._._-_.........--....--.................. I i i ! . l~eferences and broken links. r;tebsite at http://www.ext.vt.edtl/news/. I~ewsletter Archive index: hltp:llsites.ext. vt.edu/newsletter-archivel '. i) I , t~.J_.,..._..... _..... ~ , I Bee~Breed Differences: Preliminary Results. from the' U.S. Meat Animal Research Center .,. Livestock Update, September 2002 Scott Greiner, Extension Animal Scientist, Beef, VA Tech I I YQU'vereached the Virginia Cooperative ExtensionNewsletter,:. f ~rchive. These files cover more than ten year~ of newsletters posted I 911QW' old website (through April/May 2009), andareprov,i4ed iQtc !l).istorical purposes only. As such, they may contain out4jf';date .... " tto~:~ee pur latest newsletters and current information~visitour . . . . I~''ilkh ~~rtlI.\"!l'biStc~1l1V'lt :Al'1'$f~Tt!\;:'1"'1".IttY Over ttiepast 25 years, considerable research has been conducted. to characterize. andcOlnpare the major beef breeds in the U.S. The most comprehensive studies have b~en conducted at the U.S. Meat Animal Research Center in ClayCehter, NE. Since 1970, over 30 breeds have been evaluated in a common environment andmahagement system for characterization of economically important traits. Many qfthe largest and most widely used breeds in the U.S. were characterized 2S.3Qy,earsago at Clay Center. Since that time, considerable changes have been made tq these breed populations as the result of selection. Therefore, research ' '. has beep initiated at the U.S. MARC to evaluate relative changes thai hav~ '. occurred among the prominent U.S. beef breeds since they: were initially evaluat~d in the 1970's, and to provide a current evaluation forthese breeds ..The http://-w,ww.sites.ext.vt.edulnewslettel'-archive/livestocklaps-02_... 3/18/2013. 1 BeefBteed Differences: Preliminary Results from the'U,S, Mea. .. Pa.ge 2,of4! . " I ' ; "'; , fQl1()wjpg~bles present preliminary results from Cycle VII ofthe Germplasm;:,,: " Evaluation Program at the D.s. MARC. '. ' .. . •• ,;, ~},:-,~ j :-.. ' ~.);:\.,~" ... ::! ' , ",' ,', .. Procedures for the evaluation of the breeds were similar to thalutilited'ifl,' , previoQ& OPE cycles. For the current breed characterizatiol1,siresfr.orrl}h~§e.vel) largestiU.S. beefbreeds (based on number of registrations) were mated 'to , ' " maturelAngus, Hereford and composite MARC III cows 0/4 Angus~....; H~e!()f(:l, _Pinzgauer" _ Red Poll). Approximately one-half of the sires sampledfroln,each. breeawere;among the top SOin number of calf registrati9l!S,in'theirrespectt,Y¢::f.b~~ breed, and about one-halfwere young unproven sires of each breed:Calves1'Were;" born in! the spring of 1999 and 2000. Following a postweantI;lgadju~tInellt, ' period,isteers were fed a high energy diet and slaughtered (averageQ;f:2~9,.days, on feed); Steers were slaughtered serially in 5 groups ~panning 43 days, steers, were Mrvested in a commercial facility, and individualcarcassmeasut'etnents ' :takenaifter a36-hour chill.. ... ..... ...~ Sire pr~ed effects for preweaning traits for calves, born in 1999 and 2000 'are' shown below. Lighter birth weights and a higher percentage of unassisted births were r~ported for Angus and Red Angus compared to Hereford and th~ Contil1~ntal breeds (Simmental, Oelbvieh, Limousin, Charolais). The three Britishibreeds (Hereford, Angus, Red Angus) were similar for 200-dayweaning weight) Limousin sired calves were lighter at weaning than all other breed' , groups1200-day weaning weights for Oelbvieh topcrosses w~resimllar to those-' .. ofthe British breeds. Simmental topcrosses were heavier at weaningthllt-all other breed groups. Charolais sired calves were heavier at weaning than Limousin, Hereford, and Red Angus. S'• Ire B'ree dMeans,tiPor rewea,mng Tral'tsa Birth ISurvival 200-dSire UnassistedGestation to wean.calvings, weight,breed of 1ength, d wean., wt.,0/0 lb.ca~f % lb. 1284 1195,6 1190.4 1196.2 1524 1l~erefQrd ngus 1533 I1282 1199.6 184.0 2:6.7 96.7 526AnguS 282 99.1 84.5 1 1~~~ 553]96.7Isimm~ntall1285 1197.7 1192.2 534197.1IOelbvieh 11284 1197.8 1!88.7 httpt/I'o/ww .sites.ext. vt.edu/newsletter-archi ve/livestockJaps-02_,.. 3/18120'13 Beef Breed Differences: Preliminary Results from the U.S. Mea..• Page :3of4 .t 1 I , ! ". : .... ,. Postwe;aning growth and carcass traits for the sire breed groups are pre.sented for the 19Q9..bprn calf crop only. Postweaning average daily g~ins, were sirrii1ar~ _., among !al1 breed groups. The British breeds were similar in slaughte.r weIght· . ~djusted tq 448 days of age. Limousin topcrosses were generally lighter than other's{re bi'eed groups at slaughter. Differences between the breed grOlJP$ in .. slaughter'weight area;lso reflected in carcass weight. Amongthe British,breed~t, Aligus~nd Red Angus sires were superior to Hereford in marbling8c:or~ ~md' percent Choice. Angus and Red Angus also had higher marbling scores than the Continental breeds. The Continental breeds were similar for marbling score .. Contin~ntal breed topcrosses had less 12th-rib fat than British topcrosses. Additionally, Continental breed topcrosses had larger ribeye areas that British topcro~ses except for Angus. Angus-sired calves had greater ribeye areathan Red Angus and Hereford~sired calves, and werenot differentfrom the ContineIltal breeds. Collectively, the British breeds prqduced progeny whIch were 8~.8% Choictf or higher, and 22.3% Yield Grades 1 &·2;.. The Con,titlental breed sires produced progeny with carcasses that were 60.9% Choice or higher, . anq 5110% Yield Grades 1 & 2 (data not shown). . . Sire B~eed Means for Postweaning and Carcass Traits (adjusted to constantag~ I , ILi .' .' i in 11286 1197.6 1189.5 1196.9 11519 I.. Jll.QUS ...... ICharo{ais 11283 1192.8 1193.7 1197.1 11540 '·1 LSpb 111.5 11 3.4 IITJ13.8 1114 asourc~: Cundiff et aI., 2001" Gennplasm Evaluation Program Progre$'Report No. 21 bBreed!diffel'ences that exceed the LSD are significant (p < .05) '.. :: ...~. of448:days a Sire Post-Slaughter Carcass Marb. USDA Yield Fat REA. , breed of wean.ADG, weight, Choice, Th., sq.wt., lb. score, Gradecalf IbJd lb. % % in. •In. lHerefQfd 13.46 111363 11832 11538 1179.1 113.35 ImJI12.74! AnguS 13.40 111375 1846 i577 193.6 13.32 .58 [1_3A8 ~[}.40An us IE]839 589 ~3.76 .60 12.21 Simmental 3.47 11390 11854 11536 1161.2 112.95 11.421113.711 I II II II II lill I http://yrww.sites.ext. vt.edu/newsl etter-archive/l1vestockJaps~02_... 3/18/20l3,. . ':."._, .'.. Beef Breed Differences: Preliminary Results from the U.S. Mea... P~ge4 of4 ! . I. IO:elbvieh 13.33 1826 Limolisin. .30 === Charol LSobi asour~:Cundiff et al.t 2001, Gennplasm Evaluation Program Progres~ RepQrt Np. 21---" b:atij"¢i@.T~rences that exceed the LSD are significant (P < .05) I' '. Pr¢nm~natY:results from these breed comparisons indicateti)at differenc~~.:....... between British and Continental breeds are not as great. fo:i'"'unassisted, ca:Ning J . . ~ :. petcen~age, weaning weight, postweaning gain, and slaughter we.igh.t·cqm'pa,ie~ to when the same breeds Were evaluated in the 19700s. British breeds·haye. ~mph~ized selection for growth rate, whereas Continental breeds have. ertlph~ized improvement in birth weight and calving ease. Conse'que:fitly~ smaUef: diffe:rences exist between British and Continental bree~s for gro}vth.~ty an?c~vingease.a~ compared t~ 25 years ago. Howeve.r, si~i~cant diffefenc~~' eXIst b~tween Bntish and Contmental breeds for marblmg and:percentage, retad prodl)ct,(yield grade). These differences in carcass composition exist despite the increa8~sin growth rate and corresponding carcass weight that have heen characterized in the British breeds. ! These *esults confirm that no single breed excels in all economically impor.tanI , traits. 4.. well-designed crossbreeding system that captures the advantages of . . hete~o~isand utilizes these breed differences in a complimentaryfashiQA:Js1he most effective genetic resource for an eflicient beef production systf.'m. . i ", . For th~ full report on Cycle VII of the OPE study visit http://sol.mal'c.usda.govl. I, Visit Virginia Cooperative Extension http://~w.sites.ext. vt.edu/newsl etter-archive/livestocklaps-02 _... 3118/2013 I • In our professional opinion, a prudent operator would not expect to make a profit by farming the subject property. • The cropland and rangeland on the property occur primarily on shallow soils with limited productivity (Sage West, LLC, 2012). • Irrigation water rights are available for approximately 103 acres. • The balance of the property, aside from acreage in structures, yards, and water developments is currently rangeland or idle agricultural land. • Based upon observation, assessment, and the 1 st Order Soil Survey prepared by Sage West, LLC, in the professional judgment of Agronomic Ans/ytics, the NNP Property will require additional capital inputs (e.g. additional fencing, buildings, stock equipment, etc.) in order to be used for livestock production in the most efficient manner as a single farm operation. • Based upon observation and assessment, in the professional judgment of Agronomic Anslytics, the cropland present on the NNP Property will require additional capital inputs (e.g. irrigation equipment, weed control, replanting, machinery, etc.) in order to be used for pasture or crop production in the most efficient manner as a single farm operation. • Several types of agricultural operations were examined in the enterprise budgets detailed in this report: o The first is a horse boarding enterprise for 14 horses. Revenues and costs vary depending on the level of care and training provided. o The second is a llama enterprise conSisting of 28 llamas raised for the pet market and wool production. o The third is a standard cow/calf operation with 40 cow/calf pairs. This is a full year operation that retains a mother herd of fertile cows which are bred to produce a crop of calves, which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. o The fourth enterprise is an analysis of costs and returns associated with the establishment of a grass (rough bluegrass) crop for seed. o The fifth enterprise examined is irrigated alfalfa hay production utilizing the available water rights. • Even when factoring out costs associated with land purchase or lease, none of the numerous budget analyses conducted showed a positive cash flow or positive return on investment as an agricultural enterprise. Under the scenarios examined in this report, which are representative of the types of agricultural operations typical in the Bend area of Deschutes County, a positive cash flow was not shown on the NNP Property. An agricultural operation, as with any business operates with fixed and variable costs on a year to year basis. This analysis 2 has accounted for all such costs using published values where possible and conservative local values. Table 1. Budget Summaries I Budget i . Scenario • No. of AnimalsNield Total Revenues Total Costs Net Returnl Loss 11 1 14 Horses Boarding $115,080.00 $119,437.71 ($4,357.71) 12 28 Llama Pet Market $38,780.00 $70,998.05 ($32,218.05) 3 40 Cow/Calf $29,218.25 $49,985.93 ($20,767.68) 4 Blue Grass Establishment $109,695.00 $116,422.15 ($6,727.15) 5 Alfalfa Hay (3 cuttings) $61,800.00 $72,173.98 ($10,373.98) The budgets presented in this analysis represent the costs and revenues associated with the farming operations only. The costs to purchase the land, service the debt, and pay the taxes are not included in the budgets. Those costs would be the same regardless of the type of operation. The costs associated with the purchase of the NNP Property will be in excess of $100,000 per year if carried in a traditional 30-year mortgage. This cost far exceeds the potential net revenue possible with the farming operations agronomically feasible in the Bend area with the soils present on the NNP Property. 3 INTRODUCTION I This letter report describes assumptions, methods and results of budget analyses of various agricultural enterprises that might be considered by a typical Central Oregon farmer for the NNP Property. The budget analyses were conducted utilizing published range, pasture, and cropland productivity values for the soils on the NNP Property Deschutes County Map 17-12-24, Tax Lots 206,300,301,302,304,305,401,405, and 406, a 174.3-acre property located off Butler Market Road in Bend, OR. I The NNP Property is currently occupied by five rural residences with the agricultural land currently idle. The property is currently designated Exclusive Farm Use -550 or 551 Farm and 400 or 451 Tract. A field investigation was conducted on April 22, 2013. The purpose of the field visit was to assess the general vegetation and soils present on the property and to identify factors contributing to or limiting the use of the property as a working agricultural enterprise. The financial analyses were completed utilizing various Enterprise Budgets published by Oregon State University Extension Service. The enterprise budgets track fixed and variable costs and returns for both the entire enterprises and on a per head basis (where applicable). Costs for inputs and prices received are derived from government published statistics, local farm suppliers, advertised values, or personal experience. PROJECT BACKGROUND Agronomic Analytics was retained by NNP to determine whether the NNP Property is suitable for farm use, taking into consideration soil fertility, suitability for grazing, climatic conditions, irrigation availability, and other factors. This report focuses primarily with the profit and loss evaluation of typical farm operations for Central Oregon. The determination of the profitability of a farming operation is governed by many factors. In a livestock or cropping operation, the number of animals that can be raised on the property or the yields of the crops is limited by the inherent productivity of the soils on the property, the availability of working capital, the level of investment necessary to establish the agricultural operation, the management expertise of the owner/operator, and prices for inputs. Consideration must also be given to determining if investments in increased productivity (e.g. fertilization, liming, and reseeding of pastures) will provide an adequate return for the investment made. The soils on the NNP Property were mapped in the Soil Survey of the Upper Deschutes River Area, Oregon, including parts of Deschutes, Jefferson, and Klamath Counties (USDA, 1992), In addition, a private 1st Order Soil Survey was completed on the subject property in May 2012 by Sage West, LLC, 2012. 4 The NNP Property is comprised of over 170 acres of land consisting of nine tax lots. Five of the nine tax lots contain houses, structures, and improvements incidental to farming and ranching. These improvements include boundary fences, cross fences, small earthen dams for water storage, and farm roads. The NNP Property is bordered to the west by rural residential properties, single-family homes and the Bend Seventh-day Adventist church. To the north across Butler Market Road are properties used for agricutture, and residential purposes. The land to the south is a rural residential subdivision. The privately-owned properties that adjoin the east side of the subject property are developed or partially developed with nonfarm, single-family dwellings. The other property that adjoins the east side of the subject property is owned by an electric cooperative and contains major power lines above ground that is not engaged in farm use. The nearest surface water body is the Deschutes River. The NNP Property has water rights to approximately 103 acres. The agricultural land on the site is topographically level to nearly level with a moderate, rocky landscape increasing in steepness towards the eastem edge of the property. The western two thirds of the property are flatter, and have been used for cropland in the past. The site ranges in elevation from 3,446 feet above mean sea level (U.S. Geological Survey, 1987) at the northeast corner of the property to approximately 3,516 feet in the south central rangeland of the site. The NNP Property is 4.5-miles northeast of downtown Bend, Oregon. The tract and parcel identifiers are shown on Figure 2 and listed in Table 2 below. The NNP Property was acquired by NNP in 2006 and 2007. Prior to that time, the NNP Property consisted of a number of small hobby farms and vacant land. When acquired, five hobby farming operations were occurring on the NNP Property. NNP's review of County land use records shows that this pattern of small hobby farm use on multiple parcels has been in place for more than thirty years. Tax Lot 206 (approximately 29.92 acres) has no known history of farm use. Table 2 below lists the various tax lots which are included in this study. 5 Table 2. Tract Descriptions I I I I~ Assessor Real Market Value Assessed Value2 Property Tax Tax Lot Class Acresl (2012-2013) (2012-2013) (2012-2013) 300 SS1-Farm 4.52 $120,300.00 $70,630.00 $950.79 206 4OD-Tract 29.92 $172,770.00 $73,390.00 $987.91 405 4S1-Tract 4.90 $312,480.00 $299.400.00 $3,951.74 • 401 SS1-Farm 20.13 $386,390.00 $260,672.00 $3,508.98 302 SSG-Farm 13.42 $82,910.00 $3,844.00 $50.89 I 304 5S1-Farm 13.84 $365,620.00 $237,048.00 $3,190.98 I 305 SSO-Farm 6.79 $64,080.00 $2,191.00 $29.21 i 406 SSG-Farm 75.81 $292.420.00 $18,007.00 $240.10 301 =551-Farm 5.00 $178,320.00 $118,132.00 $1,590.21 Totals: 174.33 $1,975,290.00 $1,083,314.00 $14,500.81 CHARACTERISTICS OF THE REPORTED MAPPED SOILS AND THEIR PRODUCTIVITY The subject property was mapped by the USDA Natural Resources Conservation Service and soil types were published in the Soil Survey of the Upper Deschutes River Area, Oregon, including parts of Deschutes, Jefferson, and Klamath Counties (USDA, 1992) (NRCS Survey). In addition, a private 1st Order Soil Survey was completed on the NNP Property in May 2012 (Sage West Survey, LLC). The Sage West, LLC survey is a private 1 st Order survey undertaken to more narrowly define the extents and limits of the soil series present on the NNP Property.3 This survey provides detailed and accurate infonnalion about NNP soils and fonns the basis of productivity calculations on the NNP Property. The Department of Land Conservation and Development has approved the Sage West, LLC survey for used in Deschutes County's review of the NCR land use applications. The tables below depict the soil acreages present on the NNP Property and the productivity ratings associated with each soil series. Table 3 below presents the acreages and land capability classes of the soils as mapped in the Sage West Survey on the NNP Property. 1 The Assessor's Record shows a total lot size that is believed to be slightly larger than actual. 2 Assessed Value is the lower of Real Market Value and Maximum Assessed Value. 3 Agricultural Soils Capability Assessment completed by Sage West, LLC, Bend, OR. July 11,2012 6 " ". Table 3. Soils Present on the NNP Property (Sage West, LLC) Map Unit Symbol Map Unit Name Land Capability Non-irrigated Land Capability Irrigated , Map U nit Acres A B Deskamp loamy sand, 0 to 3 %slopes Gosney, deep- Deskamp complex, D 8% slopes 6 (VI) 6 (VI) 3 (III) 6 (VI) 11.0 46.0 C Gosney-Zeta complex, 0-3% slopes 7 (VII) 7 (VII) 41.0 i D E1--'.. Gosney-Rock outcrop • complex, 0-15 slopes Gosney extremely stony loamy sand, D 3% slopes. .. Total: 7 (VII) 7 (VII) 7 (VII) N/A 48.0 25.0 171.0 Capability classes, the broadest groups, are deSignated by Roman numerals I through VIII. The numerals indicate progressively greater limitations and narrower choices for practical use. The classes are defined as follows: • Class I soils have few limitations that restrict their use. • Class II soils have moderate limitations that reduce the choice of plants or that require moderate conservation practices. • Class III soils have severe limitations that reduce the choice of plants or that require special conservation practices, or both. • Class IV soils have very severe limitations that reduce the choice of plants or that require very careful management, or both. • Class V soils are not likely to erode but have other limitations, impractical to remove, that limit their use. • Class VI soils have severe limitations that make them generally unsuitable for cultivation. • Class VII soils have very severe limitations that make them unsuitable for cultivation. • Class VIII soils and miscellaneous areas have limitations that nearly preclude their use for commercial crop production. 7 97405 Agronomic Analytics TRANSMITTAL Date: July 11, 2013 Agronomic Ana/ytics Project No.: AA2013-1 Mary Ruby NNP IV-NCR, LLC 2660 NE Hwy 20, Suite 610-369 Bend, OR 97701 Subject: Letter Report Budget Analysis Study NNP IV-NCR, LLC Property Tax Lots: 206, 300, 301, 302, 304, 305,401,405, & 406 Butler Market Road Bend, OR 97701 We are sending the following: One copy of the above referenced report. Remarks: If you have any questions, please contact our office at (541) 684-8000. Thank you. Stephen C. Caruana Principal 3419 Chaucer Way Eugene, OR 541-684-8000 Date: July 11, 2013 Agronomic Analytics Project No.: AA2013-1 Mary Ruby NNP IV-NCR, LLC 2660 NE Hwy 20, Suite 610-369 Bend, OR 97701 SUBJECT: LetterReport Budget Analysis Study NNP IV-NCR, LLC Property Tax Lots: 206, 300, 301, 302, 304, 305, 401, 405, & 406 Butler Market Road Bend, OR 97 Dear Ms. Ruby: EXECUTIVE SUMMARY This report presents the results of a site investigation and agricultural budget analysis that was conducted for NNPIV-NCR, LLC ("NNP") by Agronomic Analytics. The site investigation was conducted on April 22, 2013 on the NNP Property located on Butler Market Road, Bend, Oregon ("NNP Property"). The site investigation entailed visual observation of the NNP Property. A detailed financial analysis of the various types of agricultural operations customary for the Deschutes County area was conducted, and the results presented in this report. In addition to the field investigation, extensive research was also conducted into historical soil surveys, present and past aerial photography, and the published literature. The financial analysis was completed utilizing the various Enterprise Budgets published by the Oregon State University Extension Service. Input values for the models were derived from published statistical summaries of the United States Agricultural Statistical Service, and current market rates for fuels, fertilizer, feed, pasture rental, and interest rates. Direct, documented costs or receipts were used when available. The conclusions drawn from the historical and published record, field observations, and the enterprise budget analyses are that: • In our professional judgment the subject property is not suitable for farm use. • In our professional judgment the NNP Property could not be operated profitably as a commercial agricultural enterprise, especially if the mortgage servicing and capital improvements are included in the cost of the farm operation. I j 1 j Range and pasture classifications are derived from the published Soil Survey I Deschutes County Area values where available. The absence of published data may indicate either that no data was available or that the productive capacity of the soils was considered so low as to be impossible to measure or of no forage value. For the purposes of this analysis hay yields and pasture AUM values are assigned equivalent to 1 reported values for similar capability class soils. i Pasture yield (AUM) -Animal-Unit-Month: the amount of forage or feed required to feed one animal unit such as one cow-calf pair) for 30 days. So, for example, to feed one cow-calf pair for one year requires 12 AUMs (1 Animal Unit x 12 Months). If the pasture is rated at 2 AUMs then 6 acres will be required to supply the feed and forage needs for one cow-calf pair for one year (12 Animal Unit Months 12 Acres) either as pasture or hay. If a 15-acre property had an average AUM rating of 2 AUMs/acre then the total available AUMs available would be 30 AUMs. This would produce enough forage to feed 2.5 cow-calf pairs for the entire year. A llama is calculated at 0.6 Animal Units per month and a horse is calculated at 1.2 Animal Units per month. Management of pastures for maximum production requires a high level of management and the application of inputs. With regard to the subject property these levels of input may be either unprofitable or simply impossible to implement. For example, due to limitations imposed by terrain, certain areas of the property could only be fertilized from the air. While this could improve the theoretical carrying capacity of the pastures, it would not do so at a cost that would make the improvement worthwhile. Despite these practical limitations the report incorporates a reasonable high-yield evaluation of AUMs and assumes expenses for reasonable expenses only. In reality, the subject property is unlikely to obtain these levels of AUM productivity. However, for the purposes of providing a conservative analysis, these levels of productivity will be assumed in this report. SITE INVESTIGATIONS On April 22, 2013, Agronomic Analytics visited the NNP Property to meet with the owner's representatives to discuss the operation and to conduct a visual reconnaissance of the base property. The site investigation consisted of a pedestrian survey conducted at selected locations across the NNP Property. Sample sites were chosen which were considered to be representative of the current condition and vegetation present on this property. 8 Research was conducted utilizing historical surveys and aerial photography. The site investigation included general observations of vegetation conditions, observation of exposed soil profiles, and assessing the general condition of agricultural facilities. Typical sites on the ranch are illustrated in the Photo Set which accompanies this report in Appendix B. The idle agricultural fields are currently not being used for production agriculture. The fields would require inputs to be placed into production. REPORT METHODOLOGY This report presents the findings of a series of enterprise budget analyses conducted to examine the costs and returns from various possible agricultural operations that are typical and customary for the Bend area of Deschutes County. What all agricultural efforts have in common is that they can only be as productive as the inherent quality of the land itself. Likewise, the types of crops that can be grown and animals raised are limited by the environmental conditions present. Average annual rainfall, growing season length, and most importantly the soil's capability all govern what can be grown in an area profitably. Stated another way, an agricultural operator chooses what to grow based upon risk and potential profitability. The primary limiting factor on the NNP Property is the poor quality of the soils. Five types of agricultural enterprises typical of the Deschutes County area were chosen for analysis. They were chosen based upon the soils present on the NNP Property and the types of farm uses that might be considered for the property by a prudent farmer who hopes to make a profit by farming the land. For the livestock operations, the starting point to determine herd size was the number of animals that can be fed directly from the hay and pasture grown on the property. Then additional animals were added based on the ability to purchase feed and, where typical and likely to be cost effective, to operate a confined operation. The accepted farm practice is to graze on pasture or range during the growing season (typically seven months) and fed during the winter months. The first step is based on the concept of the Animal Unit Month described above. Tables 4, 5 and 6 below outline inherent soil productivity; the potential yields of pasture, hay land, or range; and the total maximum available animal units the NNP Property is capable of producing. The five agricultural enterprises examined are: • A horse boarding enterprise for 14 horses. Revenues from this are variable depending on the level of care and training provided. 9 I • The second is a llama enterprise consisting of 28 llamas raised for the pet or breeding market and wool production. • The third is a standard cow/calf operation with 40 pair. This is a full year operation that retains a mother herd of fertile cows which are bred and produce a crop of calves, which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. • The fourth enterprise is a grass (rough bluegrass) crop grown for seed during the establishment year. • The fifth enterprise examined is an irrigated alfalfa hay crop utilizing all the available water rights. The basis of any agricultural enterprise is the productive capacity of the soil. Based upon the Order 1 Soil Survey completed by Sage West, LLC, Sage West prepared Table 4 to show the potential yields for each soil mapping unit found on the NNP Property. 10 Table 4. Soil Productivity (Sage West, LLC) Svmbol A B C i ·0 E Name Acres Oeskamp loamy sand, 0-3% slopes 11.0 Gosney, deep- Oeskamp complex, 0-8% slopes 46.0 Gosney-Zeta complex, 0-3% slopes 41.0 Gosney-Rock outcrop complex 0-15% 48.0 Gosney extremely stony loamy sand, I 0-3% slopes I 25.0 171.0 Rangeland (AUM/ac) 0.12 0.25 Dryland Pasture (Ibs./ac[year) 350 350 200 N/A N/A Irrigated Irrigated I Grass Hay Pasture • (tons/ac) (AUM) 3 1.5 3 1.5 1.5 0.5 N/A N/A i N/A I N/A i i As described above, animal unit numbers are derived utilizing aggressive estimates of the maximum carrying capacity of both the pasture and hay land in an improved condition. Various budget enterprise scenarios were developed that assumed fertilization and liming of the potential hay land or pasture. The grass hay harvested from the hay land is used to feed the livestock during the winter. Increases in the productivity of the hay land will allow more animals to be fed during the winter; however, the limiting factor is how many animals can be pastured on the available pasture. In addition, increasing the productivity of the hay land brings with it costs for fertilization and increased inputs. A farmer whose operations are not profitable may not be able to bear this expense, given the low return on investment likely due to the shallow depth and sandy (porous) texture of the soils on the NNP Property. Based upon the values in Table 4 above, the agricultural land is potentially capable of producing the following maximum yields. 11 I I I I Table 5. Computed Soil Yields I I Symbol Name Acres Hay Production Potential (Tons/ac.) Available Irrigated Pasture (Potential AUM) Native Rangeland (Potential AUM) Dryland Pasture (Lbs. IAcre/vr.) A Deskamp loamy sand, 0-3% slopes 11.0 33.0 16.5 3,850.0 :8 Gosney, deep- Deskamp complex, 0-8% slopes 46.0 138.0 69.0 16,100.0 C Gosney-Zeta complex, 0-3% slopes 41.0 61.5 20.5 8,200.0 0 Gosney-Rock outcrop complex 0-15% 48.0 5.8 E Gosney extremely stony loamy sand, 0-3% slopes 25.0 6.3 Totals: 171.0 232.5 106 12.1 28,150.0 Utilizing the values presented in Tables 4 and 5 above, the maximum numbers of available Animal Unit Months (AUMs) for three classes of livestock are displayed in Table 6 a, b, and c below. Table 6a presents the number of animals that be supported from the NNP Property under dryland conditions, the low numbers are indicative of poor quality soils present on the NNP Property. Tables 6b and c present the AUMs available under the for the confined cattle operation for 12 months and seven months if the animals are fed on irrigated pasture during the growing season and fed purchased hay for five months during the winter months. 12 Table 6a. Available Animal Unit Months (Dryland, No Irrigation) Enterprise Productivity Available AUMs Land Use Cattle Operation Llama Operation Horse Dryland Pasture 28 47 23 Rangeland 12 20 10 Total 40 67 33 12 Month Animal Unit 3 6 3 Table 6b. Available Animal Unit Months (Irrigated Pasture) . Enterprise Productivity Available AUMs Land Use Cattle Operation Llama Operation Horse Irrigated Irrigated Pasture 106 177 88 Rangeland (not irrigated) 12 20 10 Total 118 197 98 i 7 Month Animal Unit 17 28 14 Table 6c. Available Animal Unit Months (Irrigated Hayland) Enterprise Productivity Available AUMs Land Use Cattle Operation Confined Operation Irrigated Hayland Rangeland (not irrigate~ 465 10 Total 475 12 Month Animal Unit 40 Commercial agriculture is the production of commodities (crops or animals) from a parcel of land for a profit. If a farm is incapable of generating a profit, the farm's income must be supplemented through off-farm sources of revenue. The ability of a farm to produce a commodity is governed by the inherent quality and fertility of the land itself. Maximizing the yields from the land is dependent upon the management skills of the operator and the level of inputs (fertilizer, animal breeds, adapted varieties, weed and pest control, etc.). The prices received by the farmer are subject to market forces of supply and demand, consumer attitudes, and the availability of markets and suppliers. In addition to the five farming enterprises chosen for analysis, other operations were considered but ultimately rejected for the following reasons: 13 • Horse Breeding: The recent economic downtums have released a glut of horses onto the market. At present there are too many free horses available, prices are low, and horses have been reported abandoned. • Llamas for Breeding Stock: Similar to the horse breeding market, llamas are in limited demand at present. The available supply is large and too readily available to be profitable. • Dairy: The dairying industry in Central Oregon has undergone continual retrenchment for decades. Only one large commercial dairy operation now exists in the Deschutes County area. A small scale family operation may be feasible but not commercially viable due to a lack of available processors or purchasers. • Aquaculture: The NNP Property is severely limited for aquaculture enterprises. The property lacks an appropriate year-round water source, e.g. a nearby stream or spring. A muniCipal water source is inappropriate because it contains chlorine that will kill fish and other aquatic species. Irrigation water is only available during the growing season. Aquaculture requires water temperature to be carefully controlled. The only known private aquaculture facility in Central Oregon is located in Klamath County. It relies on geothermal water to regulate the temperature of its ponds - a resource lacking on the NNP Property. Expensive concrete or lined ponds would also be needed due to the porous nature of the soils. • Fur Production: Oregon is a leading producer of mink pelts. Due to increased foreign demand, production has increased in recent years; however, the eighteen existing mink farms are located west of the Cascades. Mink production in Eastern Oregon is likely to be severely limited for the following reasons: 1. Mink are raised in cages in open-sided shelters. Mink are extremely susceptible to intense heat which makes Central Oregon a poor choice for a mink farm (especially as opposed to a location in the Willamette Valley where the climate is more temperate). 2. Mink are fed fish filleting waste, by-products of poultry processing and slaughterhouse offal. The NNP Property, unlike properties in Western Oregon, is not located close to facilities that provide a reliable supply of this feed. 3. A more remote location than provided by the NNP Property (a site surrounded on two sides by a well-traveled arterial street) is needed for at least three reasons: 14 a. The security of the farmer and hislher investment are threatened by a visible location (the location of mink operations are identified on-line so that would be protesters and animal liberators are informed). b. The slaughter of animals, the processing of fat to produce mink oil and the need to dispose of the carcasses makes this use inappropriate for a rural residential neighborhood with many neighbors. c. Mink are aggressive animals that bite readily (escapees or animals released by animal rights activists). d. It would bedifficult to obtain financing to conduct this operation in such a visible location. e. Attacks and sabotage by animal rights activists disrupt production, endanger neighbors and traffic, and increase insurance costs. • Honeybees: The production of honeybees is centered on their use as pollinators of commercial crops (e.g. almonds, alfalfa, etc.). Honey production is a byproduct. Commercial honeybee operations are not conducted in Deschutes County. Honeybees are experiencing hive collapse disorder, making it difficult to obtain financing for such a startup operation. Additionally, it is not an accepted farm practice to keep a large number of hives in a single location; apiculturists typically spread hives across a number of properties in order to minimize disturbance to neighbors. This would preclude keeping several thousand hives on the NNP Property, located as it is near numerous residential properties. • Chicken Production: Recent years have seen a growing interest in free-range and pasture raised chickens. Much of this growth has been in small scale, backyard operations. A large scale, commercial operation was not deemed viable on the NNP Property due to the seasonal nature of the NNP water rights, winter conditions in the Bend area, and the need to operate in compliance with federal water and air quality regulations. Additionally, this farm use is not an accepted farm use in the area of the NNP Property. • Christmas Trees: The NNP Property currently has approximately 5 acres of Christmas trees under production. The trees have done poorly and undergone significant rodent predation. Production of Christmas trees in Central Oregon faces competition from healthier, easier grown stock in the Willamette Valley and from u-cut programs administered by the U.S. Forest Service. • Cattle Feed Lot: A feed lot was not studied as it is not a common farm practice in the area and the property is not suited for the use. The east third of the NNP Property is rocky, wooded, moderately steep rangeland unsuited for use as a 15 feed lot. The NNP Property adjoins rural residential exception areas developed decades ago with a large number of rural residences. Establishment of a feed lot in close proximity to these established residences is likely to be vigorously opposed. Further limitations include a lack of year round irrigation water rights, limitations on the use of the domestic water supply, and no low-cost water source for the winter months severely limits the NNP Property for use as a feed lot. Finally, large feed lots generate high levels of air and water pollutants. Large sites are subject to rigorous environmental air and water quality regulations. The cost of complying with these regulations and of managing these pollutants on this site will require significant capital investments. 16 FINANCIAL ASSUMPTIONS Debt service and taxes are included in each of the budgets. Unlike other fixed expenses, however, these costs are shown below the Profit/Loss line and illustrate that even without debt service and taxes considered, each of the enterprise budgets shows a loss. With debt service and taxes included, the losses for each enterprise are larger. Like feed, barns, fencing and other fixed costs, costs attributable to land ownership must be factored into the enterprise budget. Even in instances where a farm may be owned outright by a long-term family farmer, capital and operating loans are common, with the farm property and equipment used as collateral. Consequently, whether classified as a mortgage cost or debt service, a typical farmer will have to cover some level of fixed monthly payments. Whether categorized as mortgage costs or debt service, the amounts reflected below are reasonable and what a typical farmer would be expected to pay in order to operate on the property. For purposes of the present analysis, two possible land values were considered: real market value and assessed value. Both values are considerably less than the purchase price paid by the current owner and the debt service amounts factored into this analysis are far below the debt service amounts actually paid by the property owner. Both scenarios antiCipate a 30% down payment and a 5% interest rate on a 30-year loan. These figures are rather conservative given that commercial loans typically include shorter loan periods and higher interest rates. In each scenario, present taxes for the property have been amortized over a 12-month period. Real Market Value vs. Maximum Assessed Value Oregon law requires the assessor to value all property at 100 percent of its real market value (RMV). RMV is typically the price real property would sell for in a transaction between a willing buyer and a willing seller on January 1 of the assessment year, the assessment date for the tax year. On the other hand, a property's maximum assessed value (MAV) is the taxable value limit established for each property under the Oregon Constitution. The first MAV for each property was set in the 1997-98 tax year. For that year, the MAV was the property's 1995-96 RMV minus 10 percent. MAV is subject to a maximum 3% increase each year, or other limited adjustments for specific reasons. RMV is typically much higher than MAV due to the 3% limitation. Although the subject property could be sold for a value close to RMV, both RMVand MAV were used in the enterprise budgets in order to show a range of values on the property and the corresponding debt service associated with those values. 17 I I I Table 7. Mortgage Costs Real Market Value Assessed Value Value $1,975,290.00 $1,083,314.00 . Down Payment @ 30% $592,587.00 $324,994.20 Amount Financed $1,382,703.00 $758,319.80 Interest Rate 5% 5% Monthly Payment $7,422.64 $4,070.82 Taxes (per month) $1,208.40 $1,208.40 Total Monthly Payment $8,631.04 $5,279.22 Total Yearly Payment $103,572.49 $63,350.65 The second highest fixed costs are usually those associated with capital improvements and machinery. Upfront costs are usually highly variable depending if equipment is purchased new or used, buildings are built by the operator or contracted out, and the period of depreciation. Interest rates are higher if older, used equipment is purchased. Representative costs associated with these expenditures are included within each budget scenario. Periods of depreciation typically range from 5 to 15 years. The following table exhibits the average Oregon prices for cows, steers, and heifers for the period 2000 to 2008. These are the prices illustrate the variability exhibited by the cattle market. Cattle prices exhibit great volatility, subject as they are to consumer demand, feed costs, and variable inputs. Current market prices4 for steers are $130. per hundredweight (cwt), heifers $135.1cwt. The cow/calf enterprise budget utilizes current market prices; however, a prudent operator would base their long term planning on the average cattle prices. Table 8 below presents average cattle prices reported between 2000 and 2008. I 4 Capital Press. May 10,2013. Fann Market Reports, Livestock Auctions, Madras, OR Auction Yard. 18 Table 8. Average Recent Cattle Prices Cattle Prices (steers & heifers) (sell prices) Year June July August 2000 $84.30 $83.60 $84.00 2001 $84.50 $84.40 $84.90 2002 $73.00 $72.50 $70.50 2003 $80.00 $81.00 $85.00 2004 $100.00 $101.00 $101.00 2005 $108.00 $99.00 $98.00 2006 $101.00 $102.00 $99.00 2007 $93.00 $91.00 $93.00 Average 2008 $93.80 $95.50 $95.00 Average $90.84 $90.00 $90.04 $90.30 per cwt Minimum $73.00 $72.50 $70.50 $72.00 per cwt Maximum $108.00 $102.00 $101.00 $103.67 per cwt Cattle Prices (calves) (purchase ;>rice) Year October November December 2000 $92.00 $90.90 $90.20 2001 $89.10 $86.50 $86.60 2002 $79.00 $82.50 $87.00 2003 $99.50 $100.00 $100.00 2004 $113.00 $110.00 $110.00 2005 $117.00 $121.00 $124.00 2006 $114.00 $104.00 $99.00 2007 $104.00 $101.00 $101.00 Average 2008 $85.00 $88.00 $86.00 Average $99.18 $98.21 $98.20 $98.53 per cwt Minimum $79.00 $82.50 $86.00 $82.50 pet cwt . I Maximum $117.00 $121.00 $124.00 $120.67 (Source: 2000-2008 Agricultural Prices Summaries, Agricultural Statistics Board, NASS, USDA) 19 I f I I BUDGET ANALYSES RESULTS A series of detailed enterprise budget analyses are presented below. The results are displayed as tables in Appendix A. Each budget is based upon reasonable assumptions for variable and 'fixed costs, necessary inputs to produce a crop or raise livestock, and the revenue from expected returns. Neither the cost of debt serviCing for the purchase of the land nor the cost to lease the land are initially factored into the enterprise budgets. There is no charge for family labor although it represents a lost opportunity cost. In all budgets, it was assumed that at least one member of a farm family would be principally engaged in the farm use of the land without compensation unless the operation generates net income. Costs for capital improvements e.g. barns, fenCing, irrigation equipment etc. are depreciated over a specified time period. Livestock numbers are based upon the maximum potential animal units that can be supported on NNP Property through careful husbandry and the application of the requisite inputs. Crop production is assumed to utilize the available water rights. Even with land costs factored out, and even with a very conservative estimate of the productivity of the property, none of the farm operations are profitable. Horse Boarding Enterprise The first is a horse boarding enterprise for 14 horses. Revenues 'from this enterprise are highly variable depending on the level of care and training provided. Based on AUMs, the NNP Property can support up to 33 horses if horses are confined to the bam and 8 horses if the pasture is irrigated and used for grazing. A confined horse boarding operation is not an accepted farm operation and would not attract boarders. Horses require exercise to remain fit and healthy. Boarders expect to be able to ride their horses in pastures on the property where their horses are boarded. As a result, it was assumed that hay would be purchased for feed. The purchase of hay and other factors allowed an increase to 14 horses beyond the 8 horses that could be fed using hay grown on the subject property. This budget includes the assumption that the owner/operator will be a horse trainer and that aU horses boarded will hire the owner/operator to train their horses. Horse training and lessons supply the majority of income for the horse boarding operation. The income is generated by personal labor that is not tied to growing crops or raising livestock on the land. Llama Ranch The second is a llama enterprise consisting of 28 llamas raised for the pet market, breeding females, and wool production. The numbers of llamas raised is based on the 20 number of AUMs that could be produced by the NNP pastures with intense management. Cow/Calf Operation The third is a standard cow/calf operation. This is a full year operation that retains a mother herd of fertile cows which are bred to produce a crop of calves which are then either sold as steers or heifers to supply the stocker trade or as replacement heifers for breeding purposes. Based upon the soil productivity values established above, the NNP Property can be expected to support 40 animal units in a confined operation fed on the hay raised on the irrigated 103 acres of the property. The animals will be in confinement for 12 months. This type of cattle operation was selected as it is believed to have the best chance of being successful and profitable on the NNP Property. Grass Crop Establishment The fourth enterprise examined is the establishment of a grass (rough bluegrass) crop for seed. This enterprise is an example of a field crop operation. It analyses the first (or establishment) year of a multi-year crop rotation. Alfalfa Hay Production The fifth enterprise examined is irrigated alfalfa hay production utilizing the 103 acres of available water rights. Production is limited to the irrigated farmland (103 acres). It requires the purchase of equipment necessary to a cropping enterprise. This includes: a tractor, tillage equipment, swathers, and balers. The construction of a hay storage shed or building is required. Hay is marketed throughout the central and western Oregon. No animals will be fed on the farm. CONCLUSIONS AND FINDINGS The enterprise budgets analyzed represent a sampling of typical agricultural operations feasible in the Bend area. The budgets are based on the best available data for inputs and returns and represent a conservative approach. Returns and costs are summarized in Table 9 below. The losses shown below do not include costs associated with debt service. 21 Table 9. Budget Scenario's Costs and Returns Budget Scenario No. of Animals/yield Total Revenues Total Costs Net Returnl Loss 1 14 Horses Boarding $115,080.00 $119,437.71 ($4,357.71) 2 28 Llama Pet Market $38,780.00 $70,998.05 ($32,218.05) 3 40 Cow/Calf $29,218.25 $49,985.93 ($20,767.68) 4 Blue Grass Establishment $109,695.00 $116,422.15 ($6,727.15) 5 Alfalfa Hay (3 cuttings) $61,800.00 $72,173.98 ($10,373.98) I The conclusions drawn from the historical record, field observations, a review of soil productivity data, and the budget analyses are that: I • Under the budget analyses conducted the NNP Property cannot be operated profitably for representative agricultural operations. • The losses are far greater when mortgage and capital expenditures are included. • Climate and poor soils limit feasible production to pastureland and hayland. The poor soils found on the property will not support the commercial production of any other crops. • Of the numerous budget analyses conducted, none showed a positive cash flow or positive return on investment as an agricultural enterprise. 22 PROFESSIONAL AUTHENTICATION AND LIMITATIONS This report utilizes generally accepted practice standards for care and diligence as employed by recognized consulting firms undertaking similar studies. This report presents our professional judgment based upon data and findings identified in this report and on data reported by independent analytical services and governmental agencies. This report reflects the interpretation of such data based on our experience and background, and no warranty, either expressed or implied, is made. The conclusions and recommendations presented are based upon the conditions observed at the time of the site visits and as a result of the limited laboratory analysis conducted. Recommendations are subject to change if field conditions warrant or more extensive sample collection and laboratory analysis is desired and conducted. This report has been prepared and reviewed by the undersigned. This report is void if original signature is not present. Date: July 11, 2013 ~~ Stephen C. Caruana Principal Attachments: Figures Appendix A -Budget Scenarios Appendix B -Photo Set 1 Appendix C -Statement of Qualifications cc: Liz Fancher, Esq. Steve Hultberg, Esq. 23 REFERENCES USDA Natural Resources Conservation Service. 1992. Soil Survey of Deschutes County Area, Oregon. U.S. Government Printing Office. Washington. DC. USDA National Agricultural Statistics Service. 2007. 2007 Census of Agriculture. County Profile. Deschutes County. Oregon. U.S. Government Printing Office. Washington, DC. USGS Bend Airport 7.5 Topographic Quadrangle, Bend, OR. 1962. U.S. Government Printing Office. Washington, DC. 24 I 1 APPENDIX A BUDGET SCENARIOS A-I Horse Boarding Bud! et Based on Boarding: 14 Horses Time Period: 12 Months (7 months pasture, 5 months fed) ~ Years Yearly FIXED COSTS Depreciated Expense Building & facilities: Bam (14 horses) $50000.00 10 $5,000.00 Run-in shed (10 x 25 ft) $4,000.00 10 $400.00 Outdoor ridlna arena (100 x 200 ft.) $5000.00 10 $500.00 Indoor arena (60 x 120 ft.) $47000.00 10 $4,700.00 Fencing: (10000 ft.) ~h tensile Installed (51.751ft) $17500.00 10 $1,750.00 ent: Tractor (used) $8000.00 7 $1,142.86 Manure spreader (used) $1,000.00 7 $142.86 2-horse trailer (new) $7000.00 7 $1000.00 4-wheel-drive truck (new) $35000.00 7 $5,000.00 Irriaation Svstem $150 000.00 30 $5000.00 Insurancellnterest-bldas & eQuip. (4%) $12,980.00 TOTAL FIXED COSTS $324,500.00 $37615.71 Yearly VARIABLE COSTS Monthlylhorse Yearlylhorse Monthly Total Total Feed requirements: Commercial feed ($20150 Ib bag; 6 lbIhorseJdav U M~OO $12096.00 Hay /112 bale!horseJdav - 5 months $6Iba1e) $1260.00 $6300.00 SuPDIements ($1.5OIday) .00 i $630.00 $7,560.00 Salt block ($12 aa; 11horse/vT.) .00 $14.00 $168.00 i Bedding: Straw ($2.501ba1e· 314 bale/horse/day) 56.25 $675.00 $787.50 $9.450.00 Hired labor ($101hr' 25 min/horseJday) $125.00 $1500.00 $1,750.00 $21,000.00 Repair & maintenance: Vehicles ($151mo)horse) $15.00 $180.00 $210.00 $2,520.00 Pasture ($401acre) $4920.00 Building &fences ($8.00/horse/mo.) $8.00 $96.00 $112.00 $1,344.00 Utilities; Electric ($5/horse/mo.) $5.00 $60.00 $70.00 $840.00 Water ($5/horseJmo.) $5.00 $60.00 $70.00 $840.00 Replacement of supplies ($3/horseJmo.) $3.00 $36.00 $42.00 $504.00 Insurance: (highly variable) Care, custody, and control $10.00 $120.00 $140.00 $1,680.00 Riding instruction $10.00 $120.00 $140.00 $1,680.00 Commercial liability $50.00 $600.00 $700.00 $8,400.00 Workman's compensation $15.00 .00 $210.00 $2520.00 TOTAL VARIABLE COSTS $81,822.00 TOTAL COSTS $119,437.71 Yearly REVENUES Monthly/horse Monthlv Total Total . Board ($2501mo.) $250.00 $3,000.00 $3,500.00 $42,000.00 Training ($4OO1mo.) $400.00 $4,800.00 $5,600.00 $67,200.00 ! Lessons ($35Jhr.) $35.00 $420.00 $490.00 $5,880.00 • TOTAL REVENUES $115,080.00 NET RETURNs/{lOSSES) ($4,357.71) A-I Uama Raising Budget Based on Raising 28 llama Time Period: U Months (7 months pasture, 5 months fed) Initial Years Yearly FIXED COSTS Investment Depreciated Expense Building & facilities: Barn (28 llamas) $50,000.00 10 $5,000.00 Fencing: 110000 ft.) 5-strand high tensile installed ($1.75/ft) $17,500.00 10 $1,750.00 i Equipment: Tractor (used) $8,000.00 7 $1,142.86 Manure spreader (used) $1,000.00 7 $142.86 Trailer (new) $7,000.00 7 $1,000.00 4-wheel-drive truck (new) $35,000.00 7 $5,000.00 Irrigation System $150,000.00 30 $5,000.00 Insurance/lnterest-bldgs & equip. (4%) $10,740.00 • TOTAL FIXED COSTS $268,500.00 $29,775.71 Monthly VARIABLE COSTS Monthly/llama Yearly/llama Total Yearly Total ! Feed requirements: Grain ($0.40/lb, 0.75 Ibs/head/day) $9.13 $109.51 $255.53 $3,066.34 Salt and Minerals (24 Ibs./hea~/yr.,$3.oo/mo.) $3.00 $84.00 $1,008.00 Hay (115 bale/llama/day - 5 months, $6/ba1e) $36.00 $1,008.00 $5,040.00 Animal OVerhead Veterinary Expenses ($25/head) $2.08 $25.00 $58.33 $700.00 Marketing Expenses (SID/head) SO.83 $10.00 $23.33 $280.00 Repair & maintenance: Pasture ($40/acre) $4,920.00 Vehicles ($lO/mo./head) $10.00 S120.00 $280.00 $3,360.00 Building & fences ($8.oo/head/mo.) $8.00 $96.00 $224.00 $2,688.00 Utilities: Electric ($5/head/mo.) $5.00 $60.00 $140.00 $1,680.00 Water (S5/head/mo.) $5.00 $60.00 $140.00 $1,680.00 Insurance: (highly variable) Commercial liability $50.00 $600.00 $1,400.00 $16,800.00 TOTAL VARIABLE COSTS $41,222.34 TOTAL COSTS $70,998.05 REVENUES Quantity Price/Unit $75.00 ~ $375.00 Yearly Total $10,500.00Wool (5Ibs./animal, $75/pelt) 5.00 Crias (90% weaning, 2% death loss) 1.00 $1,100.00 $1,100.00 $27,720.00 Culled Females (10% cull, $200/head) 1.00 $200.00 $200.00 $560.00 TOTAL REVENUES $38,780.00 NET RETURNS/(LOSSES) ($32,218.05) A-2 Cow/Calf Costs and Returns High Desert Area HenlSize: 40 Cows Time Period: 12 Months (Confined, fed completely from irriaated hayland) Initial Years I FIXED COSTS Investment Depreciated Total Per Cow Building & facilities: Bam $50,000.00 10 $5,000.00 $125.00 Cattle Equloment $7500.00 10 $750.00 $18. Fencing: (10000 ft.) $0. 5-strand high tensile installed ($1.751ft) $17500.00 10 $1,750.00 $43.75 equipment! $0.00 Tractor (used) $8000.00 7 $1142.86 $28.57 Manure spreader (used) $1,000.00 7 $142.86 $3.57 Trailer (new) $7000.00 7 $1,000.00 $25.00 4-wheel~rive truck {new} $35 000.00 7 $5000.00 $125.00 Irligation System $150000.00 30 $5,000.00 $125.00 Insurancelinterest-bldgs & equip. (4%) $11,040.00 $276.00 TOTAL FIXED COSTS $276,000.00 $30,825.71 snO.54 Quantity VARIABLE COSTS (head) Value Unit ~~ Per Cow Salt 1 Ton .00 $4.00 Minerals (custom mix) 0.2 Ton $60 .00 $3.00 Fuel & Lube, Machinery & Equipment $1,208.89 $30.22 ! Interest -Operating Capital $333.33 $8.33 R@airs, Machinery & Equipment $2,472.62 $61.82 Fence Repair Materials $450.00 $11.25 Supplies $700.00 $17.50 Utilities $900.00 $22.50 Vet & Medicine $1,550.00 $38.75 Brand InSPeCtion $100.53 $2.51 Horse Purchase 0.25 head $2,000.00 $500.00 $12.50 Bull Purchase 0.3 head $2.000.00 $15.00 Marketing Fees $13.62 Accounting $400.00 $10.00 Legal &Related Expenses $200.00 $5.00 Farm Help labor $4,000.00 $100.00 Hayland Maintenance ($40.lac.) $4,920.00 $123.00 TOTAL VARIABLE COSTS $19,160.22 $479.01 TOTAL COSTS $49,985.93 $1,249.65 Quantity .,,,'REVENUES (head) Value Unit Total Per Cow Cull Bulls 0.3 15 cwt $82.00 $369.00 Cull Cows 6 9.5 cwt $74.00 $4,218.00 $105.45 CUll Horse 0.25 1 head $500.00 $125.00 $3.13 Heifer Calves 5 4.75 cwt $135.00 $3,206.25 $80.16 YearlinQ Heifers 9 8.5 cwt $100.00 $7,650.00 $191.25 Steer Calves 20 5.25 cwt $130.00 $13,650.00 $341.25 TOTAL REVENUES $29218.25 $730.46 NET RETURNSJ(LOSSES} ($20,767.68) ($519.191 A-3 Rough Bluegrass Establishment Year Central Oregon Production: 103 Acres Initial Years Yearly FIXED COSTS Investment Depreciated Expense Building & facilities 10~00Storage shed (SO x 100 ftl $25,000.00 Equipment Implements $35,000.00 7 $5,000.00 Tractor (used) $8,000.00 7 $1,142.86 Self-propelled Equipment $15,000.00 7 $2,142.86 4-wheel-drive truck (new) R $35,000.00 7 $5,000.00 Irrigation System $150,000.00 30 $5.000.00 Insurance/interest-bldgs & equip. (4%) $10,720.00 TOTAL FIXED COSTS $31,505.71 Price VARIABLE COSTS Unit (S) Qua . Amount IS) Farm Total Herbicides Acre $40.63 1 $40.6 .89 ; Fungicides Acre $13.44 1 I $13.44 $1,384.32 I Custom Applications Acre $30.59 1 $30.59 $3,150.77 Seed Acre $14.00 1 $14.00 $1,442.00 ~"~,"'F1,. Won Acre $149.00 1 $149.00 $15,347.00 labor Acre $153.65 1 $153.65 $15,825.95 Fertilizer Acre $104.00 1 $104.00 $10,712.00 Water ~ $114.12 1 ~i Diesel Fuel $3.99 12.86 ,285.07 ~ Gasoline Gallon $3.50 1 $3.50 $360.50 Repair & Maintenance Acre $41.13 1 $41.13 $4,236.39 ~on Operating Capital Acre $34.06 1 $34.06 $3,508.18 s (Accounting, legal, Insurance) Acre $75.00 1 $75.00 $7,725.00 ! TOTAL VARIABLE COSTS $824.43 $84,916.43 i TOTAL COSTS $824.43 $116,422.15 Price REVENUE Unit 1$) Quantity Amount(S) Farm Total Grass Straw Acre $20.00 1 $20.00 $2,060.00 Rough Bluegrass Seed Pound $1.10 950 $1,045.00 I $107,635.00 TOTAL REVENUE $1 $109,695.00 NET RETURNS (LOSSES) $240.57 ($6,727.15) A-4 AIfa/fa ProcIuctIon 13 cuttlruts\ South Central Recio" PtodIIc:tIorI: lS oc:ntS Initlol Years Yearly FlXfDCQ5J5 Investmem Expense BuIdInI.fatlllt1es StOl'illl.m.d (SO. 100ft) $25000.00 10. .00 'qulpmen! Implements 7 $5.000.00 Tractor lused! $8,000.00 7 $U42.86 SeIf-propeJled Equipment $l5,000.00 7 $2.142.86 4-wheel-dr1ve truck lnewl $35.000.00 7 $5,000.00 IrtfptIon System $1SO.ooo.00 30 $5,OOCl.OO fllSlllllllCe/lnerest·b!das. eaulD. 14'" $10,720.00 TOTAL FIXED COS'IS $31,S05.71 Subtota Machlner VARIABI.E COSTS Uno1 $/Unit I Labor Y MIIIeri... Total Amount TOTAL SoiITe5t 0.0 $15. SolI Test 2 acre 00 $0.30 $0.00 $0.00 $0.30 $0.30 $30.90 Weed Control $0.00 $0.00 $38.97 $38.97 $4.013.40 Herbicide 3 pint $8.88 $26.63 Herbicide 1.5 pint $4.56 $6.84 Custom Applbtlon 1 acre $5.50 $5.50 Fertilizer $0.00 $0.00 $38.$5 $38.55 $3,970.65 pound Gypsum 400 $ S0.06 $22.00 ! pound Murated Potash 50 • $0.08 $4.OS pound Triple Ph.,.phate 50 • so.12 $6.00 Custom APDlbtlon 1 acre $6.50 $6.50 $1.55 $O.00~$5.18 $533.54Harrow Rodent Control $0.00 $5.00 $17.00 $1,751.00 Gas Pills 1 acre $5.00 $5.00 lrrlaate $0.00 $54.20 $98.20 $10,114.60 Repair & MalntQnanca 1 acre $4.55 $4.55 Electricity 1 acre $25.00 $25.00 water/Construction Charp 1 acre $24.65 $24.65 Weevil Control $0.00 $0.00 $8.84 8.8425 $910.78 Insecticide 0.5 pint $10.38 $5.19 Sticker 0.015 gallon $27.00 $0.41 CUstom Air Appbation 0.5 acre $6.S0 $3.25 Harvest $120.00 $12,360.00 Custom H3rvest 4 ton $30.00 $120.00 load Hay 9.08 9.03 8.11 $1,865.33 Storage Shed Repair & Maintenance $0.37 .87 Operating Cap!tallnterest $11.78 General Overhead $10.00 $1,030.00 Pickup = $19.34 $1,992.02 AN t= $7 $7.70 $793.10 : TOTAL VARIABLE COSTS $394.84 $40,668.26 TOTAL COSTS $n,l13.98 I Quantit REVENUE y Unit $/Unlt Total/a<. FARM TOTAL Alfalfa 3 ton $200.00 $600.00 $61,S00.00 NET RETURNS (LOSSES) $600.00 ($lo,a73.98) A-S SITE PHOTOGRAPHS Agronomic NNP PROPERTY BEND,ORAnalytics PROJECT NO. AA2013-1 Appendix B -Photo Set 1 APPENDIXC STATEMENT OF QUALIFICATIONS Introduction Agronomic Analytics began in 1997. The object was to provide the highest level of service for developing environmentally sound and economically viable solutions to agricultural and land use challenges. We bring a solid background in agronomy, soils, ecosystem analysis, environmental marketing, soil testing, and conservation engineering to the challenges of conducting thorough and detailed analysis of soils, vegetation, and erosion processes. Agronomic Analytics has expertise in agricultural consulting, watershed restoration, project development, erosion studies and public outreach campaigns. Agronomic Analytics brings flfteen years experience with the Natural Resources Conservation Service (NRCS), eleven of those years as a District Conservationist in three fleld offices in the Midwest and the Paciflc Northwest. This experience allows Agronomic Analytics to bring a complete familiarity and understanding of the soils, geology, and vegetation analysis required to complete detailed erosion and sediment studies. We bring direct experience working with endangered species and sensitive watershed issues. As the Salmon Recovery Coordinator for the NRCS the principal ofAgronomic Analytics worked closely with agencies and tribal entities to promote positive habitat improvement. Mission Statement The mission ofAgronomic Analytics is to cultivate the harmonious integration of society and the environment. Experience Land-use Studies • Agricultural economic enterprise studies: Lane, Benton, Douglas, Marion, Lincoln, and Deschutes Counties • Detennination of environmental impacts from proposed manufacturing activities. Soillnterpretation and Assessment • Thirty years experience interpreting soil surveys for agricultural, range, forestry, and land development. • Completion of hundreds of Corps of Engineers accepted wetland delineations based on field assessment of soil conditions • Conducted detailed site assessments of existing soil surveys for revision based upon on-site analysis. Erosion and Sediment Control • Development of post-wildfire burn assessments. • Determination of past, present, and future erosion and sediment conditions on an Idaho Ski Resort. • Administered eight separate federal cost-share programs to encourage voluntary installation of conservation treatments on private land. C-l • Supervised planting of 75,000 acres of native and introduced grasses for the Conservation Service. Modeling • Developed the Farming Systems Comparison Procedure decision analysis tool for the Soil Quality Institute and the Conservation Technology Infonnation Center. Model developed utilizing extensive Excel and Visual Basic Programming language. • Extensive experience with the Revised Universal Soil Loss Equation (RUSLE), Water Erosion Prediction Project (WEPP), and the Wind Erosion Equation (WEQ) • Experience and knowledge of Geographic Infonnation Systems (Arc View), Climate and Crop Modeling (CropSyst, Climgen), and the hydrology of sediment delivery. • Watershed modeling and hydrological analysis of semi-arid, forested, and urban watersheds. Project Management • Oversight of non-native vegetation removal and water quality testing for Brae Burn Creek Stream Stabilization Project. • Fonnulated the goals, workplan and strategy and developed the technical criteria for the Salmon Safe Program of the Pacific Rivers Council. • Developed technical criteria and certification standards for assessing the soil, water, and ecosystem resources of participating fanns. Watershed Analysis • Conducted hydrological analysis (TR-55 and Rational Method) of Brae Burn Creek Watershed. • Assisted Oregon's Soil and Water Conservation Districts in the fonnation of watershed councils. • Evaluated and recommended watershed assessment strategies for use by the Soil Conservation Service. • Collaborated with staff specialists of the Confederated Tribes ofthe Umatilla Indian Reservation to select suitable watersheds for restoration. Resource Assessment • Completed econometric and socioeconomic analysis of Conservation Reserve Enhancement Program proposal for the Governor's Watershed Enhancement Program. • Developed environmental impact statements in accordance with NEP A to assess archaeological, cultural, and environmental values. Credentials • B.S. -Agronomy, Oregon State University, Corvallis, Oregon • Post Graduate Work: Landscape Architecture, University of Oregon, Eugene, Oregon • Certified Erosion and Sediment Control Lead (CESCL), 2012 • OSHA 40-hour HAZWOPER, 2008 • Supplemental Training: Wetland Delineation, Archeology, Soil Interpretation and Classification C-2 Client List Agronomic Ana/ytics has provided technical consulting services for the past 15 years. Besides private individuals, we have worked with the following agencies and groups. • Edgewood Townhouse Association I• Northwest Power Planning Council • Brundage Mountain Ski Resort • USDA -Soil Quality Institute t I• Conservation Technology Infonnation Center • Oregon Governor's Watershed Enhancement Board • National Marine Fisheries Service • Environmental Protection Agency • Forest Service Employees for Environmental Ethics • K & A Engineering • Pacific Rivers Council • Land Use Attorneys • Private Landowners IPublications and Papers Caruana. S.C. 2013. Condit Dam Removal. Environmental Connection: International Erosion Control Association. San Diego, CA. Caruana, S.C. and D.M. Johnson. 2008. Griffrth Park Bum Area Assessment, Erosion Control, and Debris Flow Mitigation. In: StormCon: North American Surface Water Quality Conference and Exposition. Annual Conference Proceedings. Orlando, FL. Caruana, S.C. and D. Towery. 2001. Better Soils Better Yields. Conservation Technology Information Center. West Lafayette, IN. Caruana, S.C., E. Larkin, J. Eddy, and R Graves. 1996. Buck Hollow 2000: A comprehensive watershed restoration for salmonid recovery. In: The Role of Restoration in Ecosystem Management. Ed. D.L. Pearson and C.V. Klimas. Society for Ecological Restoration. Madison, WI. Caruana, S., A. Tugel, M. Norfleet, and D. Towery. 1999. Procedures to identify and assess soil quality enhancing farming systems. In: Soil and Water Conservation Society 54th Annual Conference Proceedings. Ankeny, IA. f i rAwards November 1994 Certificate of Appreciation from the Oregon Soil and Water Conservation Commission for assistance with Salmon Recovery Efforts December 1991 USDA Certificate of Merit for Sustained Superior Performance as District IConservationist at Moro, OR r f ! I C-3 BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ~twki ~ Name s \eve V\ V-\~ Address ~ ~booJ ~~ t1ilD1 Phone #s %'=\ I. 410 ~ 10 2t V E-mail address ______________________ []9 In Favor D NeutrallUndecided D Opposed / Submitting written documents as part of testimony? czf Yes / BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest # #?&~ Date Zp /..IY > ) Name Po~ #o./Z.lIGe: Address 6'/770 ~U~/J4 6 Phone #s ,?"f'/-~/tJ -2tt)S-7 E-mail address rj()~..I.b~eL~d/"':?dY/.6'a~ c~ El l In Favor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? D Yes ~No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest *-(3 lb /z...c. \1 ( A-c Name ll1-~~C-~ Address Co'\-'\-DLO '\2=" U~CU-q st b~d OTL ~rl-O( \ Phone #s S1( -:s,~~-.30fc,\ E-mail address t I L-e l'tL..~c......~ <2....---~ ' 0 ;¢ InFavor D NeutrallUndecided D Opposed ,,/' Submitting written documents as part of testimony? ~Yes BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest ~~~~~~:::J..L4--f...&I!IL-.-Date 2/5 1 \Y I Address Z \ ~r:;() ~ f, ~iYlM.J?1..1 ,t( ~\ ()Y Phone#s --~~~~~~~~~---------------------- E-mail address I U YY\~~~~~~~~~~~~--~--------- D In Favor D NeutrallUndecided H Opposed Submitting written documents as part of testimony? DYes B No __ _______ ________ _ BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda Item of Interest ---LfJ....;;.....-:f_(J..........::..(f\.I..) ~ Date 2 (0 sIlf Name C, J'1 l ~'5-1 Address ~I L-~~ btJ1(...<tJ.-V\A (<:'T ~tJ ];~~ 1"J)O' Phone#s 54\ -3'62 -~4tt E-mail address __=-g-t-,V_0+G~~_u_d._oo_r_5_.(,_~ $ InFavor D NeutraVUndecided D Opposed Submitting written documents as part of testimony? n Yes ~No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item ofInteresJ..-1g"" '6 ~\\ II' \\<1,,( , " 5 \,/ '~\ '\Name ~'t"" t'\ c..~. c<.,\'-.. tpk:Address 2.\0 5 S ~ ~"V'w--c... '\) C ----------------~\_~ Phone #s ~ '5 Lf \ ~ Lf 1 \ ~ l C£ D In Favor D NeutraVUndecided Opposed Submitting written documents as part of testimony? DYes 121. No ------------------------------------------ --------------------------------------- i_ BOARD OF COMMISSIONERS' MEETING (}) D In Favor D NeutrallUndecided Submitting written documents as part of testimony? ~Yes D No /Fr'--' BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest PI! -/'3 -[' ('" C -/.~-'.-I Date :< -s--/ J Name '/ol/V J!cef;• I I Phone #s E-mail address ~InFaVOr D NeutralfUndecided D Opposed Submitting written documents as part of testimony? DYes D No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item ofInterest ~Co-up , Date~ Name :;/utA y t Go y v-e1t Address Z l b(<) 3 Ptt \\l W-(J\ DV · 0e~( Orfl q77D/ Phone #s _)'-i.<i!-,"'::-\""",-\_Q~",,2....1..8L-'q----,,:"--....:(,=-a..J....\..lo.I..g....!...l___________ E~mail address _--lwI(~If-/u..:..r).Mt.::L..:::.,J~Jj-*·... -4@";'(/.).."...,.~VI-=-.(A~,~:u.;)..;,;,,;:;·(~"·IJ..:.L.(d.:::::.::d::......_(;:::::.~-=---_-___ U D In Favor D NeutrallUndecided Submitting written documents as part oftestimony? i):yes 0 No BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK . Agenda Item ofInterest i"8 f/;.h~+'7M.i~¥/I( Name :Ed L~$a~ Address Eo, lillX -S-Z1 s4ets) tR q >~tr Phone #s \it) :3 -S..s-I .-L;;l..';:l :2 E-mailaddre~ J~df5erJm-6 @ ~tM,,J, UJ~ D In Favor D NeutrallUndecided ~Opposed Submitting written documents as part of testimony? JXtYes D No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest --L..l/1L...::1 ~Ct ..:;...J ' _______ Date .(e b ~/./L.<.:,>~iI....:..../=.'1o:....lt :(. 01 L.J Name J ty'-t:M I f/" h r"'("1~) ~!/.-L:e (P Address laSS s v L-t cc v..r .\. . ~d~/\~ Or Cf775" Phone #s -5 L../J -4 So -<61 l..-{ c1 E-mail address <9 f eM ~e (.,0 -d . (0""1 ~ 7 D In Favor D NeutrallUndecided ~posed / Submitting written documents as part of testimony? D Yes D No ,/' BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest JIaN/ArJO Date f tPb '42 1r Name ~rJ CjDl1tl ~J~OR®oJ IfW411'eJ J2j51J£/6C Address tos-~8lJ ~or-- l2-eD(JwlJO,oR-~1-1 5k Phone #s .:::,L{ll ~91lw3 E-mail address &~Jp, Col J I ~ D In Favor D NeutrallUndecided !IiI Opposed Submitting written documents as part of testimony? 0 Yes ~ BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item ofinterest !IIVA) (J LJItIe ~Date £. -;-.;1 Name &2Jlci<'SAJ 6k U~+tJ/2 {lord ( ~d ~ , Address 7rf7 S,J At/I (je.J tJa.y ~~~ ~77() 2 Phone#s Gttl) 3/7 -f52Jr D In Favor D NeutrallUndecided [KJ Opposed _Submitting written documents as part of testimony? DYes D No / BOARD OF COMMISSIONERS' MEETING & REQUEST TO SPEAK Phone#s 5 ~1 91V1 IlRL3 E-mail address fJt7mdt4 Em~ eO/nail iO Y"1 D In Favor D NeutrallUndecided ~ Opposed Submitting written documents as part of testimony? D ::Y e~ ~No @BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Date :2 -.)-.20/7'Agenda Item of Interest Name _____ _7--~-~9 -u~/~~/------------------~---------~~~.~¥r r~ --O ~,~ Admess ___ __~_~X~~J~·J~7~________________________~_G d<o < q77S9 Phone #s 50 :J -9?(J -3 D / L ------~~~--------------~-------------------- E-mail admess --_od/;....::e'--,r .. · . (]/lI __---j7~e;.L-.::G:.-;,_re.:::::;7r-=..:.....::..."..:::.c-=Q~--..~______________/~c=/t-==e..:..-o::::;. D In Favor D NeutrallUndecided ~ Opposed Submitting written documents as part of testimony? DYes [8J No BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK Agenda Item of Interest /4~v;' L-<-.JP:-:.A-:d J? Date ~/~ 7 Name 8's~ {, ,.6 / /: " Admess __~L-_L~~~~~~~~~~-d ~7 O /-L).y~________________________7 ~ E-mail admess ~?o ¥7.2~ ;7 Pv{4..-;/.. C C~( D In Favor D NeutrallUndecided [}YOpposed Submitting written documents as part of testimony? ~es BOARD OF COMMISSIONERS' MEETING O:!) REQUEST TO SPEAK Agenda Item of Interest 1fl. fA -(3 -- ( h L -(3 -J Date 2. -~-It;-r I Name __~L~J~L~/~M~O~l___L~O~tu~~~________________________ Address b 97nQ Lc~ kg Dn It< Phone #s r; ~I -"72$ -';2 Q '7 Lf E-mail address IN low e97 e c, ruGAl ,I, ( oWl J D In Favor o Neutra1JUndecided /'.' Submitting written documents as part of testimony? 0 Yes ~NO ./ BOARD OF COMMISSIONERS' MEETING @) REQUEST TO SPEAK Agenda Item of Interest ~N ,e........I t=~~)1-./5 (I tp ~~~________ Date Name W ~k:JcR.iL Address -------------------+~--_~)~10~D~~-- ( p)&~~ Phone#s_~jb~)---~~~~(--~y-)~~~~~------------------------- E-mail address __....;.:.=..-.....;,;=---.:::==;....:...:.....::~~r ....:::~~~..!:::....:....l.uJ..Jr.-A.l...... / ::..........----g ov-l... ~~.. o..;....~~=~:!..............:o:......:.~~ D In Favor D NeutrallUndecided D Opposed Submitting written documents as part of testimony? DYes 0 No --------------------- BOARD OF COMMISSIONERS' MEETING REOUEST TO SPEAK Agenda Item of Interest ----p<:C;~ffi~-Date~--------____ Name rr~a, ~ e.ed-£'e \~ Address {P~~00 80oci.,;ch Phone #s _---'£?~4....L..-II------""'-S---=-t+--=8'----'-lf_l----Z-y_"-'---_______ E-mail address D In Favor D Neutl'aVUndecided ~POSed __Submitting written documents as part of testimony? 0"Yes D No // , Hilary Garrett 21663 Paloma Drive Bend, OR 97701 January 29, 2014 Paul Blikstad Senior Planner Deschutes County Community Development Department 117 NW Lafayette Ave. Bend, OR 97708-6005 Dear Mr. Blikstad: My name is Hilary Garrett. I reside in Bend at 21663 Paloma Dr. I would like to comment on the proposal by Newland Real Estate Group to change the zoning of the 171-acre parcel they own near Butler Market and Hamby Roads from EFU-lRB to MUA-l0. The Bend Bulletin, in an article published 1/20/14, quoted Dave Wood, Newland's regional president thusly: " .... we're just trying to get (the land) into a residential zone ...Certainly we hope to develop." According to Mr. Wood, Newland Group would like to put 1,000 homes on this property. When Deschutes County Hearings Officer Karen Green recommended denying the zone change proposal, the denial focused on the failure of soil tests to demonstrate that the land is not suitable for agricultural use. I would like to emphasize that this land is agricultural land protected by Oregon's Statewide Planning Goals & Guidelines Goal 3: Agricultural Lands (OAR 660-015-0000(3). The Goal states that: ''Agricultural lands shall be preserved and maintained for fann use, consistent with existing and future needs for agricultural products ... " and that, ''Counties may authorize fann uses and those nonfann uses defined by commission rule that will not have significant adverse effects on accepted farm ... practices'~ http://www.oregon.govjlCD/docs/goals/goal3.pdf Rezoning this land will have a significant adverse effect on the area's future needs for agricultural products. If this land is developed, it will never again be usable as farm land. Of the 171 acres of Newland Communities land, 103 acres have water rights (i.e., are irrigated), which suggest that its highest and best use is for farming. Newland Communities land is tax deferred agricultural land (specifically, seven of the nine tax lots are receiving tax deferral and has very recently been used to raise income crops such as hay and alfalfa. It is rightly zoned as Exdusive Farm Use (EFU), efjgible for urbanization ONLY if there is an insufficient supply of higher priority lands. On July 26, 2007, the Oregon Department of Agriculture's James Johnson formally opposed the inclusion of farm lands in Bend's expanded UGB. His letter is part of the public record: http://www.cLbend.or.us/depts/community development/docs/UGB ODA Testimony 7 27 1 .pdf Hilary Garrett Page 2 1/30/2014 Additionally, urbanizing Hamby Road farmlands will financially harm the Central Oregon Irrigation District, as evidenced in a letter from its District Secretary/Manager Steve Johnson (please see Appendix A). The applicant Newland Communities has failed to analyze-on a parcel by parcel basis-the class of soils of the land it wishes to have rezoned. In eastern Oregon, Class I, II, III, IV, V and VI soils are suitable for farm use taking into consideration ... "suitability for grazing, climactic conditions, existing and future availability of water for farm irrigation purposes, existing land use patterns, technological and energy inputs required, or accepted farming practices". Additionally, the applicant has declined to submit parcel-by-parcel soil samples but rather, has provided samples that were to act as a proxy for the entire tract. Natural Resources Conservation Service (NRCS) maps identify that 60 percent (103 of the 171 acres) of the Newland Communities land proposed for rezoning have Deskamp loamy sand and is virtually flat with very low grade slopes. Deskamp loamy sand soils are considered "high value" farm land when irrigated., particularly when the land is relatively flat In the late 1970s, the County's records show that soils on this property were predominantly Class I-VI soils. The applicant's soil study does not justify the proposed plan amendment and zone change to MUA-I0 because it analyzed soils on the entire subject property rather than on a parcel-by-parcel basis. The Department of State Lands (DSL) land which was rezoned by the County (as noted in the County's Community Development Memorandum dated November 26, 2013) was NOT irrigated land, and has lower value soil (e.g., the soil was of a poorer quality (had far less value for agriculture) than that of the Newland parcels and, thus, could not be used for agriculture, particularly as it has no water rights). The Newland parcels and the Department of State Lands' Section 11 holdings are not analogous. In closing, rezoning the Newland Communities land from EFU to MUA-I0 does not represent the highest and best use of the land in question. It violates Oregon Administrative Rule (OAR)1/29/2014. Please, Deschutes County, do NOT pursue reckless, precedent setting land use planning strategies that will serve to weaken Oregon's important statutes and guidelines. Respectfully submitted, Hilary ett 21663 Paloma Dr. Bend, OR 97701 I 1 I I Comments of Stuart Garrett, MD on the Newlands Corporation I Proposal on 2/5/2014 Thank you for the opportunity to speak against the Newland Corporation's request for a Plan Amendment and Zone Change near Butler Market Rd. I I have lived and practiced medicine in Bend for over 35 yrs and have 1 I lived within a half mile of the property under review for 33 years. 1 1 i 1 1 I view this request as a proposal for a bailout. Newland is a major corporation with developments nationwide. They are not a long term , Deschutes County resident widow needing money for retirement or a 1. person needing cash for cancer treatment. Newland made a bad I corporate real estate investment decision. That is their fault and does not need to be remedied by Deschutes County. There were a lot of people who bought land in 2007 who are losing money. They didn't get bailed out, neither should the Newland Corp. We don't need the 1000 homes they proposed. Newland Corp could have been smarter and bought land that would have been infill within the UGB. They chose to buy ag land well outside the UGB and roll the dice for a zone change. They lost. To allow them to move forward puts added pressure on schools, roads, and sewer. I question their soils analysis since nearly all of the properties surrounding them have ag uses including hayfields, productive grazing land, and irrigated pasture. In fact 7 of 9 of the parcels have farm deferrals and 104 of the 170 acres have irrigation, rights. I have to laugh when they allege that the parcels are unsuitable for ag because it is "too cold and dry." If so, then most of the ranchers east of the Cascades should quit. There is also no need for more "rural residential exceptions" since there are 17,Ocxalready identi'fied. The Newland Corporation proposal violates both the spirit and letter of Oregon Land use laws. Violations include Goal 3 to preserve ag lands, Goal 5 to conserve open space, Goal 12 which causes excess travel, Goal 14 as the proposal does "prevent orderly and efficient transition from rural to urban land use" and also promotes the "urbanization of rural lands." If Tom McCall were alive today he would laugh at their request and just say NO. This situation is exactly why we have land use laws in Oregon. Say no to this and tell them that Oregon is not Texas, Calif, Fla or Arizona, where they have gotten by with developments that promoted urban sprawl. Thank you Respectfully submitted, Stuart Garrett, MD 21663 Paloma Drive Bend, OR 97701 Testimony of Paul Lipscomb, Sisters/Cloverdale Resident before the Deschutes County Board of Commissioners, February 5,2014 on Newland Real Estate's Application for a Comprehensive plan Amendment and Zone Change This Comprehensive Plan Amendment and Zone Change Application should be denied because it does not comply with Statewide Planning Goals 3 and 14. The Deschutes County Hearings Officer, the Oregon Department of Land Conservation and Development, and the Oregon Agriculture Department have all carefully examined this proposal and concluded that it does not comply with the Oregon Statewide Planning Goals and Guidelines Goal 3: "To preserve and maintain agriculturallands./I This Board should agree with the well-researched and well reasoned conclusions by these experts. If not, this Board's decision is likely to undergo further scrutiny by the Land Use Board of Appeals, and any such appeal and remand procedure will likely prove needlessly expensive. The present tract before you is a large 171 acre block of rural land comprised of several parcels. Most of this land has been irrigated. There are 103 acres of water rights for agricultural irrigation, and much of it has been commercially farmed in the past. Yet the applicant asserts that it cannot be classified as agricultural lands because it cannot be "profitably" farmed under currently common regional farming practices. But that is not the applicable legal test under Oregon law, as has been pointed out by the Deschutes County hearings officer, and the Oregon Department of Land Conservation and Development and the Oregon Department of Agriculture. (See also Wetherell (Foley III), 62 Or LUBA 80 (2010): "while profitability is a permissible consideration in determining whether land is agricultural under the rule definition, it is a relatively minor consideration, and one with a large potential for distracting the decision maker from the primary considerations ... ./1) If the applicant's proposed profitability criteria for agricultural lands were to be adopted here, a broad and powerful precedent would be set. And under that precedent most other irrigated farm tracts in Deschutes County would qualify as non-resource lands rather than agricultural lands. By the applicant's own calculations, 82% of those farms are also not "profitable/l under the applicant's proposed criteria. I would also point out that although much of the irrigated farm lands in Deschutes County may struggle to make a profit under current economic farming practices and conditions, that has not always been the case in the past, and it may well not be the case in the future. There are many new agricultural research developments available for implementation now and in the immediate future, and one in particular that apparently has good economic potential for Central Oregon, genetically modified drought resistant wheat, has already been successfully introduced in Egypt, Australia, and China, and it is currently under development by several major seed companies in the United States. (See for example the attached recent study done by the Department of Agribusiness and Applied Economics of North Dakota State University, which is entitled Valuing New Random GM Traits: The Case of Drought Tolerant Wheat, June, 2012 at page 23: "The results indicate that the value of drought tolerant wheat using GM technology is in the money at each phase of development.") And significantly, this county is already in the process of considering the adoption of a non-resource lands designation in a careful, deliberative and public process through our Planning Commission. That process, which is already underway, should be allowed to continue unimpeded by an ad hoc adoption of the applicant's novel profitability criteria. In addition, the Oregon Department of Land Conservation and Development and the Oregon Department of Agriculture have jointly concluded that this application is also inconsistent with Oregon's Statewide Goa114, Urbanization, although the hearings officer disagreed. Statewide Goal 14 declares that it is the State of Oregon's public policy "To provide for an orderly and efficient transition from rural to urban land use." This proposal violates that public policy because it would allow conversion of a large block of land zoned EFU to MUA -10, which in turn would allow up to 7.5 dwelling units per acre within a cluster development on 35% of the existing tract. (The balance of 65% would start out as designated open space but would be subject to redeveloped if and when the property came into the City of Bend's urban growth boundary.) That kind of intensive development with such a high residential density is urban, rather than rural in nature, and it would be inconsistent with the existing rural character of the surrounding properties. Simply put, it would be uncoordinated urban sprawl. The City of Bend would not have any voice in how that urban style development would be plotted or how the development process should best proceed in a manner that would be orderly, efficient, and consistent with the city's future growth in that direction, as well as with the accompanying public need for coordinated water, sewer and transportation infrastructure connections with the rest of the city. As the applicant itself declared in its final argument before the hearings officer, the applicant acquired this property in early 2007 "because it was a good candidate for inclusion in the Bend UGB, and the hearings officer made a similar finding: "The applicant acquired the parcels comprising the subject property because they had been identified for inclusion in the Bend UGB ... " And in an article on January 20, 2014 the Bend Bulletin reported that according to Dave Wood, the regional president for Newland: "The company initially hoped to build about 1,000 homes on the land ...." The applicant's bet that the Bend UGB would soon be extended to include this property was probably a good one in early 2007, before the local real estate market crashed, but in 2009 the City of Bend made a different decision. This present proposal is simply an end around attempt to accomplish the same development goal without the need for an urban growth boundary extension. That attempt, however, is a direct violation of Statewide Goal 14. For all of these reasons this application should be denied. Thank you for your consideration of these thoughts and comments. t II ,t I I, I Agribusiness & Applied Economics 691 June 2012 ~ i Valuing New Random GM Traits: The Case of Drought Tolerant Wheat Sumadhur Shakya William W. Wilson Bruce Dahl Department of Agribusiness and Applied Economics Agricultural Experiment Station North Dakota State University Fargo, North Dakota 58108 Acknowledgements We wish to acknowledge support from the Center of Excellence in AgBiotechnology at North Dakota State University. It was partially supported under a USDAIERS cooperative agreement titled Valuing GM Traits in Wheat, as well as research support from the North Dakota Agricultural Experiment Station, and the North Dakota State Wheat Commission. Finally, we thank Drs. Ryan Larson, Saleem Shaik and David Roberts for construction comments. This publication is available electronically at this web site: http://agecon.lib.umn.edu/. Please address your inquiries regarding this publication to: Department of Agrib IJsi ness & Applied Economics, P.O. Box 6050, Fargo, NO 58108-6050. Phone: 701-231-7441. Fax: 701-231-7400, Email: ndsu.agribusiness@ndsu.edu. NDSU is an equal opportunity institution. Copyright © 2012 by Wilson. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. TABLE OF CONTENTS List of Tables .................................................................................................................. ii List of Figures .................................................................................................................iii Abstract ......................................................................................................................... iv Introduction ....................................................................................................................1 Background .. ..................................................................................................................2 Valuing R&D in Crop Development Using Real Options .... ............................................ 5 Modeling GM Drought Tolerant Wheat Using Real Options ........................................... 7 Overview ...................................................................................................................7 Farm Budgets, Yields and Trait Efficiency ................................................................7 Stochastic Simulation and Risk Premiums ................................................................ 9 Real Options Methodology ...................................................................................... 10 Assumptions ........................................................................................................... 13 Empirical Results ..........................................................................................................15 Derived Inputs for the Real Option Model ............................................................... 15 Real Option Values of DT Wheat ............. ............................................................... 16 Sensitivities ........ ..................................................................................................... 19 Summary and Implications ...........................................................................................22 References ...................................................................................................................25 LIST OF TABLES 1 Trait Development Assumptions in Real Option Model Parameters and Distributions .........................................................................................................14 2 Risk Premiums for Drought Tolerant GM Wheat, by Regions and Measures Of Trait Efficiency, ($/acres, RRAC=2) ................................................................. 15 3 Option Value Estimates for each Phase of Development ($ millions) .................. 16 4 Expected Returns by Region ..............................................................................20 ii LIST OF FIGURES Figure Page 1 Comparison of Distribution of Wheat Yields for Conventional (CT), Drought Tolerant (DT) with Trait Efficiency of .2 and .25, Prairie Gateway Region ........ 9 2 Option Tree for GM Trait Development.. ......................................................... 11 3 Option Values of 'Drought Tolerance' in HRSW Across Stages of Development Showing Minimum, Mean, and Maximum for Acreage in United States (Trait Efficiency=.20,$ in millions) ............................................. 17 4 Option Values of 'Drought Tolerance' in HRSW Across Stages of Development Showing Minimum, Mean, and Maximum for Acreage in United States (Trait Efficiency=.25, $ in millions) ............................................ 18 5 Ascending Cumulative Distribution for Option Values of Drought Tolerance Across Stages of Development in HRS at Trait Efficiency=.20($millions) ................................................................................. 19 6 Values From Option Tree for Various Paths Taken (For a Sequence of Option to Continue, Wait or Abandon) ............................................................ 21 7 Tornado Results for GM Wheat Trait Development.. ...................................... 22 iii Abstract There has been an increase in support for developing genetic modification (GM) technology in wheat. The purpose of this paper was to develop an analytical model to analyze the value of GM traits at different phases of development. To do so we developed a stochastic binomial model of real options. The results indicate that the value of drought tolerant wheat using GM technology is in-the-money at each phase of development. The greatest value would accrue to the Prairie Gateway and northern Great Plains regions in the United States. iv Valuing New Random GM Traits: The Case of Drought Tolerant Wheat Introduction Development of genetically modified (GM) crops is continuing on numerous fronts and in several countries. Wheat is one of the next crops to be commercialized with genetically modified ingredients. It will be one of the first food grains in which GM traits are introduced, and will likely be a precursor to similar developments in other food grains. Some traits have been targeted for many years in extensive breeding programs but, now some of these traits are targeted using GM technology and marker-assisted selection (MAS) which are thought to be prospectively lower cost and more effective than conventional crop improvement technologies. These are still costly technologies and research and development using these techniques are subject to numerous risks. GM wheat is currently being developed in a number of countries and by a number of companies. Traits under development in wheat using GM techniques include Fusarium resistance (Huso & Wilson, 2005; Tollefson, 2011a; Valliyodan & Nguyen, 2006), drought resistance in Australia, and protein quality. Since the late 2000s all of the major agbiotechnology companies have made announcements indicating their intentions to enter the GM wheat market and in 2011 there were field trials by a number of companies in the United States and Australia. Amongst these, the most common traits being pursued include yield, drought tolerance (DT) and nitrogen use efficiency. Of interest to this study is that drought tolerance is extremely random, and the value of the trait results from numerous random events. Trait development strategy is fraught with randomness and extended periods for development, which results in substantial risks. It is generally thought that developing a trait can take at least 10 years. The trait pipeline typically is referred to as comprising phases ranging from proof of concept to regulatory approval. Each of these steps takes several years, is costly, and the outcome is uncertain. The costs of trait development range upwards from $130 million, and Monsanto indicated its current effort in wheat will cost at least $150 million. Finally, revenue streams from trait development do not ensue until a period following regulatory approval. For these reasons, trait development is highly risky and strategic, and as a result, real options are an appropriate methodology for valuing traits during the trait development period. The purpose of this paper is to develop a stochastic model using real options to value drought tolerant wheat. The model builds on previous studies using real options to value investments in research and development (R&D) (Brach & Paxson, 2001; Jensen & Warren, 2001; Luehrman, 1997; Morris, Teisberg, & Kolbe, 1991; Seppa & Laamanen, 2001) and on the use of real options to value GM traits in crops (Carter, Berwald, & Loyns, 2005; Flagg, 2008; Furtan, Gray, & Holzman, 2003; Wilson, 2008). Its major contribution is that it captures the effects of numerous ex ante random variables impacting trait development, resulting in random outputs in a real option framework and interpreted in the context of firm-level decision-making. Stochastic simulation is used to account for randomness in variables representing uncertain 1 outcomes associated with development of GM trait(s) including uncertainty and cost associated with their commercial release. Background Wheat is one of the largest acre food crops, but has not been a recipient of the new technologies that have benefited com, soybeans, canola and cotton. Compared to these crops, wheat has been losing its competitiveness for a number of reasons. 1 Area planted to wheat in the United States has declined by 30-40% since the mid-1980s. During the same period, canola acreage in Canada has increased to now exceeding wheat acres, and there have been important geographical shifts in the composition of crops planted in these countries. Generally, this has been for lesser wheat acres and a gradual shift northerly and westerly to dryer areas. Since 1996 a number of GM traits have been introduced in competing crops. For com, Round-up Ready (RR), Bacillus thuringiensis (BT) and several other traits have been developed and widely adopted. Some of these are now stacked in multiples of three or four traits in a single variety. During 2011 there was attention to the emerging new traits and technologies in com (Birger, 2011; McMahon, 2011; "Search for Super Com Seeks to Limit Nitrogen Use, Pollution,n 2011) and challenges and opportunities for commercialization. Looking forward, a large number of traits are under development and expected to be commercialized in the next 10 or more years (Wilson & Dahl, 2010a, 2010b). For com, there are at least 21 new GM traits under development. Some are producer traits, some consumer and some processor traits. Some of these traits are developed individually and some through joint initiatives. A comparable number and composition of traits is under development for soybeans. One of the most important traits for com is drought-tolerance (DT) and after being under development for many years, it was deregulated in late 2011, and farm trials are planned for 2012 in North America. Development of GM wheat is important for a number of reasons (see (Wilson, 2004; Wilson, Janzen, Dahl, &Wachenheim, 2003) for a comprehensive discussion of the issues related to GM wheat). First, wheat will be one of the first food grains in which GM traits are introduced, and will likely be a precursor to similar developments in other food grains. Second, wheat is traded among many importing and exporting countries, and many of these have very different mechanisms for regulating trade in GM crops and for marketing products with GM ingredients. Third, there is no doubt demand will become highly differentiated for products produced withlWithout GM ingredients, and/or requirements to provide information to consumers, among these countries. 1 There have been numerous presentations to explain the extent of these changes. See in particular, Wilson (2008). 2 Several technologies exist for improving wheat including conventional breeding 2 , marker-assisted-selection (MAS) and genetic engineering (GM), amongst others. The focus of this article is on drought tolerance in wheat (discussed below). Drought tolerance has been a breeding goal for many years and has been described in the scientific literature for at least 40 years. Drought tolerance is felt to be difficult using conventional techniques due to the complexity of the plant's metabolic pathways to the plant. The appeal of using GM techniques for drought tolerance is that it may be more efficient in improving the crop. Integration of these breeding technologies (conventional, MAS and GM) has brought about a paradigm shift in crop development referred to "Seeds and traits" as a business function. It involves combining novel genetic traits with elite germ plasm to develop crops that thrive while expressing the desired trait. The steps include discovering novel genes, transferring them into the cells of plants, optimizing the expression of the genetic trait in plants in the correct plant tissues, at the appropriate time and in sufficient levels and incorporating, through breeding, the genetic trait into commerCially viable varieties or hybrids. As a business strategy, introduction of genetic traits via biotechnology does not reduce the importance of superior germ plasm in the host plant, nor does it replace the need for plant science and plant breeding (Dow AgroSciences, n.d.; Kaehler, 2006). Round-up Ready had earlier been developed by Monsanto as a GM trait for wheat, but was withdrawn in 2004 in part due to anticipated consumer resistance. It was ultimately deregulated in the United States but not commercialized. Concurrently, Syngenta was developing a fusarium resistant trait, but never pursued commercialization. Following a number of years in which wheat acres declined in North America, largely being shifted to com, soybeans, canola and cotton, a number of events unfolded which helped spawn the recent interest in GM wheat. One was a tri-Iateral agreement amongst grower groups supporting development of GM wheat. The other was the radical escalation in prices during 2008 which precipitated concerns by end users about the longer-term supplies and competitiveness of wheat. Monsanto was the first to announce their intent to expand into GM wheat. This was followed within months by announcements from each of BASF, Bayer Crops Sciences, Limagrain and DOW. Each of these companies are following work that has already been initiated in Australia by the Victoria Agrobiosciences Center (VABC) and CSIRO. Indeed much of the initial and early work was done in Australia in which their 2 As example, a salt-tolerant gene has recently been introduced into durum wheat using non-genetically modified genes by CSIRO and the University of Adelaide. 3 primary initial focus was on drought.3 These are in addition to near-simultaneous development of initiatives on GM wheat in China (Xia, Ma, He, & Jones, 2012). These firms and organizations have been pursuing varying strategies regarding acquiring germplasm, creating public-private partnerships, etc. In addition, to varying degrees they have each made claims about the traits they intend to develop using genetic modification. Most common, these include yield, drought tolerance and nitrogen-use efficiency, amongst others. The criteria for selecting these traits are not exactly clear. Most likely, these choices are a result of experiences with other crops, plant stress, and anticipated changing geography of production, in addition to concerns of future water availability and cost (James, 2011; Rice Today, 2012; Sindrich, 2012). Drought tolerance (DT) is an example of a stress trait. It has been described in numerous articles and is the foclJs of extensive media promotion (The Economist, 2011a, 2011b; Tollefson, 2011b; Wall Street Journal, n.d.). DT is also the focus for trait development in other crops including rice (Reyes, 2009). Genes are being identified to be activated by drought (Le., the efficiency gain by drought resistant gene is realized when drought occurs) so as to avoid any yield penalty in normal conditions and indicated that "Drought tolerant crops look to be one of the most promising upcoming biotech traits in pipeline, providing ability to produce 'more crop per drop' of water" (Fatka,2008). It is deSigned to provide farmers yield stability during periods when water supply is scarce by mitigating the effects of drought -or water stress -within a plant. Drought tolerance has been analyzed fairly extensively in the case of corn (see Edmeades, 2006 for a detailed summary as of that time). Early results indicated that drought tolerant GM corn could potentially improve yields by 8-22% (15% average) under drought stress that reduces yields by 50 percent. This is commonly referred to as 'trait-efficiency' which is a critically important parameter in analyzing values and inter firm trait competition. However, their comparisons do not distinguish trait efficiency between GM technology and that from market assisted breeding. Monsanto (Monsanto, 2008,2009,2010) indicated yield improvements of 6-10% in water stressed environments and testing of first and second generation DT com varieties ranges from 6.7 to 13.4% for first generation tests, 9-15% for second generation, 9-10% yield 3 The status and outlook in Australia is described in several places. including: Agrifood Awareness, GM Wheat-Fact not Fiction: A 7-10 year program of consultation and collaboration, available at http://www.afaa.com.aulGM_wheat_2010/AF AA_ GMWheatBrochure_WEB.pdf; and the most recent application for GM wheat trials in Australia are described at: International Service for the Acquisition of Biotech Applications, 2012, -Australia's Gene Technology Regulator Oks Trial for GM Wheat and Barley. and. Pocket K No. 38 Biotech Wheat, which is available at http://www.isaaa.orgiresourcesipublicationsipocketkl381default.asp. Finally. it was described previously at, http://www.financialexpress.com/newsidroughttolerant-gm-wheat under-trial-down-under/3291631 http://www.newscientist.com/article/mg 19826623 .500-droughtresistant wheat-beats-australian-heat.html. 4 advantages were reported in low drought seasons and 15% in a high drought. More recently, Monsanto's drought-tolerant trait in com (MON 87460) was deregulated in the United States and it is planning field trials for DT com in 2012. The company said 40 percent of crop losses in North America are due to sub-optimal moisture (Reuters, 2011). In addition to GM technology drought tolerance for wheat, alternative approaches to improve wheat include conventional breeding, as well as marker-assisted selection to improve water efficiency. There have been fewer studies in the case of drought tolerant wheat, in part because the trait discovery is just commencing (in 2010/11). In the case of GM drought tolerance, there have been 4 years of field trials in Australia. Results from those studies indicate that GM lines had yield 20 percent higher than conventional wheat varieties under conditions of drought stress (prospectively greater). A challenge in valuing GM traits is that development time is long, it is highly risky as a result of uncertainties of numerous variables which are random, and it is costly. Typically, trait development including regulatory review takes about 10+ years, costs about $100 million and consists of a number of distinct phases. Estimates of these costs are difficult since they ultimately are firm-level activities and information is not readily published. Goodman estimated that development of a GM trait costs $60 million and can take 15 years. Recent estimates for regulatory costs are in the $6 to $15 million range (Bradford, Alston, & Kalaitzandonakes, 2006; Just, Alston, & Zilberman, 2006). Finally, one of the more recent studies that estimated these costs (McDougall, 2011) indicated the average cost of GM trait development is $136 million, and takes 13 years, though there is substantial variability across firms and traits on these estimates. Monsanto has indicated it will spend at least $150 million on its wheat initiative, though this includes costs of germ plasm and breeding, in addition to MAS and GM. These costs reflect what are commonly referred to as discovery, proof of concept, early and advanced product development, and the regulatory phase, though the labels for these functions vary across firms. Valuing R&D in Crop Development Using Real Options Drought tolerance is of interest for a number of reasons. Most important for this study is that the value of traits that target drought is a result of numerous random variables and hence, the value of the trait is random. For these reasons it is ideally suited to be quantified using real options methodologies. Traditional methods for analyzing investment decisions in technology include net present value calculations, amongst others. However, these have difficulty capturing two important aspects that are important in valuing GM traits. One is the randomness throughout the development phase in numerous variables. The other is that technology (R&D) has embedded options which provide trait developers choices throughout the development process. By ignoring options and their value, there is a tendency to under-value technology projects, potentially resulting in an under-investment in R&D (Hayes & Abernathy, 1980; Hayes & Garvin, 1982; Schwartz & Trigeorgis, 2004; Schwartz, Trigeorgis, & Mason, 2004). 5 A number of recent studies have used a real options framework. The foundations are summarized in (Schwartz & Trigeorgis, 2004) who describe the evolution of this method and its role in valuing R&D. Features of the problem that are important include that 1) uncertainties are resolved through time and 2) managers have options that can be exercised throughout the duration of the project. Investments in R&D provide the option to continue, wait or abandon. Investing in R&D is equivalent to buying a call option and can be valued as a real option because it involves future opportunities, uncertainty and options. Earlier work on this methodology includes (Luehrman, 1997; Morris et al., 1991 for descriptions as to why real options can be used to model R&D); and applications by (Brach & Paxson, 2001; Jensen & Warren, 2001; Seppa & Laamanen, 2001). Since the process of crop development is staged in discrete phases and are measurable risks, there are uncertain outcomes to each stage, the real options approach lends itself well to use of this framework for valuation of GM traits. Investing in R&D buys the option to abandon, wait, or continue to the next phase of development, which buys the option to continue to the commercialization phase. The option value, derived at each phase, can be either in-the-money (ITM), or out-of-the money (OTM). If expected cash flows at an early development phase are positive, it is ITM and the developer would likely proceed to the next phase. If the value of the option is OTM, the developer can either wait, or abandon the project. This paper models R&D as a compound call option using a stochastic binomial option specification. The 'continue' growth option represents the decision to continue to the next phase and make further investment to get to the next phase. So long as the option is ITM, management could choose to invest and continue. Earlier studies have used real options to analyze the value of GM traits in wheat (Flagg, 2008; Carter et al., 2005; Furtan et al., 2003). The two earlier studies analyzed decisions from a public sector perspective and were modeled as post-development timing options which were irreversible and the values were derived using the Black Scholes model. Our approach differs from these in several respects. While these studies modeled the public costs and benefits of releasing a GM trait, we model the decision process of a private firm during the R&D process. Second, while these studies model a timing decision once the product is developed, we model real options confronting management of biotechnology companies during the development process. Their primary concern was the risks in the post-product development phase (e.g., the commercialization phase). In contrast, we model making R&D decisions through time and across phases of development. Lastly, many of the parameters are random in our approach, and for this reason we derived the option value at each phase using stochastic simulation. 6 Modeling GM Drought Tolerant Wheat Using Real Options Overview There are three steps to our empirical analysis. First we determine the value of DT wheat at the farm level. Second, we use stochastic simulation and stochastic efficiency with respect to a function (SERF) to derive the risk premium for DT wheat, which is interpreted as the expected value of the trait to growers. Farm budgets are simulated to measure risk and returns and SERF is then used to determine certainty equivalents with and without the trait. These results are used to derive the risk premium of the trait compared to no trait. The risk premium is defined as the value of the certainty equivalent that is required for a grower to be indifferent between the variety with and without the trait and is then used as the basis for pricing the new trait. Third. we use stochastic simulation and these values to derive the real option value of the R&D expenditure at each phase of development. Farm Budgets and Trait Efficiency We use farm budgets for each of the USDA defined crop reporting regions (USDA-ERS.2010). The analysis quantifies risk to growers with and without the trait. Measures of risk and return per acre were derived through simulation of budgets. for each region. Random variables include crop yields, prices, seed costs, and prices for chemicals and fertilizer. and the probability of drought. Historical data for current technology (CT) wheat yields, prices and costs were fitted to distributions by budget region using data from 1996-2010 (USDA-ERS. 2010). USing current technology, returns to labor and management were defined as: ......Eq. (1) Where TTi is the return to labor and management, P is price, Y is yield for Current Technology, S is seed cost, F is fertilizer cost, C is chemical cost, DC is other operating costs, and FC is fixed costs for region i and variables with A are random and drawn from fitted distributions. Yields for DT wheat were estimated relative to current technology yields (without the trait), trait efficiency and a probability distribution of drought coverage within the region. To accommodate a rightward rotation in yield distributions for drought technologies. yields for drought tolerant varieties were modeled assuming YDT =YCT + (MaxY CT -YCT) * TE * DCe ......Eq. (2) 7 Where CTrefers to Current Technology, YDr is the yield for Drought Tolerant, MaxYieldcr is maximum yield, Ycr is a random draw for yield, TE is trait efficiency is the trait efficiency for the drought tolerant variety and DC is Drought Coverage and is a random variable indicating distribution of the proportion of area covered by drought for the region. There are a large number of distributions used in this analysis (for each random variable and region, as well as drought by region) and are not shown here. but are available from the authors. Distributions for drought coverage were fitted from data from the National Drought Mitigation Center (2010). We assigned river basins to ERS Budget regions based on which basin was predominant within each budget region. Then data for the basin assigned to the region was fitted to derive distributions for drought coverage for the budget region. Correlations between yield and drought coverage levels were estimated by mapping the joint cumulative distributions for yields and drought coverage assuming yield losses are due solely to drought. This means the jOint cumulative distributions of yields and drought coverage were defined at percentiles of the distribution from 5 to 95% such that high yields were associated with low drought coverage and low yields with high drought coverage. Then correlations were computed from these jOint observations. While yield losses can occur due to other environmental differences, this implies that lower CT yields occur when droughts cover a wider area of the budget region and should represent an upper bound for the value of the drought tolerant trait. Trait efficiency is defined as the increase in yields as a result of the GM technology being inserted into conventional germplasm. While many companies are working on DT wheat, there are only a couple public references indicating efficiency for this trait. In our base case we define trait efficiency using results from field trials in Australia (the only published reference to date on trait efficiency). Results from these studies indicate a trait-efficiency of .20 and apply this to the yield difference from maximum yields for the region. This value was from results of field trials in Australia and implies that DT wheat variety can recover 20% of the yield loss attributable to drought. This is a critical value. There is also a subtle difference between corn and wheat in the interpretation of the probabilities. For corn, it is interpreted as 12 percent of losses can be saved during drought years due to the GM trait. whereas the results for wheat are interpreted that yields would be at least 20 percent more than conventional varieties under stress conditions. It is also a critical value for competition amongst trait providers as they try to compete by increasing their trait effiCiency versus their competitors. In the analysis, our base case assumes a trait effiCiency of .20 and we conduct sensitivities at .25. Increases in trait efficiency have the impact of shifting the function rightwards, as illustrated in Figure 1. 8 0.9 0.8 ~0.7 :c! 0.6 o... a.. Q) 0.5 I----------------~~---------------------------CT >;; ftI DT = .20 :i 0 .4 DT =.25 E ::l (.) 0 .3 0 .2 0.1 o 20 25 30 Yield (bu/a) 35 40 45 Figure 1 Comparison of Distribution of Wheat Yields for Conventional (CT), Drought Tolerant (DT) with Trait Efficiency of .2 and .25, Prairie Gateway Region. Stochastic Simulation and Risk Premiums for Grower Trait Valuation Monte-Carlo procedures using @risk (Palisade Corporation, 2007) were used to simulate the farm budgets with and without the DT trait. Random variables included yields, drought coverage, prices, and costs of seed, fertilizer and chemicals. In some cases, correlations among random variables were included. Budgets were iterated 10,000 times at which time stopping criteria indicated additional iterations would not improve the results . SERF was used to derive the certainty equivalent that growers would place on a risky alternative relative to a no-risk investment (Hardaker & Lien 2003, Hardaker, Richardson, Lien, Schumann 2004). Certainty equivalents were estimated for wheat with and without the DT trait, by region for a range of Relative Risk Aversion Coefficients (RRACs) ranging from risk neutral (RRAC=O) to highly risk averse growers (RRAC=4). These were used to derive risk premiums by grower risk attitude for the trait, which are used as inputs in the option model. 9 Real Options Methodology R&D in GM trait development is modeled as a compound option, consisting of the options to continue, wait or abandon. It is modeled as a binomial model using discrete event simulation which is one in which variables change at discrete pOints in time (in contrast to a continuous system is when state variables change continuously over time). The binomial model was specified as an option tree encompassing each of the phases of GM trait development, and simulated over a 15 year period. The model is an extension of (Jagle, 1999), which developed a real options model for "new product development" case. Different phases of the R&D and commercialization were defined along with estimates of the probability of success and costs for each phase (Seppa & Laamanen, 2001). The model specifies a binomial option tree with multiple steps. These are illustrated in Figure 2. The preceding number before the developmental stage corresponds to option 1 to continue, 2 for the option to wait and 3 for option for abandon. Thus a sequential depiction of such numbers before a developmental stage illustrates the options at each phase of trait development which is contingent on previous states. At the end of each stage, there is an option to continue wait and abandon. The option price is solved at the initial node of the tree, which is done by repeatedly applying the principles established above (Hull, 2004). The length of time is replaced with At years to account for the multiple steps in the binomial pricing method. fl = e-rMfpflu + (1-p)fld] ......Eq. (3) rllte -d P= u-d ......Eq. (4) 10 Continue w.tt Abandon C~I Color s.t ...e of development elrty Development 1112 Wilt 1121 Continue ~ U 11 Continue -e tz u--e Figure 2. Option Tree for GM Trait Development. Where n is the payoff corresponding to upper node u and lower node d, p and (1-p) are probabilities for reaching upper and lower node respectively; and r is risk-free rate of interest. Equation 4 is repeated and the following sequence of equations represents a multi-step binomial model ......Eq. (5) ......Eq. (6) ......Eq . (7) 11 Equation 6 is the payoff from the option that can reach the upper node consecutively, or, reach the upper node and then lower node. Equation 7 represents the payoff from reaching the upper node and then lower node or reaching lower nodes twice. Substituting from these equations we get n:::: e-2rAt[p2lluu + 2p(1-P)llud + (1-P?lldd] ......Eq. (8) The variables p2, 2p(1-p), and (1_p)2 are the probabilities that the upper, middle and lower nodes will be reached. The option value is equal to its expected payoff in a risk neutral world discounted to the risk-free rate of interest (Hull, 2004). The model is an extension of (Jagle, 1999), which developed a real options model for "new product developmenf case. The net present value of future expected returns (FER) for the agbiotechnology company is calculated from technology fees (TF), planted acres (PA) and projected adoption rate (PAR) and derived over 15 years after commercialization of trait is calculated as: nL PERt = c· TP t . PAt' PARt' (1/ (1 + I) 1\ Td i=O ......Eq. (9) where: t refers to the year after commercialization, c =technology fee ratio (Le., share of the trait value charged as a technology fee); TF = technology fee charged (for ilhyear) in $/acre equivalent; PA = planted acres (for ith year) for the crop; PAR =projected adoption rate (for ilhyear); I =weight adjusted cost of capital (~ACC) = 10 %); T = Time elapsed after trait is commercialized; i = the year after commercialization. The FER for 15 years after commercialization is then used to calculate nodal values of the binomial option tree using backward induction. The development time and investment costs are treated as random in the binomial option tree. Each phase has a probability that the GM trait would successfully proceed to next phase. The cumulative probabilities are from Monsanto (2008b) and converted into single period probabilities and then treated as risk neutral probabilities to derive the option value at each node (e.g., development phase). The risk neutral probability for any node is solved as: ......Eq. (10) Where: P = risk neutral probability; r = risk free interest rate; tp =time in the phase of development; S =current value of project; S+ =Present value of cash flow at the end of 12 phase, in case of upward movement and S. = Present value of cash flow at the end of phase, in case of downward movement. Monte-Carlo simulation was used to quantify the real option values due to the numerous distributions, some of which are binomial, and some were non-normal. Valuations were derived for individual regions, aggregated to compose a U.S. market value, and then were used to evaluate the logic of the option model. The option values were simulated 10,000 times at which time stopping criteria indicated additional iterations would not improve the results. Assumptions Assumptions were made for the analysis and are defined below and in some cases are relaxed in the sensitivities. Trait prices are based on a relation to the value of the trait to growers which are derived from risk premiums. In our base case, we assumed a relative risk aversion of 2 to derive the risk premium. This was relaxed in sensitivity since the distribution of growers' risk preferences is not known. In this sensitivity we derived risk premiums for three different levels of relative risk aversions which were 2, 3 and 4. From these we simulated the trait fees assuming a triangular distribution of trait valuations. Trait prices are assumed to equal 30% of the value of the trait to the grower, though this is a simplification of a broader more complicated problem of GM pricing.4 Typically, agbjotechnolo~y companies price traits such that they capture 50% of the value of trait to growers. However, Monsanto indicated a change in strategy and that in the future they would seek to capture 30% of the value of the trait to the grower (Monsanto 2010). Hence, we used the distribution of trait values as shown in Table 1 as the underlying value from which the trait price was defined as .3 of that value. This implies that prices would vary regionally which is a common practice. Acres planted were defined by USDA crop budget regions and used the percent of acres planted to each region as a point of departure (USDA-NASS, 2010). From this 4 Further, this research focuses on valuing a single trait, and prices of that single trait. This is much more complicated for stacked traits. See (Gillam, 2011) and (Shi, Chavas, & Stiegert, 2010) who explore pricing stacked traits, and (Magnier. Kalaitzandonakes. & Miller. 2010) . 5 This is a simple view of a very complicate firm-level optimization problem on trait pricing. Traditionally. the technology fee is defined as % the value of the risk premium as defined above (i.e .• half of negative exponential utility weighted risk premiums). This is in line with what published news in Bloomberg suggests wherein analyst Mark Gulley commented on Monsanto that MThey are in essence splitting the value of extra yield 50-50 ft (Kaskey, 2009). Monsanto has since indicated it will reduce prices for its most expensive crop seeds next year by as much as 75% in a bid to combat market share gains by DuPont.(Kaskey, 2010). 13 we used an aggregate planted acre of 53.47 million acres with a 5 percent standard deviation. The adoption rate was specified as a triangular distribution, the values of which were subjectively determined reflecting data on adoption rates for GM traits (James, 2008) and industry trends. Specifically, penetration increases and reaches a peak in year 7 after introduction, at 70% of the targeted area, and declines thereafter. Adoption of drought tolerant varieties would be insignificant unless there are consecutive years of drought. To incorporate this in the model, the projected adoption rate is correlated with drought occurrence in the prior year. In the case of drought in the previous year, the random draw of adoption rate would tend towards the maximum, else, towards lower half of distribution. The probability of occurrence of drought is modeled as drought coverage area (random) derived from fitted distributions for drought coverage from National Mitigation Center (2010) for each respective region for each of the 15 years after commercialization. Table 1. Risk Premiums for Drought Tolerant GM Wheat, by Regions and Measures of Trait Efficiency, ($/acre, RRAC=2). Trait Efficiency 0.2 0.25 Region $Iacre Heartland 16.4 20.5 Northem Crescent 6.37 20.44 Northern Great Plains 8.58 10.72 Prairie Gateway 9.2 11.5 Eastern Uplands 2.14 13.71 Southern Seaboard 2.63 3.21 I Fruitful Rim 8.74 8.97 Basin Range 3.34 4.18 The salvage value represents the value the company may get by abandoning the project at any stage of development or by licensing it out to other competitors. Since these values are not known, they are evaluated in the simplest (first option tree) scenario wherein salvage option values are all the bottom nodes. Duration and development cost are each random variables and were taken from previous publicly accessible reports (Monsanto, 2008, 2009). The duration of each phase, along with its development cost and probability of success were defined and shown in Table 1. 14 Table 2. Trait Development Assumptions in Real Option Model Parameters and Distributions. Phase of Develo pment Dlstrib ution Type Discovery Proof of Concept Early Develop ment Advanced Develop ment Regulatory Sub mission Time (years) Uniform (2,4) (1,2) (1,2) (1,2) (1,3) Investment ($million) Uniform (2,5) (5, 10) (10,15) (15, 30) (20,40) Cumulative Probability Discrete 0.05 0.25 0.50 0.75 0.90 Single Period Probability Discrete 0.20 0.50 0.67 0.83 0.90 Source: Monsanto (2008b), Flagg (2008) Empirical Results First we show and interpret some of the derived values that are parameters in the real option model. Then, we describe the results from the real option model, managerial interpretation and then show results from some sensitivities. Derived Inputs for the Real Option Model An important variable into the ex-ante valuation of any GM trait is its valuation. Ultimately, this is the basis of pricing of the GM trait. These were derived using SERF procedures, and interpreted as the certainty equivalence of reduced uncertainty related to use of the GM trait, versus not. Results are shown in Table 3. These indicate that the greatest value, on a per acre basis in the base case is for Heartland, Northern Crescent, Eastern Uplands, followed by Prairie Gateway and Northern Great Plains. These indicate that the greatest value, on a per acre basis in the base case is for Heartland, Northern Crescent, Eastern Uplands, Prairie Gateway and Northern Great Plains at $6.40, $6.37, $12.14, $9.20 and $8.58 per acre respectively. Strictly, a value of $8.58/acre is the value of the DT trait in the Northern Great Plains and reflects the value of the increased yield and reduced risk associated with the DT trait, versus conventional technology. Thus, in the extreme case if the price of the trait exceeded this value, the grower would choose conventional technology. If the trait price is less than this value, the GM technology would be chosen. These values were derived assuming a RRAC=2. The change in the risk premium with improvements in trait efficiency is important. Our base case assumes published values in Australia. However, biotechnology companies compete on trait efficiency, ultimately trying to choose events that have 15 greater efficiency than that of their competitors. We simulated impacts of a trait efficiency=.25. In this case, the value of the trait increases by $2 to $4/acre for the major wheat producing regions. This is a very important figure and is an indicator of the prospective increased profitability associated with greater trait efficiency. Finally, for comparison, values for DT corn using similar methodologies are lesser than those shown here. In corn, the trait efficiency is in the area of .12, versus wheat which is about .20. Thus, for corn, as example in Northern Great Plains, the risk premium for DT is about $6.39/acres, vs. $8.58/acre for wheat indicating the value of improved resistance to drought is apparently much greater for wheat than corn. This is largely driven by the measures of trait efficiency for the traits in the two crops. Real Option Values of DT Wheat: Real option values were derived for each phase and for each region. In addition, since this is a stochastic model, the distributional parameters are important. First we describe the aggregate results for each phase. Then, we show the results for each region. The base case results are shown in Table 3 for both the base case and one with trait efficiency = .25. The results indicate that the real option value is in-the-money at each phase of development. It increases from $12 million at the discovery phase, to $77 million during proof of concept, and ultimately to $419 at the point of regulatory submission. It is of interest that in all simulations the minimum values exceed nil. Thus, the likelihood that the real option value is OTM is nil which would provide substantial confidence about the future payoff. Table 3. Option Value Estimates for Each Phase of Development ($ millions). Development Phase Trait Efficiency Parameter Discovery Proof of Concept Early Development Advanced Development Regulatory Submission Base case .20 Mean 12 77 176 301 419 Min 3 37 90 166 250 Max 25 139 305 498 651 StD 3 15 31 49 62 .25 Mean 16 100 227 384 526 Min 6 50 120 218 316 Max 31 176 383 623 812 StD 3 15 31 49 62 Real option values and their distributions across phases are shown in Figures 3 and 4. The distribution of real option values increases as R&D moves through the development phases. This is illustrated in the CDFs (Figure 5) and in the spreads between the minimum and maximum in Figures 3 and 4. Looking forward from the beginning of development, the amount of uncertainty escalates through time. However, 16 both the mean and standard deviation increase through the development phase. The coefficient of variation decreases through the development phase (i.e., from .23 in the discovery phase to .14 at regulatory submission) meaning the greater risk in more advanced phases is offset by a proportionately greater expected real option value. These relationships are also illustrated in Figure 6. Here the vertical axis is the NPV, and the others show the development phases, and the combinations of sequence of options that may be chosen. The option to continue (11111), when chosen consecutively till the last stage of regulatory submission, provides highest return for trait value (Figure 6) at nearly $419 mi llion. The sequence 11113 is to continue for first four stages and then abandon and the NPV is shown accordingly. The sequence 11121 (a sequence of continue, continue, continue, wait and continue), 11211 and 12111 provide the same final value of $267 million despite choosing the option to wait at different stages of development. Also note that all three outcomes refer to trait having completed 4th (Advanced development) stage of development (as there are four 1s in them, thus the option to continue was chosen four times). Real option values for DT wheat were derived for each of the wheat producing regions. These are shown in Table 4 and shown for the final development phase. The regions that would have the greater values are Prairie Gateway and the Northern Great Plains at $225 and $266 million respectively. There is no doubt that these are the regions being targeted by the technology companies . Values in all other regions are substantially less. Option Values Across Stages of Development .(00 =600::IE 500 400 300 200 100 (SinMillions,20% Eff. Gain) ---- o · Discovery Proof of Concept Early Development Advanced Development Regulatory SUbmission -Mean Min Ma. S imula1ion 1 0.20 Drought Tolerance in HRSW Min Mean Max ~ 3,411,179 12,021,269 24,585,008 36,452,322 76,937,656 138,864,899 89,899,279 176,295,015 304,839,531 o..lIIaprnen 186,138,437 301,281,004 497,455,131 ~Slilmlsllon 249,880,718 418,875,764 651,088,370 Figure 3. Option Values of 'Drought Tolerance' in HRSW Across Stages of Development (Trait Efficiency=.20,,$ in millions). 17 900 C!e tion Values Across Stages of Development ~ 800 F 2:700 600 _ (Sin MiUians~2S%Ef...Gain) ----------::;,0.".,.-"-------- - Dis covery Proof of Concept Early Development Advanced Development Regulatory Submission -Mean Simulation 2 0.25 Drought Tolerance in HRSW Min Mean Max ~ 5,707,476 15,897,497 31,096,782 49,997.412 99,964,266 175,877,117 ~ 120,239,552 226,526,141 383,274,967 217,723,191 383 ,457,289 623,391 ,570 SI.tIn'MIIcIn 315,581,585 526,425,114 811,641 ,198 Figure 4. Option Values of 'Drought Tolerance' in HRSW Across Stages of Development (Trait IEfficiency=.25, $ in millions). 18 5.0'l~ 0 .0% 0.01 O.OOS 0.006 0. 004 1 0.002 5.0% 68.S% 8.. !1__ VaiJes ;n ~(5) -HRSW / Regulatory Su bm issi o n (Simi/I) -HRSW / Advan ced Deve ;oprnent (S;mlll) -HRSW / Early De velopment (Simi/I) -HRSW / Proof of Co ncept (SImi/I) -HRSW / DiscOJery (S imi/I ) Figure 5. Cumulative Distribution for Option Values of Drought Tolerance Across Stages of Development in HRS for Trait Efficiency= .20 ($millions). Sensitivities One of the most important variables that affect the real option value is what we refer to as trait efficiency. For illustration, we ran the model for a trait efficiency of .25 and these results are shown in Tables 3 and 4. The impact of increasing trait efficiency from .2 to .25 is to increase the risk premium to growers, and the real option value to the trait provider. In this case, the real option value increases at each development phase. At the point of regulatory submission, the value increases from $419 to $526 million. Thus, the value of increased trait efficiency is about $107 million to the trait developer. This is a sUbstantial increase in real option value, and hence the reason that trait firms spend so much time identifying the best event, and testing it substantially to verify its efficiency. Sensitivity was also conducted to determine the random input variables having the greatest impact on variability in the NPV of returns. These are shown in Figure 7 (this is a tornado diagram using regression coefficients from @risk). These results indicate that the most important factors that negatively impact variability in output is the 19 time period for regulatory submission and discovery followed by uncertainty in development. Uncertainty in the technology also has a positive impact on the output variable. T bl e 1 E xpectedReturns)y Ra b egion Efficiency Gain 20% 25% Region $ Million Heartland 65 82 Northern Crescent 25 32 Northern Great Plains 266 207 Prairie Gateway 225 281 MissisSippi Portal 14 17 Southern Seaboard 5 6 Fruit Rim 36 41 B'Range 22 28 I ..Derived as: 1) over 15 years after commerCialization; and 2) uSing a technology fee of 30-50% of the traits value. The advantage of real option methodologies over NPV procedures is that the option tree captures decisions that management can take at the end of each development stage. The risk associated with distribution of values at each stage is accounted in subsequent stages of development, providing a full potential pathway of option tree for all 'what if scenarios. Management can therefore directly compare the value of GM trait at any stage without worrying about "had a different combination of option to continue or wait been chosen". For example, it is clear that GM trait development has maximum value if it is allowed to continue at all stages of development. Different combinations and sequence of options to continue and wait have potential to provide next best trait value, which also implies that given different market conditions, decisions can be chosen to maximize the value of trait development. Such comparisons cannot be done using NPV alone. i 1 I i t,20 i i $450,000,000 - $400,000,000 $JSQ,UOO,ooo . 11111 . l1U3 . 11112 $300,000,000 . 11121 . 11122 $250,000,000 11211 . 11212 $200,000,000 . 11221 11222 . 12111 $I~O,OOO,OOO 12112 12121 $100,000,000 $50,000,000 12111 12112 12121 11122 12211 11221 12222 1221l 12122 lUll 12212 11221 11222 12221 11212 11 211 12222 !J1l2 111 21 11112 11IB 11111 Figure 6. Values from Option Tree for Various Paths Taken (For a Sequence of Option to Continue, Wait or Abandon) 21 lime (in Years) / Regulatory Submission Time (in Years) / Discovery Prairie Gateway / Tech Fee Ratio Investment / Discovery lime (in Years) / Advanced Development lime (in Years) / Early Development Time (in Years) / Proof of Concept Planted Acres HRSW / Tech Fee Ratio Investment / Proof of Concept Planted Acres HRSW / Tech Fee Ratio Heartland / Tech Fee Ratio Investment / Regulatory Submission Salvage Value / Proof of Concept Investment / Advanced Development B'Range / Tech Fee Ratio Investment / Early Development HRSW / Discovery (Sim ... Regression Coefficie ... ·0.51 LI'I M .... o .... N M ci o ci ci9 9 9 Coefficient VaL .. Figure 7. Tornado Results for GM Wheat Trait Development. Summary and Implications Wheat has been losing its competitiveness relative to competing crops, particularly those that have access to GM technology, notably corn, soybeans, cotton and canola. Partly in response to this, there has been an increase in grower support for developing GM technology in wheat. Many of the agbiotechnology companies have responded and are all in the process of evaluating and developing traits for this crop. Important in this evaluation is that trait development takes a long period of time, there are many risks associated with development, and it is costly. 22 The purpose of this paper was to develop an analytical model that could be used to analyze the value of GM traits at different phases of development. To do so we developed a stochastic binomial model of real options. Compared to other studies, this study modeled the private managerial decisions and captured to the extent possible the numerous sources of risks throughout the trait development process. The results indicate that the value of drought tolerant wheat using GM technology is in the money at each phase of development. Second, the value of GM drought tolerant wheat exceeds that of drought-tolerant com (Shakya, Wilson and Dahl, 2012). These results no doubt indicate why most of the agbiotechnology companies are developing this trait, amongst others. The greatest value would accrue to the prairie gateway and northern Great Plains regions in the United States, though there would be similar value in numerous other countries which were not the focus of this study. The value of the trait has growing uncertainty throughout the trait development process, looking forward from the inception. However, the variability in NPV diminishes at each phase looking forward. For any probability of success at a developmental stage, the expected value of the trait increases with subsequent stages of development. Also, for a certain value of GM trait, there is less risk associated in later stages of development. A trait that is more likely to be discarded for development such as drought tolerance in initial stages due high probability of being OTM becomes increaSingly ITM as the developmental stages pass. The option tree provides the leverage to management to choose the option to wait by recognizing the need of market conditions and still be able to get next best value for the GM trait by deciding to continue later on. Such flexibility is absent when investment decision is made solely on NPV. There are both public and private implications of these results. From a private perspective, the positive values provide encouragement for further development of this trait. However, the value is not as great as other traits in other crops and as such, this likely means that any variety of wheat would have to have a combination of stacked traits to be commercially acceptable. Finally, that most of the companies are working on similar traits is important. Ultimately, competitive pressures will force companies to strive for the greatest trait efficiency as possible, which as illustrated here, has an important impact on trait valuation. The public implications of these results differ from those of previous studies in part due to the scope of these studies. Here the results indicate positive strategies option values of developing GM traits, in this case, drought tolerance, for wheat. This is encouraging such development, but, in the future as these become commercially available, then many of the issues that are important for post development commercialization (e.g., as discussed in Carter, Berwald & Loyns 2005; Furtan, Gray & Holzman 2003), strategies for segregating (Wilson & Dahl, 2005), and overall welfare implications of GM wheat (Wilson, DeVuyst, Taylor, Koo, & Dahl, 2008) will become important. Finally, there are a number of future studies related to the methodologies 00 results here. 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Retrieved from http://www.croplife.org/PhillipsMcDougaIIStudy McMahon, K. (2011, August 30). Seed pipeline: Future corn traits increasingly more complex I Corn hybrids content from Farm Industry News. Farm Industry News. Retrieved from http://farmindustrynews.com/corn-hybrids/seed-pipeline-future corn-traits-increasingly-more-complex Monsanto. (2008). 2008 Annual Report (Annual Report No. 2008b). Retrieved from http://www.monsanto.comlinvestors/Pages/archived-annual-reports.aspx Monsanto. (2009, May 7). Drought Tolerant Corn. www.monsanto.com. Retrieved May 7, 2009, from Monsanto. (2010, July 10). Monsanto R&D Pipeline. www.monsanto.com. Retrieved July 10,2010, from Morris, P. A, Teisberg, E. 0., & Kolbe, A L (1991). When Choosing R&D Projects, Go with Long Shots. Research Technology Management, 34(1), 35. Palisade Corporation. (2007). @Risk: Risk Analysis Software. Retrieved May 5,2012, from http://www.palisade.com/ Reuters. (2011, December 22). U.S. approves Monsanto drought-tolerant GM corn. Reuters. Washiongton. Retrieved from I ! i 26 http://uk.reuters.com/article/2011/12122/us-usa-biotech idUKTRE7BL 19A20111222 Reyes, L. C. (2009). Overcoming the toughest stress in rice: Drought. International Rice Research Institute, Rice Today, 8{3 July-September), 30-32. Rice Today. (2012, June). Developing Countires Continue to Embrace GM Crops, 11(2),7-8. Rice Today. (2012, April..June). Rice Next to Get Salt Tolerance Gene? p.8. Schwartz, E. S., & Trigeorgis, L. (2004). Real options and investment under uncertainty: classical readings and recent contributions. MIT Press. Schwartz, E. S., Trigeorgis, L., & Mason, S. P. (2004). Real options and investment under uncertainty: classical readings and recent contributions. MIT Press. Search for Super Corn Seeks to Limit Nitrogen Use, Pollution. (2011, April 15).BusinessWeek: Homepage. Retrieved from http://www.businessweek.com/newsI2011-04-15/search-for -super -corn-seeks-to limit-nitrogen-use-pollution.html Seppa, T. J., & Laamanen, T. (2001). Valuation of venture capital investments: empirical evidence. R&D Management, 31(2). Shakya, S., Wilson, W., & Dahl, B., (2012). Valuing New Random Genetically Modified (GM) Traits in Corn, AE Report , Department of Agribusiness &Applied Economics, North Dakota State University. Shi, G., Chavas, J., & Stiegert, K. (2010). An Analysis of the Pricing of Traits in the U.S. Corn Seed Market. American Journal of Agricultural Economics, 92(5), 1324 1338. Sindrich, J. (2012, February). Developing Economies: New Face of the Biotech Boom. Farm Chemicals International. Retrieved from http://www.farmchemicalsinternational.com/magazinel?storyid=3428 The Economist. (2011 a. FebnJary 23). The adoption of genetically modified crops:Growth areas. The Economist. Retrieved from http://www.economist.comlblogs/dailychartl2011/02/adoption -genetically _modifie d_crops The Economist. (2011 b. March 17). Climate change and crop yields: One degree over. The Economist. Retrieved from http://www.economist.com/node/18386161 Tollefson, J. (2011a). Drought-tolerant maize gets US debut. Nature News, 469(7329). 144-144. doi:10.1038/469144a Tollefson, J. (2011b). Drought-tolerant maize gets US debut. Nature News, 469(7329). 144-144. doi:10.10381469144a USDA-ERS. (2010). Commodity Costs and Returns: U.S. and Regional Cost and Return Data. USDA Economic Research Service. Retrieved May 5, 2012. from http://www.ers.usda.gov/Data/CostsAndReturns/testpick.htm Valliyodan. B., & Nguyen, H. T. (2006). Understanding regulatory networks and engineering for enhanced drought tolerance in plants. Current Opinion in Plant Biology, 9(2). 189-195. doi:10.1016~.pbi.2006.01.019 27 I , I [ I I Wall Street Journal. (n.d.). Western Great Plains Growers Gearing Up To Plant Monsanto's New DroughtGard Hybrids. Wall Street Journal. Retrieved from http://online.wsj.com/article/PR-CO-20120221-906840.html William W. Wilson, E. L. J. (2004, May 15). Issues in Development and Adoption of Genetically Modified (GM) Wheats, 6(3), 101-112. Wilson, W. W. (2008, February 5). Challenges and Strategies for Commercializing GM Wheat. Presented at the National Association of Wheat Growers. Retrieved from http://www.wheatworld.orglwp-contentluploads/biotech-bill-wilson-presentation 20080205.pdf Wilson, W. W., & Dahl, B. (2010a). Competition and Dynamics in Market Structure in Corn and Soybean Seed -Competition Policy International (CPI). Competition Policy International-Antitrust Chronicle. Spring 2010(Volume 4 Number 2). Retrieved from https:/lwww.competitionpolicyinternational.com/competition-and dynamics-in-market-structure-in-corn-and-soybean-seedl Wilson, W. W.. & Dahl. B. L. (2005). Costs and Risks of Testing and Segregating Genetically Modified Wheat. Applied Economic Perspectives and Policy. 27(2), 212-228. doi:10.1111~.1467-9353.2005.00222.x Wilson, W. W., & Dahl, B. L. (2010b). Dynamic Changes in Market Structure and Competition in the Com and Soybean Seed Sector (Agribusiness & Applied Economics Report No 657 No. 58487). North Dakota State University, Department of Agribusiness and Applied Economics. Retrieved from http://ageconsearch.umn.edulhandle/58487 Wilson, W. W., DeVuyst, E. A., Taylor. R. D., Koo, W. W., & Dahl, B. L. (2008). Implications of biotech traits with segregation costs and market segments: the case of Roundup Ready® Wheat. European Review of Agricultural Economics, 35(1),51-73. doi:10.1093/erae/jbn003 Wilson, W. W., Janzen, E. L., Dahl, B. L., & Wachenheim, C. J. (2003). ISSUES IN DEVELOPMENT AND ADOPTION OF GENETICALL Y MODIFIED (GM) WHEA TS (Agribusiness & Applied Economics Report No. 509). North Dakota State University>Department of Agribusiness and Applied Economics. Retrieved from http://ageconsearch.umn.edulhandle/23497 Xia, L., Ma, Y., He, Y., & Jones, H. D. (2012). GM Wheat Development in China: Current Status and Challenges to Commercialization. Journal of Experimental Botany, 63(5), 1785-1790. doi:10.1093~xb/err342 I I tf t 28 I I CENTRAL OREGON CENTRAL OREGON IRRIGATION DISTRICT 1055 SW Lake Court, Redmond, OR 97756 Phone: 541.548.6047 Fax: 541.548.0243 www.coid.org IRRIGATION DISTRICf A MUNICIPAL CORPOR AT ION OF THE STATE OF OREGON (j !I!I 17-12-24 NW Quarter Water Right History NE NW Contract Water (signed 1910) -31.0 acres NW NW Contract Water (signed 1906) -35.0 acres S Yz NW Contract Water (signed 1904) -55.0 acres There were minor tweaks to the water and land partitions over the last 100 + years bringing the water to the current configuration: NE NW -30.0 acres NW NW -34 .65 acres SE NW -13 .60 acres SW NW -37.40 acres ---------- - -- Hilary Garrett Page 3 1/30/2014 Appendix A: Testimony from Central Oregon Irrigation District c eN'( ORE 'ON lRRJ ' J liON DI 'rRl :'T 11155 SW Lnke ( 'OUIT, Kcdmnnd, OK 'J77!C, Phunl'; 1, 8,604 1 F' ; 54 1.54 8.0' J . ol d.o r e ,\ ~4U I·. 't:I".\L t:n .. ,.n" I\Tlnr-. Or' -Hr .T\T. 0" c""l'arJr-. Oct ber . _00 Kev in Keill r \ ia Em ;/: /., I!;II r dgp wi rcl ,COm City of B nd Pl an ning mm i lone r Parrick Oliv e r Vi a Email : par a ol i\·c rc:g.com Cit)' o f Bend Planni ng ComIll i Ile r CliffWalkey I/ia Em il: ~\'( \'@b(,fl db r ood /li d. fII 11)' of Be nd Planning C rnm iss lOne r Nathan H ovek.lmp Via E1II1I1 : nho l·ekalllp y ahoo. com City of Bend Planni.ng Commi • iO I'l!r Jod ie" Bnrram Vi a Eill 11 : j dba r r .Im @ilo rll/ail. ,lI/; C ity o f Bend PI::mn in g C a mIlli -lo ne r teve M iJl er ia Elllai/: miller belldbroaabalia colII Ci t)' of Bend PI ; nning Conun is:;ion ;r Do nald Senecal Viti E III , il: d f/(lII dcorh'@'bell fb r oo dand,co m Ci t)' of Bend Planning onun i ner Re: Bend Planning Co rum' ion \\'ol'k ion -October 6. 1008 -5:3() PM [)e ,u' mrni ss ione We ap pre iute th e city's coll ec ti vt' nne/H I n to th.e UGB EX P:lO i n pr . Cil)' C lmd lors, Pl a nning Co mmi sJOners and _I .ff have de di cate d man ' h urs crnfli.n and e aJu ating methods :ind alt ern.:J.ti v . CO W al so fe c gn iz es th e ffi rt s f taff and the Cou nc il and th e Pl:Jnn in g Co mm i sio n to \ rk with CO lD oope rarive \' on v:tfi nd re sp nding to (' mm nts throu gh ut the UG B prores:.. T he w o rking da, be t' re I nig ht' hear ing p pare ntl w ith the q ll!s ti 11 of due pr ss , nd wi th th e rious fi v ie w and CENTRAL OREGON (j -.,.~~rJ.-.......~7:4~i;.,. 'lI!!! ?.... >~ I!J IRRIGATION DIsrRIcr 17-12-24 NW Quarter Tax Lot I NNP IV-NCR, LLC 305 305 301 302 302 304 300 405 401 406 I Hamby 400 I Ray 403 Use Acres 2013 Pond 0.2 Dry Irrigation 5.9 Instream Irrigation 4.5 Dry Pond 0.3 Full Irrigation 11.1 Partial Irrigation 5.4 Instream Irrigation 3.1 Partial Irrigation 4.5 Instream Irrigation 19.65 I nstream/Full Irrigation 50.1 Instream Irrigation 4 Partial Irrigation 6.5 Partial 2012 Dry Dry Partial Full Partial Instream Dry Instream Beneficial Use 2011 2010 2009 2008 Dry Dry Dry Dry Dry Full Full Full Partial Partial Partial Partial Full Full Full Full Partial Full Full Full Dry Dry Dry Full Dry Dry Full Full Dry Partial Partial Partial Instream/Full Partial Partial Partial Instream/Futl Instream Instream Dry Dry Instream Partial Partial Partial Partial Partial Partial Partial Partial Partial Partial 2007 2006 2005 2004 I Dry Dry Dry Dry Full Full Full Full Partial Partial Partial Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full I Partial Partial Dry Dry , , Partial Partial Partial Partial i Partial Partial Dry Dry Partial Partial Partial Partial Partial Partial Partial Partial - CENTRAL OREGON IRRIGATION DISTRICT 1055 SW Lake Court, Redmond, OR 97756 Phone: 541.548.6047 Fax: 541.548.0243 www.coid.org Hilary Garrett Page 4 1/30/2014 I. Where is the detailed analysis for Alternative 4 on number of irrigated acres per irrigation district and loning class as had been provided by City statf for alternatives I. :! and T~ 2. The legal.justification for Ahemative 4 provided by City staff in Iheir October .l :!008 memo for adding additional resource acres in Area B and Area C is erroneous. Staff dtes soil studies provided to the staff by private developers for the first time claiming that there are soils that rate at Class VII or below lcompletely non-fannable) even when irrigated. The staffs memo to the Planning Commission on September 19. 2008 for Alternative .~ included these same lands but never mentioned the soil studies for justification of inclusion into the UGB. This contradicts the Oregon Departn);!nt of Agriculture's testimony submitted to the Commission in July 2007 (altached I that states there are no soils in the UGB study area that are below Class IV if irrigated. This testimony was further substantiated by official National Resoun:-e and Conservation Service (NRCS) soil class maps Ihat were submitted into lhe record. COlD has requested City slaff to provide lheir substantiation for lhe claim that there are soils that rate at Class VII or below even when irrigated. Damian Symik sent COlD an email this afternoon on how 10 obtain these soul\'e documents from the City web site. but we have not had time 10 review prior to submitting this leiter . .'. There has been no detailed evaluation of potential confliels between future urb.1Jl activilies and agricultural activities. or impacts 10 the irrigation districts with any of the proposed UGB alternatives except for the number of irrigated acres. City staff" merely mentions this in its list of disadvantages for all the UGB alternatives. The fact is that all four "hernati ves impact between 1.300 to nearly 1.7(Xl acres of irrigation district lands with no discussion of fmancinl or operational impact leaves imporlant questions unanswered. In addition. the issue of public safety with locating additional development rear open main canals and laterals IS likewise not addressed. While the irrigation districts have been lreeling with City staff [his paSI year discussing all of the issues mentioned above. the results of those conversations appears to be a discounting of irrigation district input and concerns. Thank you. in advance. for your consideration of our request. Sincerely. steveV\. CJolt\V\.$OV\. Steven C Johnson District Secretary Manager .'c: Damian Syrorck -Vi(l Elnlli1:ds)Tm'/"@ci.he1ld.or.uJ Elizabeth Oickson-COlD Legal Counsel I 0.2 ac. 5.7 ac. 0.6 ac. 5.2 ac. 0.3 ac. 1.4 ac. 1.2 ac. 7.3 ac. 3.2 ac. 2.8 ac. 2.2 ac.1.0 ac.0.5 ac. 3.2 ac. 3.1 ac. 1.0 ac. 0.5 ac. 3.3 ac.0.2 ac. 6.5 ac.0.2 ac. 0.7 ac.0.5 ac. 3.2 ac. 4.9 ac. 1.2 ac.3.1 ac.5.9 ac.4.5 ac. 0.3 ac. 1.3 ac. 1.2 ac. 11.6 ac. 0.37 ac. 1.55 ac.1.34 ac.1.26 ac. 0.15 ac. 21.7 ac. 11.1 ac. 10.8 ac.7.65 ac. 0.03 ac. 0.319 ac. 0.319 ac. 0.319 ac. 00406 00401 0040000402 00206 00302 00304 0040100400 00400 00403 00305 00400 00201 00300 00405 00301 00600 00700 00806 00106 00116 00102 00900 00115 00111 00105 00500 00600 00800 00100 00200 00700 0040000600 00500 00500 BUTLER MARKET RDHA M E H O O K R D LOSSERRANOSDR A- 2 4 - 1 0 A-24-10-5 A - 2 4 - 1 0 - 3 A-24-10-8 A- 2 4 - 1 0 - 4 11 COID 2004 IMAGERY 171224NW 1/40 200 400100Feet ± Date: 2/4/2014 PHOTO DATE: 7/22/2004 1 File # PA-13-1I2C-13-1 I Applicant NNP -IV-NCR, LLC Concern: Applicant wants to change a property from Agriculture to Rural Residential representing zone change from E.F.U. To MUA-10-171 Acres Commissioners Baney, Debone, & Unger and Planning Dircetor Lelack, Applicant argues that subject property is not agricultural land protected by Goal 3 thus does not request an exception to statewide planning Goal 3. Applicant's argument that subject property is not agricultural land is based on highly questionable interpretations of the lands soil classifications and its agricultural economic potential. Because the applicant's proposal does not meet all statewide goals it does not cOmply with Goal 3 and should be denied. The most obvious reason the proposal should be denied is the fact that the land is classified Agricultural by its E.F.U. status. Other concerns # 1 Soil Classification a) Under definition of agricultural lands Goal 3 lands are defined agricultural if they consist of Classification I-VIII soils and are suitable for farm use, with water rights trumping soil classifications. The subject property consists of 171 aces approximately two-thirds of which is covered with water rights for irrigation purposes. The applicant states that the soils classification are not suitable for agricultural purposes. The majority of the soils are classified 1 IV soil and are suitable for farm use, with the water rights providing further suitability as set forth on OAR-660-03-0020 (1) (9) (B). The purpose of mentioned ordinance and the responsibility of elected officials is to protect agricultural lands and croplands and keep these lands in the inventory of the county's agricultural lands as defined by law. #2 Applicant argues that the land is not suitable for agricultural purposes because of its inability to make a profit. a) Soil fertility is inadequate states applicant. This can easily be improved (if even needed) by crop rotations and green manure crops which are plowed under and build up the soil capa'City to hold water and create nutrients such as nitrogen's and phosphates. Improved fertilizers are slow release which allows them to work through growing season of a particular crop before the value ofthe fertilizer is simply watered into the subsoil. b) Suitability for grazing is inadequate states the applicant. The expense numbers given by applicant are not realistic. They are using figures as if the property had 00 infrastructure existing on the premises, which is not the case. Using and upgrading not only existing buildings but also the irrigation system would eliminate many of the projected costs suggested by the applicant, t saving thousands of dollars making the property manageable under a farm plan. \ c) Applicant argues climate conditions forbid profitability of agricultural practices. This f I I I argument simply does not hold up. Nearly all E.F.D. Lands in Central Oregon and Deschutes County have the same weather conditions effecting growing season, etc., give or take two to three weeks. Certain crops thrive in our environment. For example, the cold night temperatures create higher protein counts in crops such as alfalfa, which has become a major export crop to emerging markets in need of high protein feed. This example has grown considerably in the past few years and will continue to do so at a quickening pace in the future. There are many options today, that we did not see as possible twenty years ago, to create profit and sustainability on our RF.U. Lands. We have entered the golden age of Agriculture. d) Water for farm irrigation purposes --applicant argues property is not suitable for irrigation purposes but is better suited for other uses due to the soils, etc. This is a flawed concept and it is very important to keep water rights with the land, and until the State of Oregon completely changes the defmition of beneficial use, the arguments by the applicant are redundant and inapplicable. e) Applicant suggests surrounding land use patterns are not wholly compatible with agricultural practices. Untrue. "Right to Farm" allows farming practices to continue regardless of surrounding land use patterns. Farmers are protected to carry out their needs of production to insure the stabilization o(RF.D. lands and their productivity. f) Technological and energy inputs are an economic concern for applicant. All farming and operations in any part of the state requires technological and energy improvements. These are part of the evolution of farming which has kept our country in the forefront of world agricultural production. It is these very issues that have allowed us to be the number one producer of protein for the ever-increasing world population. Often these improvements can lower the cost of productivity allowing greater profit for the land and the owner. In summary, I see no way to get from RF.U. T\to MUA-lO designation under State Goal 3 simply by stating the property is non-agricultural when by all definitions it is agricultural. It is not the land that is responsible for production, it is the land owner and his or her responsible stewardship. The applicant's proposal does not meet all statewide goals, does not comply with Goal 3 and should be ~1! iJl/d.... ~h Redfield 68860 Goodrich Road Sisters, OR 97759 Bonnie Baker From: Robin Vora <robinvora1@gmail.com> Sent: Sunday. February 02, 2014 10:26 AM To: Board; Planning Commission Subject: Newland proposal I urge you to not allow Newland to circumvent Oregon's protective land use laws and approve Newland's request to convert farm, open space and wildlife habitat outside the Bend urban growth boundary into a residential subdivision. Butler Market Road is already busy and we don't need more residential sprawl in Deschutes County. Thank you for your time and consideration. Robin Vora 1679 NE Daphne Dr. Bend, OR 97701 1 Bonnie Baker From: Chuck <chuckinsisters@msn.com> Sent: Monday, February 03, 2014 9:18 PM To: Board; Tammy Baney; Tony DeBone; Alan Unger Cc: Nick Lelack Subject: Newland Hearing on 5 February 2014 Attachments: Newland letter. doc Dear Commissioners, ! I am attaching a letter regarding the Newland Hearing on the morning of 5 February 2014,which I am unable to attend. I would appreciate it if you would take my comments into consideration during your deliberations. Thank you. Chuck Humphreys Sent from Windows Mail 1 Charles I I t above the national poverty level that year for a family of four. And because of the extremely skewed distribution of farm sizes (the median farm size is just 29 acres f compared to the average farm size of 425 acres), the median farm income in Oregon was i Jcertainly below the poverty line. USDA's classification of farms reflects the fact that r PO Box 653 Sisters, OR 97759 Home: 541 549 1943 Mobile: 541 815 1543 chuckinsisters@msn.com Tuesday, February 11, 2014 Board of County Commissioners Deschutes County 1300 NW Wall st. Bend, 0 R 9770 I Dear Commissioners, I am writing to urge you to deny the Newlands request to reclassify its EFU lands so they can be developed for residential housing. As I am unable to attend the 5 February 2014 hearing in person, I would appreciate it if you would include these written comments in the record. The crux of the New lands argument is that its lands can never provide sufficient returns from any farming to support the land owners and should therefore be converted to non farm use. They base this argument on a detailed financial analysis of farming costs and revenue. While it is possible for a reasonable person to dispute many of their assumptions and figures, engaging in that discussion would obscure the fact that their argument is based on the wrong premise. For most farmers throughout the US and in Oregon, the viability of owning farm land depends on much more than farm income. It is precisely the value of these additional factors, as well other, considerable social benefits, that the EFU designation seeks to capture. By focusing only on income viability, Newlands' argument ignores them completely. The facts clearly support the view that farming is not only about farm income. The majority of farmers, in both the US and Oregon, require nonfarm income to survive. Based on the 2007 Agricultural Census, less than half of all farms had positive net farm income. Less than half the farms listed farming as the primary occupation; in Deschutes County it was only about 40%. Of the 1.2 million "principal farm operators" in the US, nearly 90% received over three-quarters of their household income from nonfarm sources. The average net farm income in Oregon in 2007 was only about $23,000, just I I "fanning" is more than just about fanning income: 71 % of US farms are classified as "limited resource farms", "retirement farms", and "residential lifestyle fanns." Therefore, it would be wrong to declassify Newland's EFU lands on the basis of its presumptive analysis that its lands are incapable of supporting the owners imancially. More importantly, doing so would establish a disturbing precedent that could totally undermine land use policy in Deschutes County, because it would allow the majority farmers to claim a similar declassification, on the basis that they cannot survive solely on farm income. Newland demonstrates no compelling private or social reason for such a sweeping change in land use policy. Newland has other options, most notably working to have its lands incorporated into Bend's UGB when justified by urban growth, which would allow for the development it seeks, while preserving the State's and the County's land use principles. I urge you to uphold the decision of the Hearings Officer by denying the Newland appeal. Sincerely, Charles Humphreys Bonnie Baker From: Kimry Jelen <kimry@kimryjelen.com> Sent: Wednesday, February 05, 201411:26 AM To: Board; Tammy Baney; Tony DeBone; Alan Unger Subject: Newland Board of County Commissioners Deschutes County 1300 NW Wall St. Bend, OR 97701 February 5th 2013, Dear Commissioners, I am writing to urge you to deny the Newlands request to reclassify its EFU lands so they can be developed for residential housing. As I am unable to attend the 5 February 2014 hearing in person, I would appreciate it if you would include these written comments in the record. We live in a beautiful place here in Oregon. Oregon is a special place -that's why developers want to develop here. We need to stick to a plan or make a plan that values ALL aspects of what makes this area special. It appears the Newland development people made a gamble in purchasing that land hoping they could develop it. Gambles don't always work out. Please do not give this matter anymore attention, deny it. This is not how we care for your lands, our future generations, water and community here in Oregon. End of story. Thank you, Kimry Jelen PO Box 736 1 Sisters OR 97759 2 i ~ I I I I t ! i I f ! I. I I I f