HomeMy WebLinkAboutHearing - Roe-Harry - Measure 49Deschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701 -1960
(541) 388 -6570 - Fax (541) 385 -3202 - www.deschutes.ort,
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of December 9, 2009
Please see directions for completing this document on the next page.
DATE: October 12, 2009
FROM: Steven Griffin Legal 330 -4645
TITLE OF AGENDA ITEM: L'
Remand Hearing on application of Marie Harry and Debbie Roe, Trustees, and Marie Harry,
individually, for a determination of whether they are entitled to relief under Ballot Measure 49, Section
5(3).
PUBLIC HEARING ON THIS DATE? Yes
BACKGROUND AND POLICY IMPLICATIONS:
Section 5(3) of Ballot Measure 49 allows a Measure 37 claimant who received a waiver of land usi
regulations to continue and complete the use described in the waiver if the claimant obtained a "vested
right" on December 6, 2007 to complete that use.
Four recipients of Measure 37 waivers applied to the county for an administrative determination of
whether they have achieved a "vested right" under the law. The applications were referred to a heLrings
officer who ruled that the applicants were not entitled to relief. Because Measure 49 states that suk h
local determinations are not "land use decisions" final county determinations on this issue proceed to
circuit court not the Land Use Board of Appeals.
In this case, the applicants petitioned the court to review the county's determination and partially
prevailed in that action. The trial court concluded that the county had misconstrued the applicable law,
vacated the decision, and remanded the matter to the county to be reconsidered under the correct ld.gal
standard.
The proposed agenda item would be the county's reconsideration pursuant to the court's judgment.
The questions presented at hearing will include: (1) As of December 6, 2007, what is the total cos for
the applicants to "complete the use described in the waiver "? (2) As of December 6, 2007, how much
had the applicants spent to complete the land use? (3) What is the nature of the expenditures? (41 Were
the expenditures reasonable, not adaptable to another permitted use, and otherwise incurred in go( d
faith? (5) Considering the expenditures and other legal factors, had the applicants achieved a con mon
law vested right to continue and complete the land use?
FISCAL IMPLICATIONS:
The board's ultimate decision will have a negligible fiscal impact. Conducting the remand hearin ; will
potentially result in cost savings.
RECOMMENDATION & ACTION REQUESTED:
Hold a hearing and render a decision.
ATTENDANCE: Steven Griffin, Deschutes County, Assistant Legal Counsel;
Ed Fitch, Attorney for Claimant;
Marie Harry and Debbie Roe, Claimants.
DISTRIBUTION OF DOCUMENTS:
Deschutes County Legal Department
Community Development Department
DESCHUTES COUNTY LEGAL COUNSEL
TO: Board of County Commissioners
RE: Laura and Marie Harry,
Remand Hearing
STEV
As '
?3 t.45
FIN
I Counsel
Date: December 3, 2009
File No. 4/4 -019
This is a "legal staff report" for the public hearing to determine whether on
December 6, 2007 Laura and Marie Harry had obtained a "common law vested
right" to complete the 9 lot residential subdivision tentatively approved by the
county in TP -05 -0964 and MA- 07 -03.
FACTS
The Harrys own an 80 acre parcel of properly in the Redmond area. The
Harrys applied for and received Measure 37 waivers from the county and the
state on May 11, 2005 and April 14, 2006 respectively. They applied for and
received approval to divide the parcel of property into 9 Tots. The approval states
that 8 of the nine lots will be approximately 5 acres in size; the 9th lot will be
comprised of the western one -half of the property and will be approximately 40
acres in size. The large lot will remain an agricultural lot. The 8 smaller lots will
Page 1 of 9, Legal Staff Report Re: Laura and Marie Harry
each contain one home. One home currently exists on the eastern one -half of
the property. Therefore, this project will result in a net increase of 7 homes.
After the enactment of Ballot Measure 49 the applicants applied for a
declaration that they had obtained a "common law vested right" to complete the
subdivision tentatively approved by the county in 2005. A county hearings officer
denied the application. The matter was "appealed" to the Deschutes County
Circuit Court on a writ of review. The court held that the county had
misconstrued the law and directed the county to reconsider the decision in light
of the legal standards articulated by the court in its decision. The purpose of this
hearing is to determine whether or not the applicants had obtained a common
law vested right as of December 6, 2007 to complete this now unlawful land use.
ISSUES PRESENTED
Issue 1. As of December 6, 2007, how much had the applicants
spent to complete the land use? What was the nature of the expenditures?
Were the expenditures reasonable and otherwise incurred in good faith? In other
words, what are the total allowable expenses which should be included in
determining the "Holmes ratio" 1?
Recommended Answer. Allow $106,254.74 in expenses.
Issue 2. As of December 6, 2007 what was the total project cost?
Taking the total project cost figure what is the corresponding "Holmes ratio ?"
Recommended Answer. The total project cost for infrastructure is
1 The Holmes ratio is contained in the Oregon Supreme Court decision in Clackamas County v.
Holmes, 265 Or 193, 508 P2d 190 (1973) which is explained in the "Discussion" section below.
Page 2 of 9, Legal Staff Report Re: Laura and Marie Harry
approximately $200,000.00. Total project cost including the cost of 7 homes
should be from $900,000.00 to $1.075 million. Accordingly the recommended
"Holmes ratio" is 10.8% (1:9) to 13.3% (1:7.5).
Issue 3. Considering the "Holmes ratio" derived from the figures
obtained in Issues 2 and 3, and the other legal factors, do these applicants have
a "vested right" to complete the proposed project?
Recommended Answer. Provided that the board finds that total project
cost is less than $1.5 million (which would entail a home cost of approximately
$170,000.00 per home), the board should consider granting the application.
DISCUSSION
Legal Standard Vested Rights
The right of a landowner to continue and complete a land use in spite of a
change in the law which would make the land use unlawful is known as a
"common law vested right." The Oregon Supreme Court in Clackamas County v.
Holmes, articulated several "factors" which decision makers should consider in
determining whether a developer has achieved a common law vested right to
complete a land use rendered unlawful by a change in law.
The Holmes factors are:
(1) The ratio of expenditures incurred to the total cost of the project;
(2) The good faith of the landowner;
(3) Whether or not [the landowner] had notice of any proposed zoning
or amendatory zoning before starting his improvements;
(4) The type of expenditures, i.e., whether the expenditures have any
relation to the completed project or could apply to various other
uses of the land;
Page 3 of 9, Legal Staff Report Re: Laura and Marie Harry
(5) The kind of project, the location and ultimate cost; and
(6) Whether the acts of the landowner rise beyond mere contemplated
use or preparation, such as leveling of land, boring test holes, or
preliminary negotiations with contractors or architects).
Clackamas County v. Holmes, 265 Or at 197 -99.
Much of the "vested rights" discussion centers on the "Holmes ratio" of
expenses incurred in good faith to total project cost. No particular ratio is
determinative. Not all Holmes factors apply in every case and the weight to be
afforded any factor varies depending on the particular circumstances of each
case. Union Oil Co v. Board of Co. Comm. of Clackamas Co., 81 Or App 1, 8,
724 P2d 341 (1986). The vested rights determination is a case -by -case factual
exercise. See Holmes, 265 Or at 197.
Issue 1. As of December 6, 2007, how much had the applicants spent to
complete the land use? What was the nature of the expenditures? Were
the expenditures reasonable and otherwise incurred in good faith? In other
words, what are the total allowable expenses which should be included in
determining the "Holmes ratio "?
Discussion
The following is a line -by -line analysis of the applicants' claimed expenses.
Each expense is detailed, discussed, and then counsel makes a recommendation
regarding the total amount which should be allowed. Previously, the hearings officer
had allowed a total of $2,400.00 in expenses. As discussed in the introduction
above, the hearings officer disallowed any expenses incurred after June 15, 2007.
The trial court ordered the county to "reassess" post -June 15, 2007 expenditures.
The court did not make a specific determination as to each claimed expense. This is
a task for the board.
Page 4 of 9, Legal Staff Report Re: Laura and Marie Harry
In determining whether to allow or disallow an expense, the board should
consider such factors as:
(1) the good faith of the property owner;
(2) whether the claimed expense is sufficiently linked to the approved
development;
(3) whether the claimed expense is reasonable; and
(4) whether the expenditures could apply to various other uses of the
land.
The applicants presented and the county approved a 9 lot subdivision.
The home would result in a net increase of 7 homes. There is one home
currently on the property and the larger lot is not contemplated to have a
dwelling. The following is a discussion of the expenses:
Povey and Associates $4,372.50
Background. Applicants submitted two invoices from Povey and Associates for
engineering fees. Some of the fees related to an earlier, failed application. The
failed application and the successful application were similar. Applicants
submitted an affidavit stating that approximately $1,000.00 in work was solely
attributable to the failed application.
Opinion. Approve $3,732.50 in expenses.
Septic Fees $4,355.00
Background. Applicants have submitted a claim to allow $4,355.00 in septic fees.
These fees relate to the condition of approval for septic systems.
Opinion. Allow $4,355.00 in septic fees.
Legal Fees, Bryant Emerson and Fitch $8,729.00
Background. Applicants have submitted invoices for $8,729.00 in legal costs.
Not all costs appear to be sufficiently linked to the development to be included in
the common law vested rights calculus.
Page 5 of 9, Legal Staff Report Re: Laura and Marie Harry
At a minimum, the following claimed expenses should be questioned:
Date Charge Discussion
12/7/07 to 12/28/07 $1,387.50 Legal charges incurred after December
6, 2007 not allowed.
11/12/07 to 12/6/07
$2,110.00 Charges related to vested rights are not
an allowed expense. The applicants
submitted two affidavits from attorneys
relating to conferences on November 12
and 14 stating that the vested rights
discussion was "limited" and more of a
generic discussion rather than a
discussion about a particular application.
Nevertheless, the charges do not appear
to be allowable expenses.
Opinion. Allow $5,231.50 in legal expenses pursuant to chart above.
Western Water Development $38,863.00
Background. Applicants have submitted an invoice from Western Water for
$38,863.00. This is for drilling of several wells on the property for the subdivision.
Opinion. Allow $38,863.00 in well drilling expenses.
Star Excavation and Trucking, Inc. $43,405.07
Background. Applicants claimed $43,305.07 in expenses related to excavation
and construction of the road necessary for the subdivision. The invoice submitted
is labeled "estimate" but testimony at the first public hearing established that the
work was complete. Based upon the adaptability standard applied by the board,
these would be allowable expenses.
Opinion. Allow $43,405.07 in road excavation fees.
ACME Engineering $8,132.67
Background. Applicants submitted an invoice related to road engineering
services. The services appear to have been performed after the subdivision
application was modified to its current configuration.
Opinion. Allow $8,132.67 in engineering expenses.
Page 6 of 9, Legal Staff Report Re: Laura and Marie Harry
Legal Expenses, Stanley Clark, PC $7,487.71
Background. Applicants submitted multiple invoices from attorney Stanley
Clark. The applicants limited the invoices to line items marked with a star. There
is no indication of who marked the invoices and whether or not that person had
any personal knowledge of the specific work performed by Mr. Clark.
Additionally, there is a line item of $1,300.00 for advanced costs to an
engineering firm which is not supported with an invoice for services rendered.
Opinion. Disallow expenses due to inadequate documentation. Alternatively,
allow $6,187.77 in attorney fees.
Title expenses $150.00
Background. Applicants submitted a receipt for a $150.00 fee related to a
subdivision guarantee.
Opinion. Allow $150.00 fee.
Fees, Deschutes County $2,385.00
Background. Applicants claimed a fee to Deschutes County for $2,385.00.
Opinion. AIIow $2,385.00 in fees.
RECOMMENDATION
AIIow $106,254.74 in expenses calculated as follows:
Legal Fees $ 5,231.50
Excavation $ 43,405.07
Septic $ 4,355.00
Title fee $ 150.00
Other fees $ 2,385.00
Well expenses $ 38,863.00
Engineering $ 8,132.67
Engineering (Povey) $ 3,732.50
TOTAL $106,254.74
Potential Atty Clark Fees $ 6,187.77
Adjusted Total $112,442.51
Issue # 2. As of December 6, 2007 what was the total project cost and
corresponding Holmes ratio?
Page 7 of 9, Legal Staff Report Re: Laura and Marie Harry
DISCUSSION
Throughout the various proceedings counsel and the applicants have
agreed that the total project cost for infrastructure is approximately $200,000.00.
This figure has been substantiated with the invoices outlined above and an
affidavit establishing an estimate of costs of remaining infrastructure.
This project consists of a net increase of 7 homes. Accordingly, the total
project cost should be in the following range:
Incurred Costs + Remaining Infrastructure + Cost of Homes=
Total Project Cost.
$106,254.74 + $93,000 + 7 homes @ 100,000.00 per home2 = $ 899,254.74.
$106,254.74 + 93,000 + 7 homes @ 125,000.00 per home = $1,075,254.74
RECOMMENDATION
Holmes ratio counsel's recommendation: 10.8% (1:9) to 13.3% (1:7.5).
Holmes ratio applicants' recommendation: 23% (1:4.3).
Issue # 3. Considering the "Holmes ratio" derived from the figures
obtained in issues 1 and 2, and the other legal factors, do these applicants
have a "vested right" to complete the proposed project?
DISCUSSION
The supreme court has stated that the "ratio" of incurred to total costs is
only one factor to be considered in determining a "vested right:"
Other factors which should be taken into consideration are the good
faith of the landowner, whether or not he had notice of any
proposed zoning or amendatory zoning before starting his
improvements, the type of expenditures, i.e., whether the
expenditures have any relation to the completed project or could
2 There is evidence in the record to substantiate this figure and it has been a figure accepted in
previous vested rights cases.
Page 8 of 9, Legal Staff Report Re: Laura and Marie Harry
apply to various other uses of the land, the kind of project, the
location and ultimate cost. Also, the acts of the landowner should
rise beyond mere contemplated use or preparation, such as
leveling of land, boring test holes, or preliminary negotiations with
contractors or architects. * * * "
Clackamas County v. Holmes, 265 Or 193, 197 -99, 508 P2d 190 (1973).
All of these other factors enable the board to determine whether or not the
applicants have made "substantial" progress (within the meaning of the law)
towards completion of this now unlawful land use.
RECOMMENDATION
There are disputes concerning whether certain claimed expenses should
be allowed. Using all of counsel's figures still leaves an amount of expenditures
in excess of $100,000.00 in allowable expenses.
Provided that board finds that total project cost is not more than $1.5
million, the board should consider granting the application. Based upon
counsel's calculations, total project cost in excess of $1.5 million would involve a
cost of a home to be approximately $175,000.00.
cc: Mark Pilliod
Dave Kanner
Bonnie Baker
Page 9 of 9, Legal Staff Report Re: Laura and Marie Harry