Loading...
HomeMy WebLinkAbout2008-09-10 Work Session Minutes Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, SEPTEMBER 10, 2008 ___________________________ Present were Commissioners Dennis R. Luke, Michael M. Daly and Tammy Melton. Also present were Dave Kanner, County Administrator; Erik Kropp, Deputy County Administrator; David Givans, Internal Auditor; David Inbody, Assistant to the Administrator; Sue Brewster, Lt. Gary Decker and Capt. Marc Mills, Sheriff’s Office; Laurie Craghead and Mark Pilliod, Legal Counsel; Tom Anderson, Peter Gutowsky and Anthony Raguine, Community Development; Anna Johnson, Communications; Judy Sumners, Risk Management; and approximately twenty other citizens including Hillary Borrud of The Bulletin and other representatives of the media. Chair Luke opened the meeting at 1:30 p.m. 1. Redmond Humane Society Update. Dave Kanner wanted to bring the Board up to speed on this issue. On July 21, a discussion took place regarding the County providing a loan to pay off the society’s construction loans. The total is over $1.4 million. The Board asked for three things at that time: an audit, a fundraising plan, and a draft loan agreement. A full-blown audit was not done; the agreed-upon procedure was not at the same level. The final draft is not ready for distribution as it needs a signature from the Society’s Board. There are not many surprises, though. It was a very limited review, which indicates that there is proper supporting data for almost all transactions, for the 75 largest transactions from the past year. All disbursements appear to the legitimate and ordinary business. There are no formal disbursement approval policies and none of the documents show evidence of supervisory approval. They have not been managing finances as they should have. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 1 of 12 Pages Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 2 of 12 Pages The auditor said that checks were signed with little oversight, but it is possible that was not required. The organization seems to always pay its bills late, is constantly in arrears and still has a big backlog of accounts payable. Nothing much is new. It was not in just one particular area; it is all over the board. They have had a cash flow problem for many years. They wait for cash to come in and typically pay off the oldest bills; 45 of the 75 transactions were handled in that way. They have been working on getting financial policies in place. Essentially the review indicates they were not spending money inappropriately; expenses were legitimate but there is a lack of fiscal controls. The formal fundraising plan has not yet been done. They have a lot of ideas but have not put together a plan. There is a public informational meeting tonight, where they plan to lay out the history of what happened and the current situation. There are talking with an attorney, Tom Sherwood, who has had a lot of experience dealing with this type of situation and who was referred to them by County Counsel. At this point, they indicate that they have reduced all of the expenditures to a bare bones level. Even at this point they have a structural deficit, which at best case is about $4,300 a month and at worst-case $16,000 per month. There are differing assumptions about revenue sources. They simply do not generate enough revenue. Both of these scenarios assume that the County will take over the construction loans. A question being raised is whether this organization can survive past the end of the month. They can, although October is uncertain. Legal Counsel and he recommend that the Board does not enter into the agreement at this time. There are potential serious ramifications with the County substituting itself for the banks’ bad loans. Commissioner Luke asked if the City of Redmond is being kept informed. Mr. Kanner replied that they were a participant at the August 29 meeting. They don’t have the draft audit at this point but the Board meets with them in the morning. One problem is that the agreement does not work in any form without the concurrence of HSCO due to the trust. HSCO met last night and won’t enter into any agreement until they see a fundraising plan and are satisfied it is realistic. Mr. Kanner agreed that this is proper. This would be a four-way agreement between the County, the two Humane Societies and the banks. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 3 of 12 Pages There is no guarantee that the organization will survive even if the County takes over the loan. HSCO has to sign off, and this asks the trust to take money to which HSCO may be entitled. HSCO would be the sole beneficiary but would then have to pay off the debt. Mark Pilliod said that Redmond is entitled to its share of the proceeds as long as it operates. If it no longer operates, it won’t get any more and HSCO gets it all. Mr. Kanner stated that there is quite a bit of unsecured debt, about $120,000. The worst-case scenario is that this could end up in bankruptcy court. The judge could stay the reversionary clause. He can’t recommend entering into the agreement but the organization will not survive if the County doesn’t help; it’s the worse possible catch-22. They can probably take some more time to work on this, as they are getting different opinions from various attorneys regarding how to secure the County’s interest. They need a realistic fundraising plan. There has been a lot of talk about the event center, but in his opinion, it is a white elephant. Perhaps it could be partitioned and sold off. There is no current way to make money off of it. And it is a difficult time to be trying to sell a small industrial parcel. He recommends continuing to work on the loan agreement but protect the County’s interest. The fundraising plan needs to be satisfactory to HSCO, who is being logical. They want to see Redmond continue to operate as they don’t have capacity to take in the animals. The timing is bad. Commissioner Daly said that it looks like if the County backs away, they will be forced to close. HSCO will get the entire estate and there will be no way to pay off the loans other than through foreclosure. The County has a reversionary clause so the banks don’t have as much security. Commissioner Luke noted that the Board members could have some personal liability. Mr. Kanner stated that there is not much else for them to do other than get a fundraising plan in place. He has talked with HSCO to get them comfortable but they aren’t there yet. The Board needs to be aware of how dire the situation is. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 4 of 12 Pages Commissioner Daly stated that letting it close is a terrible option. He asked who else can save the facility. The County needs it, as does the Sheriff and the City of Redmond. It looks like the County may have to take it over. The debt is mostly secured by the property. Mr. Kanner said that it can’t be sold off since there would then be no shelter. Commissioner Daly added that people try hard to keep these kinds of facilities going and government does not do enough to help them. The County needs to do more as it will be in trouble without it. He suggested that more be done to see how to make it work. Commissioner Melton stated that the onus needs to be on their board and fundraising. It can be done. Others have had similar issues and have pulled themselves out of it. They need to finish this. She asked how close they are to completing the plan. Commissioner Luke said that the County did increase the fee and share for dog licensing to both shelters. There is an advantage to having the humane societies run these facilities. He does not want to see a dog pound as such. The animals don’t stay long and don’t get adopted as much. Commissioner Daly asked about the ratio between the two shelters is regarding the number of animals. Diane Gokey replied that last year HSCO had about 5,000 with 11 full-time staff. Redmond had about 2,500 with about the same overall staff level. Redmond’s staff is now at 6.5 or 7 full-time. However, HSCO has more volunteer help available, and Redmond takes in the large animals that can result in more expense and work. Commissioner Luke asked what is going on with the fundraising part. Ms. Gokey replied that they have been working with Vancouver Humane Society to get ideas about an annual walk and a lounge dinner, which can bring in a lot of revenue. They have been doing this for years, and will help in any way they can. The plan is also to go to the Chambers of Commerce, the cities, the downtown groups and others. They just did one event that brought in about $1,400, but it’s a start. A golf tournament fundraiser is in the works. An event in conjunction with the Boys & Girls Club could be held at Brasada. Eagle Crest will host three events a year. A Christmas fundraiser is also planned, selling photos of pets with Santa. Last year there was a fundraiser called cowboys and critters, put together with 4-H. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 5 of 12 Pages This will not all happen tomorrow. At this point, it would be just packaging up the plan; a lot of planning is involved. Commissioner Luke asked if there is disagreement about the numbers, and how they would make up the shortfall. Tom Sherwood, an attorney from Portland who is now working for the shelter, said that he deals with this type of situation quite often. For the last few weeks, they have been doing other work, other than fundraising. The history is disturbing, and resulted from a series of errors and a lack of communications. The problem has been going on for years. Redmond cannot be brought out of the red without help. They’ve been involved with little fundraising and a lot of deficit spending for a long time. Commissioner Melton asked if they should move forward with the loan agreement at this time. Mr. Sherwood replied that he does not have the responsibility or the expertise to make that recommendation. There are concrete assets. Collectively, under the right set of circumstances, there needs to be enough to pay back the debt and operate in the black. The stakeholders need to sit down and come up with something realistic. Commissioner Luke stated that the membership would be meeting soon. Someone needs to demonstrate that they can bring in revenue. Mr. Kanner indicated that they need about $4,100 for a study and short-term operations. Today’s update was to let the Board know what is happening, but this issue is time-sensitive. Mr. Sherwood said that there is income from the Teater trust from the mobile home park. He added that the person who handles the trust, Mr. Karnopp, has entered into an agreement with one of the creditors to pay that particular obligation, which is secured by the trust. Mr. Kanner indicated that he is referring to the two notes with Columbia River Bank. Commissioner Luke said that work on this should continue and the Board needs to be updated weekly. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 6 of 12 Pages Jane Ohlemann asked to speak for a moment. She said that the Save our Shelter group has been trying to meet with the current board and offer its help, but the board has declined each time. She met with the interim director for the same reason but was fired as a volunteer, even though she has volunteered for years. The group wants to help. There are thirty to forty people who are willing to put their names on a list as a board. They need fifteen board members right now. The group is willing, but the current board and director are not listening to their offers of help. 2. Event Venue Text Amendment: Deschutes County Sheriff’s Office Comments and Concerns. Commissioner Luke said that a letter from the Sheriff was received in regard to events, in particular wedding events and the proposed text amendment. Sue Brewster explained that they are trying to be proactive, since problems could result. There are already some problems so they can foresee that this will continue. There is no real way to handle the noise and traffic. Lt. Gary Decker explained the kind of calls they have responded to in the past. The biggest problem has been the failure of the County to take action on code enforcement issues. Law enforcement gets the calls but typically just on the noise ordinance. In Powell Butte, they have recently gotten fifteen calls regarding traffic and noise. There have been four calls on Neff Road and three on Sunday Lane. Now there could be unintended consequences regarding public safety because the complainants are not seeing results; they are doing things to disrupt the events. The problem is escalating. The noise ordinance is too vague. Capt. Mills added that they are not opposed to people making money using their properties if used and zoned properly. But when people move to rural areas and set up businesses inappropriately, this puts the Sheriff’s Office in a bad position. Ms. Brewster said that this is an ongoing issue, and they are seeing more commercial uses all the time. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 7 of 12 Pages Commissioner Luke observed that there are a lot of laws that a vague. Many times infractions are ignored, and some are hard to enforce. Commissioner Daly said that the Sheriff told him that there could be areas where this is appropriate as it does not disturb anyone. This is one reason the Board decided to hear the appeal. There might be places where this could be conditionally allowed. Capt. Mills replied that people will often do something if they can. Some should not. The Sheriff’s Office will get calls even if something is allowed in some places. In some instances, there have been situations that were out of control. Lt. Decker added that the outdoor mass gathering ordinance created unintended additional work for the Sheriff’s Office, especially in regard to noise levels. The theory to incorporate this was good, but it creates more work since someone must monitor it. Ms. Craghead said that measuring decibels was a carryover from the previous law, which was seldom used. Commissioner Melton asked if there are any specific recommendations or ways to make it more workable. Lt. Decker said that there could be circumstances where a neighbor isn’t close, but there could be other factors. Capt. Mills added that it is up to the people in the area. They are the ones who will call. The Sheriff’s Office has to respond if it is law. They end up having to explain the laws on the books to people and why they are not enforcing them. Ms. Brewster said that the rural roads sometimes cannot handle the increased traffic. Capt. Mills added that Powell Butte Highway is a major accident route. In the summer months accidents increase a lot. Pronghorn was forced to account for traffic flows. Flaggers at events can help but after dark it puts officers’ lives in danger when they get out of the patrol cars. If there is alcohol served at the event, it makes it worse. Ms. Brewster stated that this can put the Sheriff’s Office in the position of having to shut down someone’s wedding event. Anthony Raguine provided a memo comparing various scenarios. If a decision to approve this is made, there could be some criteria to follow in regard to hours of operation, noise levels and traffic. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 8 of 12 Pages Commissioner Luke asked if other counties allow this kind of thing. Mr. Raguine replied that Hood River was the first. The stakeholders, property owners and neighbors got together and worked out the language. Clackamas and Hood River require that there be an established form. Wineries and bed & breakfast operations are already allowed as a conditional use in the MUA zone in Deschutes County. The recommendations are identical to those of the other counties. Events are allowed as a home occupation there, however. He said that a guest lodge is different from a bed & breakfast. A guest lodge requires at least five acres and allows a maximum of eight guests. A type 3 home occupation allows a few employees. He recommends a twenty-acre minimum for this. The conditional use criteria come in when you consider placement. The owners would have to get a conditional use permit and a site plan review. All events would have to be within an identified location. They would also have to analyze the impacts on the neighbors. Commissioner Luke asked if something is in farm deferral, this use would be non-agricultural. Ms. Craghead said that part of the property could be taken out of farm deferral. Mr. Raguine suggested that the Board consider the possible impacts to home occupations, guest lodges and bed & breakfast operations if this is allowed. Commissioner Luke asked if there has been any response to the mailing that was sent out. Mr. Raguine replied that he has gotten over 150 phone calls, plus a stack of letters and e-mails. The overwhelming majority appear to be against allowing this. He offered to put together a reading file for the Board to review the correspondence. The Board indicated they could simply look at this information on the CDD webpage. 3. Work Session on Aspen Lakes Text Amendment. Peter Gutowsky explained that an earlier work session has been held, and this work session before the public hearing next week. Information was posted to the website and notices have been sent out. More specifics are included in regard to the areas impacted by Aspen Lakes and its position in relation to the cities and other resorts. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 9 of 12 Pages The staff position has not changed. Converting a cluster development to a destination resort is not acceptable per state law, as the proper process has not been followed. There are legal hurdles that staff and the Planning Commission feel cannot be overcome. There is a letter from the DLCD that supports staff’s recommendation to deny it. Doug White of the DLCD, staff and the applicant met to talk about the application earlier. This action would also apply to cluster developments throughout the County. 4. Discussion of Bethlehem Inn Draft Memorandum of Understanding. Eric Kropp presented a draft memorandum of understanding, outlining the major policy decisions regarding the Bethlehem Inn. It is divided into two segments, and recognizes the CDBG grant. He said that it could show the County applying for a CDBG grant for up to $800,000, but the question remains: what if the funding is lost. One option is for the County to explore other grants in partnership with the Bethlehem Inn. Commissioner Melton is concerned about the County’s involvement in this situation, as it gives the impression that the County is going to be a responsible party. Commissioner Luke stated that this is a huge investment and feels that staff should be involved at some level to keep the County informed of what is going on. In regard to #2, Mr. Kanner stated that there is no consequence for non- performance. This appears to be being used to make the County more comfortable, and the same thing will be presented to the City of Bend. Mr. Kropp said that they put the capital campaign on hold to develop it further. Commissioner Luke would like to see them raise the funds within five years or the building can go up for sale. At that point, the County and City would be paid off and remaining proceeds would go to the Bethlehem Inn. Mr. Kropp stated that the grant was given on the condition that the property be used as a homeless shelter. Mr. Kropp said the County could have the option of finding another provider at that point. Mr. Kanner stated that he likes the idea of a firm timeframe. The County will have title in five years and can do what it wants at the time. Mr. Kropp will keep the Board advised of his discussions with the Bethlehem Inn board. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 10 of 12 Pages 5. Economic Development Grant Fund Requests: ƒ Redmond 2J Education Foundation – this is for the annual holiday concert. The Commissioners granted $500 each. ƒ 4-H Leaders Association – Tradeshow Display – Dave White, 4-H agent, said they are trying to do more outreach to others in the community, so that people know they do more than raise animals. They are looking for a professional way to advertise, since first impressions count. Commissioner Luke said they could look at what the County has and maybe do the same. The Commissioners granted $1,000 each. 6. Update of Commissioners’ Meetings and Schedules. Commissioner Melton will attempt to attend the ABHA meeting via video conferencing, or at least by teleconference. It is being held in Lincoln City this time. The District AOC meeting is in Lakeview on September 25. Commissioner Daly may be the only attendee from the Board. Commissioner Melton said that the KIDS Center would like the County’s support as a beneficiary for the 2010 Gala. Commissioner Luke stated that typically the Board provides letters of support for partners. Commissioner Melton will put together a letter for signature. 7. Other Items. The group then discussed the four candidates vying for the seat on the Planning Commission. Commissioner Melton felt that all four candidates were good. She liked Chris Brown and Nola Horton-Jones. She said Judy Forsyth and James Fleming interviewed well, but seemed focused on one part of the County and not the County as a whole. Ms. Horton-Jones has a lot of knowledge about land use and talked about balance. Mr. Brown was raised in the area and knows the issues. Commissioner Melton was concerned about south County representation, and asked when other seats may be open. Minutes of Administrative Work Session Wednesday, September 10, 2008 Page 11 of 12 Pages Commissioner Luke said his top two choices were Ms. Horton-Jones and Mr. Brown. The other two were very concentrated on south County but there are a wide variety of regions and situations to consider. The learning curve will be short, and some background and reference would be good. The County is very diverse and what the Planning Commission does affects the entire area. Mr. Gutowsky stated that Mr. Brown has demonstrated his experience and knowledge well. Mr. Gutowsky’s second choice would be Ms. Horton-Jones as well, as she is articulate, pragmatic and ready to handle challenges. She gave a lot of thought to how much time this involves. He added that south County wants specific representation, and a conduit for their issues so that they can be heard. Ms. Horton-Jones may be the best candidate in this regard. Commissioner Luke said that experience is important, but the historical context also matters. Some of these candidates were here when various issues were first addressed, years ago. This person will represent everyone in the County. Commissioner Melton’s choice was Chris Brown. Commissioner Luke prefers Nola Horton-Jones. Commissioner Daly missed the interview session and said he does not know all of the applicants. Keith Cyrus added that the Planning Commission needs experience and continuity to continue to function well. No decision was made at this time. 8. Executive Session, called under ORS 192.660(2)(h), pending or threatened litigation. At this time Christopher Bell joined the meeting, and the group went into executive session. No action was taken. Being no further discussion, the meeting adjourned at 4:50 p.m.