Loading...
Agenda Item - 2022-11-15 - Number 08.2 - Approval of Meeting Minutes 8.2 o�c t COUNCIL REPORT �� o AEG% Subject: Approval of City Council Meeting Minutes Meeting Date: November 15, 2022 Staff Member: Kari Linder, City Recorder Report Date: November 2, 2022 Department: City Manager's Office Action Required Advisory Board/Commission Recommendation 0 Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑ Not Applicable ❑ Information Only Comments: ❑ Council Direction 0 Consent Agenda Staff Recommendation: Approve minutes as written. Recommended Language for Motion: Move to approve minutes as written. Project/ Issue Relates To: NA Issue before Council (Highlight Policy Question): NA ❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑Not Applicable ATTACHMENTS 1. September 6, 2022, Draft Regular Meeting Minutes 2. September 27, 2022, Draft Special Meeting Minutes Respect. Excellence. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 CITY COUNCIL REGULAR MEETING rrA MINUTES L September 6, 2022 aREGO� 1. CALL TO ORDER Mayor Buck called the regular City Council meeting to order at 5:32 p.m. on September 6, 2022. The meeting was held both virtually via video conferencing and in person in the Council Chamber at City Hall, 380 A Avenue. 2. ROLL CALL Present: Mayor Buck and Councilors Mboup, Nguyen, Verdick, Rapf, and Manz. Councilor Wendland was excused. Staff Present: Megan Phelan, Assistant City Manager; Evan Boone, City Attorney Pro Tem; Kari Linder, City Recorder; George Burke, Police Chief; Daphne Cissell, Associate Planner; Jessica Numanoglu, Deputy Community Development Director 3. PLEDGE OF ALLEGIANCE Mayor Buck led the Council in the Pledge of Allegiance. 4. PRESENTATIONS 4.1 Proclamation — Lakewood Theater Anniversary Mayor Buck recognized the significant contributions of the Lakewood Theater Company to the quality of life in Lake Oswego (Proclamation — Lakewood Center for the Arts 70th Anniversary). Since staging its first performance in 1952, the Company today is the oldest continuously- operating theater in the Portland metropolitan area. The Lakewood Center for the Arts is the largest arts provider in Clackamas County, and he hailed the Center leadership for their exceptional commitment to the arts and enrichment of the community. Along with opening of their fall show, Blithe Spirit, running September 9 through October 16, the Lakewood Center will celebrate its 70th-anniversary party this coming weekend. 4.2 Proclamation — Hispanic Heritage Month Mayor Buck announced that the City is honored to celebrate Hispanic Heritage Month, from September 15 to October 15 (Proclamation — National Hispanic Heritage Month). As detailed in the Proclamation, this year's theme is "Unidos: Inclusivity for a Stronger Nation", a message that City Council Regular Meeting Minutes Page 1 of 21 September 6, 2022 encourages all to reflect and celebrate the many contributions of Hispanic community members to the vitality of Lake Oswego. A cultural exchange event will kick off the celebrations on Sunday, September 18, from noon to 8:00 p.m. at Millennium Plaza Park. It will include musicians and other artists, traditional dance performances, along with food and various other vendors. Additional information is available on the City website about this and other events celebrating Hispanic Heritage Month in the community. 4.3 Introduction of New Lake Oswego Police Chief George Burke Mayor Buck provided background on the community's high expectations of the City's police department. Over the course of years, the department has worked hard to gain the community's trust through actionable progress and transparent collaboration. Last year's community survey showed 88% of respondents to be very satisfied with the quality of police protection, considered extraordinarily high for communities in the Northwest. Upon Chief Dale Jorgensen's announced retirement earlier in the year, the City had initiated a national search for a leader with the desire and skills to foster the high level of trust between the people of Lake Oswego and their police department. Specifically, the ideal candidate would be capable of continuing the City's traditions of excellence and innovation, someone who could connect with people and share the commitment to a welcoming and inclusive community. Police Chief George Burke, now completing his first day on the job, was introduced by Mayor Buck as the consummate law enforcement professional. He understands that a police department's success depends on building healthy, trusting relationships with the community and he is deeply committed to inclusive, community-oriented policing. His skills in mentoring staff and solving problems will be a great asset. Called on for comments, Chief Burke was welcomed with applause. He expressed his honor at being selected and acknowledged the high bar that has been set for the City's policing. He commended the department's professionalism, noting the importance of their community dialog in recent years. Going forward, he anticipates continued engagement and deepening relationships throughout the community. Development of the strong current staff for the future is a high priority, one that he is excited about. 5. PUBLIC COMMENT • Greg Hayden Mr. Hayden noted that he has lived for 46 years at his home near the North Shore Road bridge. Over the months of the bridge's closure to vehicular traffic, he and many other neighbors have come to appreciate the vast reduction of cut-through traffic and the related safety issues for people and pets. The necessary detour for motorists, he indicated, is not a significant inconvenience. The bridge now conveys large numbers of pedestrians and bicyclists, and he asks that the City explore making the closure permanent. This would allow for only non-vehicular traffic, similar to Portland's Tilikum Crossing. Mayor Buck indicated that the City would consider his comment and follow up. 6. CONSENT AGENDA 6.1 Resolution 22-25, A Resolution of the City Council of the City of Lake Oswego Appointing Evan Boone as the City Attorney Pro Tern Motion: Move to adopt Resolution 22-25. 6.2 Approval of Meeting Minutes City Council Regular Meeting Minutes Page 2 of 21 September 6, 2022 May 24, 2022, Draft Special Meeting Minutes June 7, 2022, Draft Regular Meeting Minutes June 21, 2022, Draft Regular Meeting Minutes July 19, 2022, Draft Regular Meeting Minutes Motion: Move to approve the meeting minutes as written. 6.3 Approval of the Water Treatment Plant Facility Use Agreement with the United States Geological Survey Motion: Move to authorize the City Manager to sign the Facility Use Agreement with the United States Geological Survey for their use of the portion of the Water Treatment Plant's lab space. END CONSENT AGENDA Councilor Rapf moved to adopt the Consent Agenda. Councilor Manz seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Mboup, Nguyen, Verdick, Rapf, and Manz voting `aye'. (6-0) 7. ITEMS REMOVED FROM THE CONSENT AGENDA No items were removed from the Consent Agenda. 8. PUBLIC HEARING 8.1 Appeals of the Development Review Commission's Approval of Type II Tree Removal Applications at 529 8th Street 499-22-000160—TREE (AP 22-03) and at 541 8th Street 499-22-000158-TREE (AP 22-04) In opening the hearing, Mayor Buck first highlighted the consolidated hearing format, which was proposed in place of two separate public hearings. He asked for confirmation that all members present found the format acceptable, and all indicated their endorsement. Mr. Boone reviewed the subject and parameters, both as to inclusion and exclusion, for the quasi- judicial hearing, citing pertinent Lake Oswego Code (LOC) sections. As the hearing will be on the record established before the Development Review Commission (DRC), no new evidence may be presented in the hearing. No issue may be raised on appeal to Council that was not raised with sufficient specificity to enable the Commission and the parties to respond to the Commission. Only persons who appeared before the DRC orally or in writing may testify. Testimony and evidence must be directed toward the applicable criteria, and persons testifying are asked to identify the criteria or standards being addressed so that Council may consider the testimony in relation to the applicable criteria or standards. Time limits for testimony were reviewed as shown in the agenda; however, any person in attendance who qualifies to testify may cede his or her time for testimony to another person who qualifies to testify. Next, he outlined the format for testimony and then noted that, if after deliberation, a motion is made to approve the application with conditions stated in the motion and before the vote, the Applicant may raise constitutional or other issues relating to the motion's proposed conditions of approval with sufficient specificity to allow Council to respond to City Council Regular Meeting Minutes Page 3 of 21 September 6, 2022 the issue. Failure to do so precludes an action for damages in the circuit court. Next, he asked Council members to declare any ex parte contacts, bias on the application or any conflicts of interest. Councilor Manz stated that she had walked by the site and viewed it on two occasions. Mayor Buck noted he also had made a site visit. Mr. Boone asked if there was any objection or challenge to a City Council member's right to consider the appeal. None was heard. Staff Report Ms. Cissell, staff coordinator for the two tree-removal applications, advised that Ms. Numanoglu would be available to address questions after her presentation, as necessary. She next introduced Exhibit F-008 for both records, submitted on behalf of the Applicant. Exhibits G-346 through G- 354 for AP 22-03 (Application 499-22-000160-TREE) and Exhibits G-349 through G-357 for AP- 22-04 (Application 499-22-000158-TREE) were introduced, these being received in opposition to the tree removals; they reiterated previous concerns that have been addressed in the record. The Council Report (Appeals AP 22-03 and AP 22-04) was supplemented with related slides (Presentation — Appeals AP 22-03 and AP 22-04). Ms. Cissell noted that the two tree-removal applications relate to the same property owner on abutting lots within the R-6 zone, a residential medium-density zone. The two properties have historically been developed with a small single- family home. They constitute two legal lots of record that are now proposed by the owner for separate development of two single-family homes. As detailed in the Council Report (p 2), following a public hearing on June 20, the DRC tentatively approved the removal of five trees. The First Addition Neighbors— Forest Hills Neighborhood Association (FAN) subsequently filed a Notice of Intent to Appeal the DRC's decision. At this appeal hearing, staff will focus on Criterion 3, which addresses tree-removal impacts on the character or aesthetics of the neighborhood (Report, p 2-6). The DRC had found that both applications meet the Type II removal criteria. They agreed with staff that the removals would have a significant negative impact on the neighborhood in relation to Criterion 3: specifically, loss of continuity of the neighborhood skyline and removal of 50%or more of a stand of trees. Notwithstanding, the DRC agreed that an exception to Criterion 3 was applicable because there were no reasonable alternatives that allowed the property to be used as permitted in the zone. The DRC and Council have previously found that requiring the Applicant to shrink the size of the dwelling to less than what is allowed by the zone, limiting development to one dwelling or requiring a different dwelling type are not reasonable alternatives. When considering alternative designs, staff considers shifting the building footprint within the buildable envelope, flipping the footprint or reconfiguring it if doing so will maintain the functionality and constructability of the dwelling. The Appellant contends in their appeal that reasonable alternatives to removal do exist and that the DRC erred in finding that an exception to Criterion 3 applied in approving the applications. Displaying related slides, she reviewed background from submission of the original applications through building plan approval. For the south lot, at 529 8" St. (Presentation, p 6-9/18), four Type II removals were approved by the DRC. For the north lot, at 541 8' St. (Presentation, p 10-13/18), five Type II removals were approved; two alternative site plans shown at the DRC hearing (Presentation, p14/18) were not deemed reasonable because any alternatives must comply with code, and neither complies with setbacks. She reiterated that both the DRC and Council have previously found that it is not a reasonable alternative to require the applicant to obtain a variance or reduce the size of the dwelling below what is permitted by the zone. Further, DRC and Council found that it is not a reasonable alternative to require the applicant to construct a different dwelling type, such as a zero-lot-line dwelling, as suggested by one of these site plans. Per the DRC, staff City Council Regular Meeting Minutes Page 4 of 21 September 6, 2022 recommends approval of Tree Removal Application 499-22-000158-TREE and 499-22-000160- TREE. Testimony Testimony of the Appellant Jill Cabral-Schinn (via video conferencing) Ms. Cabral-Schinn noted that she spoke as representative of the First Addition Neighbors and Forest Hills Neighborhood Association. Thanking Council for their consideration of the matter, she emphasized its importance to FAN neighbors, as reflected in their unprecedented number of comments submitted, i.e., over 130, and their Association's unanimous vote to appeal. With accompanying slides (Presentation - Appellant on AP 22-03 and AP 22-04), she provided an overview of her presentation at the DRC hearing, substantiating that the majority of criteria for removal were not met and hence the exception and approval of the applications was in error. The DRC's finding shows obvious disregard of the Tree Code and clear lack of effort to preserve significant trees and integrity of rights of neighboring properties, she asserted. Neighbors are not opposed to development; they simply ask that it be responsible and reasonable, without such a glaring negative impact on their neighborhood. The Appellant contends that the majority of criteria have not been met to allow the exception, resulting in the DRC's erroneous approval of the tree-removal applications. Citing references from Chapter 55, she noted that weather events of the past three years were a factor in determinations of "Fair" condition of some trees on the property. Nonetheless, trees in either "Fair" or "Good" condition are deemed healthy by the City, so five of the nine trees approved for removal meet that standard. The majority of those also meet criteria defining "significant tree", notably that they constitute part of a stand of trees. Significant trees have dwindled greatly, with noticeable effects on the neighborhood that will be catastrophic if allowed to continue (Presentation, p 2-3). She disputed the Applicant's claim that both lots are flat (Presentation, p 4-5); in rainstorms, water rushes down the slope. By leaving more of the trees in place, this water and any erosion effects on this property and downslope neighbors would be easily controlled. With removal of so many trees, stormwater mitigation is necessary, resulting in even more removals. Successive images were displayed to illustrate additional concerns: (1) Change in permeable surface, from one small cottage to two large homes with basements and driveways (Presentation, p 6/16); (2) Increased susceptibility to windthrow for John Dunn's redwood (p 7/16); (3) A major gap in the skyline for surrounding neighbors with removal of 15 trees total, including Type I trees, leaving only three, a massive change in character and aesthetics. The Applicant had stated that no gap in the skyline would result and that, in fact, these were individual trees, not a stand (p 8-13/16). The Appellant called for the Applicant to bear the burden of proving that all options have been explored to preserve more than 50% of this stand, which has not been done. By the time of the DRC hearing, the Applicant had not provided a mitigation plan; assuming one has not yet been provided, this omission should render the applications incomplete and therefore not approvable. If instead the Applicant chooses to pay a fine totaling only $1,215 for removal of nine significant trees, it will require 150-plus years for replacements to reach the current trees' stature. This is deeply disheartening to the Appellant. She asserted that the Applicant simply states there are no alternatives, without describing what, if anything, was explored by way of alternative designs or evidence to support their claim. The Appellant insists on reasonable exploration of alternatives to save more trees on each lot, as seen elsewhere in the neighborhood (p 14/16), e.g., angling the houses, modifying one or both to have a single-car garage, exploring a variance, relocating City Council Regular Meeting Minutes Page 5 of 21 September 6, 2022 driveways and/or surfacing them with permeable material, building closer to significant trees, retaining the property as one lot and building one home sited to preserve more trees. Most obvious is omission of basements, which are included only to increase square footage and the sale price. Basements will be prone to flooding and will increase flooding risks for neighbors. The Applicant's arborist stated before the DRC that omitting or reducing size of basements would allow more trees to be preserved. The Applicant was aware of the tree distribution on the property before buying it, and it is utterly shocking that staff and DRC have deemed this plan acceptable; essentially, it is a clearcutting to build two identical homes with basements. Although the Applicant claims that their development is intended to address the housing crisis and repeatedly mentions HB 2001, Ms. Cabral-Shinn challenges this. As a person employed in affordable-housing advocacy, she attested that multi-million-dollar single-family homes do not address that crisis. Council was asked to put themselves in the place of adjoining neighbors and to consider adverse effects on them. These would include costs of remediating runoff and possible flooding and replacement of shade- loving plants. Particularly on the B Street side, neighboring properties will now be less desirable: bordered by roads and the side of a house, rather than by a stand of trees. Property values and enjoyment of their homes will be affected. Mr. Dunn's redwood tree can be expected to suffer damage, with additional expense to him and perhaps eventual loss of the tree. The Appellant asks that Council hold the Applicant to providing alternative plans to preserve a minimal number of trees as detailed in the displayed image (p 15/16). After detailing how various alternatives might be made feasible, she concluded that two perfectly sizable homes could be built on the property while preserving at least three, if not more, trees. Council was asked to think about the cumulative impact on the neighborhood's tree canopy as a result of the many permits that have been issued for removals (p 16/16). Since 2016, the total Type II Trees removed in the city will soon be 223 if the proposed nine are approved here; in contrast, eight trees have been saved by denied permits over that timeframe. Council should represent all neighbors and what is best for the community as a whole: responsible preservation of trees in symbiosis with development. All community members must be stewards of the land while preserving it for future generations. The Applicant, she concluded, did not adhere to the code and did not provide any viable, legal alternative designs. Therefore, the permits should be declined. Testimony of Individuals in Favor of the Appeal Mayor Buck noted that testimony by Ann Mikulka would include time ceded to her by Pierre Zubrinsky. • Ann Mikulka A resident of the Bryant Neighborhood, Ms. Mikulka requested Council's support for the appeal. She highlighted the massive community response regarding this matter: over 160 comments prior to the DRC hearing, including signatures, per application in opposition to removal of the trees. Secondly, the Applicant has not met certain Tree Code criteria. Citing various code sections, she stated that removal of the nine Type II trees is very likely to have a significant impact on the flow of surface water, existing windbreaks, and the protection of a neighbor's coast redwood. All nine trees are significant, in her opinion, in terms of both size and character. All are very large and clearly visible from nearby streets. Each is part of a grove of trees, which contributes to the forested character of the neighborhood, its tree canopy, and its skyline. Removal would have a significant negative impact on the character and aesthetics of the neighborhood, as shown in photos she displayed. As these trees make up a stand as defined by code, removal of more than 50% of the stand is not allowed. The Applicant's plan to remove much more than that is not City Council Regular Meeting Minutes Page 6 of 21 September 6, 2022 allowed and they have not met exception criteria by demonstrating that there are no viable alternatives. Her belief is that Renaissance Homes is an experienced builder with the expertise to devise a more suitable footprint; she emphasized the City's authority to "consider alternative site plans or the placement of structures that lessen the impact on trees" from exception criteria in the Tree Code. Council is urged to require the Applicant to submit alternative building designs that are reasonable for residents, in contrast to the current unreasonable plan. The Tree Code's purpose is to preserve the city's wooded character and protect trees as a natural resource. Therefore, the City's duty is to interpret and enforce code in the best interest of the entire community, rather than the commercial interests of one developer. The Applicant should be required to submit an alternative design that is viable and reasonable for FAN/Forest Hills residents. Mayor Buck noted that testimony by Betsy Wosko would include time ceded to her by Ann Savage. • Betsy Wosko Ms.Wosko heralded Governor McCall's 1973 foresight in supporting Senate Bill (SB) 100, known as Oregon's Comprehensive Plan, and touched on three important components: (1) It created 19 statewide goals. (2) It required local governments to establish their own comprehensive plans. (3) It established an agency to oversee compliance with the State's comprehensive plan. She recognized Goal 1 as the result of Governor McCall's awareness that development interests would or might have an outsized influence on land use policy and practice and that citizens would provide a necessary check-and-balance against development and commercial interests. In the matter now before Council, this is borne out by the 200 or more comments in opposition between the two applications, as well as the opposition of the home NA. Goal 1 requires strong consideration of these comments and denial of these applications. The applicable portion of Lake Oswego's comprehensive plan supports denial, as well, as found at Healthy Ecosystems, Ordinance 2687, from January of 2016. She enumerated positive benefits of old trees cited there, including prevention of surface runoff and erosion, habitat provided for urban wildlife, and promotion of economic vitality, noise buffering, decreased crime, and increased property values. The State and local comprehensive plans are a land use constitution, she posited. The overriding purpose of SB 100 was to delegate to local governments a fundamental framework in which to consider creation and application of local ordinances, policies and practices. To the extent there is any question, ORS 197.175 (2)(b) explicitly requires cities to enact land use regulations to implement their comprehensive plan provisions. Accordingly, land use in Lake Oswego should be guided by LOC Chapters 50 and 55 (the building and tree codes, respectively). To the degree the City does not regard its comprehensive plan as a constitution, Article 1, Section 20 of the State constitution requires individuals to have equality of treatment with developers in terms of due process and equal protection, she asserted; therefore, saying and applying in policy and practice that the development code trumps the tree code is a myth and is pro-development propaganda. The Chapter 55 exception (i.e., "no reasonable alternatives exist to allow the property to be used as permitted in the zone" at LOC 55.02.080 (3)(b) violates Article 1, Section 20 of the Oregon constitution, as it places the development code ahead of the tree code; rather, they should be given equal footing. As to Chapter 55, Tree Code considerations weigh in favor of preserving these trees. Per LOC 55.02.08, their removal would have a significant impact on the character and aesthetics of the neighborhood and would reduce property values. Among other impacts, the skyline would be affected drastically, wildlife habitat decreased, and less rainwater absorption, carbon sequestration, and shade would be available. Chapter 55 considerations alone and as interpreted through the City's comprehensive plan weigh strongly in favor of denying the City Council Regular Meeting Minutes Page 7 of 21 September 6, 2022 applications. The smaller mitigation trees would not come close to matching the benefits of the existing ones, and the City's application of the tree and development codes has been skewed too favorably to private property and commercial interests, in both policy and practice. As noted earlier, in First Addition the vast majority of Type II applications since 2016 have been approved. These two applications should now be considered within the context of hundreds of similar applications. The City must and should consider the cumulative impact of tree removal, especially in light of the climate crisis and loss of biodiversity. Developers prefer tree removal because it is easier and more profitable to clearcut than to preserve. That is neither a good nor justifiable reason for removal and would violate the City's comprehensive plan; Tree Code considerations and public policy also weigh strongly in favor of denial of the applications. Council is therefore asked to require the Applicant to spare all of these trees and instead build a single-story or two- story home on the existing footprint where a home has been on the property for decades. Overturning of the DRC decision and denial of these applications is requested. • Mark Puhlman Mr. Puhlman introduced himself as a 10-year resident of the Forest Highlands Neighborhood and current member of the Sustainability Advisory Board (SAB). He joins in requesting approval of the appeal and denial of the Type II tree removal applications. The trees in question satisfy all criteria of LOC 55.02.080 for being saved, he stated. They have not outgrown the setting; their removal would impact drainage adversely, while lost benefits of the trees would include their significant contribution to the skyline and screening of nearby homes, all mentioned in the applicable code. Additionally, the Applicant is asking to remove more than 50% of a stand of trees, which is disallowed. The key issue, he believes, is a misinterpretation of LOC Chapter 55 (Tree Code). This misinterpretation allows developers to remove any tree that interferes with construction of any structure that is allowed by Chapter 50 (the building code). The Applicant states, and the DRC concurs, that there is "...no reasonable alternative to allow the property to be used within the zone". This code language allows anyone to twist the original meaning, allowing the removal of any tree that is in the way of construction, and that is not the meaning of the code, in his view. Though the word reasonable is often seen in U.S. common law, it does not mean that proposed alternatives to the plan cannot cost the developer money or time. He likened this situation to financial and other responsibilities of employers under the Americans with Disabilities Act: The Applicant here, if necessary, should be required to change the building plans to accommodate mature trees in the area. Changes should include omitting the basement and not subdividing the property. Only one home should be built on the property, or perhaps two smaller ones or a duplex to accommodate middle-income residents. He posed other questions of reasonableness, including (1) requiring a duplex that could provide two middle-income homes, in the spirit of HB 2001, rather than pricing such residents out of Lake Oswego in favor of two multi-million-dollar homes; and (2) denying basements for the houses, so as to decrease the amount of excavation and protect these mature trees. Though he considers them reasonable, the Applicant has not presented them as viable alternatives. If that is based on cost concerns for the builder, it is not reasonable. In approving these applications, the DRC had explained that they felt compelled by City interpretation of the Tree Code to approve these applications. Despite SAB and DRC memos to Council in 2019 and 2020 encouraging changes to that code, changes have not been made. Concluding, he noted that supporters of this appeal are aware that the development should and will happen, but the land and aesthetics of the neighborhood must not be neglected. They implore Council to deny the applications and uphold the appeal as the only reasonable course of action. • Terri Kraemer City Council Regular Meeting Minutes Page 8 of 21 September 6, 2022 Ms. Kraemer explained that her home is next door, downhill from the Applicant's property on 8th St., and she is concerned about surface-water damage if the trees are removed. The City's topographical map shows an eight- to 10-foot elevation drop from the Applicant's property to her and an adjacent neighbor's properties, yet the Applicant states that with proposed mitigation measures, the tree removals will have no negative impact on surface water. However, the Applicant did not provide any mitigation measures and claims that the surface water currently absorbed by all of the trees on his property will not have a negative impact on the downhill property. This makes no sense to her. City staff reported that, after completion of stormwater management required with development, there will not be a significant impact on the flow of surface water; however, staff failed to address the fact that removal of the trees will cause surface- water disruption that must be mitigated, regardless of what Renaissance Homes decides to do with the property or how long it takes to develop it. Because trees store and intercept water, significant disruption to the flow of water is foreseeable, as is damage to her property from diverted water. She believes the DRC erred in upholding the Type II tree-removal applications and that the Applicant must do surface-water mitigation to prevent damage to her property. Having lived there for over 12 years, she affirmed the accuracy of information on the City website about chronic localized flooding in First Addition, and often on her property where it abuts the Applicant's. Council is asked to reverse the DRC's decision and deny both of the Type II removal applications, as surface-water mitigation is required regardless of development and has not been addressed at all by the Applicant. She referenced pertinent code in LOC 55.02.080 (2). Additionally, all privacy she has enjoyed will be lost when trees along the lot line are removed; although she expected this property to be developed one day, she had never anticipated a builder being allowed to remove all of these trees. Finally, she emphasized the importance of truth: In its application, Renaissance Homes had stated that the proposed tree removals would not alter the neighborhood skyline, that they are not removing more than 50% of the stand of trees, that the lots are flat or nearly flat, and that, considering proposed mitigation measures, there will not be a negative impact on surface water. None of these being true, she asked, why would the City believe that the Applicant has considered all alternatives and found no alternative but to shift the footprint slightly to save one tree? Her belief is that reasonable alternatives exist and should be considered. Based on the purpose of the Tree Code, the City has an opportunity and an obligation to save trees on these lots. Council should interpret the Tree Code in a legally-sound manner that allows for development in order to save some of the trees. She asked that the DRC's decision be reversed, with these Type II removal applications denied and the appeal approved. • Stuart Eckmann Mr. Eckmann noted that he and his wife live next door to Ms. Kraemer and adjacent to the properties in question. They share her concerns with regard to privacy, runoff, and surface-water damage, particularly when the application initially stated that the lots were flat. They also share the concerns of John Dunn, the neighbor with the redwood directly across the alley from the trees to be removed, and its probable exposure to wind shear. This developer, he opined, is proposing what works for him, without reference to how it impacts the neighborhood. He joins in asking that Council reverse the DRC's decision to approve the plans for building of the two houses at 529 and 541 8th St. It was the wrong decision, and they disagree with staffs statement, citing "The alternatives to the tree removal have been considered, and no reasonable alternatives exist to allow the properties to be used as permitted in the zone". Specifically, when staff asked the Appellant to provide reasonable alternative designs, only the same design was submitted, flipped or slightly repositioned on the lot, and it definitely does not provide an alternative design. • Lois Eckmann City Council Regular Meeting Minutes Page 9 of 21 September 6, 2022 Ms. Eckmann observed that the Renaissance Homes website shows various standard plans that are based on criteria or limitations of the particular lot, including a section on narrow lots. Although more creative aspects of this could have been employed on these lots, that was not presented as an alternative. Council is asked to consider other houses in the neighborhood constructed in recent years, where some significant trees were retained without clearcutting everything. Two such houses on B Avenue were described; one at the 8th St. intersection directly across from the subject property had been able to accommodate an old-growth tree surprisingly close to the new structure. This was achieved simply by building a partial basement with space left near the tree to maintain its root structure, demonstrating that tree preservation with new development can be done. For the lots in question, staff did ask for reasonable alternatives; however, what they accepted from the Applicant was only the repositioning of the plans, not a design alternative. Therefore, Council is requested to overrule the DRC decision, with staff and the Applicant to explore design alternatives as they should have done. To expect this from some developers and not from others creates, at the very least, a perception of differential treatment. Providing alternative plans to save more trees, she concluded, is a reasonable request of Renaissance Homes, given the description on its website as both a "customer builder" and a "green builder". • Written Public Testimony is found in the meeting materials for Agenda Item 8.1. Testimony of the Applicant Kelly McCall, Renaissance Homes, introducing herself as the permit coordinator from Renaissance Homes, provided an overview of the timeline, beginning February 11, 2022, with submission of the application and posting of signs for the removal of 10 trees on two separate legal lots. At the end of the public comment period on February 16 and due to the overwhelming number of comments and attention received, the City questioned the removal of six of these trees. The application was placed on hold to enable to the Applicant to provide more evidence in support of the removals. The Applicant then (1) explored the root structures, under the supervision of TRAQ-certified arborist Mary Giersch, (2) submitted a site plan clearly lining out the excavation for foundations and shoring methods required for new code-compliant homes, and (3) retested infiltration rates at different locations and depths; this enabled them to reduce the size of the stormwater facilities and consequently to preserve one tree on 8th St. The City responded on March 24, convinced that three additional trees could still be saved. In response, the Applicant explored further with hydro excavation, and discovered root systems even more extensive than detected previously. At this point, they submitted more alternative site plans to show that both sites cannot be developed without the removal of nine proposed trees. These entailed increasing the front setbacks of both homes to retain two additional trees along 8th, i.e., one Type I and one Type II. Additionally, the City was furnished with more information, specific to each tree, from the Applicant's arborist,justifying the removals in relation to both projects. A 33-inch Douglas fir was included, based on the recommendations of both Ms. Giersch and the City's arborist. After further consultation with City staff, the Applicant was able to submit final evidence and supporting materials on April 15, which initiated the new comment period on April 22. Three months after the original application had been submitted, City staff tentatively approved this application. On the May 20 deadline, a formal appeal was received. This extended the project timeline to meeting with the DRC on June 20. At that meeting, the DRC decided in favor of the application, but on July 15 it was appealed to the City Council. As the Council does not meet in August, the timeline was extended another month to this appeal hearing. Neither construction nor demolition of the existing house can begin until the tree-removal situation has been determined. In the meantime, the Applicant has worked very closely with staff to ensure compliance with the City's application City Council Regular Meeting Minutes Page 10 of 21 September 6, 2022 procedures. The Applicant has provided clear evidence that is certainly above the standards expected from a typical homeowner, she noted. They have fully justified the removal of all trees for which applications are submitted, and Council is encouraged to deny this appeal and allow the Applicant to move forward with their project today. For Council's awareness, Ms. McCall spoke briefly about unpleasant public attacks from neighbors near the project site and from other community members. This included a neighbor who approached the Applicant in a very hostile manner following the announcement of the DRC's decision, as well as police responses on two occasions for trespassers posting extremely rude and distasteful propaganda on the Applicant's property. Threatening people who are constructing housing is utterly inappropriate; their company has built hundreds of homes, and she intends to stand behind their project. She also wants everyone, including her family, to be safe, and asks for an end to the hostility now to enable their project to move forward. There is no merit in drawing the process out any further, she concluded. In response to a question from Councilor Rapf, Ms. McCall described the nature of various encounters that she regarded as threatening to her company and/or their employees, e.g., instructing nearby schoolchildren to write certain verbiage on the sidewalk in chalk. Mayor Buck indicated that this exchange did not address the criteria. In relation to comments heard in earlier testimony, people wanted to know what other alternative designs the Applicant had considered beyond shifting the design back on the property to preserve trees along 8' St. Mayor Buck asked what other alternative designs they considered throughout the process, based on the record. Ms. McCall explained that moving the basement had been considered at one point. However, after consultation with their arborist and doing more of the exploratory trenching and hydro excavation, they realized that even with a traditional foundation or no basement, the tree-removal situation would be the same. Councilor Mboup asked Ms. McCall to address a report from ArborPro, and she stated that she had not seen that report and could not speak to it. The Applicant's arborist had agreed with the City's arborist, and that provided them the necessary verification. Jamie Howslev, Jordan Ramis PC, continued the Applicant's Presentation. As attorney for the Renaissance project, he referenced his letter to the City dated September 6 (Written Public Testimony) outlining the Applicant's legal response to the appeal. They agree with the DRC and City staff that all of the applicable criteria have been met and therefore the appeal should be denied. The crux of this appeal is that Renaissance failed to consider reasonable alternatives, but it fails for these reasons: (1) Renaissance is not required to look at every possible permutation on the lots. In concluding that the criteria had been met, staff and the DRC averted a subjective search without end, as well as violations of the clear and objective criteria and the State law. (2) As correctly explained in the staff report, under Exception (3)(b), the City of Lake Oswego has already established in other cases that a builder is essentially enabled to use the full buildable area of a lot and is not required to do things such as variances in order to be allowed tree removal. The Applicant has met their burden of proof, supported by substantial evidence in the record, not only from their arborist, but confirmed by the City's arborist. (3)The Appellant's desire for smaller houses and designs that provide additional tree preservation is not supported by LOC 55.02.080 essentially because the designs submitted by the Applicant are permitted outright in the zone. Conversely, the code does not require or provide any authority for the City to mandate that they reduce the house size, as the appeal assumes. As detailed in his letter and related attachments (Written Public Testimony, p 1-2/46), changes implemented with ORS 197.303(1) apply to nearly all housing types. The Applicant believes that Lake Oswego's tree ordinance fails to meet the City Council Regular Meeting Minutes Page 11 of 21 September 6, 2022 requirements of this "needed-housing" statute because it lacks clear and objective criteria. He highlighted two significant reversals achieved by his firm in front of the Land Use Board of Appeals (LUBA), along with another in the Lane County area, among other examples related to jurisdictions applying criteria that are not clear and objective. The Applicant is concerned that now, five years after enactment of the statute and two years after local governments were informed by the Land Conservation and Development Commission (LCDC) that their codes may no longer be compliant with state law, the City continues to resolve conflicts between tree preservation and housing development using discretionary criteria. Specific code issues are discussed in the letter (p 2-6/46). The Appellant's assertions failed to demonstrate an error, and therefore Council should deny the appeal. With regard to "needed housing", the City is long overdue in aligning itself with the legislature's clear requirements and in ceasing to impose subjective criteria. He offered his firm's experience in doing so. On a personal note, he stated that, while recognizing that this is not a popularity contest, he had witnessed some comments after the DRC hearing which he viewed as a threat. Having done this work for over two decades, in two states and probably more than 100 jurisdictions, this is the first time he has felt threatened in an urban setting. Councilor Mboup raised questions about the legality and objectivity of the City's ordinances and whether or not Oregon legislators had multi-million-dollar housing in mind when they worked on housing needs. After offering background on the "needed-housing" statute, Mr. Howsley opined that it encompasses housing from lowest-income to the most expensive house in the state, excluding Portland. He referenced the Applicant's letter for citations of where they believe the City's Tree Code departs from clear and objective criteria, as noted earlier. Mr. Boone suggested that if Council wished to discuss these questions, it should be during deliberations. Randy Sebastian, Renaissance Homes, final speaker for the Applicant, introduced himself as president of the organization developing this property. Most of his friends in construction no longer build in Lake Oswego because of the community enmity they have experienced, he indicated. As the prior U.S. president had normalized bullying, civility had been lost. The result was reflected in the jeering of the Appellant, including their staff, at the DRC hearing. Some of the people attending that meeting were present at the current appeal hearing; he singled out one threat that had been directed at him at the DRC meeting. After taking the issue to the Lake Oswego Police and being referred to the county sheriff's office, he dropped it. He vowed to continue Renaissance building work in the community, recognizing this as the environment that exists and one that his friends have chosen to avoid. Regarding discussion heard earlier on the urban growth boundary, which he supports, he asked Council members if they were aware that only 2% of the land mass in Oregon is allowed for residential housing, a result of Governor McCall's great foresight with SB 100 in 1973. Though this is not a lot of land, the Applicant does all they can to build within it. Next, he provided background on his family's strong connection to the city, starting with his great-grandparents' home and farm property within present-day First Addition. He dismissed claims he has heard that the trees are 150 years old; they are no more than 80 or perhaps 100. Despite concerns heard about these high-end homes that are not covered under"needed housing", people need to understand that all housing helps. Someone buying one of these homes will sell another house, he explained, with someone then buying their first home; the domino effect is ongoing. Renaissance Homes is Lake Oswego's largest builder in terms of permits, but they regard it as a contentious place to work. He credited their staff, along with the City's, for working effectively in a very good relationship. As the community is his home and his office has been here since 2004, he does not plan to leave. His 32 employees and subcontractors enjoy building here. He asks that Council stand by City staff and the DRC and do not allow the bullying, mistruths, and other effects on his company. The threats, postings, trespassing, and City Council Regular Meeting Minutes Page 12 of 21 September 6, 2022 need for police intervention should stop. If they do not, civility in Lake Oswego loses, along with needed housing and codes to which the Applicant is adhering. Appellant's Rebuttal Jill Cabral-Schinn (via video conferencing) Ms. Cabral-Schinn first addressed the Applicant's references to incivilities by persons in support of the appeal: Students at the nearby school were not instructed to write messages in chalk on the sidewalk nor were any children forced to do anything. She acknowledged that one neighbor had written in chalk simply "Save more trees" prior to the 4th of July parade. The same message had also been posted on signs in some residents' yards, and a sandwich board displayed some of the documents submitted to the DRC and a few Lorax pictures. As to the verbal attack, that was one person who made an emotional comment. Ms. Cabral-Schinn stated she did not condone that and affirmed it had occurred, but that the person had recognized immediately that she was in the wrong. Mr. Sebastian, however, had failed to mention a photo of this woman he had posted on social media and other things he has said about her and others supporting this appeal. She suggested that Council members review the DRC hearings, the comments of appeal supporters, and consider their own experience at this hearing; in her view, none of the supporters have been anything other than civil and respectful. Mr. Sebastian's categorization of their supporters as violent, etc., is not appreciated. One person made an emotional mistake and a couple of passionate people displayed signs in their own yards. She then summarized the ways this application fails to meet the code: (1) These are significant, healthy trees in the only stand within many blocks. (2) They are important features and assets of the neighborhood, especially to neighbors in close proximity. (3) The property is not flat, and surface water and erosion will be issues for these and neighboring lots. (4) The neighbor's redwood is at great risk if the current plan is carried out. (5) Removal of these trees will drastically change the skyline, leave a large gap, and most certainly change neighborhood aesthetics. (6) The plan calls for removal of much more than 50% of the stand: nine Type II plus six other trees, for a total of 15 trees, leaving three in place. Removals will represent 83% of the stand. (7)Alternatives exist and should be explored, and the Applicant must bear that burden. Exploring alternative designs should mean exploring alternative design plans, not just moving around the same design and proving that it doesn't work. (8) None of the alternatives mentioned at this hearing had been mentioned in either application, and in most respects, this is the first she has heard of them. At the DRC hearing, the Applicant's arborist had stated that at least one tree could be saved if basements were omitted; however, earlier in this appeal hearing they had reported they explored that possibility, but that was a moot point. The Appellant asks for the meaning of that, along with the supporting data and explanation. She echoed Ms. Kraemer's testimony in questioning the truth of the Applicant's statement that alternatives had been explored, since they had made continuous false statements throughout the application. Council has the power to clarify verbiage related to exceptions and not allow another applicant to slip through the loophole; it has become such an expectation of developers that Mr. Sebastian came to this hearing prepared with an argument about the Tree Code's lack of enforceability. Concluding, she reiterated that the Appellant is all for development that is responsible, reasonable, and in compliance with the code, while taking the rights and interests of all citizens into account. Council is asked to represent the neighbors who will be affected by these tree removals and also the community and its best interests. All of their property rights should matter, too. Questions of Staff City Council Regular Meeting Minutes Page 13 of 21 September 6, 2022 Councilor Manz requested confirmation that pre-existing stormwater conditions had been taken into consideration. Ms. Numanoglu advised that the plans have been reviewed by staff and found to comply, but the permit will not be issued until the tree permit is resolved. She and Mr. Boone responded to related questions of stormwater removal and mitigation as relevant to the Tree Code. Councilor Manz inquired about the arborist's report that had been discussed earlier. Ms. Cissell clarified that the Applicant's arborist, Ms. Giersch, had prepared the only arborist's report, submitted as part of the application. Additionally, the City's contract arborist visited the site and prepared staff findings that are in the record. The ArborPro report referenced earlier should not be considered in Council's deliberations as it was discussed at the DRC hearing but not submitted. Councilor Mboup asked whether staff's work on this matter takes into account the current climate crisis and loss of diversity. Ms. Cissell explained that these are not part of the Type II criteria for tree removal, which are the criteria considered by staff. Councilor Mboup next asked: Since neighbors and NAs say that alternatives do exist, does staff believe that there are alternatives other than cutting nine trees to mitigate? Ms. Numanoglu noted that staff had presented the alternatives in their report that they will typically consider as reasonable alternatives. Displaying the site plan (Presentation — Appeals AP 22-03 and AP 22-04, p 3/18), she emphasized that alternatives can be required to save additional trees, but only if it meets code, e.g., shifting the footprint in such a way that it meets code setback standards without removing even more trees. In this case, the building design plan is maximized, but as allowed in the R-6 zone, and other shifts in placement will not save additional trees. Additionally, constructability and functionality of the structure must be considered; she cited examples of alternatives that are not considered reasonable or functional. Regarding two specific trees, Ms. Cissell indicated that staff also had questioned removal, but learned that both were in poor condition and not candidates for retention. At the DRC hearing she came to understand that only the arborists for the Applicant and the City had looked at the trees closely; Mr. Boone confirmed this was shown in the record. Councilor Mboup asked if it could be considered a reasonable alternative if building of these two houses as proposed would impact an existing neighbor's house, i.e., Ms. Kraemer's, as heard in testimony; given that, should removal of the nine trees be allowed? Ms. Numanoglu noted that, had the Applicant not proposed any sort of mitigation measures and simply removed the trees, there would be a negative impact and the removals therefore disallowed. She discussed the City's permits process and the need to issue the removal and building permits together. The City will not allow the Applicant to remove the trees and then not build anything. This is an improbable scenario after an applicant has completed both permit processes. In this case, the plans show stormwater chambers and lines, and they have been reviewed by staff and found to comply with the stormwater-management regulations. Mayor Buck inquired about reasons for the greater side yard setback here in the R-6 zone, i.e., 7%feet, as compared to certain other zones. Ms. Numanoglu advised that the 7%feet pertains to all new development in the zone, as with these dwellings. In responding to related questions, she noted that the 6,000-square-foot lot in this zone is not large, compared to lots where more space would allow greater flexibility with placements. Having heard in some testimony that no mitigation plan has been submitted and therefore no mitigation will be done, Mayor Buck requested clarification. Ms. Numanoglu explained that mitigation is not a criterion for approval; rather, it is a requirement. If an applicant is approved for removal of any Type II trees, they are required to mitigate at a 1:1 ratio; it is not a criterion for approval, so it is not a basis for rejecting an application. Many times, as in this instance, the City may even require mitigation beyond the 1:1 ratio. The Applicant has not submitted a mitigation plan, but it is a condition of approval. She affirmed that if these applications are approved, staff would then require the Applicant to submit a mitigation plan. Responding to additional questions, Ms. Numanoglu advised that staff would City Council Regular Meeting Minutes Page 14 of 21 September 6, 2022 make the approval decision on that plan. She reviewed the conditional approval as written by staff, which required the Applicant to replant 10 mitigation trees between the two lots, with specific size requirements for deciduous and evergreen trees. In the event all 10 trees cannot be fit onto the lots, the code affords flexibility by allowing the Applicant to pay into the Tree Fund; however, staff must first review and agree that the space is insufficient. If Council is seeking opportunities for enhanced mitigation, the conditioning authority in the Tree Code allows Council to call for that; for example, larger-stature evergreens might be required for mitigation of some trees, though realistically not all 10. In terms of adding more trees, she emphasized the need to consider site constraints: building footprint, underground utilities, existing trees that must remain, and narrow side-yard setbacks. In addition, there is a Community Development Code requirement that for new dwellings in the R-6 zone, two new street trees must be planted. Given certain limitations of this property, she explained how staff believes at least two large-scale evergreens could be required as street trees, along with three others on the lots, for a total of about five large-scale evergreens. Together with the three trees that must be planted on the site, this would leave seven for the Applicant to mitigate. Of those, staff suggests that they be allowed flexibility, either to plant other appropriate-sized trees, all native, or pay into the Tree Fund if space is not sufficient. While acknowledging that the ultimate goal is to plant all of the mitigation trees on site, realism must also be applied. Where a site is overcrowded, staff has seen the new owner begin to remove trees, which is not desirable. Therefore, the plan should be realistic and reasonable, allowing adequate growing space, rather than creating conflicts for the future. Addressing questions from Councilor Nguyen about the nine trees slated for removal, Ms. Cissell advised that four of the nine are deemed in "Poor" condition; those rated "Fair" or"Good" are considered healthy by the City's arborist. Of the latter five trees, all of which are rated `fair', three are within the building footprints and one (Tree 10302) is near the location of basement excavation and sewer lines (Presentation —Appeals AP 22-03 and AP 22-04, p 3/18); another is requested for removal because it is part of the stand of trees and therefore not a good candidate for retention if the other trees are removed. Mayor Buck requested any feedback staff might have on the Applicant's comment regarding Tree 10302 to the effect that its removal is necessary to meet shoring requirements for the basement excavation. However, a subsequent comment was made that even without the basement, that tree would need to be removed. Ms. Numanoglu pointed out the stormwater line along the lot's south property line; if placed on the north side, the stormwater facility would necessitate removal of that tree. She affirmed that there is no alternative location for that utility because if it was moved to the north side, the large tree could not be retained. At Councilor Manz's request, Ms. Numanoglu clarified the suggested location for the new street trees in the large right-of-way north of the property line. As such, the street trees would be the responsibility of the property owner. With regard to neighborhood character and sightlines, she confirmed that Councilor Manz is correct in believing the City has determined the trees requested for removal to be significant. The trees may not be removed without approval of the exception under Subsection 3 (b), Mr. Boone added, i.e., related to the reasonable alternatives, among other grounds found by both staff and the DRC. Councilor Verdick asked who would bear responsibility for care and maintenance of the street trees mentioned by Councilor Manz. Ms. Numanoglu stated that the property owner will be responsible for both the street and onsite trees. For all Type II permits associated with building permits, the City inspects 100% of the mitigation; this ensures that all of the trees are planted before the final inspection is done. Staffing capacity does not allow the City to follow up on all City Council Regular Meeting Minutes Page 15 of 21 September 6, 2022 mitigation in the city. However, in an instance of unauthorized removal or a maintenance issue with a tree, the City typically receives a complaint and follows up for compliance. Mr. Boone cited other pertinent code references on which Council might consider basing a condition of approval. Councilor Mboup expressed his need for clarification of the code references to "clear and objective" with regard to saving some of the nine trees. He asked what could be done to communicate to the Applicant that certain healthy trees should not be removed. Mr. Boone advised that the question about the "clear and objective" standards raised by the Applicant's attorney pertains to the State statute that requires the criteria be clear and objective. However, there are circumstances in which, under the City code, removal of healthy trees is allowed; the question before Council now is: Have each of the criteria been met? In essence, the answer must be based on (1)whether or not alternatives have been considered; (2)a finding that no reasonable alternatives exist to allow the property to be used as permitted in the zone, and if so, then (3) there is an exception found under Criterion 3. Due to that exception, and if Criteria 1, 2, 4, and 5 have been met, the removal can proceed. Ms. Numanoglu responded to Mayor Buck's request for clarification of the mitigation plan. Councilor Nguyen followed up with questions about condition of specific trees on the two lots. In responding, Mr. Boone pointed out that health of the tree is only one of several sub-criteria for establishing whether or not it is a "significant tree"; that determination is one of the elements of the code's Criterion 3. In the context of a Type II removal request, a tree's health relative to its condition is only important as one of those criteria. Agreeing, Councilor Nguyen noted that with Council's full faith in the ability of staff to interpret code, this degree of detailed exploration should not be required of the policymakers. When Council identifies code that is not in accord with the spirit and intent of the community, that needs to be addressed. Staff, however, is charged with interpretation and enforcement of code, and ensuring that permit applications meet the approved code. The need for policy change can be considered during deliberations, when Council takes a broader view: What is the intent or spirit of this ordinance? Mr. Boone concurred, adding that legislating is for a time other than at this hearing. The question now before the Council is: What does the existing code require, as we interpret it based upon the legislative history since it was adopted, as heard by this Council, and as decided by the DRC? Councilor Nguyen acknowledged this, stating that Council is required to make the decision based on the code that is currently in effect. In response to inquiry from Councilor Mboup about his right to interpret this code by the spirit rather than the letter of the law, Mr. Boone emphasized that code is interpreted on the basis of determining what the legislative body intended at the time of its adoption. That is done by looking at the code's (1) text, (2) context, (3) legislative history, particularly staff commentary accompanying the annual code amendments, and (4) rules of construction. After verifying that the pertinent property address is 529 8th St., Mayor Buck called for deliberation on AP 22-03. Mayor Buck moved to tentatively affirm the Commission's decision to approve the tree removal application 499-22-000160-TREE with the following conditions of approval: that, of the street trees required, we require one large evergreen tree; and of the onsite mitigation trees required, we require two large evergreen trees to be planted; and in addition, we require the City to ensure the owner maintains the health of all the mitigation trees for a period of twelve months. Councilor Rapf seconded the motion. Responding to requests for clarification from Council members, Mr. Boone explained that the hearing format requires Council to ultimately make two separate decisions because a party may City Council Regular Meeting Minutes Page 16 of 21 September 6, 2022 decide to appeal one and not the other. Also prior to deliberations, he apologized to the Council for not addressing earlier in this hearing the issues people brought forth, that in fact, none of these are in the record because they obviously occurred after the DRC hearing. Council therefore should disregard that, to the extent it may be weighed as a factor. Secondly, he suggested that Council first consider the analysis based on the Tree Code. Mayor Buck asked about comments in this hearing by Mr. Howsley, the Applicant's counsel, discussing court cases decided as recently as the previous week: Are these comments in the record? Mr. Boone advised that they are not in the record, but more a sort of general legal argument by Mr. Howsley. Mayor Buck, having read through the hundreds of comments submitted regarding these appeals, thanked community members for their efforts. He described the extensive research he had done to explore the historical context of the Tree Code provision that is central to the appeals, and specifically the question of alternative designs. Specifically, he sought to identify what the City Council had in mind at the time they adopted the pertinent Tree Code provisions. He learned that efforts to determine the best balance of development and conservation of natural resources has been ongoing for decades. Despite today's concerns, some of which have been heard for over 20 years, he also recognizes positive movement by the City with regard to the tree canopy and to investment in publicly-owned natural areas. Along with considerable development around the city over the past two decades, he has seen treed character maintained. As painful as individual tree removals continue to be, he believes it also draws attention to the bigger picture: how carefully applications for removal are considered and how attention has been drawn to the many trees that are not cared for properly. The latter is demonstrated by the decayed condition of trees on the property in question, which he finds appalling. As noted earlier, more trees are being lost because of lack of care and stewardship than through these Type II permit approvals. The monitoring offered by the permit process, including the strong public engagement explicitly required, is important. Yet the entire urban forest cannot be preserved only through that process. Regarding compliance with criteria in this appeal, he joined others in wishing the Applicant had proposed a home that would work around some of the existing trees or at least those deemed healthy. He recognizes that the initial plans had been changed modestly to preserve the three healthy trees along A Avenue. However, the code is clear that restrictions cannot conflict with the requirements of the zone or the use; while it would seem the Applicant should be required to build a smaller home on this lot or to build one house on the combined property, these are not legal options that are before the Council. Some of the Council members' arguments might be considered in a different scenario, e.g., where the property owner sought to build affordable multi-family housing or middle housing and the number of units might be restricted. However, Mayor Buck is in favor of ensuring that the approved plan, with its enhanced mitigation, really addresses the need to replace much of what is lost. He is concerned that if Council denies the permits here and the matter is taken to court and the City loses, all of that enhanced mitigation also will be lost. In that situation, not only will the property be developed, but the City will have no say in what is planted there in return; this is a risk he is unwilling to take. At this time the mitigation is within the City's control, and Council should now ensure that these conditions of approval will return some of the large-growth trees and ultimately the ecological value so many have mentioned. Councilor Rapf commended the Mayor's remarks. He indicated he would vote to affirm the DRC's decision, largely based on the property rights issue. In a society where people own property of value and neighbors encroach on that value or tell neighbors what they can or cannot do, it exacerbates a situation that now is being seen: people looking over the fence, whispering and yelling at one another, rather than having civil conversations. He likened this matter to the right to have children without asking the neighbor's approval. A neighbor should not have the right to tell him what he can do on his property, and therefore he supports this motion. City Council Regular Meeting Minutes Page 17 of 21 September 6, 2022 Councilor Mboup indicated he takes an opposing view: Property owners do not have the right to do anything they want on their property, e.g., making excessive noise at midnight, just as they cannot destroy the environment on their property. The many benefits of trees and the air around us belong to everyone. The decision for him is simple: There are laws, including city code, but people are people; while he respects Mr. Sebastian, Councilor Mboup stated that he will never forfeit or negotiate on children, education, and nature. As an educator himself, he asserts that removal of these trees will impact the children at his school. City code is written by people, i.e., Council. If Council denies permits in this case, the Applicant's attorney may take the City to court on the "clear and objective" issue of ORS 197.3, but will not win. This is the people's city, and there is no objectivity to removing these trees, he stated; therefore, he will vote against the motion. Councilor Nguyen noted that, in considering the two appeals separately, he had learned that the northerly lot (AP 22-04) has four trees in "Poor" condition and one rated "Fair", hence the request calls for removal of only one tree that is not likely to remain viable for the longer term. The appeal now being considered, for the southerly lot, presents a more difficult decision for him. This entails removal of four trees considered healthy, all in "Fair" condition. He will not necessarily oppose it, but wants to see another good-faith effort from the Applicant to provide an alternative that would save one or two more of these -Fair" trees for the sake of the community; all possible permutations are not expected. He called on the Applicant, as a fellow Lake Oswego business owner and resident, to consider the importance of good relationships with the community. As compared to more formidable sites where houses have been built, e.g., lakeside lots that are very steep and/or narrow, he sees the site here to be less challenging. He would support the DRC's decision to approve the application for the northerly lot, but wishes to see this additional step taken on the southerly lot. Councilor Manz expressed gratitude to all who have participated in this process, including all who have testified, the volunteer DRC, staff, and neighbors. She emphasized that her role as a Council member in this hearing is to determine if the DRC decisions on these appeals meet code and if code was applied objectively; in this quasi-judicial hearing, the rules cannot be changed without new legislation. As the Mayor had noted, the issue has been ongoing for decades. She, too, had looked back for more context, and believes it may be time to review the development and/or tree codes. That remains to be determined. She urged those who are working on either side of the issue to continue providing feedback to Council; that is the basis for the best decision- making. Given the community's high level of involvement in this application process, together with concerns voiced about the rapid pace of development in numerous neighborhoods, she asked that the community convey to Council their ideas for legislative solutions. As to the task at hand, she will vote in favor of the Mayor's motion and its included conditions of approval. Mayor Buck pointed out an earlier concern he had, like Councilor Nguyen, about the adequacy of alternative design solutions for this lot. Specifically citing obstacles to a reduced basement, he reiterated that if this appeal is denied, his concern is that if the Applicant proceeds with a court action and the City loses, they will lose the ability to mitigate. In response, Councilor Nguyen opined that neither he nor any of the parties are seeking a court action; for the benefit of everyone involved, it is unfair that people feel their voices are not being heard. Regarding this lot, while it is not required by law, offering an additional design alternative(s) would be the right thing for the Applicant to do. Differentiating the law from what is good for the community, he suggested it would demonstrate the Applicant's good faith and also help the Council in its decision-making. He clarified that, while he would currently endorse approving the tree removal requested in AP 22- 04, on the matter now before Council he suggests remand back to the DRC. City Council Regular Meeting Minutes Page 18 of 21 September 6, 2022 Mr. Boone reviewed the options available to Council: to approve, to approve with conditions or to deny. It would be up to the Applicant whether or not to remand, but a Council motion including that would essentially constitute a denial because Council found that the criteria were not met. Following additional comments from Councilors Mboup, Nguyen, and Mayor Buck about the Council's role at this hearing, Councilor Rapf echoed concerns heard earlier from Council colleagues: Significant risk of losing options may follow if this matter goes to a court above. At this time, Council should secure that which is within their control. After clarifying that it pertains only to the lot at 529 8th St., Mayor Buck reviewed the motion before the Council. He called for any comments from the Appellant. Mr. Howsley responded that there are no objections for the record. Mayor Buck finalized language for the motion, with input from Ms. Linder and Ms. Numanoglu. At Councilor Manz's request, Mayor Buck verified accuracy of the revised language regarding mitigation trees. Councilor Nguyen suggested the possibility of certain modification to the mitigation that might be at the Applicant's option, rather than required. After related remarks from Councilors Rapf and Nguyen, Mayor Buck called for the vote on his motion to tentatively affirm the Commission's decision to approve the tree removal application 499-22-000160-TREE,with the following conditions of approval: Of the street trees required, require one large Evergreen to be planted, and of the on-site mitigation trees, require one large Evergreen to be planted; and also require the City to ensure the owner maintains the health of all mitigation trees for a period of 12 months. A roll call vote was held, and the motion failed, with Mayor Buck and Councilors Rapf and Manz voting 'aye' and Councilors Mboup, Nguyen, and Verdick voting 'no'. (3-3) In response to Council members' questions, Mr. Boone suggested that another motion be put forward. Mayor Buck asked those Councilors who voted 'no' what changes might result in a passing vote. Councilor Mboup reiterated his objection to any motion that allows for removal of all nine trees. Any motion he could support should consider the voices of the neighbors and of nature. Such a motion would preserve the trees he had identified specifically earlier, i.e., those in healthy enough condition to be saved. Necessary workarounds can be found, as seen with many other neighborhood properties. Councilor Nguyen acknowledged that he would vote against the motion as it is currently presented. In order for him to vote in favor, he indicated he would need to see a good-faith effort from the Applicant to find an alternative design that would save more trees. To him, the crux is that, although the motion includes mitigation, it does not replace sufficiently the trees to be lost; he needs to see additional effort to preserve more trees. Councilor Verdick endorsed Councilor Nguyen's remarks about the need for additional design alternatives: To offer only a flipped floor plan does not demonstrate good faith by the Applicant. While not expecting to save all the trees or to see a comprehensive array of alternative designs, she believes it is reasonable that the Applicant present one or two more options. Mayor Buck reiterated his concerns that if Council denies the application and it goes to circuit court or LUBA and is overturned, this will end with no conditions of mitigation imposed. Councilor Nguyen discussed his view that both the City and the Applicant face risks in such a case. Mayor Buck reiterated his belief that those opposing the motion do not have a legally valid, code-based reason for denial at this time. Requesting several clarifications from staff, Councilor Nguyen reiterated his doubt about the Applicant's good-faith effort. Questioning again the reasonableness of the DRC's decision, he discussed issues of objectivity versus subjectivity that may have precluded some potential alternatives. Ultimately, the Applicant took the easiest and most City Council Regular Meeting Minutes Page 19 of 21 September 6, 2022 economical approach. Mayor Buck concurred. However, he opined that the Applicant had not done a good job of showing that many alternatives were pursued. Nonetheless, the Mayor remains unconvinced that requiring additional designs will result in saving more trees, given the constraints in this zone. Councilor Rapf pointed out that this decision must consider the need for equitable treatment of both Applicant and Appellant: Had it been a single family applying to build a home on this property instead of a prolific Lake Oswego developer, it likely would not have generated so much opposition or reached this point, he opined. Councilor Nguyen conveyed his belief that the City would be able to defend its position in court because it could be demonstrated that there were no alternatives considered except for flipping the same floor plan. Mayor Buck identified as a key sticking point the City's reliance on the precedent of considering "reasonable alternatives"; applicants must be allowed to build what is permissible in the zone. Councilor Nguyen countered with benefits of denying this application, e.g., requiring applicants to submit creative designs that work within the lot constraints to achieve harmony with nature. Mayor Buck emphasized the uncertainty generated by this approach, which in turn, contributes to the housing shortage; this is why the State is looking for clear and objective standards. Councilor Nguyen concurred that predictability is needed, but asking the simple questions about alternatives is part of the City's necessary due diligence. Both acknowledged that disagreement on the point could not be resolved in this hearing. Recognizing the deadlock, Mayor Buck advised that their excused colleague, Councilor Wendland, will be asked to review the record. Council will then take another vote. Mayor Buck moved to table AP 22-03 and reconsider it when all seven members of the Council are present at the September 20, 2022, meeting. Councilor Rapf seconded the motion. In discussion of the motion, Mayor Buck affirmed that it is to consider only AP 22-03. Councilor Manz differentiated current code from prospective legislative changes that had been discussed, reiterating that the question now before Council is constrained by the code. After a further brief exchange, a voice vote was held, and the motion passed, with Mayor Buck and Councilors Mboup, Nguyen, Verdick, Rapf, and Manz voting `aye'. (6-0) With regard to AP 22-04, Mayor Buck moved to tentatively affirm the Commission's decision to approve the tree removal application 499-22-000158-TREE, with the following conditions of approval: Of the street trees required, require one large Evergreen, and of the onsite mitigation trees required, require one large Evergreen. Also require the City to ensure the owner monitor the health of all mitigation trees for a period of 12 months, and direct staff to present findings, conclusions, and an order finalizing the Council's tentative decision on September 20th, 2022. Councilor Nguyen seconded the motion. Mayor Buck called for any comments from the Appellant concerning the additions heard in the motion. Mr. Howsley stated there are no objections to those proposed. At Mr. Boone's request, Ms. Numanoglu clarified that the conditions of approval on both applications stipulate that approval of each is dependent on the approval of the other. This is because the trees are in a tight group , and the removal of some trees will leave others vulnerable. Mr. Boone reviewed the language for the Council, confirming that if this motion passes, it is contingent upon the other appeal, now tabled, also being approved. After additional clarifying discussion, a roll call vote was held, and the motion passed, with Mayor Buck and Councilors Nguyen, Verdick, Rapf, and Manz voting `aye'. Councilor Mboup voted 'no'. (5- 1) City Council Regular Meeting Minutes Page 20 of 21 September 6, 2022 Mr. Boone advised that this is a tentative decision of the Council, with findings to be brought back at the next meeting on September 20. Mayor Buck thanked all present for their participation and affirmed the discussion would be carried over until the next meeting. 9. INFORMATION FROM COUNCIL Mayor Buck congratulated Mr. Boone for being named City Attorney Pro Tem. Thanking him for stepping into this role, he highlighted Mr. Boone's many years of dedicated community service. No further requests to share information was heard from Council members. 10. REPORTS OF OFFICERS No reports were made. 11. ADJOURNMENT Mayor Buck adjourned the meeting at 9:16 p.m. Respectfully submitted, Kari Linder, City Recorder Approved by the City Council on Joseph M. Buck, Mayor City Council Regular Meeting Minutes Page 21 of 21 September 6, 2022 ATTACHMENT 2 CITY COUNCIL SPECIAL MEETING rrA 1217 C1I MINUTES c:}0 September 27, 2022 1. CALL TO ORDER Mayor Buck called the City Council special meeting to order at 3:02 p.m. on September 27, 2022. The meeting was held both virtually via video conferencing and in-person in the Council Chamber at City Hall, 380 A Avenue. 2. ROLL CALL Present: Mayor Buck, Councilors Wendland, Nguyen, Verdick, Manz and Mboup. Councilor Rapf was excused. Staff Present: Martha Bennett, City Manager; Evan Boone, City Attorney Pro Tern; Kari Linder, City Recorder; Anthony Hooper, Deputy City Manager Others Present: Jill Jamieson, President of Illuminati Infrastructure Advisors; Lee Ward, Project Manager for EPCOR; Farshad Allandadi, Business Services Group Manager for the Portland Bureau of Environmental Services 3. EXECUTIVE SESSION: The Lake Oswego City Council will meet under authority of ORS 192.660(2)(e) Conduct deliberations with persons designated to negotiate real property transactions; and (f) Consider records that are exempt by law from public inspection. The City Council met in Executive Session from 3:05 p.m. to 4:11 p.m. 4. STUDY SESSION 4.1 Wastewater Treatment Plant Project Update. Deputy City Manager, Anthony Hooper introduced the project team and noted there were many individuals present and able to answer questions Councilors may have. Farshad Allandadi, Business Services Group Manager for the Portland Bureau of Environmental Services, appreciated the opportunity to make a few comments in support of the City Council Special Meeting Minutes Page 1 of 7 September 27, 2022 program, which had been a very long road for both jurisdictions. Replacing the Tryon Creek Wastewater Treatment plant was in the shared interests of both municipalities and there had been a lot of good work done evaluating some viable alternatives. The Bureau believed very strongly the Public Private Partnership (P3) negotiated thus far was a very viable solution to the shared municipal needs. Work had been done before he began at the City of Portland, and Lake Oswego's Staff had been excellent partners. He looked forward to the conclusion of the process and concluding the negotiations of the updated Intergovernmental Agreement (IGA) between the jurisdictions following the P3. Mr. Hooper presented the Staff report, via PowerPoint, with a review of the history of the project, the progress to date, the benefits of the P3 option, project goals, and an overview of the physical site. The City Council would be presented with the definitive pricing from EPCOR on November 15, 2022. Additional comments were noted as follows: • The Tryon Creek Plant was built in 1964 and needed to be upgraded. The plant served both Lake Oswego and Portland but was owned by the City of Portland. Under the P3 arrangement, the plant and the land would be owned by the City of Lake Oswego but operated and maintained by EPCOR. • EPCOR would design, build, and finance the plant during the construction period and operate and maintain the plant for the following 30 years. • There would be a new aerial rendering of the design to reflect the shift of the administrative building and main facility to the west side of the site for cost savings. • The new rendering and design work would be unveiled as part of an online open house in November of 2022. The online open house would include curated pages on various topics, including sustainability, as well as an interactive chart for users to see how the wastewater treatment process worked. The public would be invited to give feedback on the project as part of the online open house, which would be open for an extended period of time starting in early November. • The process leading up to the current day was progressive. The City had hired EPCOR to do preliminary services. Some P3s were not hired until the design was finished and built, but the City was working collaboratively with EPCOR. The process was growing close stage in between the 60 percent design phase and the last task force step. • Many things were happening in tandem, including cost development, permitting with the Department of Environmental Quality (DEQ), and advancing through the Water Infrastructure Finance and Innovation Act (WIFIA). • EPCOR had taken the lead on navigating the WIFIA process, which had been successfully advancing. • The City was currently in negotiations with EPCOR on a Project Agreement(PA). Financial close would happen after the go/no-go decision in an after-project agreement. • Property acquisition was being worked on. • The Council had the opportunity to do an off ramp at this meeting, the November meeting or the December 6th meeting. If the relationship with EPCOR was severed, whether for convenience or cause, the City would own the design rights up to that point as well as all the different materials provided by EPCOR. The Council would then have to look at other options. • Staff recommended the City move forward with EPCOR and continue to develop costs. There was more to be done and things looked promising, but they had yet to finalize numbers. • Construction would begin in the summer of 2023 and would take about three years total. City Council Special Meeting Minutes Page 2 of 7 September 27, 2022 • EPCOR was working hard and fast to refine cost numbers by November. Currently, the design build was estimated at $182.3 million. Operations and Maintenance (O&M)were estimated at $2.9 million annually, an increase from the previously estimated $2.5 million. • Costs had increased due to commodities, inflation, and interest rate increases, as well as supply chain complications, among other issues. • Ratepayers could expect an increase of 3.9 percent to make the project work. Upgrading the existing plant and building a new plant both had targeted 3.9 percent increase. • The project had a robust website with an extensive Frequently Asked Questions section and users could sign up to get updates. • Staff would like the Council to give feedback on a project which would irrigate Foothills Park using reclaimed water from the new plant. The project would involve running purple irrigation pipe along Foothills Road and connecting to the existing system. • The total cost was $750,000, or$2.1 million when financed. • The City could forego the project completely or complete the upgrades necessary at the plant to complete the project at a later date. Upgrades at the plant would cost an estimated $500,000, or$1.4 million when financed. Lee Ward, EPCOR Senior Manager, resumed the presentation with a history of EPCOR and additional comments as follows: • EPCOR was a utility operator in the United States and Canada which ran about 40 wastewater treatment plants. • Operations was a large part of EPCOR. The company was not a contractor and did not design or build but brought in partners who designed and built. • EPCOR had partnered with a great team for the Lake Oswego Project, including infrastructure builder AECON, local contractor, Filanc, and the design firm Wood. • P3s were complicated and included many different aspects from design and construction to finance and O&M. EPCOR had put together a good team. • The proposed treatment process was based on a lot of existing technologies which were not quite cutting edge because EPCOR wanted to be sure the technology brought to the project was tried and true. • There were some nuances that enabled EPCOR to build on a smaller site and add a tertiary level of treatment versus the current two-level treatment process. • The first step of the process would screen out plastics and other items from the influent collected from Portland and Lake Oswego, and then remove grit from the screen influent to protect the main treatment system. • The second treatment was the AquaNereda, `secret sauce' treatment. The difference with AquaNereda was the sludge type: how the sludge grew and matured, and the level of treatment the sludge was able to do inside the basin. • Once through AquaNereda process, waste would go through a tertiary filtration to ensure the plant suspended solids and phosphorus levels, which helped in storm flow situations. The tertiary filtration system would filter out any deleterious materials. • After the tertiary filtration, liquids would be treated with a UV system, a change from the current chemical process using chlorine, before being discharged to the Willamette River. • Solid wastes would be separated out through the AquaNereda process to ancillary basins, thickened, and then pumped into trucks for transport to the Columbia Wastewater treatment plant and eventual dispersion onto farmers' fields. • The process was exciting. To place the plant on six acres was a challenge and only a few options would work. City Council Special Meeting Minutes Page 3 of 7 September 27, 2022 • EPCOR had gone on a field trip to get a first-hand look at the results and operations of an AquaNereda plant and were impressed by what they saw. • Resiliency and reliability were an important part of the project; contract and insurance talks had included discussions about the seismically active area. The project would be built to a Category 4. • The project had to comply with certain conditions associated with its location on a flood plain. The plant was designed to comply with the RFP stipulations that the main treatment units be built to withstand a 1 in 100-year flood and the main electrical systems be built to withstand a 1 in 500-year flood. • EPCOR had met with the Assisted Sustainability Network, Oregon Energy Trust, among others, to work sustainability and environmental benefits into the project. Solar panels were included in the current design and budget, and there was the possibility of reusing the facility water on site and recirculating water back into the plant, saving on potable water. • The plant was designed to treat very high wet weather flows of up to 53 million gallons per day. Redundancy and backup systems were being built into the plant to ensure it could withstand failures without interruption in service. The team was looking at standby power and building a Genset into the design. An emergency bankside outfall for long period wet weather flows was also included. Jill Jamieson, President of Illuminati Infrastructure Advisors, continued the presentation with a review of the process, with comments noted as follows: • The process was now in the Preliminary Services period and there was an opportunity to off- ramp at any time. Preliminary Services was designed to give the Council an objective moment at the end of the phase to make an informed decision at the end of the about whether to proceed or not to proceed. • EPCOR had done a great job advancing the project through design stages, as well as through the permitting front with cost information, financial structuring, WIFIA applications, O&M plans, and commissioning and decommissioning plants. • There was a lot of information developed in the preliminary services phase, but they were not yet at the end of the phase because there was no full visibility into pricing, therefore there was no recommendation in terms of a go/no-go decision. • The preliminary service period was financed by EPCOR, so the City was not out of pocket to them, though it was out of pocket for advisors to the project including Carollo, Illuminati, and others. • If the City proceeded with the process, costs that EPCOR had incurred would be rolled into the availability payments which would start in the future once the system was up and running. • If the City proceeded with the project after the go/no-go decision, the project would advance to the Project Agreement (PA) phase which covered the next 30-year period. • In the PA phase, EPCOR would finalize designs, finish construction, and then begin operations. The City would begin payments upon operational readiness of the facility, so there were many years left before payments would being. • The Council was approaching the point where it would be able to make an informed decision about whether or not to proceed and the process had worked as originally designed. • The study session on November 15' would include information about pricing. Even though full visibility was not yet available, there had been some inflationary adjustments and prices and interest rates had increased. • Illuminati wanted to be sure the City was getting a competitive price for the project, which was what the company would be looking at going forward. City Council Special Meeting Minutes Page 4 of 7 September 27, 2022 • Should the City decide the project was not in the best interest of the people of Lake Oswego or Portland, that was its right. The project could be terminated for a number of reasons, including exceedance of affordability thresholds or convenience. The reason for termination would determine how high EPCOR's compensation would be. The compensation would then be split between Portland and Lake Oswego, so both parties would need to have discussions. • Terminating the project would leave the City with many options. The process could be rebooted, the City could move forward with design/build, design/build/operate, or the existing Tyron Creek facility could be refurbished. Options would be presented to the Council after the off-ramp decision was made. • The go/no-go decision should be based upon the merits of the project presented, not the myriad of options available if the City decided to offramp. • There would be a comparative assessment to determine whether the project was a good deal for the City and rate payers, but it would be impossible, for practical purposes, to go through 500 different contracting options. The company would provide the City with expert judgement and opinion on whether or not it was a good deal, but next steps would have to be separate. • The process was designed from day one to minimize risk and allow the opportunity to make a fully informed decision. The process had been painstaking, and a lot of detailed information was coming to the Council fairly regularly to allow the Council to make the best decision for the people of Lake Oswego. • The Council could opt out of the project at any point. Even after moving forward with the P3 contract, the City would have the right to terminate for convenience or other reasons. Opting out of the project would cost money, but the Council should make an informed and sober decision about the next 30 years. • Significant transfer of pricing risks was with EPCOR both during the Preliminary Services phase and the PA. EPCOR owned the cost right now in terms of cost overrun. The company had given the City a firm cost and firm price for services. From Illuminati's perspective, EPCOR had been a very reasonable partner in that regard. • The City was not transferring all risk to EPCOR in order to optimize risk allocation and assign risk to the party best positioned to manage it. EPCOR was not in a good position to manage all the risk and would not be able to handle macroeconomic shifts or currency and interest rate issues any better than the City could, so some of the risk was shared. • The Project Agreement (PA) ran through many different issues, which was why it was so thick. Illuminati was responsible with getting the Council up to speed on the provisions of the PA and what sort of liabilities or contingent liabilities belonged to the city. • As an observer to the process as well as a participant, what she had seen thus far had given her great hope and confidence in the ability to move the project forward. • EPCOR was a world-class firm and it had worked collaboratively with its partners AECON and Filanc for the best outcome. There were elements, including some of the pricing, outside everyone's control. Mayor Buck thanked the team and recognized the work of Mr. Hooper and the City Staff as well as the other partners for the work they had been doing over a long period of time. The City of Portland had been a great partner in the current facility and throughout the process, and he appreciated the work going into the next phase. Council supported the ratepayers in Lake Oswego and Portland who would be paying for the new facility. In that regard, the partnership and the effort only took the project so far because at the end of the day there were real rates being paid by real people who expected the City Council to seek the best deal possible on their City Council Special Meeting Minutes Page 5 of 7 September 27, 2022 behalf. The Council was very positive about many aspects of the project, such as the technology, sustainability, energy efficiency, and its potential as a beneficial alternative to refurbishing the current plant. However, the Council was absolutely concerned about the price increase, which was unacceptable. The Council was growing weary of the continual blaming of the untoward price increases on the pandemic bogeyman or other externalities that it was expected to rollover and accept as the truth, because it knew better. Conditions were changing but the environment was not as dire as EPCOR would like the Council to think. The Council was coming in with eyes wide open and hoping for the best, but the deck was in EPCOR's hand. The continued good partnership the project was built on should be manifested in transparent numbers so the Council would feel good about it as it came to the go/no-go decision. Mayor Buck shared the positive sentiments expressed by Jill Jamieson, but the Council was really there for the ratepayers and wanted to ensure the project was a great deal for the people of Lake Oswego and their neighbors in Portland. Councilor Manz commented that the Mayor had expressed most of her thoughts. Councilors often heard from ratepayers about what they were paying for various services and asked when the lowest bond drop-off would be. City Manager Bennett replied the finance director was not present and wanted to be sure to get the Councilor an accurate response so would follow up with numbers later. Councilor Manz stated the City had a fiduciary responsibility to the ratepayers and people were weary. EPCOR would make an excellent partner, and the product was very exciting. She hoped to get to the point of transparency where the Council would feel good about going to the ratepayers with the product as a positive benefit for future generations and residents of the City. Mr. Hooper stated he was 95 percent sure the estimated drop off for the lowest bond was 13 years from now in Fiscal year 2034/35. Councilor Wendland thanked the team for the update and agreed with the Mayor's comments about pricing and rates. The decision also had to do with functionality and dependability because the sewer system should not fail and performance should not be compromised. When the system went in, the City should ensure it worked without any pause and was fully operational all the time. When was pricing expected from EPCOR? The Council and their partners in Portland should have more than 24 hours to make a decision and needed realistic expectations on timeframes since the final decision was expected in December. If a decision could not be made with good information, a decision would have to be made later. Councilor Wendland asked if there was an expectation of when the Council would have finite numbers. Lee Ward replied that EPCOR's target date for submitting numbers to the Council was October 27th, 2022. A decision had been made at the 11th hour to shift the site in order to save a substantial sum of money, however the shift impacted influent and effluent piping, and stormwater drainage, among other things. A design meeting had been held the previous week to finalize some of those issues and EPCOR had come back to the City this week to clarify stormwater drainage. The shift was now in hand and being worked through quickly. EPCOR was getting quotes back now for various parts of the plant not impacted by the design change. The company promised the Council it would have updated numbers on capital, operations, and the 30-year repair/replacement plan to the Council by October 27th Councilor Wendland noted economic conditions had changed in the last 60 to 90 days and the local community was savvy and tied to the financial markets and building, development, construction. Councilor Wendland inquired whether or not the company was starting to get City Council Special Meeting Minutes Page 6 of 7 September 27, 2022 more favorable and realistic numbers from the marketplace. Lee Ward agreed prices had calmed down, though some items were offering more favorable prices while other prices were not budging. Lumber prices had come down but stainless-steel prices had increased. Plastic prices had risen meteorically but were starting to come back down to earth a little bit. There were still outstanding supply chain issues which delayed some items. An AECON rep had noted earlier today there were still some contractors or vendors who would not give more than a one- day quote. The company hoped the news of easing prices would translate to lower costs, but it could not promise that was true across the board. Councilor Wendland, who had attended early, pre-pandemic meetings on the project, appreciated the team's hard work. He also thanked the City of Portland for its partnership and noted the process had been very positive and encouraging. Lee Ward noted EPCOR was heavily invested and was trying to do everything it could to make the project a go. The project was important to their entire team as well. Councilor Wendland replied the City knew EPCOR would have the very best pricing possible and the City was counting on that. Mayor Buck thanked everyone for their time and said the Council looked forward to hearing back from the team shortly. 5. ADJOURNMENT Mayor Buck adjourned the City Council special meeting at 5:06 p.m. Respectfully submitted, Kari Linder, City Recorder Approved by the City Council on Joseph M. Buck, Mayor City Council Special Meeting Minutes Page 7 of 7 September 27, 2022