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City Council Minutes - 07/09/2019 Citeses 'Tigard Tigard City Council Meeting Minutes July 9, 2019 STUDY SESSION At 6:30 p.m. Council entered into an Executive Session called under ORS 192.660 (2) (e) to discuss real property negotiations. The Executive Session ended at 7:21 p.m.Youth Councilor Turley joined the meeting at that time. Administrative Items: • Council Liaison reports were not given and will be covered at the next Study Session. • Councilor Lueb requested a discussion on general concerns with the drop box franchise renewal. City Attorney Rihala and Utility Manager Goodrich will schedule this for an August or September meeting. BUSINESS MEETING A. At 7:31 p.m. Mayor Snider called the City Council meeting to order. B. City Recorder Krager called the roll. Present Absent Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ Youth Councilor Turley ✓ C. Mayor Snider asked everyone to stand and join him in the Pledge of Allegiance. D. Mayor Snider asked staff and council if they have any Non-Agenda Items. None 4. CITIZEN COMMUNICATION A. Follow-up to Previous Citizen Communication—Mayor Snider asked Community Development Director Asher if there is any follow-up to previous citizen communication. He reported that in late May a concerned neighbor reported some code violations on a property. The city's Code Compliance Officer has been working with the property owner to TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 1 of 15 bring it up to code. The City organized a volunteer party scheduled for this week to go over and help the property owner with things such as lingering issues such as weeding and general cleanup. Multiple departments are working on this and there are 30 people who have volunteered to help. Mr. Asher also updated council about a speeding traffic issue brought to Council on June 11 in the Pebble Creek neighborhood. Traffic monitoring devices were put in place and staff is now in the process of compiling and reviewing that data to see what solutions can be offered about traffic and possible enforcement. B. Update from Police Chief McAlpine The Chief reported that June was a pretty calm month. The peacocks at River Terrace were a community concern but Tigard Police had no role. They referred the issue to Fish and Wildlife and other entities. Two officers were hired,Klayton Fink and CJ Boungnavath. She showed a slide highlighting crime trends in June. There was an increase in organized retail crime with crews coming in from Washington and the I-5 corridor. There was also an increase in burglaries with no items taken. Food carts are being burglarized and receiving minor damage. Four vehicles were stolen in June at the Washington Square Mall but none left the parking lot. The Fourth of July fireworks led to 52 callers from 6 p.m. to 3 a.m. Mayor Snider said he received some calls, even at 2:00 in the morning. Chief McAlpine said they do not allow officers to take the Fourth of July Holiday off so it is a highly staffed day. She said there were many citizens that were very frustrated. There were some that want regulations by ordinance regarding fireworks and she strongly encouraged them to give their input to Council. She said the department is not meeting the expectations of citizens regarding fireworks and is looking for solutions to make the city more livable around that holiday. C. Tigard Area Chamber of Commerce CEO Mollahan gave an update. Eight members were added in June. The annual meeting was held to review the year end accomplishments. Board members were elected. The Farmers Market still getting new vendors and continuing to expand and will probably need to move some booths into the Burnham parking lot. August 2 is the annual Farm to Table event, featuring local products. She announced that the Tigard Downtown Alliance is planning the Street Fair and Latino Festival for September 7. Councilor. Newton suggested that Council have a booth at the Street Fair. D. Citizen Communication—Sign-up Sheet. Mayor Snider noted that two people signing up wanted to speak on ADUs and asked if they could hold their testimony to the public hearing. Scott McCormack,McCormack Properties, 7190 SW Sandburg Street,Tigard, OR 97223, spoke about the design contract on the consent agenda for the connection of Wall Street with Tech Center Drive. He said he owns two buildings on Tech Center Drive and TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 2 of 15 understands the benefits of the road extension as it might open up new development. He said they are not against the road extension but wanted to make council aware of potential negative impacts. This change will send a lot more traffic down Tech Center Drive towards the intersection on 72"d Avenue,which is already a difficult intersection. He said it is easy to see that more vehicles will cause traffic issues along Tech Center Drive including blocked driveways. He said a solution is to make improvements to that intersection at the same time the road is being worked on. Mr. MacCormack said he spoke with the city's Senior Project Engineer Newbury to review the traffic and their concerns and he agreed to take consideration of their concerns during the design process,including looking at adding a new traffic signal and other possible changes to the intersection. He said the meeting went well and he looks forward to seeing the final design. He asked that consideration be given to the importance of improvement to that intersection to help all the existing long-term businesses along Tech Center Drive. 5. CONSENT AGENDA (Tigard City Council&Local Contract Review Board) A. APPROVE CITY COUNCIL MINUTES • May 14,2019 B. CONSIDER CONTRACT AWARD FOR WALL STREET/TECH CENTER DRIVE PHASE 2 DESIGN Councilor Newton requested that when scoping the project staff take under consideration citizen comment given tonight. Council President Goodhouse moved for approval of the Consent Agenda as presented. Councilor Newton seconded the motion. Mayor Snider conducted a vote and the motion passed unanimously. Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ 6. LEGISLATIVE PUBLIC HEARING: CONSIDER COMPREHENSIVE PLAN MAP AMENDMENTS, ZONING MAP AMENDMENTS,AND DEVELOPMENT CODE AMENDMENTS RELATED TO THE TIGARD DOWNTOWN PLAN DISTRICT A. Mayor Snider opened the public hearing. b. Mayor Snider announced that anyone may offer testimony and a sign-up sheet was at the front of the room. C. Associate Planner Warren gave the staff report. The PowerPoint projector was not working so paper copies were made available to the audience, through Council was able to view the TIGA.RD CITY COUNCIL MEETING MINUTES-July 9, 2019 City of Tigard J 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 3 of 15 PowerPoint on their computers. He said the hearing was for Council to consider the adoption of map and text amendments related to the Tigard Downtown Plan District. The Downtown Plan District Chapter was streamlined, and accommodations were made for affordable housing including allowances for density,height and parking. The Comprehensive Plan Map and Zoning map were reconciled and the zoning designation corrected along Fanno Creek Park. Other issues addressed include the residential island at Knoll Drive. Residential zone conditional uses were clarified. He said existing Downtown reviews have three tracks. Track 1 is an issue of a design compliance letter. This is the only place in the Community Development Code where this is done.Track 2 (design review)is more typical and Track 3 was for discretionary design review. Proposed changes will bring all those reviews into one process—Downtown design review,which can be Type I or II. Type I is minor consideration of clear and objective standards with no discretion needed. Type II would have some discretion,like a site development review and has the appropriate notice procedures. The former Track 3,which was the design committee becomes an adjustment.There is another type of adjustment which brings in two kinds - adjustment to design standards and adjustment to specific standards (formerly called exceptions).The cost and barrier to getting through these design standards is lower. It is a quicker process and will make the code in Downtown more flexible and predictable for applicants. The chapter has been restructured and repetitive language was consolidated. Minimal language in the standards was clarified. He showed a slide of the existing chapter structure with 13 different sections and one showing the proposed structure reduced to 8 sections. Mr. Warren said another big policy change is related to affordable housing projects -an incentive zoning proposal. When Council heard about the Affordable Housing Plan last month the concept of incentive zoning came up. Staff thought this was a good place to implement it in a small fashion because it helps make affordable housing in the Downtown economically feasible. These bonuses only apply to qualified,regulated affordable housing and include two kinds: height,up to 20 additional feet;and density,variable depending on number of affordable units,with a maximum of 1.5 times the standard maximum density. This is the first time the City has offered an incentive for both rental units and home-owner units and would be in place for the life of the development. Mayor Snider asked if this meant the homeowner could only sell to qualified affordable home buyers. Associate Planner Warren said it did and that is typical for home-ownership units within the community land trust model. He said the reality is that most of these bonuses will be used mostly for affordable housing. In the near-term this will be used primarily by non-profit housing developers. Another policy change is residential development standards which will provide standards for nonresidential development in residential zones. He said this is for schools, churches, and lodges,etc. and offers more guidance to conditional uses and minimal standards. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 4 of 15 Associate Planner Warren listed a few small omnibus changes regarding flag standards, removal of the requirement for pre-application conferences for certain small Type Is such as Home Occupations and Extensions, etc. It also makes noticing requirements for Type II and III decisions consistent. He showed a slide of various non-policy changes that provide greater clarity for standards that already exist. They include how side lot lines are measured for flag lots, entrance standards for ADUs,ADU garage conversion,removing references to mobile home park subdivisions and clarification of facade standards for single detached houses. Comprehensive Plan Map changes will correct a disconnect between Open Space Comprehensive Plan designation and Parks and Recreation zoning and make them match. Associate Planner Warren discussed the zoning changes. Proposed zoning on Knoll Drive will preserve the housing island without making it non-conforming by extending the MU- CBD zoning from across the street. The existing single family detached housing use cannot be extended but can continue. The downtown code allows incremental development into commercial development.An example of this is the Tigard Taphouse,where a single detached house was converted into a commercial use. In the O'Mara Street area, the Parks and Recreation zone is overlaid on the Senior Center property and this is not appropriate zoning for the site. There is an MU-CBD planning designation covering the Tigard Christian Church and a residential area. The proposal is to compress the comprehensive plan district, so it does not include residential properties and rezone the Senior Center and Tigard Christian Church as MU-CBD. Next to Woodard park there is a flag lot originally acquired by Metro. It was carved off as surplus, but the plan designation never changed. It has a single-family dwelling built on it but is zoned Parks and Recreation. They will be rezoned to match their neighboring residential zoning. In response to a question from Council President Goodhouse about why the map is considered downtown and citywide,Associate Planner Warren said it was because the Comprehensive Plan designation follows the entire corridor along Fanno Creek all the way from the north end of town to the Tualatin River and it is citywide. Council President Goodhouse asked for a recap about flags in the code. Associate Planner Warren said flags have always come under code compliance and he understood that some time ago there were issues with equitable enforcement because the code preferred institutional flags such as the American flag or state flag over others and that is not a content-neutral designation. There is case law that the city must have content-neutral regulation for signs. The code changes provide greater clarity that there is not a permit required for a flag,but enforcement comes down to code compliance which is complaint- driven. The height bonus in the downtown was discussed and Councilor Newton asked if having 80-foot tall buildings would make it seem like a tunnel through Main Street and reduce the pedestrian feel of the downtown. Associate Planner Warren said the height was not TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 5 of 15 changed;it is currently 80 feet. Mayor Snider clarified that this would allow it to be 80 plus 20 feet if they provide affordable units. Council President Goodhouse requested clarification on measurements for ADUs built on garages. Associate Planner Warren said a garage would count towards the square footage just like it would for a home. The change clarifies that the portion of an ADU that is above an existing attached garage is counted separately from the garage. Councilor Newton asked about the process change and was interested in adjustment tradeoffs. Associate Planner Warren said the downtown adjustments used to be a Director's decision but there were no criteria. What is now offered is a lower threshold for getting the design-related adjustments because these are typically minor changes. There is a well- developed purpose statement for each of the design standards, so the applicant will be asked how they are meeting the purpose statement and staff can decide if they met it. d. Public Testimony— Bill Reed, 12360 and 12390 SW Knoll Drive,Tigard, Oregon 97223, spoke in favor of the zoning change on his property. He looked at how he could develop his property for single family dwellings and given the topography and other issues it was not practical. He said leaving it as a big lot would be a waste when it is so close to downtown Tigard. He supported changing the zoning to mixed use. He said the neighbors to the left and right of his properties are also favorable and this equates to 60 percent of the land in the Knoll Drive area. He asked that Council consider parking when discussing affordable housing. Many people eligible for affordable housing cannot afford a lot of cars.Parking is expensive. He asked that the City also offer incentives to those property owners that are not non-profit agencies. He stated that his mission is to build affordable or workforce housing on his land but sometimes subsidies come with too much red tape and are more costly. He said he wants to deliver units for$120,000 to $150,000 each but a non-profit entity would have to charge $250,000-$350,00 each. Bryn Stephens, 12450 SW Knoll Drive,Tigard, OR 97223,voiced support for the zone change. He has a large lot and it would allow a lot more flexibility. e. Response to testimony by staff—Associate Planner Warren clarified that the density and height bonuses do not require the developer or operator to be a non-profit,it just requires the deed restriction to be in place regarding regulated affordable housing for the life of the structure. He added that the downtown adjustment specifically related to parking is only offered to those developments demonstrating public benefit such as affordable housing. Council President Goodhouse said sometimes developers pay extra not to have to increase the height. He would like it to be for all development, not just affordable housing. He suggested an SDC waiver to encourage the height limit increase. Councilor Anderson said he saw this presentation earlier with the Planning Commission. The text and maps in these code amendments work better and he was supportive of them. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 6 of 15 He added that there would not a lot of buildings using the height increase option. He suggested the language about height increases remain. Councilor Lueb said the height increases are a creative way to incentivize affordable housing rather than continuously offering a fee waiver and she was not in favor of changing it. Councilor Newton said to leave it in as proposed. Youth Councilor Turley agreed with leaving the language in. Mayor Snider commended staff for putting a lot of thought and work into these amendments and the support received in the community testimony tonight reiterates that. Councilor Newton said she appreciated the time it took to prepare these changes. f. Mayor Snider closed the public hearing. g. Council Discussion and Consideration: Ordinance No. 19-09 Councilor Anderson moved to adopt Ordinance No. 19-09. Councilor Lueb seconded the motion. City Recorder Krager read the number and title of the ordinance and conducted a roll call vote. Ordinance No. 19-09 — AN ORDINANCE AMENDING THE COMMUNITY DEVELOPMENT CODE TO UPDATE THE PROCEDURES AND STANDARDS IN THE TIGARD DOWNTOWN PLAN DISTRICT AND ADOPT OMNIBUS CHANGES TO THE COMMUNITY DEVELOPMENT CODE; AMENDING THE COMPREHENSIVE PLAN MAP TO RESOLVE DISCREPANCIES; AND AMENDING THE ZONING DISTRICTS MAP TO ADD PROPERTIES TO THE TIGARD DOWNTOWN PLAN DISTRICT AND REMOVE A PROPERTY FROM THE PARKS AND RECREATION ZONE Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ Mayor Snider announced that the ordinance passed unanimously. 7. LEGISLATIVE PUBLIC HEARING: CONSIDER EXEMPTION FROM SYSTEM DEVELOPMENT CHARGES FOR CERTAIN ACCESSORY DWELLING UNITS a. Mayor Snider opened the public hearing. b. Mayor Snider announced the hearing procedures and said anyone may offer testimony and there is a sign-up sheet at the front of the room. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 7 of 15 C. Associate Planner Warren gave the staff report. Copies of the PowerPoint were available. He said system development charge (SDC) exemptions for Accessory Dwelling Units (ADUs) was brought up during Phase II code amendment discussions. This is being considered because SDCs are a higher percentage of the total project cost. Most developers of ADUs are homeowners and ADU construction is financed with home equity or cash. Homeowners may be on the fence about building ADUs. An exemption may allow thee ADU to be rented at a lower rate and this helps bring the city into alignment with regional ADU production goals. It also promotes aging-in-place and multigenerational households. Associate Planner Warren discussed impacts. It does impact parks and transportation project budgets,but the fiscal impact is relatively small. It is a loss of$6,678 in parks and $3,909 in transportation SDCs. The Transportation Development Tax is still in effect and that money comes back to the City.ADU households are smaller and have lower impact. Their construction does slightly increase the tax base with annual property tax increases of$200-$300. Several nearby cities offer exemptions: Hillsboro,Lake Oswego,Tualatin, Wilsonville, Sherwood,Troutdale and Portland. Mr. Warren showed a slide of the proposed terms of the exemption. They are that the ADU must be 1,000 square feet or less, not used for short-term rentals (Airbnb,VRBO) and the exemption expires July 31,2022. Owners must record a deed restriction. SDUs become due if the ADU is used for short-term rental within ten years. The SDC exemption sunset will allow the City to examine impacts and encourage homeowners to act soon. Council President Goodhouse asked about water and sewer SDCs. Associate Planner Warren said water and sewer lines are typically shared by an ADU, so they don't trigger that SDC. There will be instances where an ADU could push the property into the next tier for water meter size and that would increase their water bill. Mayor Snider clarified that Washington County Chair Harrington is having conversations with cities to see if they want to band together with the county and act on reducing the SDCs. Council President Goodhouse asked if other cities have any additional incentives. Associate Planner Warren said the largest barrier is the regulations and that has been removed. Other barriers are outside of what the city can control. Financing has not caught up to the development world and the desire of property owners to build these. Councilor Newton asked if she wanted to build an ADU and keep it as a guest house and not rent or sell it,would she qualify for incentives. Associate Planner Warren said she would qualify. Councilor Lueb said the Affordable Housing Plan said that Tigard previously exempted ADUs from SDCs and then started charging for them. She asked if anyone took advantage of the ADU program during that time. Associate Planner Warren said anyone who applied for an ADU permit during that time would have received it. However, there TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 8 of 15 were not a lot of ADU applications because attached ADUs were not allowed,there was an owner occupancy requirement, and there were other regulatory barriers. d. Public Testimony—Mayor Snider called upon those who have signed up to testify. Greg Foley, 11280 SW 78th Avenue,Tigard, OR, said he really appreciated the work staff has done to remove the barriers to ADUs. He said the SDCs are a lot of money and it would help. He said he is not a developer and would be doing his ADI as a family project. Gayle Kent, 10155 SW Murdoch Street,Tigard, OR, said she appreciated the help when she called in to the city to discuss her plans for an ADU in her basement. She said it will be a substantial investment to make sure the unit is not only safe and compliant, but comfortable and modern. She said the SDCs would have come to 34 percent of their original budget and they did not think they could continue with their plan. She heard about this public hearing and wanted to share three reasons in support of the SDC exemptions. 1 —Cost. She thought that one reason ADUs were allowed last fall was to have a wider range of housing options to increase citizen diversity and reduce housing costs. She said for regular citizens like she and her husband to afford to adhere to the requirements to develop a nicer place for people to live and alleviate housing costs, the associated SDCs should be substantially reduced or eliminated. 2—Livability. Another goal of the code amendment last fall was to create a more vibrant and sustainable community while allowing for flexible design and development of housing. She agreed that ADUs can make this happen. A few people can be added to each neighborhood without cramming in more homes or apartments. She noted something in Metro's audit report in Table M of self-reported incidence of ADU inquiries and outcomes. She cited Oregon City because it has a similar SDC price and said while a few inquiries came in weekly,most of them did not go on to construct ADUs, often choosing to build accessory structures without a kitchen. She does not think that is fair to future residents not to the City because it would not create the atmosphere the City seeks. 3—Fairness. The SDCs are related to Transportation and Parks,which she fully supports and very much enjoys. However, the street maintenance fee and park and rec fee are already being charged on the utility bills. Then there are additional Washington County charges so the SDCs seem out of proportion to the monthly fees. She said, "If your goal is to create a financially equitable situation for citizens who are able and willing to contribute to your plan to make the city more equitable,vibrant and sustainable,please support this exemption." Ezra Hammer, Home Builders Association, said he echoes and agrees with the last two speakers. He said this is a positive step in the right direction. He is speaking for builders who say the No. 1 issue they hear from members bidding on ADU projects is concern with SDCs. Folks do not have a ton of equity in their homes. This is cash out of their TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 9 of 15 pockets. The waiving of SDCs will encourage a significant number of these projects to move forward. Other points to consider for additional incentives are a limited property tax abatement and a waiver of water SDCs in the rare instance where the addition of a fixture or two adds to the size and price of a water meter. He said a recent DEQ survey found that 10 percent of ADUs are offered rent-free to family members or friends for a shorter period. He said this can move the needle on producing naturally occurring low income or free housing which is of tremendous value to the community. He encouraged Council to support this proposal. He asked that they also consider a limited property tax waiver,water SDC waiver and extension of the cap beyond 1,000 square feet.Larger families will have a hard time with those square footages. It makes sense to look at this program and determine its effectiveness,but a sunset clause may not be appropriate if there is a downturn in the market. City Attorney Rihala noted that written testimony was received and added to the record. e. Response to testimony by staff. Associate Planner Warren said he did not profess to understand how water meter fees are charged as that is a Public Works policy,but it would merit looking at more closely. He was not aware of any jurisdiction in the state offering a property tax exemption, probably because the tax increase due to the addition of an ADU is marginal compared to the entire property tax bill.The State had to intervene when Multnomah County was reassessing the entire property when an ADU was added and said they should only reassess based on the value of the ADU which typically is small. He said the ADU size limit was carefully considered by staff The 1,000 square foot limit is an important way to incentivize these units. They will be built at a lower cost for the person living there. Going from 1,000 to 1,500 square feet is not a huge soft cost difference for mobilization, etc. But what is likely to happen with a higher limit or no limit is that the property owner will be incentivized to build the maximum size that they can. This doesn't serve the population of smaller or lower income households that are really the intended target of this policy. Staff across multiple departments carefully considered the sunset period. The consensus was that it made sense and was the appropriate period to offer staff the opportunity to reexamine and bring back to council. They felt it was important to have the clause there so if someone is on the fence about building an ADU, they know now is the time to act. f. Mayor Snider closed the Public Hearing. g. Council Discussion and Consideration: Ordinance No. 19-10 Councilor Anderson commented to the audience who may not be aware, 1,000 square feet is equivalent to a very large two-bedroom apartment with a dining room and kitchen. He said he supported keeping the 1,000 feet or lower language in the code. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 10 of 15 Councilor Newton appreciated the sunset clause, so staff and council can consider other barriers. She said the City needs to be as creative as possible in finding opportunities for missing middle housing. Councilor Lueb said it seemed well thought out and she supported the 1,000 square feet or lower size, as 1,000 feet is a lot of space. She appreciated having the sunset clause so it can be evaluated to see if it solves the missing middle issues. Council President Goodhouse suggested if ADUs are the best way to meet the missing middle,he did not want to limit the size. Mayor Snider said it is unlikely to be affordable if it was 1,500 square feet. He said a 1,500 square foot rental in the current market would probably cost$2,000. Council President Goodhouse asked staff to report back to Council on whether people are asking to build larger ADUs. Council President Goodhouse said a five-year sunset clause would be more appropriate. People do not know what these are, and it will take a while to get started. Some need to get built so people can see what they are. Associate Planner Warren spoke on behalf of Finance Director LaFrance who wants to examine the impacts of SDC waivers on the Parks and Transportation Funds. Three years seemed like a good enough window to get good data but short enough to take time to assess the fund impacts from a cost and benefit analysis. Community Development Director Asher said a sunset clause does not mean it ends then. It is a structural check-in point. Staff would make a report to council and anything can be decided at that time. Council President Goodhouse suggested extending the sunset clause to five years. Mayor Snider suggested four and he,Council President Goodhouse and Councilor Anderson indicated support. Councilors Lueb and Newton said they wanted to keep it at three years. Council President Goodhouse asked about adding the water SDC waiver to this ordinance. Mayor Snider noted that this was not in the meeting materials and was not noticed so he did not want to act on it tonight. City Attorney Rihala said staff has not been involved in discussions on this and it would be a significant departure from policy as the City currently does not exempt affordable housing from water and sewer SDCs. Community Development Director Asher suggested that the Community Development Department track whether the water SDC is disincentivizing anyone from building ADUs. Council President Goodhouse asked for a report in six months or a year. Council President Goodhouse moved to change the sunset timeframe from three years to four years. Councilor Anderson seconded the motion. Council Lueb said the City is getting rid of barriers but she is concerned about how many will receive SDC waivers,yet the City still has roads that need to be fixed. She said she looked at this financially. One year is too short,three years is critical to gather enough information. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov Page 11 of 15 Mayor Snider asked what Finance Director LaFrance would say about this timeframe amendment if he was here. Community Development Director Asher said he would agree wholeheartedly with Councilor Lueb's explanation. The policy of exempting SDCs going towards badly needed funds—Transportation and Parks—without knowing exactly what that cost is to the city makes him nervous as a rule, not just to ADU exemptions,but on affordable housing SDC exemptions which will be discussed during the next agenda item. He said Finance Director LaFrance would be asking that the timeframe not be extended. Councilor Newton said she would not support an extension because the impact on funds is unknown. She hoped that this will incentivize people to do this and that the City takes the time to see if this is a workable balance. Three years was enough time to do this. Council President Goodhouse said it will take a while to get the message out to the construction industry who can get this started and get the model and concept down. He said the biggest problem with transportation is affordable housing. So people can find a place to live and work in the same area,it would be perfect if ADUs sprung up all over. There would be fewer impacts on transportation or roads. Mayor Snider conducted a vote and the motion to amend the timeframe from three to four years passed 3-2. Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ Council President Goodhouse moved to adopt Ordinance No. 19-10,as amended. Councilor Anderson seconded the motion. City Recorder Krager read the number and title of the ordinance. A roll-call vote was conducted and the motion passed unanimously. Ordinance No. 19-10—AN ORDINANCE TO AMEND THE TIGARD MUNICIPAL CODE CHAPTER 3.24 TO EXEMPT CERTAIN SYSTEM DEVELOPMENT CHARGES FOR ALL ACCESSORY DWELLING UNITS amended to change the sunset time to four years. Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ At 9:34 p.m. Mayor Snider conducted a time check and verified that Council wanted to continue the meeting. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City=of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 12 of 15 8. RECEIVE BRIEFING ON CONSTRUCTION EXCISE TAX Associate Planner Warren gave a briefing on progress being made on bringing a Construction Excise Tax for Council consideration.A CET is a tax levied on the permit value of construction, not the sale price or land value. They were made possible by SB 1533 in 2016 and can be levied on both residential and commercial construction. Residential CETs are limited to a maximum of 1 percent. It must be allocated in the budget to defined uses: 50 percent to developer incentives for housing such as SDC exemptions or tax abatements, 35 percent for flexible affordable housing programs and 15 percent to Oregon Housing and Community Services for homeownership programs in Tigard. For Commercial/industrial CETs there is no upper limit but 1 percent is typical. It also must be allocated to defined uses: 50 percent for developer incentives for housing and 50 percent is unrestricted but recommended for affordable housing programs. Reasons for adopting a CET include backfilling SDC funds from exemptions like the affordable housing exemption, funding flexible affordable housing programs, and supporting affordable homeownership in Tigard through a state down payment assistance program. A CET is a key implementation step for the city's Affordable Housing Plan. Johnson Economics did a CET revenue forecast by looking backwards at permits issued from 2009 through 2018. Estimated revenue from a 1 percent residential CET is $587,500 in revenue; Commercial 1 percent would yield$158,000 and 2 percent$316,800.This is a total of$745,900 for both at 1 percent. For a 1 percent residential/2 percent commercial would bring in total revenue of $904,300 less around 4 percent for administration. Other cities in Oregon that have adopted a CET include Milwaukie,Medford,Portland, Corvallis, Eugene,Bend, Cannon Beach, Hood River City,Newport, Hood River County,and Tillamook County. Associate Planner Warren said next steps are determining rates,vesting and delayed implementation, refining detailed budget allocations for projected funds, and working with stakeholders,including the Home Builders Association. He said Council could consider this as early as Fall 2019. Mayor Snider asked about stakeholder input and Associate Planner Warren said the feedback given by the Home Builders at the Affordable Housing Plan adoption summarizes it. There will be impacts to development and considerations about balancing the costs of a CET with other incentives to offset it. Staff will be looking at this closely. Councilor Newton is interested in a commercial CET and going to 2 percent. She asked what other cities are doing.Associate Planner Warren said he knew of no other cities in Oregon with a 2 percent CET and the City would engage with the commercial development community to work on this. Council President Goodhouse commented on testimony given by the Home Builders about affordable housing about collecting fees closer to when they receive their certificates of occupancy. He asked if there was a sliding scale for larger construction projects. Associate Planner Warren said staff could look at that. He mentioned that State law enabling the CET spells out a number of projects that cannot be charged a CET, such as schools. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 13 of 15 He added that the CET for ADUs has been exempted by other cities and this would be very likely encouraged by staff. 9. CONSIDER RESOLUTION TO APPROVE A FISCAL YEAR 2019-2022 SEIU CONTRACT AND AUTHORIZE THE CITY MANAGER TO SIGN Human Resources Director Bennett and Library Director Bernard presented this item. Ms. Bennett walked council through major changes in a new three-year collective bargaining agreement between the City of Tigard and SEIU Local 503/OPEU 199. The staff recommendation is for Council to adopt the resolution approving the new agreement and authorizing the City Manager to sign the final agreement. Mayor Snider noted for the public that Council may not ask a lot of questions tonight because they have been involved during numerous stages and staff has kept them apprised of details of the negotiations. Council President Goodhouse moved to approve Resolution No. 19-29 and Councilor Newton seconded the motion. City Recorder Krager read the number and title of the resolution and Mayor Snider conducted a vote. The motion passed unanimously. Resolution No. 19-29—A RESOLUTION ADOPTING A NEW COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY OF TIGARD AND SEIU LOCAL 503/OPEU LOCAL 199;AND AUTHORIZING THE CITY MANAGER TO SIGN Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ Mayor Snider asked Human Resources Director Bennett to extend Council's appreciation to the entire bargaining team. 10. NON-AGENDA ITEMS There were none. i 11. EXECUTIVE SESSION None scheduled. 12. ADJOURNMENT At 9:53 p.m. Council President Goodhouse moved for adjournment. Councilor Newton seconded the motion. Mayor Snider conducted a vote and all voted in favor. TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd., Tigard, OR 97223 www.tigard-or.gov Page 14 of 15 Yes No Councilor Lueb ✓ Councilor Anderson ✓ Mayor Snider ✓ Council President Goodhouse ✓ Councilor Newton ✓ Carol A. Krager, City Recorder A st: Jaso Hider, Mayor Date: . TIGARD CITY COUNCIL MEETING MINUTES -July 9, 2019 City of Tigard 1 13125 SW Hall Blvd.,Tigard, OR 97223 www.tigard-or.gov I Page 15 of 15