City Council - Regular Meeting

ALL RIGHT, GOOD AFTERNOON, EVERYONE. TODAY IS TUESDAY, SEPTEMBER 1ST, 2026. WELCOME TO THE MONTH. AND THIS MEETING OF THE CITY COUNCIL IS NOW CALLED TO ORDER. MS. HAWKINS, PLEASE CALL THE ROLL.

MAYOR BUCK.

HERE.

COUNCILOR WINLAND. HERE. COUNCILOR VERDICT IS REMOTE. COUNCILORS CORRIGAN. HERE. EDMONDS-MANS. HERE. AFKIN.

HERE.

EMMA BOOB.

HERE. THANK YOU. NOW, EVERYONE, WILL YOU PLEASE STAND, REMOVE YOUR HATS, AND JOIN US IN THE PLEDGE.

I pledge allegiance to the flag of the United States of America.

Thank you, everyone. September is National Preparedness Month, which is an opportunity to remind the community that emergencies can happen without warning and that preparing in advance helps protect our families, neighbors, and community. We invite you all to join us for the city's annual Emergency Preparedness Fair on Thursday, September 24th, where you can learn how to make or update an emergency plan, prepare supplies, sign up for alerts, and learn how to support one another when emergencies occur. More details can be found on the City website. It's a great annual event. I encourage everyone to attend. And September is also the time that we recognize both National Recovery Month and Suicide Prevention Month, which gives us an opportunity to recognize the importance of compassion, connection, and support for those who may be struggling. We encourage the community to reduce stigma, to reach out without judgment, and to help connect people with resources and support that they need because no one Should face a difficult time alone, and those are both very important topics often that exist of course behind the scenes But that impact probably nearly every household in the community you will find these community these proclamations as well as all other city council proclamations on our website and Now is the time we have set aside on the agenda for public comment. We haven't had anyone sign up I just want to ask if there's anyone here who would like to give any public comment and No. No. No one online? Okay. Now, we are going to move on to the consent agenda. On the consent agenda, we have four items. We have ordinances 2974 and 2978. That adopts our findings for the trade regulations. We have resolution 2645, which is a grant for body-worn cameras, the police department, and resolution 26-47, which is our city manager employment agreement. Is there a motion to adopt the consent agenda?

MOVE TO ADOPT THE CONSENT AGENDA. SECOND.

ALL RIGHT. MOTION MADE BY COUNCILOR CORRIGAN AND SECONDED BY COUNCILOR MANS. ALL THOSE IN FAVOR SAY AYE.

AYE.

ANY OPPOSED? ALL RIGHT. MOTION PASSES 7-0. OKAY. NOW MOVING ON TO COUNCIL BUSINESS. I INVITE DIRECTOR OF SPECIAL PROJECTS STEPHEN BROADUS TO COME FORWARD. WE ARE GOING TO RECEIVE AN UPDATE ON THE WASTE WATER TREATMENT PLANT FACILITY.

Mayor, Councillors, thank you for having me today. I'm here to give an update on the wastewater treatment plant, and specifically we're going to talk about the cost proposal we recently received from Jacobs. So joined with me here tonight is Kyle Rohrer and Michelle Green, and I will let them introduce themselves. Kyle.

Hi, I'm Kyle Rohrer with Corolla Engineers. I'm an owner's advisor to the city of Lake Oswego for this project for quite a long time. I'm Corolla Engineers National Director of Program Management and Owner's Advisory Services. Nice to see you guys.

And good evening. Michelle Green with Jacobs. I am Jacobs' proposed design, build, operate, maintain project managers. Nice to see you all again.

Thank you both. And for this evening on our agenda, a number of topics that I want to discuss. And so running through these, I want to start with talking about goals and objectives. And so and not just project specific goals, but I want to start with citywide goals and then link those to what we're trying to achieve with the project itself. I want to give a little bit of a moment to talk about the schedule and what we've been up to over the last few years to get to where we are today. I'm going to hand it over to Michelle at that point to give a recap of the technical side of this proposal. So the main focus of tonight will be the cost element of the proposal, but the sister component of that is the technical side. what the project includes and how it will perform and things of that nature. And so Michelle will talk about those things. And then I will resume talking about all the various cost elements of the project. So we'll spend a few minutes on that. We'll talk about the value engineering and price validation effort that took place to make sure the city was getting the best value it could with this treatment plant. And then we'll wrap up by talking about how we can pay for the construction and operation of the plant, as well as how we can pay back the financing instruments that we need in order to afford the project. And then finally, I'll talk just a quick minute about where we go from here. So zooming out a bit to talk about citywide goals and objectives, the few that I think are most applicable to this project I have up here on the screen. So I'll read those verbatim. The city goal is to strengthen public trust in the city through continuous improvement, outstanding customer service, infrastructure investments, and fiscal stewardship. So this project most obviously connects to that with the infrastructure investment, but also the fiscal stewardship that we're here to talk about today. And then the corresponding council initiative is to collaborate with the City of Portland to make a financially and environmentally responsible long-term investment in a wastewater treatment plant. And I do want to take a quick minute to thank the City of Portland team members that have been an incredible level of support on this project and are advocates of what we're here to present today. Zooming in a little bit to project-specific goals and objectives, probably our biggest element here that we're trying to address is our aging infrastructure. So the Tryon Creek wastewater plant has been an incredible asset for the community for over 60 years. And actually, it will be close to 70 years old by the time our new plant goes online. So it has done an amazing job of cleaning water up of our community before it's released into the river. But as you can see in these pictures, nothing lasts forever, and we're reaching the end of our useful life, and the plant needs to be replaced soon. Other goals for the construction of the new facility include resilience to both growth of the community, so increasing flows over time, but also disaster, both in the terms of the obvious one, which could be an earthquake, but also resilient to flooding as well. We want to be good stewards for the environment. So that means efficiently treating our wastewater and producing a high quality effluent that we release to the Willamette. And then also we want to be good neighbors, support the Foothills District vision. So that's a parallel process that's occurring right now. to envision what could be developed down there and repurpose that neighborhood. And we want to be a contributing force of that effort. So thinking about schedule and where we've been over the last few years, this schedule really focuses on the most recent two years. But I did want to have a call out here for recognition of the effort that's been going on for quite some time. So really, going back 10 years, even more, 2014, there's a facilities plan for Tryon Creek wastewater plant that looked at expanding the existing plant. And then about 2017, 2018, the conversation shifted from a rehabilitation of the existing plant to it made more sense to replace with a new plant. And so then more recently we began a procurement to find a partner to design, build, operate, and maintain the new facility. And so we've been working on that for the last few years. A couple of other key milestones up here that we've talked about, but I wanted to just recap those. About this time last year, actually, about 12 months ago, we closed on our WIFI alone, and I'll get more on that later with how that plays into the financing element of the project. And then also in December of last year, we executed our intergovernmental agreement with the city of Portland that lays out the partnership and how costs will be shared between the two cities. And again, I will get into that towards the end of the presentation. A QUICK PREVIEW INTO THE NEXT FEW MONTHS. SO WE'RE HERE TODAY TO TALK ABOUT THE COST ELEMENT OF THE DESIGN, BUILD, OPERATE, MAINTAIN PROPOSAL. AND THEN IF COUNCIL DIRECTS TO, WE WILL EXECUTE THE PROJECT AGREEMENT AT A SPECIAL SESSION IN OCTOBER. AND THEN WE WILL BREAK GROUND LATE 2026, EARLY 2027 TO GET STARTED ON CONSTRUCTION IN EARNEST. And Michelle, if you'll please talk about the technical proposal.

Sure. And we chatted about this a little bit when I was here in June, but wanted to just touch again on some of the highlights. So, you know, Stephan talked about the existing Tryon Creek facility being nearly 70 years old. This new plant represents really a generational investment on the part of the city. This facility will need to provide service 24 hours a day, seven days a week, and anticipated to serve the city long into the future, hopefully another 70 years, if not more. So we looked hard at identifying technologies and solutions that would meet the demands, those range of flow conditions, the longevity considerations to provide technologies that provide predictable and reliable performance over that range of not only day-to-day conditions, but over time. Really a lot of attention to efficient systems, so really a power usage that is cost-effective and efficient and responsive to those day-to-day facility demands. And that results in our proposed solution would result in over a 50% reduction in power on day one and 20% use of power at the end of the envisioned 30-year design criteria for this facility. with a fair amount of flexibility for future changes. So the city has identified criteria for the next 30 years, what can reasonably be anticipated in terms of regulatory climate, et cetera. And so this facility not only meets those criteria, but provides flexibility to respond to changes as they happen over again the course of many, many years. So the facility meets or exceeds the current regulations. It will provide enhanced treatment as compared to what is provided at the existing Tryon Creek facility. So some limited increase in capacity, but a 50% reduction in what is returned to the river. I'm sorry, 50% reduction in pollutants that are returned to the river. in that clean effluent, so an increase in water quality. And this facility will provide treatment for all flows, even really high rain events that the facility will see. And that's an enhancement over what the Tryon Creek facility is able to do. Seismic resiliency is also a key component of this facility designed to make sure that the facility is not only standing and can be repaired at the end of a very major seismic event, but is actually operable. So it's the same standards and criteria that hospitals meet. So very resilient facility that will be a pretty big enhancement. Odor control and kind of good neighbor considerations are also a key goal of the city and that's quite clear in the criteria that were provided and we responded in the nature of our improvements. So we have really enhanced levels of odor control collection and treatment of odorous areas of the plant with very strict performance requirements that include some financial penalties if we are not able to meet those. So we put quite a bit of focus on odor control. And our design also mitigates for noise and prevents kind of, you know, other good neighbor items like preventing nighttime light nuisance, right, consistent with dark sky approaches, and as well as considering edge treatments that are very compatible with the Foothills District Plan as it evolves. And I think the last point I want to make is the facility is really ready for the future. So as I mentioned, it's designed to meet the criteria of what can be reasonably anticipated for the next 30 years, but flexible enough to respond to changes in criteria. One of the benefits of the design, build, operate, maintain delivery model is the city has cost certainty, not only for what this facility will cost to design and build, today, you have that certainty, but you also have certainty on what it will take to operate the facility over the contract term. So that's a, those numbers are not changing save, you know, changes in law or those kinds of events. And embedded in that O&M pricing over the contract term is proactive maintenance that includes preventative and corrective maintenance as well as repair and replacement for components at the facility and what that really ensures that while we are charged with protecting your investment we're making sure that we're meeting those requirements. And at the end of the contract term, whenever that might occur, we're delivering back to you a facility that is high quality and well maintained.

So at this point in the presentation, I would like to start discussing the specific cost components and get into detail of what the cost proposal includes. So as you see on the screen now, the cost proposal can be summarized in basically two elements. So we have the fixed price to design and construct the facility, and that's shown as just shy of $370 million. And then we also have the year one operating and maintenance cost, and that's shown as about 6.5 million dollars. And that second item there, the O&M fee, that includes a few things. So that includes the labor to run the plant, that also includes the major repair and replacement of pumps and motors and screens, things that Michelle just discussed. It also includes the hauling of biosolids up to City of Portland's Columbia Boulevard facility, which is the process that's in place today with the existing plant. It also includes a energy guarantee of the maximum usage as a pass-through cost from PGE. And then why this is called the year one O&M fee is it is tied to a index that will be escalated annually that will reflect what the new annual price is. So that's year one price. Year two price will be larger than that based on the index. Year three price will be larger than that based on the index and so forth. Now, we recognize that this is a significant investment and a significant cost to the community. And so the project team took several efforts to ensure the cost was appropriate and that this is a strong value to the city of Lake Oswego and to the city of Portland. And so a couple of items that I wanted to highlight to show the effort that was taken to both confirm the price was appropriate, but also try to negotiate the price down in areas that were reasonable. WERE FIRST OF ALL SHORTER TERM OPTION. SO WHEN WE FIRST STARTED THIS PROJECT, WE LOOKED AT A 30-YEAR OPERATING TERM, VERY LONG FOR THIS INDUSTRY. IT HAS SOME ADVANTAGES, WHICH IS WHY WE STARTED THERE. BUT IT ALSO INCLUDES QUITE A BIT OF RISK IN THE UNKNOWN ON THE CONTRACTOR SIDE IN PREDICTING WHAT MARKETS AND PRICES DO OVER A 30-YEAR PERIOD. AND RISK TO THE CONTRACTOR TRANSLATES TO COST TO THE CITY. In trying to right-size that, we looked at what shorter terms what value that would provide to the city. And we feel like a 10 year term is the sweet spot in that it provides minimal risk to the contractor. So minimal risk pricing to the city, but it also gives us some extended period of time for contract operations. And so we have some flexibility built in, but not instability at the same time. So we found that this 10 year period was the sweet spot there. We also performed, with the help of Corolla Engineering, we performed a review of the cost elements to ensure that they were consistent with current industry levels. We also compared peer efforts, both of other utility agencies in what they're doing with their utility rate in order to maintain and address this aging infrastructure challenge that I mentioned before, but also other wastewater treatment plant constructions throughout the country and noting that It's a very difficult practice to compare those projects just because no two plants are really the same. There are different sizes. They're meant to treat different influent characteristics, different weather patterns, all of those things. But looking at that data, we were able to assess the reasonableness of this proposal. And then we also, this isn't necessarily trying to get the cost down, but it was trying to get the cost down to our community by looking for external funding opportunities. And unfortunately, just the amount of federal or even state money available to either pay for entirely or pay for portions of projects like these in the form of a grant is fairly limited, is very, very limited these days. WE WERE ABLE, AS I MENTIONED BEFORE, TO SECURE A LOAN FROM THE EPA, BUT LOANS HAVE TO BE PAID BACK, AND UNFORTUNATELY, JUST GRANT PROGRAMS ARE VERY FEW AND FAR BETWEEN THESE DAYS. WITH THAT SAID, PROJECT TEAM WILL CONTINUE TO LOOK FOR OPPORTUNITIES AND APPLY FOR THEM WHEN THEY'RE AVAILABLE, BUT I DON'T EXPECT A LARGE GRANT TO COME ONLINE THAT WILL HELP FUND THIS PROJECT. So a couple of graphs coming up here that I think go a long way to explain the financial situation that we're in. So this graph that you see on the table, we notice a pattern of accelerating costs of mega projects such as this in our industry. And trying to figure out what the correlation was led us to this identification that the consumer price index is just this one of the typical metrics that you use to assess inflation was rising but what was outpacing that increase in the consumer price index was the water sewer heavy civil index that really reflects cost patterns specific to wastewater treatment plants and large construction projects such as this and you can tell SPECIFICALLY SINCE THE PANDEMIC STARTED, THOSE TWO CHARTS HAVE DIVERGED FROM EACH OTHER AND WE'VE SEEN THE COSTS IN OUR SPECIFIC INDUSTRY OUTPACE GENERAL INFLATION BY QUITE SOME BIT. THIS CHART TAKES A LOOK AT TREATMENT PLANTS THAT HAVE BEEN CONSTRUCTED WITH AN EMPHASIS ON OUR REGION BUT DOES LOOK NATIONWIDE. compares the capital construction cost of those projects in today's dollars relative to the design capacity, so essentially how big the plant is, and tries to plot that and develop a trend line. And while I mentioned before that really no two plants are the same and it can be fairly tricky to make an apples to apples comparison, at some level of detail we feel like this is representative of the industry and we have plants on here from larger agencies such as the City of Denver, the City of Seattle, But we also have smaller agencies that would be more closely considered peers to us, City of Spokane, City of Oak Harbor, Washington, to name a few. And so what we tried to do here is show that the cost here is consistent with recent construction projects of this type in the country. So shifting a little bit away from cost validation into how we will pay for the project. So this kind of shows the flow of funds. Starting at the left-hand side, we have two major cost elements that we have to pay for. The first is the short-term construction of the new facility. So that is about a five-year term in which we need to pay for the $370 million dollar construction project. And then we also have below that on the left hand side the annual operations and maintenance fee. And so the way we will pay for that, moving a little bit to the right, is from a few sources. We have some money available to us through our system development charges, the SDCs. Not a ton, but every bit helps. And then for the remainder of the construction, we need to borrow money. And we have two instruments that are available to us for that. First of all is the WIFIA loan from the EPA, which provides us great benefits in terms of timing and the repayment structure. And then the second financing instrument that I have up there is your traditional municipal bond. And so both of those help give us the capital that we need to pay off the construction costs. But we have to pay them back. And so that's where we use our utility fund to pay those. And we also use our utility fund balance to pay for the annual operations and maintenance. With those monies going out to pay for the O&M, but also our loan repayments, we need to replenish the utility fund balance, and we do that in two ways. First of all, we have our utility billing for Lake Oswego customers, and then we also have our cost share payments from the City of Portland that is paying their proportionate share. So that is the flow of funds in order to pay for the project. But unfortunately, our utility billing at its current rate is insufficient to maintain a positive utility fund balance. So we do need to raise our sewer utility rate. And this graph on the table shows a couple of different options that are available to us to make in order to raise that revenue. But before I get into those options, I want to spend just a quick minute kind of going through the history dating back about 20 years, showing and highlighting 2007 to 2011, in which we needed to raise the sewer rate in order to pay for the lowest, the Lake Oswego interceptor sewer project that runs through the lake. And so I highlight that. I take a minute to highlight that. REALLY TO SHOWCASE THAT WE HAVE BEEN IN THIS POSITION BEFORE IN NEED TO RAISE REVENUE TO PAY FOR A MEGA UTILITY PROJECT, AND THIS IS QUITE SIMILAR TO THAT. SO FROM 2011 TO 2026, WE HAVE INCREASED THE SEWER RATE AT A FAIRLY CONSISTENT RATE. THAT HAS BEEN BETWEEN 3 AND 4% PER YEAR LEADING UP TO 2026 WHERE WE HAVE ESSENTIALLY TWO OPTIONS THAT ARE AVAILABLE TO US TO CONSIDER. I have labeled those option one and option two. So to talk about option one, looks like a 28% increase in the sewer rate for next year. That would go into effect July 1st of 2027. And that option includes some pros and some cons. So the con is obvious in that the rate increase is significant. quite significant for this first year. The benefit to that option is it stabilizes quickly. And so starting in year two, it returns to the 3.9% targeted rate increase that we've had in recent years. And another benefit of this option is there is a break-even point with option two in that after a few years, that option actually becomes the less expensive option to our rate payers, and we would expect that to continue out into the future. Option two, conversely, has its own pros and cons. So its advantage is that the rate increase is less significant every year. So we're looking at what would be closer to an 8% rate increase, but that would be an 8% annual rate increase uh... annually each year for ten straight years while we build up enough capital to pay uh... off our financing instruments at that point we could then return the rate down to three point nine percent so the advantage to that is in any given year the rate increase is less significant than what option one proposes however the disadvantage to this option is THE RATE INCREASES ARE, WHILE LESS SIGNIFICANT THAN OPTION ONE, STILL CONSIDERABLE AND THEY'RE CONSIDERABLE EACH AND EVERY YEAR FOR TEN STRAIGHT YEARS. AND EVENTUALLY AFTER THAT BREAK EVEN POINT THAT IS PROJECTED TO OCCUR AROUND 2031, 2032, THE RATE ACTUALLY STARTS TO SURPASS THAT OF OPTION ONE AND BECOMES HIGHER. indefinitely. So those are really the two options that we have to consider when financing this project. And so looking forward, We're here today to talk about the cost of the wastewater treatment plant project. From here, over the next several weeks, we will be conducting a couple of public information sessions where people can join us and hear information about the project and express any questions or concerns they may have. And then in October, specifically October 13th, we will be meeting again here in a special session seeking approval for contract authorization as well as the rate increase. And then pending council direction, and if those are approved in December of this year, we would start with project construction. So that would include demolition of the existing buildings on the site, as well as site preparation, grading, and really breaking ground on construction of the project. July 1, 2027, the approved rate adjustment would go into effect. And then longer-term milestones, some point 2031, we have projecting for construction of the new facility to be complete and to go online. And then even further out into that, 2041, we would be reaching the end of our 10-year O&M contract term. And so that is the cost proposal and the next 15 years or so for wastewater treatment for the city of Lake Oswego. And I appreciate your time and I'd be happy to answer any questions that you may have.

Thank you, Stephan. Real quick on the next steps, I know those are kind of next steps for the council, but can you talk briefly just about some of the outreach, the community outreach that we're doing here this fall?

Yeah, I'd be happy to. Thank you for the question. So we have two information session, webinar sessions that are scheduled in which people can join and we will have various project team members on the call ready to answer questions that may be about financing, that may be technical, whatever the question may be in nature, but we'll probably spend the first bit of the meeting giving a similar overview to this presentation and then the second half of the meeting as more of an open question and answer session.

And we're going to have a meeting with some of our board and commission folks and neighborhoods leaders as well.

Correct.

As part of one of those. Yes. Yeah, we're trying to get the word out to folks that we work closely with here in the city, our neighborhood leaders, our advisors on the boards and commissions, and others in the community to make sure that they're up to speed. As much information as we put out, we know it's hard to stay abreast of everything. YOU KNOW, THIS PROJECT, I THINK BACK TO AND THE DISCUSSION HERE AROUND A LARGE IMPORTANT MUNICIPAL PROJECT AND THE CONVERSATION AROUND HOW WE PAY FOR IT AND THE IMPACT THAT HAS ON RATE PAYERS AND THE IMPORTANCE OF THE CITY MAKES ME THINK OF THE WATER TREATMENT PLANT, WELL, THE OTHER SIDE OF THIS WHOLE System the water treatment plan project that we did some some years ago now and you know counselor Manson I were on the council and that was kind of going forward and it was very controversial I mean and that's critical safe drinking water critical, but it were there was a lot of people opposed to us Undertaking that project even on the council and we had colleagues who would vote against every contract that came before us for that project and And but now I imagine that most everyone in the community is so glad that we have one of the most resilient water systems in the state. And we are in a position and well, to have this safe, clean drinking water delivered in a very efficient way. And it's another example of a great partnership with another jurisdiction and we're doing the same thing here with this with the wastewater treatment project partnering with the city of Portland and we have one large facility that you know and we're a decent sized city but we're not the largest city and and where we have these big facilities that have more capacity that we can share with others. So the wastewater or the water treatment plant, sharing that capacity with the city of Tigard, having an agreement to help with Westland as well. And then this project being able to handle Lake El Sego customers as well as some Portland customers and future capacity is great, you know, because we need the infrastructure. There's some real fixed costs there. So the more we can spread it out, the better we can manage those costs. So I really applaud the way this project has come together. I just want to quick clarify, it was way back earlier in your presentation, you had the first year O&M costs, and I just, it looked like it was a little different than what was in the, because in the staff report has a five, just a little over $5 million number. Are there additional costs in?

There are. So I appreciate you bringing that to the attention. So both numbers are right, but the numbers are referring to different elements. So this number that you see on the screen is $6.5 million, includes additional it includes additional costs. So it's the major repair and replacement, so that's the replacement of pumps, motor screens, etc. It includes the solids transportation and also includes the maximum energy utilization, so the electricity, whereas the number in the staff report that I believe was 5.7 perhaps, did not include those other items that are in this list. So My apologies for that confusion. I tried to lump them together in this presentation, and then I realized that it was different than the staff report. So both numbers are right. They're just different. I apologize for the confusion. I thought about changing it last second, and I thought that might create more confusion. Hence, you have this me rambling about the clarification.

No, no, thank you. And you do have that included down here, so thank you for that.

Just on that point, Stephanie, you want to also talk about the amount that Lake Oswego picks up versus the amount that the city of Portland picks up?

Yes, thank you, City Manager. An important distinction here is the costs that are shown are all total cost dollars. These are not City of Lake Oswego obligations specifically. So in our IGA that we executed late last year, it defines the formulas for how the costs are shared between the City of Lake Oswego and the City of Portland. roughly it's about a 70-30 split. It's more granular than that, but just for ease of round numbers, it's about 70% Lake Oswego, 30% City of Portland, and that is aligned with the quantity of flow that each agency contributes to the plant. And so the numbers that you see on the screen here are total numbers that the, if you will, the partnership will need to pay, not just Lake Oswego.

Good clarification. And then just real quick, we were speaking earlier, and it was helpful context to know that our water treatment plant operates for a very similar annual cost as to what this plant, what Jacob's proposal is. So that's a very similar size staffing model at that plant. And of course, it's also run by the city. So that was helpful to kind of understand. Well, I mean, because who knows? WHAT IT'S SUPPOSED TO COST TO RUN ONE OF THESE THINGS. YOU GUYS KNOW.

SO, OKAY. COUNSELOR AFGHAN. THANK YOU, MR. MAYOR. DIRECTOR, WHAT KIND OF CONTRACT ARE WE SIGNING UP?

We're signing a DBOM, design, build, operate, maintain, fixed price for the design, build, and with a 10-year operations and maintenance term. And so we found that to be the optimal duration for the O&M. Any shorter than that, we started to see increased labor costs because we would be hiring seasonal or temporary employees. And any longer than that, Jacobs had to start assuming, well, they began taking on more and more unknowns as far as the performance of equipment and other things. So we found the 10 year was the appropriate length there or the optimal length. And so that's the contract that we'll be seeking approval in October.

So for the design build portion, it's a fixed dollar amount lump sum design it, built it, and the performance spec says what kind of effluent we can discharge.

That is correct.

And there won't be any change order if it's above ground design. Underground, they don't know what it is, but above ground, no change order whatsoever.

Right. So what you described it great. And so we have relief events that are carved out in the contract that would be allowable circumstances for Jacobs to seek additional compensation. That could be below ground surprises like you mentioned. And there's a few others, there could be acts of war, acts of God, things of that nature that also qualify as a relief event, but beyond that it is a fixed price proposal.

Okay, thank you so much. Next question. Five years seems to be a long duration. I have not done this size of a wastewater treatment, but is there a major activity that takes the longest duration for that five years?

Sure.

So that five years includes time for design, right? So that we've done some measure of design and we need to complete the design. So that's part of it. It's a challenging site from a lay down access perspective as well as the geotechnical conditions. So the first year we will be in parallel with design performing doing the demolition, et cetera, but doing field investigations to further confirm the geotechnical conditions that exist under those big buildings that nobody's been able to drill underneath. So we'll take some time to make sure if there are any surprises, we unearth them, no pun intended, early on in the project time duration. But then subsequent to that, once we just start the design in earnest, I did mention high seismic resiliency. That will require some pretty significant foundation stabilization, piles, those kinds of things. That is a pretty significant chunk of time. And then from that point forward, it's mostly driven by the ability to create efficiency at the site. Again, it's pretty constrained. There's not a lot of lay down. So there's some inefficiencies just associated with it. It takes that long. You can only get so many people on the site at once.

Thank you. Is there an incentive in the contract for finishing early or penalties for finishing late?

WE HAVE PENALTIES FOR FINISHING LATE, LIQUIDATED DAMAGES. WE DO NOT PROVIDE INCENTIVES FOR FINISHING EARLY.

LAST QUESTION. CAN YOU GO BACK TO THOSE PERCENTAGES INCREASE OPTION ONE AND OPTION TWO? THERE, THANK YOU. IF WE WERE TO Attached dollar amount to the 28% and the 8% and the 30.9%, what would those values be?

Right, so the typical median sewer bill in the City of Lake Oswego right now is at about $96.83. And that's taken from our Master Fees and Charges booklet. So the percentages are almost one to one with dollars. So a 28% increase reflects into a sewer bill increase next year of $27.11. And then whereas an 80% increase would be about $7.75. So between the two options in year one, you're looking at about a $19 to $20 difference. Thank you.

THE REASON I'M ASKING THAT QUESTION IS FOR THOSE WHO ARE ON FIXED INCOME AND IS IT, AND I DON'T KNOW INDIVIDUAL BASIS, IS IT BEST FOR THEM TO DO ONE YEAR OF HIGH OR SEVERAL YEARS OF LOWER INCREASE? THANK YOU. THANK YOU, MR. MAYOR. THANKS, COUNCILOR AFKIN. COUNCILOR MANS?

THANK YOU. THANK YOU FOR THE GREAT PRESENTATION, BY THE WAY. To add on, thank you, Councillor Afghan, for all of your questions. They eliminated many of my questions. So I will stick with the rate payer question. I am having a hard time as a long time Lake Oswego resident who has paid for Lois, who happily now has paid for our water treatment plant, seeing this jump in wages at this juncture in my particular residency in Lake Oswego. I've always wondered if there were a way, and you've shown it here, but there is a cost to it, of extending that out to say people who move here in 2020, for example, or 2025, who will pay for these projects, these future projects. We all want the project. But how do we take care of our folks on fixed incomes and those who have always paid long-term residence? How do we justify that cost to that? Do you have any thoughts or insight around that?

The thing that comes to mind is the utility financial assistance program that the city offers, of which I'm not intimately familiar with. But I'm wondering if. Sean can maybe come speak to that just for a second.

Hello, Sean Cross, Finance Director. So the city actually has two utility assistance programs. We have one, it's a short-term one, where we actually have another outside agency administer it for us, but those are for people that lost their jobs or something like that. But then we have the more, one that's more long-term for persons that are at a lower income level, more of a part. We only have about 50 residents out of our 12,000 that are on it. But what it basically does is it cuts the bill in half.

Okay.

They qualify for it. So it's like, depending on how many people are in the house, it changes. But we do have...

I got it. The more of that sort of information that we can get out to the public, I think as small a group as it is, and given our demographics in this city, I think it would be fabulous to just get that out in some way, shape, or form. I do have one other question. Thank you so much, Director Cross. I THINK I KNOW THE ANSWER TO THIS, BUT I HAVE TO ASK IT ANYWAY. WHY HAS THE HEAVY CIVIL CONSTRUCTION OUTPACED TO THE DEGREE IT HAS THE CPI?

COUNSELOR, THANKS FOR THE QUESTION.

I CAN SPEND THE NEXT THREE HOURS WITH AN ANSWER, BUT I CAN GIVE YOU A MUCH SHORTER ONE.

THANK YOU.

There's a couple of big reasons. In this part of the country, in particular, infrastructure is at the cycle where it's getting very old. ACROSS THE COUNTRY IN GENERAL, THE INFRASTRUCTURE GRADE IS VERY LOW. SO A LOT OF MONEY NEEDS TO BE PUMPED INTO FACILITIES, NUMBER ONE. THE OTHER THING IS THAT THE REASON YOU SEE THE GRAPH THAT CPI IS LOWER AND THEN THE CONSTRUCTION HEAVY INDUSTRY IS...

IT CAUGHT MY EYE. THANK YOU.

YEAH, I MEAN, IT'S TELLING. if you ask me on the street, I think it'd be even more dramatic than it is now, has a lot to do with the cost of regulations, has a lot to do with the transfer of risk, has a lot to do with monetary risk everywhere. These are long-term projects that can expose these companies to heavy duty financial risk when they're looking straight out. And just from an order of magnitude perspective, they're huge. So all those coupled, it's understandable that they're pulling away. You know, the real, you know, another real good thing that we're seeing on the West Coast, I'm from California and it's acute in California, that these contractors are just so busy that in order for owners like yourselves that want a high quality contractor that's going to build really nice infrastructure that's going to last forever, unfortunately, you're going to have to pay for it. That's just kind of the nature of supply and demand right now.

So when this infrastructure went in, it was generally funded, if you will, by the federal government, I would imagine, to a big degree. Absolutely, the Clean Water Act and the Safe Drinking Water Act came with a whole bunch of funding.

Absolutely, and from a sophistication treatment perspective as well, you know, the early, the try-on plan isn't, I mean, good for it for lasting 70, almost 70 years. It's pretty old technology comparatively.

Well, thank you for that answer. We could talk about it for three hours. Thank you. Appreciate it.

Thank you, Councillor Vance. Councillor Winland. I've got a few questions. First, I just want to thank the whole team because it's been a long process. We've all been, ever since anyone's been on council, we've talked about the sewer treatment plant and I'm so happy that I think we're going to get it over the finish line, at least getting the decision from here. It does seem like Four years is a long time to build a plant, but I'm going to leave that to you guys. When we talk about the length of service, Kyle, you said forever, but I know that's probably not. But we are building a high quality plant that probably will be another 70 years, you think? I mean, is that kind of, I know we talked about the 30 year horizon, but this plant, was built well. It's lasted 70 years. Can we expect the same?

Yes. Yes. I mean, I think we look at concrete as a 100-year lifespan. I mean, I think that the level of investment in the Tryon Creek facility has been influenced by City of Portland's other demands as well as this discussion that's been ongoing, as Stefan mentioned, related to this new plant coming. So the City of Portland has had to grapple with what's the right level of investment in that facility. So I think it could have probably lasted a bit longer with a different level investment over the last 10 years. But yeah, 70 to 100 years is REASONABLE AND EXPECTED AND REALLY THE BASIS FOR OUR APPROACH TO THESE FACILITIES.

OKAY. SO IN THE PACKET, I DID SEE A LOT OF ODOR PERFORMANCE CRITERIA REFERENCES. BUT I GUESS THIS COUNCIL AND FUTURE COUNCILS ARE GOING TO BE DEALING WITH FOOTHILLS. AND I KIND OF WANTED TO KNOW THE CRITERIA THAT WE DO ON THE ODOR PREVENTION, ODOR ELIMINATION. Because if we build a lot of infrastructure and a lot of housing and whatever down in Foothills, is this a long-term odor performance criteria that in 10 years, 20 years, 50, 70 years is going to be the same? And is it going to be our criteria enough so that the average person with an average smell in Foothills would not know that there's a sewer treatment plant there?

So a couple things to speak to here, and I'm going to try to pull in our planning team and City of Portland and Carollo and Jacob. So I'll try to make a very comprehensive answer here. So I think it starts, and I may even pull in our police department because I believe there's some phrase out there like an ounce of prevention is worth Some amount of cure or maybe that's our health department. But anyway, so I think the the while we will have language in our contract for enforcement of odor violations in which Jacobs is financially responsible for and significantly financially responsible for what's better than that is the level of treatment that they've included in their design which is is really industry leading right now. And that was, which I'm not a technical expert in, but luckily we have a great team and our counterparts of the city of Portland, as well as Corolla has subject matter experts that that's basically all he does, right? And so we have a high degree of confidence that the system is going to perform. And so that is key and hopefully leads to us never having to use those financial penalties that we have. And then lastly, what I want to bring up is our planning team, I think, has done an excellent job of conceptual design of the foothills redevelopment in which the treatment plant is not, with our treatment plant that we're designing, it's going to perform great. But it's not necessarily something that we're going to have a parade by. It's not that type of plant, right? And so they've done a fantastic job, in my opinion, coming up with conceptual designs that really de-emphasize the plant. And so they bring these celebrations, these corridors of emphasis and redevelopment opportunities really away from the plant. And so while it's there, it's going to operate. It'll be there. The visibility of it relative to a pretty small area that Foothills is, has really been, I would say, minimized by their creative thinking on how they can maximize that development potential down there.

OK. I mean, I'm less on the visual part. I mean, I think that's great, especially with it covered and so on. odor permeates all things. And that's my concern. I don't want our penalties to be such that it's going to be an economic decision where they're able to operate the plant and somehow get it more efficiently to pay for the penalties and just let the odor go and they're still in contract. That's what I want to say. I guess my leading question to you is, No stink going forward. Design, let's do a design. I hate the penalty thing. I mean, in the sense, let's get it done. And you feel confident that we'll reach those goals? Yes. Yes, sir. OK, for the long term. So the length of time on the loans, as you look at that chart, and Director Cross, you might want to come up because you're probably the master of all numbers. My question is, we continue to see the ARC continue to go up. Eventually, we're going to pay off Lois. I'm not sure when that will be, but probably around 2032 or 34, 35, something. And then what's our financing on the WIFI? It's a 30-year or 20-year loan.

35. 35. Yeah. So basically when we pay off the lowest loans, the two bonds, the 2009, 2010 full faith credit bonds we have for the wastewater, we will then start paying the principal portion of the WIFIA. OK. Because we get a five year deferment after the completion of the plant. And that basically allows for more I mean, for the rates to stay lower. Yeah, yeah, a longer but lower rates up front, because if they didn't, you'd have to have a bigger jump up if we did all bonds, because you'd have to be paying that bond from day one.

Right. So I think that's great. And the WIFIA financing structure, huge supporter of that. Are we able to kind of finance this for a couple years so that we have a runway of opportunity to look at inflation and maybe bond rates going down in the next two years to execute? Are we going to float the bond immediately and get a bond premium? Or do we have a strategy for that?

We basically can use the WIFIA as kind of what you're talking about, where we can, if the rates do go down, we could then, I guess, in theory, do the full faith and credit earlier. Except again, we'd have to ramp up the rates to pay for that more upfront, where the first half or the first third of the project gets paid for with the WIFIA.

We don't pay for on that for about seven years right and we can wait to float the bonds and at so I'm not saying that anything's gonna happen the economy, but let's just say we see a dip when we see that Bond rates go down We might be able to get and you're look you're planning on those to be 30 year or 20 year probably 25 year 25 very similar to the way the water plant water lowest bonds and There'll be multiple

Most likely, we won't do them all. We won't do 300 or 250 million all at one time.

Right. And so I guess just in the general concept then, are we ever going to see that line maybe level off? Or when would that, in like 10 years after the lowest has paid off, are we going to be able to see some relief to the taxpayer, I guess, or the rate payer?

PROBABLY NOT BECAUSE THE ACTUAL LOANS FROM THE LOWEST ARE LITERALLY GOING TO START PAYING. IT'S ALMOST A ONE-FOR-ONE THAT WHEN LOWEST COMES OFF, THAT $6 MILLION IS GOING TO START PAYING THE WIFI LOAN FOR THE NEXT 35 YEARS. IF THE LOWEST BONDS WEREN'T COMING OFF AND WE HAD THE WIFI LOAN AND THEN A WASTEWATER PLANT, LIKE I SAID, IT WOULD BE A MUCH HIGHER RATE INCREASE. SO THE WAY THAT WE HAVE IT STRUCTURED IS

We've already realized any savings that we can buy.

Basically like how we did the parks bonds, you know, when they came off, we put new ones, you know, they were voted on, we sold them so that the rates didn't go up. Right.

Right. Okay. Good. I was just hoping that there may be something in there. We can hope that maybe bond rates go down. Probably not in my lifetime. Right. Exactly. And then I guess the last question is, So do we have flexibility in the contract? Let's just say that we have a brainstorm on how to run a water treatment plant five years from now, and all of a sudden it costs a lot less to run it. Who's going to be the beneficiary of those savings? Is it our rate payers, or is it from Jacob's standpoint or the operator's standpoint?

So as I was mentioning the response to Councillor Afghan's question earlier, our contract in general is a fixed price contract. And so while the benefit of that is for all of the unforeseens that may happen, excluding those relief events, subsurface surprises, those unforeseen events Jacobs would be financially responsible for. The other side of that coin is Jacobs is the benefactor of efficiencies that they find. So if they find a better way to treat the wastewater than is currently available, they would then reap the benefits of that. I will say that's another benefit of our 10-year term is that as technology evolves, if there is a better way to do this whole thing, then we can reconfigure at that time.

OK, so Jacob is taking all the risk if everything's out of hand. And we love Jacob. Thank you for being here, whatever. It's just, unfortunately, you know me, this was an uncompetitive bid, per se. There was one person coming to the table. I'm just astounded at the amount of money it costs to build a sewer treatment plant this size. And that's just, I mean, I've been building sewer treatment plants for decades. Just kidding. No, I don't know anything about the money for this. But I do look at other capital projects around. This certainly is the biggest check that Lake Oswego will ever write, hopefully, at least in most of our lifetimes. I was just hoping that there would be something that would be a, if we find ways to save money, if there was ways to control costs, efficiencies, if the prices of commodities go down, which they hardly ever do, but there might be that case that our rate payers would benefit from positive outcomes. But apparently, we're pretty much in this situation where It is what it is.

You mentioned commodities. I think there are opportunities for Jacobs to use their collective knowledge and experience in order to create a more efficient or higher performing treatment plant and then them benefit from that. We did in our negotiation period try to identify cost elements that really there was very little opportunity for Jacobs to adjust the price or really affect the outcome. So electricity comes to mind. We reviewed and will continue to review their design as it evolves to make sure they're selecting energy efficient equipment. But then at that point, there's not really a lot of value in Jacobs assuming risk of how much electricity will be used. You know what I mean? And so by saying, hey, Jacobs, why don't you just pass through the electric cost to us, and we will pay it, what that eliminates is Jacobs pricing built-in risk into their proposal and saying, well, annual electricity could cost us $300,000, but if PGE raises their rates due to whatever, and now all of a sudden it's costing Jacobs $500,000 a year, they could build that into their price so that they wouldn't be exposed to that risk. And so by us saying, hey, the cost of electricity is going to be what it's going to be. We can't control that. Pull that out of your proposal. Pass that through to us. We'll pay that directly. We faced the risk, but we would have faced it either way now what we don't have to pay is the risk premium and the city can pay just what the actual cost of that is and so that's the example that comes to mind that we did that and we did that in a couple of different areas where we said this cost really Jacobs has very little control over this, but they do face some risk there. Why don't we pull that out and just minimize the amount of risk that we're paying for in our contract and

Right. No, I'm really talking about the capital, the $369.5 million. And I mean, we're going to build an elementary school for $40 million, OK? A brand new element. And I know it's different. But I mean, that's a huge, that's a huge. Yeah, they just got the contract. It's actually $38 million. They're going to build it for that. Then it's the soft costs on top of that. But I mean, they came in, and the contract was actually in pretty good shape from where they estimated, and it wasn't higher than they thought. So I'm just putting lots of different things in my head about how much it costs to build things. And I know, Kyle, you can probably talk to that it is just very, very expensive per square foot to build a sewer treatment plant. Is that correct?

Absolutely, and a huge percentage of it is stuff that you don't see. It's all underground. I mean, these are very, very large, expensive concrete structures with horribly sophisticated technology inside of them, very, very expensive mechanical equipment, pumping, disinfection equipment, stuff that can't break. you know, the air conditioning can go out in the school for half a day. You can't have, you know, your headworks fail on a wastewater treatment plant. It's just, it's really, I do appreciate, you know, that I'm just looking for an analogy, but it's, I mean, wastewater treatment plants are horribly sophisticated and very, very expensive on a PER UNIT, PER SQUARE FOOT, PER WHATEVER BASIS.

OKAY. I NEEDED TO HEAR THAT ANSWER. I KNEW THE ANSWER, BUT I THINK OUR COMMUNITY IS GOING TO HEAR DIFFERENT FIGURES AND THEY'RE GOING TO GO, WOW, THAT'S A LOT OF MONEY TO BUILD SOMETHING TO FLUSH. AND I JUST WANT TO MAKE SURE THAT WE AND OUR COMMUNICATION ARE ARTICULATING HOW I won't say difficult, but sophisticated sewer treatment plan is, and it is a 100-year project. I mean, and we're building one to go 100 years, so that we need to be talking about those things with our constituents so they know that that's part of the messaging that they need to hear and understand so that they are never gonna have to worry about building another wastewater plant in their lifetimes. So anyway, thank you. Thank you, Mayor. Thanks, Council Corrigan.

really helpful to me in terms of trying to get my head around what it is we're talking about. I wanted the community members to know that we did have the opportunity to walk around and listen and smell, and we did that. And to me, this seems feasible, what we're talking about today, that this could be a facility that will work well in our community. So I just had had kind of a minor question, which has to do with the owner controlled account. And I think Councilor Afghan touched on that with these would be the rocks and the things that are underneath the ground are going to be covered by this $15 million. That's the next line down from the 369. Is that right?

Right, and that figure we haven't settled on an exact amount yet, but the idea there is to be able to pay for those, a couple of different items. One would be for the unforeseens. The other one would be for that risk transfer that I included in my response to Councillor Winland. for items where we did not want Jacobs to carry the risk because it came with a cost. So that's really the two major items that that owner controlled account is set up for.

Okay, so is that funded with the WIFIA loan and the muni bonds? Would that be in addition to the 369? Or is that funded like we talked about earlier when we talked about this, we said, well, there are some residuals in our sewage account. And there was, let's see. And we have, no, let's see, you estimated $10 million in the LO sewer fund balance and maybe $5 million in the SDCs. Is that where that comes from or is it in the...

So the owner-controlled account can be just considered a construction expense. So it can be considered in addition to the $369 million and will be paid for by the same funding sources that would pay for the construction costs. Because it would just be another construction cost. So that could come from those sources. Our existing utility fund balance, the WIFIA loan, municipal bonds, SDCs, any of those sources could contribute funds to that owner-held account.

Okay, so our price might actually be higher than $369,000 depending on how the contingencies all work out?

The capital construction cost will almost certainly be greater than that $369,000 number. It will include that owner account as well.

Okay, great. Thank you.

Thank you, Councillor Corrigan. Councillor Mook. Yeah, thank you, Councillor. That's what I was going to ask, like how, at the end of the project, what's the cost? Because with EPCOR, we were around 670. Yeah. It was 30-year.

Yeah. A 30-year.

Yeah, but if you look at that 30-year, 600, like 400,000 probably, like when we finish, that's what I'm thinking. And what I look is it's $10,000 per person in Lake Oswego. That's how it will cost at the end. Because this is, I think, as a teacher, that's how I can explain how much does it cost. Every person in Lake Oswego will pay $10,000 to build this thing. I think it's very expensive. But we have no choice. We have to have this infrastructure. And we need to tell people that. And on top of that, 28% or even 10% on the thing, the sewage rate, it's very expensive. And for me, we shouldn't even think of talking about what option to take until we meet with the people, like the meeting you are going to have, and have feedback from the community so that we just come and make a decision. I think it's the wisest way, because this is a lot of money. All of this, when you look at it, it's a lot of money. I just, you know, for me, I just put it in some other currency that I know to see the, like, it's a lot of money. And John asked something and I really want, because the, you know, foothills is a place where there will be people living there. So the other thing has to be very, I mean,

Absolutely.

The response I get is like we are not 100% sure that it will be controlled. Maybe I didn't understand. No, I would like to speak a little bit more to that.

So I would say I mentioned a couple of things in this presentation, our odor control system and also our cost validation value engineering efforts. So we spent a lot of time extracting THINGS, ELEMENTS OF THE PROJECT THAT WERE NICE TO HAVE, BUT WERE NOT MUST-HAVES BECAUSE WE WERE VERY COST CONSCIOUS. ONE AREA THAT WE DID NOT CUT WAS OR EVEN go with a lesser option on was our odor control. Our odor control is very, very robust. And there's cost savings to be had there. But I am not hearing that from the council that that's the area that we want to look for cost savings. And so two things. We have looked extensively at cost saving opportunities. And at the same time, We have a very, very robust odor control system in our design.

Thank you. And also, like, not that I'm really proud of what you have done. Like, for example, the Wi-Fi at 3.9%. I mean, in terms of lending, getting money, it's something that's a genius idea that you did out there. And I think... When we talk about this project, we have to say those, that it could have been worse if we have as a lending people, you know, giving us money. It's just we have to tell people. And I like when John is saying that even if it's questioned, we know the answer as counsel, but we tell people, hey, $400 million, but this is what we're going to get. Or the control. almost 100 years, like let's say seven years or more of a water treatment plant that will resist even when the big one hits. All those are things I think you need to tell people because the number itself is scary, but it's worth the price. This one, if we have an earthquake, we are out. So that's, you know, yeah. Thank you. I'm very happy about what you've been doing, you know, so

Thank you, Mr. Mayor. Would the system development charge also be, would it also increase because of this charge? And if we don't know the answer, we can say we don't know, but we'll find out.

So the system development charge is really based on the wastewater master plan as it was built, I don't know, 20 teens. And so not until the new master plan comes out would the new SDC charges be calculated, because it's based on all the outstanding projects on that list. And by doing this right now, it won't change it right now.

OK, so the new houses do not need to pay what the current existing houses pay. That's because it's based on consumption and not- Well, it's based on expansion.

And right now, we're really getting the same flow. I mean, there's a little bit built in so we can use the SDCs, but it's not really, I mean, this plan isn't that much bigger than what we have now? So the answer was no. Thank you.

Thank you. Thank you. Director, when we talked about the capital cost, the $370 million, back about a few months ago, it was hard for me to gauge where we land. So when you and Director Rooney put that comparison graph together, even though it's not apple to apple comparison, it made me a little more confident in the numbers we're getting. Did we do the same thing for operating cost? the annual operating cost of six point some million.

Other operators.

So in the proposal that was attached to this particular agenda item, that's Jacob's revised proposal, there is included in there a graph that's similar. Can I go, is it up or down? Oh, wrong way. There's a graph that's similar to this one, but in lieu of capital cost in million of dollars on the Y axis, it's level of staffing, right? So we compiled that, got some feedback from partner agencies, other agencies where we are operating those facilities. So we provided information to support the level of staffing and You can find that graph in the attachment to today's agenda that provides a basis of the justification for our staff. All right.

Thank you so much. Last one is a request. We all seem to be concerned with the order. So I'm requesting that you personally go to one of the Jacobs design and built and operating facility that uses the same technology and use your expert nose and see how much older there is. BECAUSE ONCE WE BUILD THIS THING, IT DOESN'T MATTER HOW MUCH MONEY WE'RE GOING TO COLLECT AND PENALTIES, IT'S TOO LATE.

CAN WE JUST CHECK TO MAKE SURE STEPHEN HAS A GOOD NOSE?

I THOUGHT ABOUT RESPONDING AS, WELL, MAYBE NOT APPLICABLE, BUT I WANT TO BE RESPECTFUL TO THE CITY MANAGER AND RESPOND. I will need to have a qualified teammate join me because I have a horrible sense of smell. And so I know that's kind of ironic for leading this project, but we will take someone with a very sensitive nose and they will be a panel of our informed stakeholders.

Outstanding. Outstanding. We want to prevent those kind of situations, obviously. And I see Director Rooney in the back looking at me. And Director Rooney, did you want to add anything or your thumbs up?

I was volunteering to go somewhere.

All right. Thank you. Thank you so very much. I'm pleased to see that you guys are very prepared talking about this topic. Thank you.

Thanks, Councillor Afghan. Councillor Wen, then you had a follow-up as well.

I just want to, just real quick on the, oh, it's not 10,000. If you do this, we're only 70% of the equation. And if you do our part, it'd be 64, 75%. I just did the math, but I'm an accounting major.

No, it's 10. It's 40,000 people, 400 million. But we're only 30%.

We're 70% of the cost. Portland is, yeah. So 64, 75. But anyway, the big picture, this is going to take a tremendous amount of money, but I just want to... have confirmation from you and Director Rooney that we are still putting money away for other sewer infrastructure issues and maintenance and capital spending, that we're not putting all of our dollars into this Sewer treatment plant that we're still some of the money that's collected from your sewer bill is still going towards Maintaining and and keeping our infrastructure Working is that correct?

Yes, we actually had that conversation earlier today about the rate model and what would be remaining after using those dollars to pay for this plant. And yes, we have X dollars aside from this plant to help take care of the general collection system. So manhole replacement, pipelining, INI treatment, things like that.

OK, that we would expect, if we were not doing this plant, that we would still have roughly the same type of money available. We're not cutting that in half, are we?

I guess that's what I'm saying. We're not cutting our traditional level of investment in the system in order to pay for this plant. That's your question. Yes. And so it's hard to say definitively because we don't have a set annual capital investment. We don't invest $5 million a year in the capital investments of the collection system. no matter what you know so it is a bit of a fluctuating level of investment but that was something that we were looking in when uh proposing these uh rate adjustments was that we wouldn't be spending all of our money just on the plant and then have other issues in a failing uh collection system with pipes collapsing or manholes leaking, things like that. So we have carved out that investment so that we're not just robbing from the collection system to pay for the new treatment plant.

OK. Because the last thing I want to do on future councils is to tell them, oh, you have this big surprise 10 years from now. We took all the money away, and you've got millions of dollars worth of expenses. So OK.

Thank you. Good question. And to add even more color to the $10,000 now, $6,000 and some, as the other accounting major here, that would be about a two-year cost of renting an outhouse for your front yard, which would be the plan B. FYI, to put it into context. The one thing, and it's good to know too, even our neighbors who are outside of the sewer system who are on septic tanks, I mean, even those have high costs. The annual cost of pumping and maintaining a system, I think, actually exceeds the cost that people pay in their sewer rates. And then, of course, there's the social costs, the environmental costs of those systems as well. THE, SO THIS, UNLIKE THE WATER TREATMENT PLANT, WHICH IS STAFFED BY CITY OF LAKE OSUGO EMPLOYEES, WE'RE GOING TO BE WORKING WITH JACOBS, THESE WILL NOT BE PUBLIC EMPLOYEES, BUT THE PUBLIC IS PAYING FOR THE FACILITY. CAN YOU TALK A LITTLE BIT ABOUT STAFF, WE VALUE ENSURING THAT OUR PUBLIC EMPLOYEES ARE, YOU KNOW, THEY collectively bargain, they are provided with strong benefits. Can you talk a little bit about that part of it, employee, how Jacobs handles its employee relations and benefits and whatnot?

How we take care of our employees?

How you take care of your employees.

Yeah, so I would say it is surprising how, I mean, Kyle talked about the level of investment in these types of facilities, and it is surprising how competitive it has become to basically secure and take care of these employees, right? In many industries, we see the silver tsunami. The level of sophistication that's required to run these facilities has changed over the years. So we have, to answer simply, we take very good care of our employees. And while that's a value of ours, it's also a requirement to be able to retain and attract qualified staff to operate these facilities. I'll just put that simply.

Yeah, that's good to hear. Did, now, did you want our feedback on the, we have kind of two routes, you know, on the other side in terms of the rate increase and, you know, we see that the one path, because, you know, no doubt, No doubt there is a cost to building this, and it's a high cost, just in raw dollars. But there is a cost, of course, to not pursuing this project. And we are here because we have looked at those alternatives, which include rehabilitating the current facility, which we know would be vastly, vastly more expensive than the project we have here before us. So no matter what, You know, we have made a series of decisions along here to get to, and then through these partnerships with the City of Portland, through the WIFI financing, to get what is a large and expensive project to be as the lowest cost that we can make it while still having a very high quality project run by a partner that we can trust for the long term that's going to deliver the level of service that our residents expect and a project that's going to be a good neighbor down in the Foothills area there. So we have kind of a sustainability question here. You know, we want to make good decisions today that will have a positive impact out in the future. And so even though this, the option one requires us to kind of bite the bullet now, down the road, it leads to our rate payers paying less money, you know, per year. And you look at the differences of this chart, it looks like at its highest would be about a 20, $25, you know, difference in the rate. But on the out years, that starts to grow, you know, much larger and continues to grow. INTO THE FUTURE. SO IT SEEMS THAT OPTION ONE IS THE MORE SUSTAINABLE OPTION, EVEN THOUGH IT DOES AMOUNT IN THAT, YOU KNOW, AND COUNSELOR MANS BRINGS UP GOOD POINTS ABOUT, YOU KNOW, THERE ARE FOLKS IN THE COMMUNITY WHO HAVE DIFFICULTIES AND I'M GLAD WE HAVE THOSE PROGRAMS IN PLACE TO ASSIST THEM. BUT FOR THE MOST PART, YOU KNOW, OPTION ONE IS GOING TO PRODUCE THE MORE SUSTAINABLE RATES FOR THE LONG TERM. I JUST WANT TO, IS EVERYONE KIND OF ON THAT SAME PAGE? THAT'S THE PATH TO GO.

THE INFRASTRUCTURE THAT WAS DEFERRED OVER THE TIME THEY'VE LIVED HERE AND WILL CONTINUE TO PAY FOR IT UNTIL THEY DON'T LIVE HERE.

Okay. So we generally, we're generally, thank you for that, Councilman, as we hear you there. We're generally on the same page. Is that good? I don't know if that's information you needed to kind of have.

Thank you. That's great feedback, and we will be meeting with the public to get feedback from them, and then returning on October 13th, seeking your approval of the contract, which will serve as our notice to proceed, and as well as adoption of the rate adjustment of your choice. Okay.

I would add one figure onto your chart on the 3.9% on the difference. The delta is about 45%. Yeah. So that people have an understanding. I mean, these charts are not really You want numbers. People need examples. These are kind of like fluffy. I think you need to have rates at the bottom part of what your rate would be. And I think the unfortunate thing is we're going to have to really bring in, this is only for sewer, we're going to have to add in the water rates too so that people totally understand what the utility bill, because some people, when you look at lowest down here, it almost looks like, oh, that's the LO sewer rate. Oh no, that's the water rate because that's all the high increases. So if that makes sense. Yes, we can do that. So I would have a couple bars to go. The more data people have to understand, I think they're going to be able to make the hard swallow, but they're going to understand why they're doing it.

THANK YOU ALL VERY MUCH. IT WAS A GREAT REPORT. WE APPRECIATE THE THOROUGHNESS OF IT. AND YOU HAVE A GOOD TEAM ASSEMBLED HERE. WE APPRECIATE THE UPDATE. THANK YOU ALL. THANK YOU. SEE YOU SOON. THANK YOU. BREAK. BREAK BEFORE THE TRACE. A LITTLE BREAK. LET'S TAKE A LITTLE FIVE-MINUTE RECESS. Stretch our legs a little bit. Okay, we are back in order. We now have a study session on establishing a per-inch fee for our clearing objective type 2 tree application retention requirements. We have our Community Development Director, Jessica Nemanalu, here with members of the team. Would you take it away?

Thank you. Good evening, Mayor, and good evening, Council. I'm Jessica Numonolu, Community Development Director, and I am joined today by Daphne Sissel, who is one of our associate planners and administers our tree permits. And then, oh my God, Christine. Christine Johnson. Gosh, excuse me. I was going to say Morgan Holland. Morgan was supposed to be here tonight, but excuse me. Christine Johnson, she's a certified arborist, and she's one of the sub-consultants for our tree regulation project and will be helping answer questions this evening. So the request before you tonight is to provide direction on how we establish what we're calling a tree retention deficit fee under our new TYPE 2 CLERON OBJECTIVE TRACK. AND THIS FEE WILL BASICALLY MAKE UP FOR ANY DEFICIT OVER MEETING WHATEVER THE MINIMUM RETENTION REQUIREMENT IS. Another ask is for the council to confirm whether affordable housing should also be exempt from this fee. One of the questions that is not before you tonight is whether or not we should have a 45% tree retention requirement or whether it should be a different percentage. That was discussed in great detail during the tree regulation amendment project, so we're not revisiting that. It's just the question before you is how should we calibrate the fee that applies when you can't meet that 45% minimum standard? So I'm going to be presenting three options representing lower, moderate and high fee incentives. And then I'm going to be asking the council which policy direction you prefer. So for the presentation, we're going to start with a brief overview and a refresher of what the clear and objective track is. I'll also provide a very simple example of how the tree deficit fee might apply. We'll talk about the objectives of the tree retention deficit fee. We have done research of other cities fees on trees as well as some tree valuation methods that will help establish a range for Council to consider for that fee amount. We'll discuss what those policy options and trade-offs are, apply them to some case studies, and then we'll have time for Council discussion and direction. So the clear and objective track is a new track that was just freshly adopted, now finalized by the council tonight and will become effective on October 1st. This is required by state law that we have a clear and objective option that applies only to the development of new housing. So this new track will only apply when new housing units are proposed. So it's not going to apply when someone puts an addition on their house for a garage, or if someone is just, the only thing they're proposing is to put a sports court in the back of their lot. They can't use this, the clear and objective track. It's only when there's new housing. And that standard requires the retention of either 45% of all the trees on the site that are 15 inches in diameter or greater, or 45% of the total cumulative diameter of all trees on the site that are over six inches. For any portion of the minimum tree retention requirement that can't be met, THE CODE REQUIRES THAT THE APPLICANT PAY A STANDARD FEE PER INCH INTO THE TREE FUND, AND THAT'S WHAT WE'RE GOING TO BE TALKING ABOUT TONIGHT. I DO WANT TO POINT OUT THAT THE APPLICANTS HAVE THE OPTION ALWAYS TO USE THE DISCRETIONARY TRACK INSTEAD OF THE CLEAR AND OBJECTIVE TRACK, BUT BY STATE LAW WE HAVE TO PROVIDE THE CLEAR AND OBJECTIVE TRACK AND WE CAN'T FORCE THEM TO USE THE DISCRETIONARY TRACK. A couple of other things to remember about the clearing objective track is that they have to actually show that the trees being removed are affected by development. So the tree protection zone has to be in an area affected by development. So if you have a huge lot with a bunch of trees in the back of the lot that aren't affected, you can't just remove them under the clearing objective standard. You have to show that they need to be removed for development purposes. The other one is that dead, hazardous, invasive fruit and ash trees are not counted towards the minimum retention requirement. So you don't have to worry that that 45% includes trees that are non-viable. And then finally, just a reminder, we did build in an incentive for certain high value trees. This includes Douglas firs and Oregon white oak that gives bonus retention credits if you save those higher value trees. So here is a very simple example of how the tree retention deficit fee could apply. As you can see here, there's just three trees on this lot. The total diameter for all three trees is 102 inches, so that means to meet the 45% minimum retention requirement, they have to save 46 inches of trees on the site. You can see here that they proposed to take out 62 inches, leaving 40 inches, which has a deficit of six inches. So whatever fee amount that we would, or the council would select, we would take six, multiply it by that fee amount, and that's the fee that they would have to pay for the deficit in meeting the standard. We have three main objectives of the fee. First is that we want the fee to provide an economic incentive to meet the retention standard. That means that the more that you are in a deficit below the minimum threshold, the higher the fee should be. And this is to deter pay to cut behavior. We don't want people to just have it be a cost of the development to be able to just remove all the trees on the site. But we also need to make sure that the fee is not so high that it adds unreasonable costs to housing or forces most projects into the discretionary track. And this, again, has to do with state law. In addition to the requirement that we provide a clear and objective track, state law says that we cannot have standards that are, quote, cause unreasonable cost or delay to housing. And they don't define what that means. But I think that it's reasonable that if we are causing everyone or the vast majority of applications to go into the discretionary track, that could be perceived as causing unreasonable delay. Or if you picked some exorbitant cost, $10,000 per inch, that that is going to be considered to be an unreasonable cost. So we're trying to find something that's reasonable and legally defensible. And then another objective of the fee is that this fee is intended to mitigate the impact of the additional canopy loss below that 45% threshold. It is not to be a replacement for planting on the site. So if someone has to remove 10 trees, and they have a six inch deficit, they have to pay that deficit fee plus they have to plant 10 trees on the site. So it's not a replacement for mitigation. So what are we trying to balance here? I mean, ultimately this is a policy calibration question. If the fee is too low, as I mentioned before, it simply becomes another development cost and applicants may choose to pay that instead of carefully designing the project to retain more trees. If it's too high, It could significantly increase development costs or force more projects into the discretionary track to avoid the fees. And that could raise legal challenges since, again, state law doesn't allow unreasonable cost or delay for housing. Our objective here is really to find a point where the fee is meaningful enough to influence behavior without creating unreasonable costs or delays for housing and is legally defensible. So how do we establish this fee? So one of the first things that we wanted to do is look and see what other jurisdictions are doing. And so our consultant helped us research this. They looked at other city programs, but I do want to point out that other city programs really differ in how fees are calculated, when they apply. and what they are intended to accomplish. There wasn't a single jurisdiction that we looked at that provides us with an exact model because the programs are just structured so differently. So unfortunately, we can't do a pure apples to apples comparison. What the research does do though, is it helps us understand the range of fees that other cities that are applying SORT OF THE CHALLENGES WITH THEIR DIFFERENT APPROACHES AND HOW EFFECTIVE THEIR APPROACHES COMBINED WITH THE FEES ARE IN DETERRING REMOVALS. SO I'M NOT GOING TO READ THROUGH ALL OF THESE. I'M JUST GOING TO HIGHLIGHT A COUPLE OF EXAMPLES. SO FOR INSTANCE THE CITY OF BEND HAS A FEE PER INCH FEE OF 50 TO 126 PER INCH. However, the way that their program is structured is they only have a retention requirement of 25%, which is really low. And on top of that, if they plant trees on the site, you actually get credit that further reduces that fee. So what we found is while You know, they said it wasn't really affected at deterring removals, but I think more of the issue there is that they have a very low retention rate, so there's other factors at play there rather than just the cost. I would say Milwaukee is probably the closest to the Lake Oswego's model, and their fee right now is 150 to 250 per inch. It does vary by the tree size or type, so they have kind of a more complex structure in how they apply that fee, which we're kind of trying not to make things more complex. But they do have a discretionary track alternative, and they said that this fee that they have found has been effective at deterring just sort of cut-to-pay, pay-to-cut type of removals. And for those where the fee gets too high, they always have the discretionary track they can fall back on. And then finally, the final comparison I would look at is Tigard in the city of Portland. You can see their fees are significantly higher at $426 to $472 per inch. Again, their program is structured differently. Portland is actually very strict. They do not have a discretionary option. In fact, their retention rate is they require a retention of a certain percentage of trees over 12 inches in diameter, and then you have to retain any tree over 20 inches in diameter, and if you don't meet those standards, you have to pay into the fee, or pay that, excuse me, that deficit fee. With the city of Tigard, it doesn't apply as widely. It's only in their Oregon White Oak districts. But again, it's also not a flexible fee. Like you have to pay it if you don't meet the standard. Both of them said they get a lot of complaints from applicants about how high the fees are. And I do hear, and I'm sure... Christine would verify this, that there's a lot of complaints about the city of Portland's fees. But again, they don't have the discretionary track like we do. So I would say the main takeaways from these jurisdictions that we looked at are that the per inch fee ranges from $2 an inch to $472 an inch. So we have kind of a wide range there, but a range nonetheless. I think our consultant said, you know, recommends that fees are typically the most effective at tree retention in the 150 per inch to 472 per inch range. Higher fees receive more applicant complaints. Lower fees result in more cut and pay scenarios. And they did also ask jurisdictions about whether they provide exemptions for affordable housing projects, and most jurisdictions do. There are other considerations the council could look at to inform the fee amount. So for instance, we did look at the tree, two different tree valuation methods. One is tree appraisal and the other one is ecosystem service benefits. Tree appraisal is a professional estimate of a tree's monetary value prepared by a qualified arborist and they use the Guide for Plant Appraisal, which is by the Council of Tree and Landscape Appraisers. In a residential context like LO, the most common appraisal technique is called the trunk formula technique, and that's what's shown here in this table. And what this does is it takes the cost of the largest common available nursery stock of the tree that's being appraised and then scales the trunk and value of the nursery tree up to the size of the appraised tree. then they depreciate that price based on various factors, including the condition of the tree that's being appraised, its growing conditions, and any issues that are sort of outside control of the owner that can affect the tree growth. The challenge, of course, with this method is that Lake Oswego has a wide, well, most cities have a wide variety of tree species and sizes as well as growing conditions. So for this analysis, we decided to look at the most common species in Lake Oswego, which is the Douglas fir, which I'm sure most people are familiar with. And we selected the size of 35 inches since that is the threshold to qualify as a significant tree under our updated tree regulations. So what this table does is it includes a value range assuming four different scenarios. Perfect conditions, good conditions, fair, and poor conditions. And then it gives a percent weight rating for each of those. So for trees in perfect condition, they get 100% of the appraisal value. Trees in poor condition get 25% of the of the value, and so based on these four scenarios, the per-inch fee of a tree, a 35-inch Doug fir, ranges from $1,028 per inch to $16 per inch. Obviously, we have a wide variety of conditions in Lake Oswego. So again, we're looking at the average here. And the average comes out to about $402 per inch. So that gives us some context in how we might want to set the fee as well. The next is ecosystem service modeling. This methodology... It's based on the value of the ecosystem services benefits provided by the tree over its lifespan. Ecosystem services are things like carbon sequestration, stormwater interception, air pollution reduction, shading, which obviously causes cost savings for heating and cooling for our homes. There's a bunch. I'm not going to go into all of them. But the USDA Forest Service has conducted extensive peer-reviewed research on species conditions and locations over time. For this analysis, the ecosystem service benefits of a Douglas fir tree was calculated over a 99-year time frame. And per the methodology, we assumed the size at the time of planting was one inch. that they had sufficient planting space, ideal growing conditions, and the tree was maintained in excellent condition. And again, we use the Doug fir because that's the most common species in Lake Oswego. And through that methodology, it came up with a just under $4,000 ecosystem service benefit for that 43 1⁄2-inch Doug fir, which would be the size at maturity at 99 years. But that only comes out to $90 an inch, which is significantly below the appraisal value. But again, another context that we can use in looking at this fee. So based on the considerations of the fees from other jurisdictions, the tree valuations, we are suggesting three policy options, high, medium, and low ranges for your consideration. I just wanna point out there's not going to be one objectively right fee amount, and there aren't any options that don't have any downsides or risks, but in sort of looking at these three options, the $100 per inch option, that's gonna place more emphasis on keeping development costs low, but it will provide the weakest incentive for retaining trees. $400, of course, per inch is gonna provide the strongest incentive, but also creates some risk that it could add significantly to the development costs or probably more likely force folks into the discretionary track. And then $250 is the middle option. And we literally just took the middle option. There wasn't anything magic about that number. We were just trying to provide a range and that is in the middle. I want to emphasize to the council that anything within that range, you could pick 300, you could pick 200, you could pick 380, any of those would just fall within sort of this range that we came up with based on the research that we did, that we just presented to you. I will note that the high fee is pretty close to the tree appraisal value of 402-inch, while the medium and low fees are significantly lower than the appraisal value. And then, of course, all three fees are more than the ecosystem value, which is actually quite low. So let's apply these to some examples. And I don't know why my arrows are all showing up.

Nope.

My animation didn't work, but that's okay. To understand what each fee option would look like for real-life projects in the city, we did look at 20 case studies from 2024. Of the 20 case studies, there were seven that would not have met the 45% retention threshold. And I just want to note that all seven of the case studies were detached single-family dwellings. So this table shows all seven case studies and ranks them in order of the near the 45% threshold to moderate, high, or significant deficits below the threshold. It is important to note, and I'm gonna point out some examples here, that the variability in tree quantity, sizes, and locations on the lot have the most influence on the ability to meet the tree retention requirements. and the amount of fee that will actually apply. So, for example, if we look at this fee here, this deficit, they only retained 6% of the trees on the site. But that added or that amounted to 75 inches of deficit. But if you look at this high deficit, which is, you know, 20% is a lot more retention than the 6%, it has a pretty similar deficiency in number of inches because it just depends on how many trees were on the site. So even though you have different retention rates, The fees are actually pretty similar when you look at the different ranges from the $400 to the $100 fee. They both range from the $7,000 to $8,000 to about $30,000 range in the fees. Then we look at the moderate deficits here. We have a 35% retention rate and a 31% retention rate. But you can see here, very different deficits. in terms of the number of inches of deficit. Even though this is at 31%, they have a 34-inch deficit, which is a significantly higher fee than the project with a 6% deficit. I think this will become a little more clearer when we look at the next slide, which is I figured you would probably ask about the cottage clusters. So I've included them in here as well. So this table shows two cottage clusters from 2025, both of which involved removal of every single tree on the property. So they had 0% retention rate. And you can see the fee ranges are significantly different between the two projects, even though both removed all the trees on the site. And that's because one had a deficit of 177 inches. They had a lot more trees. versus the other one which was only 52 inch deficit. But there's a $50,000 difference in the fee on the high end. Another thing to note about this is that even though the fees are really high, In this case, because they have eight dwelling units, they could spread those costs across those dwelling units, so I do show you the cost per dwelling unit for each of them as well, but it's still a pretty steep cost. I doubt, I don't know, we'll have to see how this bears out, but at $70,000, that project might have just gone through the discretionary project.

Because all of these were obviously approved using the current discretionary. And they could still be, or had they come in under the clear objection and decided, ah, it's too expensive, I'm going to go discretionary approved, no fee. Yeah. Well, besides whatever permit fees or whatever.

And I wouldn't really be concerned about the high costs like this in these extreme examples where they're not saving any trees, whether it's a single family or whether it's a cottage cluster, because we aren't trying to calibrate these fees for the worst case scenario. We are just trying to make sure that, you know, if somebody is at like six inches under or two inches under, that there's some flexibility and we aren't just automatically pushing everyone into the discretionary track. So for these extreme examples, I know it sounds like a lot, I doubt anybody's going to pay these fees. And in these cases, we don't want to calibrate the fees so that it's not going to be too much for somebody who's removing every tree on the site.

Jessica, can you clarify one quick thing? Sure. So let's just say someone has a lot, and kind of like the cottage cluster. So let's say it was going to be a single-family home. So they could definitely retain perimeter trees. And they're just like, screw it. I'm going to pay the $70,000 and cut them all down. We would not, under the current objective, we wouldn't say yes. We'd say, well, hold on here. You can't just cut these trees outside the envelope.

Well, yeah, you have to show that the trees are impacted by the development. So the tree has to have, you know, excavation or fill or a structure that's going in their tree protection zone, so the tree has to be removed. The typical things that we hear about.

Okay, okay, so you just can't pay and clear cut.

Right, but, you know, they can propose development on the site. I mean, I got to be honest with you here. Like, so if, for instance, somebody was putting in a new single-family dwelling, and they had some other improvements associated with it that went beyond the dwelling, that could all be reviewed under the clear and objective. But it still has to be impacted by the developer. They could have asked for it under the discretionary and gotten it too. So I don't think that they're pulling a fast one. But I just want to be clear that you would be able to consolidate removal for other purposes associated with the dwelling as part of that clear and objective track.

Like a swim pool or a deck? That's right.

So if you applied for a house, a swimming pool, and an ADU all on one application, then you could do that all under one clear and objective track. a tree removal permit. It just becomes too complicated because otherwise you would have two different permits with two different processes. It would be very confusing to the public and the applicant. So we allow that to be consolidated. But it has to be applied for at the same time. What you can't do is apply for your dwelling, get all of that approved, everything's issued, come in later for a pool, and then try to go into the clear and objective track for the pool. You're stuck with the discretionary track. You have to do it all at once. So I do want to acknowledge that this is a new framework and we recognize that there may be things that we haven't anticipated. So what I have been working with Daphne on is making sure that we're setting up so that we can collect data on this new process, particularly on tree retention fee payments and the use of the two review tracks so that we can determine whether we need to make any changes in the future. We do annual data on tree removal that we publish in the urban forestry insert during Arbor Month. We've been doing that for several years now. We will also add this type of data to that as well so that people from the public can kind of see how this is working, but we're going to be keeping a close eye on it because we want to make sure that we don't have unintended consequences and we can make some, recalibrate things if needed. So in conclusion, this is my last slide, staff is seeking direction on this fee level. Three options are provided representing the low, moderate and high levels. I will note that while we are not, staff is not making a specific number recommendation, we do not recommend the $100 per inch fee. We believe that's too low and could encourage that cut and pay behavior we're trying to avoid. And we just don't think it supports the city's urban forest goals. We do believe that either the moderate or high fee levels or any amount in between could work so you know whatever the the council feels is appropriate I think is legally defensible. And it is based, it's not numbers we're picking out of thin air. We did look at other jurisdictions. We looked at these other tree valuation methods. So I do feel that it is legally defensible if it were to be challenged. So we are also, I just want to remind you, we're also seeking direction on whether affordable housing development should be exempt from this fee. We do have a policy in our master fee schedule that exempts affordable housing of where it's affordable at incomes of 80% or below the median area income. It exempts it from all land use and tree fees. So if you want this to also be exempted, it fits well within our existing policy. I don't think we would need to make any changes. But I just want to confirm whether the council wants to do that. And if the council provides direction on the fee tonight, the next step will be to bring back a resolution at your next meeting. And because if it's adopted, the resolution becomes effective immediately, then this fee would be in effect before the new tree regulations go into effect on October 1st. So with that, we are happy to answer questions and we look forward to your direction.

That's a great presentation. Yeah. And let me, just another, I'm sorry, just a quick clarifying thing. So there is a... Well, because you're not recommending the low, 100, because people could engage in this pay to cut behavior. There is some, you know, a behavioral kind of, you know, component to the fee, we hope, right? So it's not just hopeless. It's not like I have no choice. Like this is the development and, you know, this is what's required. There is some... IT SEEMS LIKE THERE ARE OPTIONS, IS WHAT I'M HEARING. I GUESS WE HAVE ALSO SEEN THAT HERE, KNOWING THAT PEOPLE ARE CONCERNED ABOUT APPLICATIONS, DEVELOPERS MAKE MODIFICATIONS TO SAVE TREES. THEY RUN SOMETHING. SO WHAT YOU'RE SAYING, IF THE FEE IS TOO LOW, JUST BE LIKE, I'm just doing this thing. Oh, I sure I can move the line. But why would I do that? I can pay 200 bucks. Yep. You know, easy enough. So it's good to know that. But one thing that Councillor Afghan brought up when we were kind of briefly discussing this, because you do have like a variety of examples where sure, someone's so close to meeting, like maybe they have made these modifications. They're like, we have made the buying, we're a couple inches off. Versus someone who maybe hasn't made any modifications and is like well. I'll just pay and was creating some kind of a scale you know to start on the lower end and then have it escalate and as they as they further from the 45% which I thought at the time you said I was that's a good great idea and So I'm wondering if, and I know we don't have that here, but maybe that becomes some kind of a movement even from the moderate to the high as the application deviates further from the 45%.

Yeah, and we did have an example of a jurisdiction that had a similar approach, and I don't remember which one it is.

Milwaukee has a similar approach. They do a cumulative approach. You go higher with the inches removed or the preservation You know increases decreases then your fees go higher get higher Okay, it is similar in that aspect think about that councilor Afghan Thank You mr. Mayor If we go back a couple of pages, there's a column that says Yep, mitigation three required can you Share what that means?

Yeah, so what we wanted to emphasize is that even though this fee will apply and they're below that deficit, they are still required to plant mitigation trees in addition to paying that fee. And it also gives you a sense of how many trees they took out. So for instance, for the first one that's only 1% below the threshold, they actually took out nine trees. but they also saved a bunch of trees on the site, and they only had a deficit of two inches. So they will pay two times the deficit fee, and then they still have to plant nine trees on the site.

Can you go back a few more pages to your example of the three trees?

This one?

One more, two more, there. Okay. So let's assume this is a real case. So the... the applicant still has to plant two trees and pay a fee. Correct. So I think that's important to keep in mind because we're still requiring them to plant two trees and pay a fee. So it's not just a fee.

Yeah.

Okay. What would happen to these fees? What budget does it go into and what is it used for?

So those fees go into our tree fund. And our tree fund right now, we have a payment in lieu for mitigation. When someone cannot fit mitigation trees on the site, we have a per fee amount that they pay into the tree fund when they can't meet that. Our tree fund also is supplemented by enforcement fees. So if someone violates the tree code, they have to pay a fee, that goes into the tree fund. Right now, I think the tree fund is somewhere around, it's, somewhere between $300,000 and $400,000. Takes a while for it to kind of build up. We use it for Arbor Month activities. We use it for tree workshops, to support urban forest activities. We also have used it in the past where we've done one-time fee transfers, like for instance, to the Parks and Rec Department for their habitat enhancement program. We use that as sort of seed money for that. right now we have three hundred thousand dollars in the current budget allocated towards the tree inventory which is a full tree inventory of all city trees on city owned or public rights of way and That will be that was part of our urban and community forestry plan so The way we use it now is basically to implement our urban and community forestry plan to help fund those projects So this could be an additional funding that would help fund those programs And maybe replacing our ash tree as we cut them down so we don't have to ask for more budget for It could be. I mean, when we do the tree inventory, that's going to pretty much deplete what's there, but we will have a certain amount each year. It's not super stable because we don't know how many people are going to violate the code or how many people are going to pay into the tree mitigation. That's why it takes a little while for it to build up over time. But absolutely, I mean, that could be something that the council might want to use that money for.

Thank you, Mr. Mayor. Thanks, Councillor Afghan.

Councillor Boone? Yeah, thank you. I was going to call you this morning to ask for more, but I was. So, I mean, you did a wonderful work. I mean, it's wonderful. And I mean, yeah, I would go me. You know where I'm going. No more dread. We have to put it high because, and I'm going to say the reason. Can I say that? Can I?

It's a work session. You can say anything you want. Well.

Yeah, no, I just, I just, because first we are having the Ash Borer Emerald is going to kill so many trees. We've seen part of Lake Oswego that unfortunately, I start seeing even in my school, they're cutting there some, the Red Cross, you see it. So in that, like the circumstances, I think we cannot lower the things. And when we know that even It's only almost developers, but they are like the more people. I think this thing should have applied even to the 5,000 square feet people. I don't want to go there. But what we have here is the least is you want to cut, it's 400. And we are doing it to discourage people so that they just cannot come and clear cut and do things. And we have to save the canopy because global warming, we know that many trees will die, even apart, aside from the ash borer. I was talking to Mike, even which is what is very, crazy is even trees that are close to water are dying so we don't even know like you say oh it's a drought no it's not drought some trees are right next to like on my creek next to the creek they're dying so we should think of that in a way that we don't want people just to cut because they want to cut and the only way we can do it is to discourage people by putting the money like 400, I was going to say even more. But I agree that it's reasonable just to say 400. And I would have known, like Portland, even I know people are complaining. That's what they will do. Even at $50, they would complain. Sometimes we don't. We care about people. We don't want to hurt them, but we are legifying, we are governing, and we have to go the hard way. I would have known. Like Portland, if in the thing you see that it's hard, they are saving. They are discouraging people to cut. So 400 is reasonable. And I just want to say thank you for you folks, the work you've done. Joe knows that my friend Claude is always, I work with my friend Claude on all the work I do everywhere now. And Claude told me. He's chief of staff. Yeah, he's my chief of staff. So it's the cheapest. I pay $20 a month. FOR A BRAIN. AND PART OF MY BIG SALARY OF MY 120 BUCKS A MONTH. YOU DID A WONDERFUL WORK, EVEN IF CLAUDE DIDN'T TELL ME. THANK YOU.

THANK YOU, COUNCILOR MOVE. COUNCILOR MANS.

FIRST OF ALL, THANK YOU ALL FOR THIS WORK. BEEN MY LIFE TO LOOK AT TREE CODE ISSUES. AND I WANT TO START BY SAYING I REALLY SUPPORT THE SLIDING SCALE IDEA, THE MILWAUKEE PLAN, IF YOU WILL, BECAUSE THAT WILL ENABLE STAFF ALSO TO HAVE A JUSTIFICATION FOR WHY PEOPLE ARE BEING CHARGED A FEE. AND IT WILL MAKE PEOPLE THINK A LITTLE BIT MORE. I THINK YOU WERE RIGHT IN THE DESIGN PROCESS THAT PEOPLE MAY BE MORE CONSIDERATE. PERHAPS NOT, BUT I THINK IT GIVES STAFF MORE OPTIONS. THAT'S MY PERSONAL THOUGHT ON THAT. I DID HAVE A QUESTION ON LEAPING AHEAD TO THE AFFORDABLE HOUSING, IF THAT'S APPROPRIATE. WE CURRENTLY DON'T CHARGE ANY SDCs, ANY TREE-CUTTING FEES FOR AFFORDABLE HOUSING. What sort of tree canopy is left on or around those sites as a result of that would be a question. Is there any data around that?

Well, I mean, we just have a few affordable housing projects. Right, exactly. And what I would say is, so for instance, the Hacienda one, I think most of the trees were already removed. from that site, so there weren't very many. But I can't recall if there were many that were retained. Well, we did that before we .

That was a staging area, so we did pay fees for that. I can speak a bit to that one. Our firm was involved with that. there's three large douglas firs that were all retained in a grove and we worked very closely with the contractor to build a sewer around large roots from those trees but the trees that were existing on that site many have actually would have been exempt because they were in poor condition they were invasive and then there were street tree or sidewalk improvements that were required to you know bring all those utilities into the site so i think in that example It was a value of that build to retain the trees for a play structure. That's where their outdoor space is. It's definitely a topic that comes up very frequently in urban forestry and affordable housing at that intersection, and they do deserve to have those benefits too. So yeah, it worked out very well in that instance, but it's site specific.

The Mercy Housing Northwest went in a former dorm site, so they demolished some existing structures to put the new structure in there. So I doubt there was much tree removal associated with that. And then the Habitat for Humanity, They actually did the subdivision for the site for townhomes, actually market rate townhomes, and then Habitat came in later and purchased it. So the tree removal had already been taken care of. And they did remove quite a few trees, but we also went to great pains to save a grove of trees there. But that was a pretty heavily treed site. So regardless of the project, they would have had to take a lot of trees out.

So if I'm just to reiterate or re-clarify this, we don't have a lot of those projects. Most of the inventory is being built or is built is what I'm hearing, at least in the short run. As far as our other fees, it's kind of been... CODIFIED OVER A NUMBER OF YEARS THAT AFFORDABLE HOUSING WOULDN'T BE LIABLE FOR ANY OF THESE FEES. AND STAFF IS ABLE TO WORK, HOPEFULLY, WITH DEVELOPERS IN ANY FUTURE SITE, SHOULD ANY COME UP, TO MAKE SURE THAT TREES ARE SAVED FOR PLACE STRUCTURES OR FOR SHADE OR COVERAGE whatever it may be, so.

Yeah, and I think a lot of those projects, they want to work with the community too, and they'll hear if they're getting a lot of flack for removing a lot of trees. But yeah, it could be a situation where somebody come in and they have a lot of trees to be removed and it's a huge deficit, then we would be waiving that totally. So that is something to consider.

I see the conundrum.

Yeah.

but we don't you're right we do not have a lot of these projects so it's not you know almost all of the projects are we we have our market rate we have very few affordable housing projects right i'm of a mind at this moment to stay the course on it as we introduce this new system because there isn't anything in the pipeline to my knowledge is there for affordable housing no AND SEE HOW THIS WORKS IN THE SHORT RUN. I MEAN, I REALLY WOULD HATE TO STOP ANY AFFORDABLE HOUSING OR NOT MOVE ANYTHING FORWARD SHOULD IT COME THROUGH IF THERE WERE AN APPROPRIATE SITE. SO THOSE ARE MY THOUGHTS, GUYS. I'M DONE. THANK YOU.

THANKS, COUNCIL MANS. VERY HELPFUL. COUNCILOR WINLAND.

So this is just new housing. So how many dwellings would this be per year? Do we put like 20 of these?

Yeah, so we did a case study of 2024. And we just looked at all of the new dwellings that would have qualified for the clear and objective track. There were 20. Of those 20, seven did not meet the 45% threshold. So seven would potentially be. the fee could apply to that if they had a deficit.

OK. So in reality, this is like a really small amount of development. It's not like we're building 100 or 200, 500 units a year. So I guess I look at it as, There's two things we have going for us. One thing, we have the highest tree canopy of any city. So when I look at some of those cities on your list, they're like at 14% or 13% tree canopy. So every tree that you knock down is a larger percentage of their total tree coverage. I'm not saying that you can just go carte blanche and knock trees down. But if you have 20 houses a year and you're talking about 100 inches here and there, I mean, we're almost talking about this is not really a big issue, right, for trees. I mean, we're not having a, it's going to have a very small impact on the total tree canopy of Lake Oswego.

I think that's a true statement, but you know that the public perception is that development has a huge impact on tree canopy, and they're usually very visible and high profile. So I just keep that in mind, that even though there aren't that many of them, it is perceived by the public as having a big impact. And the reason why we chose a 45% retention threshold is to try to maintain our tree canopy cover. And so we really want people to stay within that range if they can. But we don't want to be so rigid that, you know, if you don't go a little bit below. So we do want to make sure the fee is not encouraging people from just saying, I'll just, you know, I won't even try to kind of save extra trees on the property. I'm just going to pay the fee and that's much easier. So this is sort of a, a proxy for our discretionary process, which makes them look at reasonable alternatives. It doesn't say you can't remove the trees, but you sure have to look at reasonable alternatives to make sure to show that those trees really need to be taken out. So we're just trying to balance and walk that fine line.

Oh, and I totally agree with that. But I mean, when you have seven out of the 20 that would even have to be considered. You have 13 that were right on. So I mean, all I'm saying is that we've got a pretty good track record in Lake Oswego of, I think, valuing trees and making sure that, I mean, I think most developers look at trees as a valuable asset on the property, because it's going to save them money from having to replace other trees. So I mean, it's the economic cost. I don't know where you're going to settle on the dollar amount. I think it's going to be somewhat implement. low cost for the total amount of the project but I do think that it's just one more thing that we're putting on along with SDC funds and we've you know if you knock down a house you have to pay you know an extra five demo fee and I mean we've added a lot onto our cost of housing and one of our goals is to try to have more affordable housing so all I'm saying is that the the GOAL OF THIS COUNCIL IS TO TRY TO DECREASE HOUSING COSTS AND MAKE IT MORE AFFORDABLE FOR EVERYONE. AND I THINK THAT'S A CRITERIA THAT WE NEED TO THINK ABOUT. BUT I JUST THINK THE NUMBERS, WHATEVER NUMBER YOU DECIDE ON, I THINK BETWEEN 250 AND 400 OR 450, WHATEVER IT WAS, I THINK THOSE ARE FAIRLY REASONABLE NUMBERS. BUT I GUESS I'M MORE WORRIED ABOUT So we have this policy. What about the other person who wants to put on a deck or wants to put in a pool or wants to do landscaping or whatever? That's 83% of our permits, right? So we're not really changing the tree code that much, right? They go through the old process. And they go through the old process.

Yeah, but we improved a number of things. First of all, we defined what we have a clear and objective definition of what a significant tree is. Before we had these very arbitrary ways of, so it's very clear what is a significant tree and what isn't. So that helps significantly. We also reduced the processing time from three weeks to two weeks and we eliminated one appeal opportunity. So it brings them more on par with one another, even though it is a discretionary standard. But they still have the bar of do you have reasonable alternatives if the tree removal will have a significant impact, meaning it's involving significant trees. Yes, it is a different standard, and that was something that we looked at. Do we want to have one clear and objective standard for everything? We decided that was too low of a bar to bring everybody down to, so we still kept the two-track process, but we did make, I think, pretty significant improvements, and again, time will tell. We will keep data and see how it all shakes out, but I do think it'll be an improved process for people overall.

And I value your opinion, the three of you, because you work the day-to-day details. Do you think, whether it's 250 or 400, with all the new tree codes that we put in and with this additional fee part, do you think we're pretty balanced? And do you think we're going to probably be pretty good on maintaining our tree canopy and keeping harmony in the city?

Well, that was our objectives all along, so that's what we tried to design it to. But again, you know, I have to be honest with you. I mean, we don't know what the outcome is going to be because there could be unintended consequences, things that we don't. We have very clever builders and developers that get around things. And as you know, that's why we have our annual tree or annual, sorry, code amendments program. I don't want to revisit the tree code standards again anytime soon, but I'm fully cognizant of the fact that we are going to have to monitor the data, see how it's all shaking out, and make adjustments where needed.

Right. But I just kind of feel after going through this process, I think we're in pretty good shape, don't you think? I mean, you guys work with it. I do. Yeah. So whatever number you decide on, just, I don't care.

Well, wait, I... Well, I just hope they all go and update their LinkedIn profiles to add keeping harmony in Lake Oswego. What? Harmony. Yes, harmony. So little of them.

Yes.

It's not going to be perfect, OK?

Nothing that we do is perfect. No. Like we've said, if almost everyone's slightly agitated, then we have a good policy, sort of.

Well, how about, and then, Councillor Corrigan, let me just, so you can maybe give feedback on this. What about if six inches is like a little, you know, magic number in our tree code. So what if they have, instead of going with a percentage, if they are making up a deficit of six inches or less, it's 300 per, let's just throw this out, and if it's over six inches, then it's 400. Oh man, Sen doesn't like it. Too low for his blood, but we're trying to compromise. Okay, let me just, I just tossed it out. Six inches or less, 300 per inch, and then if it's, you know, above six, 400.

Okay, so we know for sure that state housing mandates have really shut down the voices of neighbors who object to tree removals. It's actually pretty painful. They haven't had any opportunity to object to anything that's come their way on that. So I think that we have an opportunity to show that we value trees. with this. We are really spoiled here with these majestic trees that add value to our city and to our properties. So knowing that any trees within the building footprints can be cut without question, PLUS THERE IS A REALLY GOOD DISCRETIONARY TRACK. I WOULD LIKE TO SEE THE $400. I THINK THIS IS AN ASSET WE JUST MUST NOT SQUANDER. IT'S A SIGNATURE FOR OUR CITY, AND I THINK WE NEED TO TREASURE IT.

I DON'T LIKE THE SLIDING SCALE, EVEN FOR SIX INCHES.

THAT'S WHERE I'M COMING DOWN.

MAN, ALL RIGHT, OKAY. OKAY, SO COUNCILOR KORGAN, NO SLIDING SCALE. 400. Okay, Councilor Atkin has a, and if you could weigh in on the end results so we can move this along.

Thank you. If we take this example, and we went discretionary path, so there are two trees that are being cut. Those two trees have to be replaced. And if there's no room on site, then I think there are $200 per tree that we- The mitigation for 2026 is $171.

It goes up a little bit every year, but that's what it is currently.

So why would I even consider going this direction?

Well, so if you go the cleared objective, only the applicant can appeal. If you go discretionary, your neighbors or anyone can appeal your decision, and then it goes in front of the hearing officer. I think that alone, I think, will encourage a lot of developers just to go the cleared objective if they can because it's a guaranteed timeline. as far as just their building permit review. Whereas with an appeal, that gets stretched, that timeline gets stretched way out, which costs them money.

Thank you. That answered the question. This retention deficit six inches, did we consider, instead of charging, having trees replaced? Like three, two inch, Trees replaced for the retention deficit, which equals to six inches.

Well, the way it's set up is they still have to replace the trees.

So in this case, what I'm asking is, so they replace the two trees. There is a six-inch deficit, and I believe our tree replacement is that the tree has to be two inches at the base. So six-inch deficit divided by two inches, that's additional three trees.

So five trees total instead of paying the deficit fee. I mean, that is one way to do it, but it is a low bar because it's, you know, you're just planting three additional trees, whereas you can, if you charge the fee, that can be more of a deterrent if it's a large enough fee to make sure that they're that they really need to remove those trees.

Where I was going is that I would prefer to have three more trees for the climate change benefit as opposed to have $2,400 and put it in a bank.

Understood, but recognize that there's a lot of projects that are being built that don't have sufficient space to accommodate additional trees. So this is just one example, but there could be an example where someone has to take out 10 trees and they have to replant 10 trees and trying to put those back on the site, you know, they have less and less room, especially when you consider middle housing going back.

Okay. Thank you, Mr. Mayor. It's a good point.

I mean, I think, yeah. Oh, I'm sorry. Please. In favor of the sliding scale? And I think what we're trying to get, and as I hear Councillor Corrigan, and it's true, see, we want to, there's, people will be motivated to follow the clear and objective paths, so we have to have some mechanism to ensure that they retain that flexibility or that creativity that we have seen in applications where they know they could become facing an appeal, you know, and and where they can be, but I think we also want to make sure for those folks who really are really trying to meet the 45% requirement, but they're just a few inches off, that we're not trying to hit them with something that's penalizing, you know, but is more reasonable. And, I mean, all of this is pretty close, right? You know, it's more symbolic than anything, but to show that, hey, if you're really trying to meet the 45% requirement, we're looking at that differently than if you're not really near or, you know, you're getting further away from it. And that you know, we're trying to put a fee in place that gets you to consider other options, you know And so that's where I was kind of go if I can persuade Councillor Corrigan to go full thing because I heard Councillor Manns prefers a sliding scale It's not complicated.

It's it's it's it's the only two slides if I may yes I think AS DIRECTOR NEMANOLU HAS POINTED OUT, TIME WILL TELL. WE REALLY DON'T KNOW HOW PEOPLE ARE GOING TO REACT. WE CAN ASSUME THAT THEY'RE GOING TO RUN TOWARDS THE CLEAR AND OBJECTIVE BECAUSE TIME IS MONEY. AND IN CONSTRUCTION, AS WE'VE SEEN TONIGHT, IT'S A LOT OF MONEY. SO THEY WILL DO WHAT THEY CAN TO EXPEDITE THE PROCESS FOR BETTER OR FOR WORSE. TO COUNSELOR CORRIGAN'S POINT, WE DO NEED FOR PEOPLE WHO TRY TO CIRCUMVENT THE PROCESS AT SOME POINT A HIGH ENOUGH FEE THAT IT WOULD REALLY DETER OTHERS FROM DOING IT. BUT ON THE OTHER HAND, I STILL TOTALLY BELIEVE THAT IF SOMEONE IS ONLY AN INCH OR TWO OR FOUR INCHES OVER, WE NEED TO ALLOW STAFF SOME FLEXIBILITY IN ORDER TO WORK WITH THAT PERSON BECAUSE THEY'RE OBVIOUSLY TRYING TO SAVE TREES. BECAUSE IF THEY COULD, THEY MIGHT WANT TO CUT DOWN ALL THE TREES. AND FOR WHATEVER REASON THEY'VE DECIDED TO LEAVE TREES ON THE LOT, WHETHER IT BE MITIGATION, DOESN'T MATTER. AND I APPRECIATE WHAT COUNSELOR AFGAN SAID WITH THE TREES, PLANTING ADDITIONAL TREES. BUT AS WE'VE SEEN OVER AND OVER AGAIN, PEOPLE WILL PLANT THE SMALLEST POSSIBLE TREE THAT THEY CAN AND THEN NOT WATER IT OR NOT MAINTAIN IT. OR MAINTAIN IT FOR A SHORT AMOUNT OF TIME AND I won't say all people. I'm saying we have examples. We have plenty of examples.

There's examples. But if you go around to all the new houses, I would encourage you to go around to the 60 new houses that have been built in the last five years. And I guarantee you that they have trees that are going to be substantial trees in 30 or 40 years. And these are $3 or $4 million houses, a million dollar house, whatever it is. They're putting landscaping in. They're not putting in just to get by on a thing. Yes, are there a couple people that do that? Yes, but those are the same people that have tree cutters come in on the weekends and knock stuff down. I mean, OK. I mean, so we're always trying to make policy for the 1% or 2%. And I think we have to have some confidence in the people that live here that THEY'RE GOING TO DO THE RIGHT THING AND PROTECT THEIR INVESTMENT.

I WOULD AGREE WITH YOU, JOHN, BUT I HAPPEN TO LIVE IN A NEIGHBORHOOD WHERE THE PRICE POINT IS SLIGHTLY DIFFERENT THAN THAT, AND THERE'S BEEN A LOT OF BUILDING ACTIVITY, AND IT'S A VARIETY. I'LL SAY IT'S VERY CHOPPY. SO THAT'S MY PERSPECTIVE. I AGREE WITH YOU. If I were building a $3 million house, or what would go to market for a $3 or $6 million, I would landscape the heck out of it.

One thing that you needed the answer for on the middle housing or whatever developments, affordable housing, I'm kind of saying let them live with these requirements. And then if they have a real issue, we can make an exception as a council when they make a thing. But I think that should be somewhat of a call just so that somebody doesn't come and clear cut everything and get away with it if we're really doing that. Because we've done some exceptions over the years. when somebody comes in and we do a case-by-case basis. But I don't know. Can I? You guys are all over the place.

One thing at a time. Control us, Joe. Control us. Let's deal with the slide. So the scale. Your account score. Councilman, sliding scale. Sliding scale.

Sliding scale. $400.

OK. Sliding. Sliding scale.

1, 2, 3, 4. Sliding scale. 2, 400. Sliding scale. It is. 300, and you guys go with the 300.

But what do you mean by sliding like you? I explained it.

It was six inches or less, $300 per caliper inch, six inch deficit or less.

Jesus. I mean, you remove the power from the people, and then you adjust. Yes. It's just like, but you see what people are going to do. OK. Come on.

This is, you guys, come on. This is their high. And then $400 above six inches. OK. All right. That's good. We're giving away the farm. OK.

And affordable housing.

It has been our consistent policy to do.

And again, these are not.

And like we said, the developments that we have seen are very motivated to retain the trees for the property's habitat, bend over backwards to save, which was a complicated site, because that was a green site that had never been built on. And it's great seeing people moving in there, by the way. Um so I would just favor being just staying consistent with that with that policy because you know we're waving we we are want to be partners in um in the subsidized affordable housing projects which is why we leave us we wave all the fees sdc fees you know obviously we do property tax exemptions for them it's just consistent all around the council policy to you know, waive fees in general to make sure that these projects are financially feasible. And we know we're a small piece of the big puzzle they have to put together, so this would be an exception to that, you know. Well, we're Tree City USA, so I don't know.

You know, it's just... That's OK.

They do have to replace the trees, though.

Yes.

Oh, OK. Yeah. Well, if they do the mitigation, OK, I'm fine with that.

Yeah, it's not. Don't worry. OK. It's a good one. OK. So we're good with keeping the affordable housing. Everyone's good. OK. Yep. OK. Thank you, everyone. Great job. Did we answer all the questions? It was very helpful. Oh, throw something else at us.

Thank you very much for your very thoughtful consideration, and I hope that we don't have to come talk about trees for a long time.

This is coming back at the next meeting.

It's coming back for resolution. I have it on the consent agenda, but if you want me to... No, no, that's...

Okay. Well, if any of my colleagues reach out to me and tell me not to do that, then... You guys can reach out and tell me, but otherwise he'll be on the consent agenda at the next meeting.

Thank you. Thank you.

Thank you all very much.

May the tree be with you.

Yes. It's now time for information from counsel. Counselor Manz.

THE DEI MEETING WAS CANCELED YESTERDAY DUE TO A FAMILY EMERGENCY FROM THE DIRECTOR, SO I ASSUME IT WILL HAPPEN NEXT MONTH, SO I HAVE NOTHING TO REPORT ON THAT. I DO WANT TO SAY I WAS AT THE PICNIC, AS WAS COUNSELOR BOOP, AND IT WAS LOVELY, THE EMPLOYEE PICNIC, THAT IS. IT WAS QUITE NICE TO SEE old friends and meet new folks, so lovely. And that is my report.

We did celebrate Officer Sparling. He's our adult resource officer. Celebrated his retirement after 20 years with the Lake of Segal Police Department this morning here in Council Chambers. That was a nice event, seeing some past folks coming through to say goodbye to him and some current folks. And we thank him for all the service. He's been great as the adult resource officer. There was a letter we sent out. Megan sent it last week in the Friday email. I've been working with Mayor McGriff of Oregon City on something that we've been talking about, a ban on the flavor tobacco. We all know that Washington County and Multnomah County passed bans. They were challenged, of course, in the courts. And those challenges were the counties prevailed. So these bans are legal. So we're just asking if Lake Osceola will sign on to a letter. We're trying to ask Clackamas County just to join the neighboring counties in implementing this ban. Just to flavor, these are the babies that target kids. They're just an article in the Oregonian Today, just insidious. SO I WANT TO CHECK, ARE YOU GUYS ALL OKAY WITH US JOINING THIS? YES, WE SUPPORT THAT, 100%. THAT IS GREAT. WE'RE TRYING TO GET ALL THE CLACKAMAS CITIES ON BOARD. THAT'S GOOD. THANK YOU.

YEAH. GOOD EVENING AND GOOD JOB THIS EVENING. I JUST WANTED TO HIGHLIGHT WHAT A HISTORIC DECISION IT IS THAT YOU'RE MAKING ON THE WASTEWATER TREATMENT PLANT. It is the first one that will be Lake Oswego's, just starting there. And when you look at the arc of history around wastewater treatment plants, the federal government was at its peak giving out 75% of the money. for a wastewater treatment plant. So the WIFI alone is nice and it really does help bring down the rates. I am not negating that at all, but it is a difficult time in history to do a wastewater treatment plant because 100% of the cost goes on the rate payer. So it is a difficult decision. I just wanna say thank you for all of your work to make this happen and push it along and make reasonable decisions and keep it affordable. So it's hard.

We know the federal government has so many other great things to spend money on.

So many other things. So many other things. It has so much to do with our daily lives. Yeah, it actually started to change in the 90s and has just been going down and down and down, just the same on transportation, right? It used to be 80% to 90%, and now it's very much less than that. But just to keep you updated, the Wednesday concert at Foothills Park has been canceled due to the expectation of heavy rain, and it will not be rescheduled. So that was the last Wednesday concert for the summer, which means summer's over. Oh, yeah. So just pass that on to your folks to make sure that nobody goes down there and gets rained on. And then I just wanted to reiterate the two town halls, the virtual town halls that we just talked about, but I want to be more specific. One is on September 16th at 5.30 p.m. The other is October 1st at 5.30 p.m. And you go to lakeosweegowastewaterfacility.org, all spelled out. Lake OswegoWastewaterFacility.org to get the virtual link. So it's on the site.

Oh, sorry, I just remembered one other thing. On the 19th, we have a couple things. One, we have a ribbon cutting for the art installation. Oh, art installation. Yeah, well, there's that. The art installation at the library that the council approved eons ago, same thing. AND THEN THE HIGH LOW TRAIL IS HAVING ITS OPENING. AND THEN WE HAVE THE GOLF TOURNAMENT BACK FOR THE FIRST TIME. SINCE 2021. I SAW THAT.

HOW DO WE PLAY?

WE HAVE TO DIVIDE AND CONQUER. COUNCIL MANS AND COUNCIL VERDICT ARE GOING TO BE AT THE ART RIBBON CUTTING.

I heard that. Oh, I want to be there, but I want to golf. Well, hold on.

We're putting together, you know, we need to take this tournament seriously. It can't be a joke. I heard Council Correa might be a good golfer.

Oh, no, no, no, no. I'm supposed to be out of town.

Oh, my God.

Sorry. But I heard. I did. I heard you're a good golfer, though. I did hear you're a good golfer. Is that true? It would be so fun to have you.

So, like...

But Councillor Boop's going to be on the team.

Best golfer in town. So, my par, I'm in three.

Is it a... It's not a golfing count.

I know.

You're too busy. Well, this was... I was trying to put the team together and perhaps intimidate other players. Yes, we have to.

Okay. Thank you, everyone.

Was it miss ball? Yeah, it is like a scramble.

So it's a scramble. So you just need someone better than me. So just one person.

Yeah, you just need one really good golfer. I think everyone has to take one, though. So you just need one good shot.

But can I invite some? I have a very good golfer.

Yes.

Okay. We are adjourned.