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April 15, 2002

Department of Land Conservation and Development

635 Capitol Street NE

Suite 150

Salem, OR 97301

Re: Exceptions to Staff Report on North Plains Periodic Review Work Tasks 1-5

This letter contains our exceptions to the Staff Report issued April 4, 2002. We disagree with the staff report in three major areas:

• Executive Order 97-22 must be followed. We contend that DLCD must comply with Executive Order 97-22, which requires that DLCD use OEA population and employment forecasts as it coordinates with the County. The TGM Study projections do not meet this requirement.
• The TGM Study population projections are flawed. We contend that the TGM Study population projections are flawed for several reasons. A more realistic population projection would be in the range of 2150 to 2600 persons, rather than the 4000 specified in the Work Product.
• The adopted household size is inappropriate. The household size should be adjusted from 2.5 to at least 2.75, based on 2000 Census data and demographic trends.

These items and others will be addressed in detail on the following pages. Items appear in the order they appear in the staff report.

We appreciate your attention to our comments.

Sincerely,

Enclosure:

Exceptions (5 pages)

WORK TASK 2:

The staff report makes reference to a 2001 draft of Work Product #2. We have a draft dated July 2000 that was created prior to approval of the current work plan. We were told the Work Product had not changed when it was resubmitted, so we are somewhat concerned that the most recent draft of the Work Product was not made available to us.

Regardless, we don't understand how the City could use the lower 2000 Census figure (1605 instead of 1755) as a base, and still come up with a higher 2020 projection (4000 vs. 3750)!

The staff report dismisses Executive Order 97-22's requirement to use OEA projections. The Executive Order is expressly directed toward the land use process, directing state agencies to create "Quality Communities" through a set of "Quality Development Objectives" (Section A). The Order names LCDC as one of the agencies to which the order applies:

"The Community Solutions Team, including […], Land Conservation and Development, […] shall have the primary responsibility for implementation." (Section B)

"Each Community Solutions Team agency shall use the population and employment forecasts developed or approved by the Department of Administrative Service's Office of Economic Analysis in coordination with Oregon's 36 counties to plan and implement programs and activities." (Section C.6) ¹ 

Since Periodic Review is clearly an LCDC program, the Executive Order must apply. The Order directs LCDC to use OEA forecasts when coordinating with counties. We contend that DLCD erred when it directed Washington County to use the TGM Study projections (which are not based on OEA projections) as the basis for their coordination efforts with North Plains.

Given that projections must be based on OEA data, the City must attempt to derive its population projections from Washington County figures, since OEA does not provide data for cities.

In Work Product #2 (p.8), the City dismisses the use of the simple ratios between City and County population as a basis for deriving City projections from County data. It mentions that this technique is "one of a dozen projection analysis techniques", but does not attempt to define or apply any other technique to derive its projections from County data. Even DLCD's own Planning Bulletin ²  suggests the "share of past growth" method.

The Work Product argues that the simple ratio method does not apply because the County and City growth rates are so different. But the rate difference is due to the vastly different numerical base (311,554 vs. 972), not to any fundamental difference between the County and the City. Certainly it is clear that both North Plains and Washington County experienced high growth during the 1990s. Just as North Plains was one of the fastest growing cities in the Metro area, Washington County was the fastest growing county. The similarities are clear. (Please note: our original objection #7 [on p. 5 of our 6/26/2001 document] addresses the issue of widely different City/County base populations. This objection was not addressed in the staff report.)

In fact, the primary methodology used by the TGM Study is to relate North Plains' growth rates to Canby's and Sandy's, neither of which is in Washington County. The City is trying to argue that comparing its growth rates to towns in Clackamas County is more valid than comparing itself with Washington County!

Looking more closely at the ratio method, we find that even if the highest historical ratio is used to derive the City projection, the result is still far below the number adopted in the Study and Work Product. The following chart appears in our Objections document dated 6/26/2001 (p. 7):

Applying the various ratios to the latest (January 1997) OEA 2020 projection for Washington County (598,800) yields the following projections for North Plains:

Thus the ratio approach would result in a 2020 population projection of between 2150 and 2600 persons. But even the highest figure is only 66% of the Work Product projection of 4000, and it is the oldest data point! We suggest that 2156 would be the most likely factual value, since it is the most recent. But this value is only 54% of the adopted projection, demonstrating that the adopted projection is far out of line with OEA estimates. We are unable to discern a factual basis for the City's adopted population projection.

The staff report insists that coordinating between the City and County is more important than following state mandates. We agree that coordination is important, but not more important than following the law and having an adequate factual basis from which to coordinate. Staff should have directed the City and County to use OEA estimates as the starting point for coordination, rather than the TGM Study. The TGM Study’s reliance on growth rates for two cities in different counties does not provide an adequate factual basis on which to estimate North Plains' growth rate.

This section of the staff report refers to the correspondence record between the County and City. However, the record reveals a clear pattern of County reluctance to endorse the TGM Study projections. Perhaps the County would have been more willing to agree on the population projection had it been based on OEA projections, since they yield a more reasonable result.

We stand behind our objections. What the staff report dismisses as "methodological nuances" are actually significant calculation errors that:

• overstate the City's growth rate by almost 20%, and
• produce an incorrect Metro TAZ analysis which is then dismissed because it appears to be flawed. In fact, a correct Metro TAZ analysis supports the lower population projections indicated by other methods, such as the City/County ratio method.

The findings also rely on the 1990-99 period, which contains 2 highly anomalous years that skew the results.

These calculation errors inflate the population projections and hence the land needs. We contend they undermine the factual basis of the adopted projections. We request that the City be directed to correct these errors prior to attempting any further use of the TGM Study projections.

In addition, staff again attempts to place County-City coordination above the requirements of the Executive Order. The fact that the County and City agree on a population projection does not itself prove that it has any basis in fact or meets legal requirements. We agree that there is no rule that requires the City to use a comparison (ratio) statistic. Most importantly though, the Study and Work Product do not use a methodology based on OEA projections, as required by the Executive Order, and they do not use a method that has an adequate factual base.

We have addressed most of the staff arguments previously. However, we must take exception to a statement in this section:

There is little evidence to indicate that increasing population improves a city's ability to improve (or even maintain) the level of public services. In fact, there is ample evidence to the contrary:

• The Governor's Report on "Growth and Its Impacts in Oregon", which finds that "the incremental contribution of an average housing unit to the cost of new public facilities is about $40,000 to $50,000." ³   Since SDCs don't come close to recovering these costs, it is clear that increasing population puts an increasing strain on the City's ability to provide public services.
• The American Farmland Trust's "Cost of Community Services" reports, which indicate that residential areas consume $1.19 in services for every $1 collected in taxes, whereas farming and commercial areas return more services than are collected in taxes. ⁴ 

If the City wishes to have a larger population base to support a viable downtown, then it should focus on development and infill of the existing downtown area, as the staff report notes under our objection #17 (p. 18 and 19). Expansion at the City's outer edges does not serve this purpose. We agree that the City should be directed to increase redevelopment and infill opportunities by designating an expanded downtown core.

Since the household size and single/multi-family housing type issues are first discussed in this section, we will address both of them at this point.

We find that staff's response to this objection is confusing. Staff apparently disagrees with our objection, but then states "our agreement is balanced with…". Staff attempts to combine discussion of household size and housing type ratios, indicating that one can be played off against the other. While they may be related, we do not agree that they are interchangeable. We will address each issue separately.

With regard to household size, we first note that the 2000 Census data shows a North Plains household size of 2.70 persons. ⁵  This is clearly the most recent and accurate data. Demographic trends in North Plains would argue for larger household sizes in the future, since the Census data also shows an increasing Hispanic population in North Plains, and Hispanic households are typically larger. Staff's recommendation of 2.75 (under discussion of our objection #18 on p. 19) seems appropriate.

With regard to single/multi-family housing ratios, we are pleased to see that staff agrees with our objection to the City's adoption of a 75% single, 25% multi-family housing ratio without any supporting findings. Given the demographic trends mentioned above, it would be hard to justify creating more single-family housing in an area with increasing Hispanic population and decreasing per-capita income. Goal 14's requirement of "maximum efficiency of land uses" would further argue for less single-family housing.

The 50/50 ratio should stand, and the City should adopt a household size of at least 2.75. This should reduce the City’s residential land need.

WORK TASKS 3-5:

This section does not address any specific objections, but we take exception to one particular statement (p. 12):

This statement is overly broad, and risks setting a dangerous precedent. Cities may make some choices about community form, but they must still follow state land use laws, which may limit those choices.

The staff response misses the point of our objection. The Industrial Land Need is overstated by the 6 acres supposedly required by transit facilities, because the transit facilities are covered under "Institutional Uses". Therefore, the adopted Industrial Land Need, instead of being zero, should reflect an excess of 6 acres. This excess should reduce the City's total land needs, since the excess land can be rezoned for other uses, such as commercial, institutional, schools, residential, or parks.

Please see our discussion under objection #12 on p. 5 of this document. Household size and housing type ratios are not interchangeable.

We are pleased that staff agrees that the City has failed to fully consider its redevelopment potential. We agree that the City should designate a larger downtown core. Such a change would:

• increase the viability of the downtown area,
• increase the infill and redevelopment potential inside the existing UGB, and
• help to maximize the efficiency of land uses within the existing UGB.

The staff response indicates that they do not agree with the "extent" of our objection. We interpret this to mean that staff believes that our estimate that as many as 351 potential housing units could be accommodated is too high. But staff does not offer any reason why they believe our estimate is too high.

We stand by our analysis, which is based on zoning maps included with the TGM Study. Our conservative estimate subtracts parcels with little likelihood of being redeveloped (such as City Hall and existing businesses). If a larger downtown core were designated, the infill and redevelopment capacity would be even larger.

We believe this document addresses all of our objections with which staff disagrees. If not, we hereby take exception to those items by reiterating our original arguments.

1. Executive Order 97-22. Access via http://www.governor.state.or.us/governor/legal/execords.htm.
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