ECONOMIC TECHNICAL ADVISORY COMMITTEE MEETING RECORD

January 13, 2003 – 2:00 p.m.

Metro Regional Center, Room 370 A&B

Committee Members Present: Chair Andy Cotugno, Al Burns, Ron Carley, Cindy Catto, Brent Curtis, Rob De Graff, Greg Jenks, Tom Kelly, Patti McCoy, Terry Morlan, Kelly Ross, Dennis Yee

Also Present: Rashad Ahmed, PDC; David Crouse, Johnson Creek Watershed Council; Chris Easton, Angelo Easton & Assoc.; Elissa Gertler, Portland Development Commission; Kelly Hossaini, Miller Nash LLP; Jim Labbe, Audubon Society of Portland; Margaret McKenna, Eaton, Student Intern

Metro Staff Present: Kim Bardes, Justin Houk, Paul Ketcham,

Andy Cotugno, Metro Planning Director and ETAC Chair, called the meeting to order at 2:10 p.m.

1.  Member Self-Introductions

Those present introduced themselves.

2.  Approval of Minutes: November 25, 2003

Chair Cotugno asked for additions, deletions or revisions to the November 25, 2003, meeting minutes. There were none.

3.  Presentation of Staff Work on Economic Ranking

Justin Houk passed out copies of maps for the members, which are attached and form part of this record. He explained the significance of the maps in conjunction with the materials the members received as part of their meeting packets.

An audience member asked if they would be looking at Goal 5 with the new Urban Growth Boundary (UGB).

Andy Cotugno said yes, and that would also pull in the additional study area.

Justin Houk said that before they could incorporate the new areas they would need zoning and design type designations for that area.

Andy Cotugno said that there were design type designations assigned from the action taken by Council, but zoning would not be resolved until local governments implemented the Damascus Concept Plan.

Al Burns wanted to know if in areas where the jurisdictional boundary was larger than the UGB, would they go with the jurisdictional boundary or the UGB boundary?

Justin Houk said that for the purposes of this analysis they had gone only to the UGB boundary.

Al Burns asked if the Goal 5 purpose was to look only at lands within the UGB?

Justin Houk said he would was not sure exactly how it would work. He said he was assuming that the jurisdictional boundary would be somewhat different.

Al Burns said that the jurisdictional boundary would be either the same as or larger than the UGB.

Brent Curtis said that there were inventory and significance decisions all the way out to the alternatives analysis boundary. He said that once you make those decisions then you have to finish the process.

Justin Houk said that it was Metro’s intent to finish the areas that were outside the UGB but inside the Metro jurisdiction. He said that the zoning there created different assumptions for those areas.

Andy Cotugno asked how to define economic importance against a natural resource importance? If Metro did do something outside the UGB it would be a different economic characterization than an urban economic characterization.

Brent Curtis said that the Metro inventory and significant resources had to account for the rural characterization.

Justin Houk told him he had his facts right. He said that the idea was to complete an Economic, Social, Energy and Environmental (ESEE) analysis for every significant resource, but that the current presentation did not deal with every single significant resource. He then went over the Estimating Economic Value material that was sent to the members and is attached and forms a part of this record. Then he gave a presentation on his maps.

Dennis Yee asked if Option 2 was an index?

Just Houk said yes.

Dennis Yee said that there was a third piece – equipment values. He said that he would track them down.

Justin Houk said he should if that was a piece that he needed.

Dennis Yee said that they had land value and urban value and then there was personal business property data that could be included.

Justin Houk said that information could be added.

Terry Morlan asked if Option 3 could include using the design type information and the economic data separately rather than be indexed?

Justin Houk said that that was how it was intended to be used. The idea in Option 3 was to use the best available information to make decisions in the matrix. This would mean that Metro might develop an index value and have it on hand for comparison. It might, however, not be the best piece of information in each category. Perhaps they should isolate one piece of information either from expert opinion or an individual piece of that index value. For instance, property value or business properties, those could be input into the process. They were talking about increasing the value of a specific class of an area, not necessarily at a specific location. They were still, at that point, seeing a big picture. Mr. Houk continued with his presentation.

Al Burns asked if this was the first time that they had discussed the 2040 types by zone.

Justin Houk said that it was the second time, but that it didn’t look the same.

Al Burns said that he was advised that you look at what was allowed in the ESEE analysis. He said that the ESEE analysis should be based on the broader policy document. He said that the 2040 Design Type map allowed more industrial use than the 2040 Design Type map adjusted by local zones. Adjusting by local zones meant that you were putting together an analytical framework that analyzed less than was allowed by the 2040 Concept.

Justin Houk said he agreed with that.

Al Burns said that he felt that was not a good idea and that it might be contrary to the purpose of Goal 5. He wanted to go on record that he felt adjusting by local zoning was not a good idea. He said that what they were supposed to do was analyze conflicts between what was allowed and uses that would identify significant resources.

Justin Houk said he understood his point and that the intention was to reflect the best possible information. He said that one of the issues was the scale of the design types. He said that it didn’t make sense that they should come to a different ESEE choice in a residential area just because a design type happened to spill over into it.

Andy Cotugno said that the issue that Mr. Burns had put his finger on was how they deal with those areas inside the UGB that don’t yet have zoning, but that attempts to implement the 2040 Design Type assigned to that area. In other words, it was still carrying rural zoning. That was going to be a bigger problem in Pleasant Valley and Damascus and all the other expansion areas. How should those areas be treated? They don’t currently have local zoning, but they will pick up local zoning over the course of the next several years. The policy principal was more a reflection of what was happening in the centrally sited area where there was conflicting zoning, or where the zoning was not implementing the 2040 vision. If it were an industrial area with the right zoning it would be the top priority. If it were central city with the right zoning it would be top priority. It happened to be central city with the wrong zoning, and the question was should it get credit for being central city?

Al Burns said he agreed with the concept of not counting conflicts, or not going against 2040. He said that he thought they would sidestep those problems by not adjusting for local zoning.

Andy Cotugno said that it was more appropriate for them to figure out how they would deal with all those places that still carry rural zoning.

Steve Kountz asked about central city designation on one of the maps. He wanted to know, pertaining to Option 1, which was adjusted by zoning, why was there a difference in the color designations, and why weren’t they all red?

Andy Cotugno pointed out the zoning that was commercial, which did support the central city designation. The rest of the area was industrial zoning, which would not support the central city designation.

Steve Kountz asked if the industrial was also colored red, which would be high priority.

Andy Cotugno said that what they were trying to do was to line up how well the local zoning implemented the 2040 design type. The 2040 design type was central city. The local zoning was industrial. If the 2040 design type was industrial and the local zoning was industrial, then it would get the highest classification. He said that remnant industrial zones around the region that were not trying to implement the regional center wouldn’t get the highest priority classification.

Terry Morlan said he agreed with Al Burns. He felt that what Mr. Cotugno had discussed was a planning exercise, which was forward looking. Whether the zoning was appropriate or not seemed to be an issue that would be dealt with when doing the planning. He felt that taking something zoned industrial that was located in area designed for city center and giving it a lower score was not productive.

Andy Cotugno said that it was a reflection of what local government had implemented, and not an attempt to move towards the higher plan.

Terry Morlan said that by taking those out they would lose the focus and priority that they ultimately would want to put on them.

Andy Cotugno agreed. He said that if the local government were taking the actions to change the zones to get to that higher level of planning then they wouldn’t lower those priorities. He said that he felt that the way to account for the areas that they wanted to adjust was through the economic data. He cautioned that even that did not deal with the zoning issue.

Justin Houk continued with his presentation.

Terry Morlan asked if on parts of the map the index was a combination of economic and land value data and if on other parts of the map it was just land/property value?

Justin Houk said that on all of the employment lands and the multi-family residential lands Metro applied payroll, employment density, and land value. For single family they didn’t apply employment. The weighting for those areas was only dependent on the dollar value.

Terry Morlan said that economists would find that troubling.

Justin Houk said that it was his feeling that they were somewhat different in terms of expectation of value. He said that because they were generalizing, and neighbors have a way of influencing each other’s values, they could be put together as well. A troublesome thing about Option 2 was some areas planned for development were relatively low.

Greg Jenks asked about the “D” category – he wanted to know how Mr. Houk had come up that descriptor.

Justin Houk said that the “D” category that he was likely to develop was primarily applied on public open spaces and parks. If it had a design type or zoning that open space or park, he didn’t feel it would be right to apply the economic or land value data to those areas.

Greg Jenks was concerned about the green area surrounding Damascus.

Justin Houk said that he did not apply the values to those particular lands. Also, if the value was already low and there was no employment there, then you could end up in the zero category as well.

Greg Jenks encouraged them to look at other descriptors.

Justin Houk said that the analysis was looking at current data only, not looking forward.

Brent Curtis said that someone was getting a free ride by having low valued land.

Justin Houk asked how should rural land be treated in this particular model? He said he had taken rural design types/zoning and not applied the index to those areas.

Cindy Catto said that there were shortcomings of using Option 1 or Option 2. Neither one was a perfect model. She suggested a combination of the two.

Andy Cotugno said that rural zoning would still be a problem that they should fix. If the intent behind that option was to prescribe a strictly economic value indicator, it was reasonable to effectively suppress the data on publicly owned land. It would be incorrect, however, to suppress land that was simply rurally zoned.

Justin Houk said that to fix it, they would need to apply all the values to rural land, and not include it in Option “D.”

Brent Curtis said that under the Oregon Planning Program there was not supposed to be rural zoning inside the UGB. However, there could be holding zones that were urban, that operate like a rural zone. He said that you could have farm and forest deferred land that created a tax value inside the UGB.

Chris Eaton said they should be careful about generalizing zones that are open space zones because they were often privately owned.

Jim Labbe said that a potential problem with using land values was that you could be counting the values of natural resources.

Justin Houk asked him if he meant that on residential land some of the land value was derived by amenities that included natural resources in close proximity to what was already built.

Jim Labbe responded that land values were affected by proximity to greenspace and we should be accounting for the amenity value of natural resources in estimating development value of land. Not doing so made the use of the land value economic data to rank development value problematic.

Andy Cotugno said he was not sure how to separate that out. He said they had to recognize that the assessor had picked up a property value that acknowledged the property adjacent to an open space, which gave it a higher value than the equivalent property somewhere else. Therefore, at some point it was built into the value that the tax assessor assigned. He said that they had no way to take that out. They were simply mapping that information as one of three indicators of economic value. The first was straight up property value, the other two were payroll and employment. He didn’t think that they were connected.

Jim Labbe said that they could be connected.

Andy Cotugno said that Option 3 was explicitly intended to call out the intrinsic value of the natural resource.

Jim Labbe said that is seemed to him that it would be unfortunate if the value of land was ranked higher due to its economic development value because it was next to a natural resource. He said it was not dealing with the conflict. He asked if they could get an update on the progress of some of the other “types” that were so nicely outlined in the report.

Chris Eaton wanted to know if public lands would come up zero on the economic model and therefore it could be applied?

Andy Cotugno said that there was very valuable park lands out there, and they would have great economic value.

Terry Morlan said that the adjustment that Mr. Houk was talking about would take them from green to yellow on the map.

Justin Houk said that he could look at the full spectrum before applying the categories. He discussed Option 3. He said that Option 3 was more flexible than Option 1 or Option 2.

An audience member asked a question about industrial zoning producing a lot of jobs.

Andy Cotugno said that it did not raise a classification where there was a contradiction. The question that was raised was how high should the scale be? Mixed-use zoning was good and got an “A” even if it was in a town center or main street. It was zoning that was supportive of that objective. Whereas industrial zoning was a contradiction. It was not what they were trying to achieve in a town center.

The audience member asked if it was always a conflict; are industrial zones that have many jobs a conflict?

Andy Cotugno said that industrial zoning did not necessarily indicate high-density jobs.

The audience member asked is that the kind of zoning that Metro would expect local governments to do later?

Andy Cotugno said that the whole process was about using a single set of consistent rules on a regional basis.

Justin Houk reviewed Option 4. He said that this option reflected the best scores of the policy and economic data.

Cindy Catto said that Option 3 required a lot more work.

Justin Houk said that it required less than it appeared to need.

Cindy Catto said that part of her concern was that they could be doing this until she retired. No matter how much they quibble and refine it – it would still not be perfect. She said that her vote was for Option 4b and she wanted the process to move on.

Al Burns said that after looking at the big maps he still thought that they were missing Title 4 when they identified industrial zoned areas.

Justin Houk asked if that was an industrial design type or an industrial zone?

Andy Cotugno said it was an industrial design type.

Al Burns said that his other concern was that it looked different from what he thought they had already made some decisions on. One was using the 2040 design type as the forward-looking document. The purpose of the ESEE analysis was to look at what uses would be allowed and which of those uses would have an effect on significant resources. That was the scope of the ESEE analysis.

Justin Houk asked if the zones had any impact.

Al Burns proposed a flat 2040 map.

Justin Houck said it wasn’t an option, but he showed it on one of the maps in the presentation.

Al Burns said any industrial use in the right area was a good thing.

Greg Jenks asked what that would do to high industrial use areas?

Al Burns said the right thing in right place should get one point. Then look at the RTP hierarchy – the right thing in those places get one more point. Then the right things in places carried out by local zoning get yet another point. Therefore you would get good, better, and best.

Justin Houk said that that was basically what they were doing except with just an alternate approach.

Al Burns said that they were throwing away too much in Option 1 by taking out the forward-looking 2040 plan. He said he felt that they were throwing away too much before they even develop Option 1.

Justin Houk asked if he thought that should be the starting place? Then add areas of higher value?

Al Burns said to add areas of higher priorities. He suggested some kind of map with just the design types by themselves.

Brent Curtis said that he had not said anything about the economic data, and he wanted to know if that meant that Mr. Burns was excluding it.

Al Burns said that he was concerned about the economic value track. He said that there were billions dollars of investments in capital facilities and therefore in highways and railroads, etc. If they were tax exempt they would show up as zero or no value. Therefore they would not be capturing those kinds of values by using that methodology. He said he was also concerned that the economic methodology measured the same thing in three different ways and tripled the value. The flat maps from the last meeting peaked just in the central city.

Brent Curtis said they peaked in other areas.

Justin Houk said that the central city was the highest peak, but it did peak in other areas. He said that they had agreed that central city was a different population, but the other places were just as important. The category for that might need to be altered. They had picked classes that tried to make it more fair.

Al Burns suggested that they use some professional adjustments for the final map.

Justin Houk said it sounded like he was arguing for Option 3 except for the way they got to the value that they had started with.

Al Burns said that he was disagreeing with going by a design class that didn’t match. He said he agreed that the design types that were carried out by local zoning were more valuable.

Andy Cotugno said he was arguing between the first two options.

Al Burns said that one was good, but if it was carried out by local zoning, that would be better.

Paul Ketchum said that he wanted design types over zoning.

Al Burns said he felt that design types carried out by local zoning were better.

Justin Houk said they might have to meet off line so that he could better understand what Mr. Burns meant.

Cindy Catto asked if, after all the analysis, they would have anything significantly different from Option 4b?

Andy Cotugno said the important thing was the relative amount in the highest category. There seemed to be a sense that you could say this kind of place could be more important than that kind of place. He said that a pretty substantial amount of the region was in the lowest category. If at the end of the ranking scheme you have about 1/3, 1/3, and 1/3 then you have generally the right proportionality. He said they don’t want to end up with everything in the top or bottom category, then there would be no distinctions.

Cindy Catto asked if the economic analysis actually showed that 2/3 of the land was really important economically, what was wrong with that?

Andy Cotugno asked if she wanted to grade on the curve, or did everybody get an “A?”

Patti McCoy said that if you grade it for what it was, it could turn out 2/3 more.

Brent Curtis asked about the environmental analysis, when Metro made choices about significance, was the choice to be inclusive? If the choice was to be expansive, err on the side of a judgment that was economic value.

Terry Morlan said that there were probably three things to use. He didn’t understand the right thing in the right place part, because to him they were making development decisions so something of high value economically was less likely to be developed. He said he thought starting with the first one and not adjusting for zoning was the forward looking plan they were trying to implement. Therefore, he would put that at the top of the three pieces and he wouldn’t combine the pieces together as in Option 4B, because you lose information. He would take the economics as a second measure, and the zoning as the third measure. Then you keep those pieces in the highest priority measure of the design type hierarchy measures. That would modify that finding with economics and then zoning.

Brent Curtis said that the 2040 design types were developed from a growth management perspective. Used in a transportation sense to focus a response to transportation investments in those places that contribute most to the efficiency of urban use within the boundary, as opposed to looking at creation of economic development. He said he thought just using the design type hierarchy in this exercise had some limitations. The design types do not come out as they should when you were trying to come to an economic conclusion. The economic data model may overrate many places. He said that he felt that the design types didn’t work for what they are trying to do. He said he felt that some notion about what could happen in business centers and what happens in suburban locations needed to be factored into the data. He said he was leaning towards going with Option 4b, but that it needed to be scaled back.

Greg Jenks said he was inclined to go with either Option 2 or 4b. He wanted to know how this would this be applied to an emerging urban area. He said he thought that looking at the economic activity surrounding the area was an important consideration. He said that, however, it was important to know where those intermodal facilities lie.

Justin Houk said they should put all the intermodal facilities on all the maps.

Brent Curtis said that it appeared that the important properties were picked up.

Greg Jenks said it would not hurt to add the intermodal facilities.

Cindy Catto said that it appeared that Option 4b was most inclusive of future economic planning. She said that she felt Option 4b was the best choice they had to-date.

Patti McCoy said she agreed. She said she did not think that it would change it in a lot of places, but having it there as a layer would be critical when they start moving some stuff back from it. If they focus on just being the most expansive that suggests that at some point there would be an adjustment downwards. As those happen, they want to be sure that they have given every area the benefit of every layer that does apply. She said they should choose Option 4b with intermodal facilities added.

Justin Houk said it was intended that in Option 3 you can also use the economic data. Primarily in Option 4b there was a specific mathematical equation that you would have to follow. Option 3 was more flexible and could contain more data.

Brent Curtis said they should not a make decision about natural resources until they simultaneously made a decision about the economic importance of land. The planning and determination should go forward together.

Andy Cotugno said that suggested a distinction between Pleasant Valley and Damascus. In Pleasant Valley they had a defined concept plan that had more detail than the 2040 designations. It covered both urbanization areas as well as protection areas. He suggested they treat that as if the zoning was like other urban-zoned areas. Whereas in Damascus, they didn’t know what the zoning was going to be. Therefore they should focus on Goal 5 natural resources and set aside this part of the concept plan.

Justin Houk said that if they were arguing for Option 4b as is, then they would also be arguing to make a zoning adjustment. They could amend that by creating an Option 4c, then that would use the 2040 design types.

Andy Cotugno said that the proposition on the table was to use the higher of the two. It was between using the straight 2040 design type, which was the forward looking plan, or the economic plan, whichever was higher.

Cindy Catto said in other words either 2040 or Option 2, whichever was higher.

Al Burns said that they were looking at it through three lenses. 2040 – what we want; zoning – what was allowed; and economics – what was happening. They were all important, but then they kind of lose information when combined. They might be more valuable as separate pieces of information.

Cindy Catto said that in the final analysis they would need them combined in order to compare one to the other. At some point you would need to say that one trumps the other.

Al Burns said it would be nice to have good, better, and best for the natural stuff, and good, better, and best for the economic stuff.

Justin Houk said that they had done something like that.

Andy Cotugno said that he heard a consensus of the group. With corrections on the non-park land values, the economic data would show all land values, with the 2040 hierarchy unvarnished for zoning. Then the proposal was to take the higher of the two. So, the 2040 design type in the UGB expansion areas would be added to the 2040 hierarchy map. The rural land value for those expansion areas would be added to the economic data map. The overall economic importance rating was a combination of the two. He said they would proceed with that as the recommendation.

Jim Labbe said it would be interesting to see what the breakouts were percentage wise so that they know what kind of spectrum they were getting. He asked how the other pieces would be integrated. He said that the economic valuations would be compared directly with the fish and wildlife inventory. He said it appeared that incorporating the economic values of the resources themselves was the next step. He said he felt that was an important piece of what the ETAC committee was supposed to do. He wanted to know what the timeline to accomplish that was. He also asked if there would be a final map that would integrate those things.

Paul Ketcham said that they were setting up the tool to prepare economic rankings to compare with resource rankings. He said that the reason they had not moved forward with rankings of the riparian and wildlife habitats was that they felt it was incumbent on them to at the same time develop an economic ranking system. Then they would come back and look at how to combine the resource rankings, so that people could understand the context of a larger regional analysis. Then they would have a way of describing both sides of the equation and how they would summarize or collapse data into a usable piece of analysis. Next would be the process of examining the consequences of allow, limit and prohibit decisions by ranking categories. They would be able to display for the general public or policy makers what the consequences of conserving or limiting resource protection or conflicting uses in a given area to achieve a certain level of protection. That process would carry them through the spring. They would have preliminary results and tradeoff analysis for the regional level sometime in late spring and early summer. At the same time, the staff would be looking at pre-program concepts. Whatever options come out of that analysis would have to comply with the ESEE analysis. Through the pre-program analysis they would lay out various options with varying degrees of baseline regulations. They would also examine the components of the incentives, landowner education, acquisition, and restoration based on regulatory options. The goal was that the council would have various pre-program options to explore with full descriptions of tradeoffs among those common alternatives. Then they could choose which of those options seemed best to explore a regional program for 2004.

Jim Labbe asked where they were with accounting for ecosystem services and intrinsic values?

Paul Ketcham said that those were on the front burner for them to consider in the trade-off analysis. Their consultant, Eco Northwest, had the responsibility for giving them a summary of empirical literature on eco system services and integrating that information into the analysis.

Al Burns wanted to know if they would see that alaysis.

Paul Ketcham said yes. He thought that ETAC would be examining those consequences and tradeoffs, and how to integrate all elements of the ESEE analysis.

Jim Labbe asked if they would quantify those things.

Al Burns said that there was no way to stop them from quantifying that.

Andy Cotugno said that their only restraints would be how much time they had and the budget.

4.  ETAC Discussion - Scheduling Regular ETAC Meetings

Cindy Catto asked if there was a schedule.

Andy Cotugno suggested that they have a regular meeting schedule.

Rob DeGraff said that the second Monday of every other month seemed to work.

Greg Jenks requested every third Monday.

Patti McCoy said third Mondays worked for her also.

Cindy Catto asked to meet in February to finalize the map. She said that 60 days was a long time between meetings to retain the pertinent information.

Justin Houk offered to work up the map and documents and send them out to the members within 30 days, then they could meet again on the 60-day schedule.

Terry Morlan requested some description with the new map.

Rob DeGraff said it might help to have a meeting in February and then switch to the 60-day schedule.

After some discussion, the committee agreed to meet again on February 3, 2003 and then every other third Monday of the month thereafter.

There being no further business before the committee, Chair Cotugno adjourned the meeting at 4:10 p.m.

Respectfully submitted,

Kim Bardes

Council Office

ATTACHMENTS TO THE RECORD FOR JANUARY 13, 2003

The following have been included as part of the official public record: