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Landowner charge bill heads to Oregon Senate

A bill being considered by Oregon legislators to limit the charge for a landowner in The Dalles to partition a lot has been narrowed down to deal only with the local city.

“This is not happening anywhere else in the state, so the chair of the committee wanted an amendment that would narrow the bill to apply only to folks in The Dalles,” said Dave Hunnicutt, who authored House Bill 3479-4 and was asked by Sen. Arnie Roblan, D-Coos Bay, to make the latest change in language.

“I think it’s really unfortunate that this had to happen and I don’t think anyone in the legislature is enamored with doing this but I think they understand that it’s the only way to provide relief for the people who need it now.”

Hunnicutt is executive director of Oregonians in Action, a private property rights advocacy group. He joined several The Dalles residents in testifying last week before the Senate Rural Communities and Economic Development Committee that is chaired by Roblan. A vote is expected Thursday, May 30.

“At the end of the day, we genuinely felt the committee heard us,” said Randy Hager, who is facing an $80,000 assessment for creating a new lot on his East 10th Street property.

“We were so graciously received, as we were in the House committee, that we joyfully wait to hear what they decide.”

At issue is the city’s $351 per linear foot assessment on street frontage for lot partitions as prepayment for future infrastructure improvements. Because lots in the eastern end of town are more rural and larger, that charge ranges from $50,000 to $152,000, an amount landowners say is unaffordable.

City officials contend that residents are being asked to pay ahead for infrastructure improvements to accommodate increased traffic and population growth. Attorney Gene Parker said The Dalles differs from other municipalities in that System Development Charges typically levied for new construction are being assessed at the time a property is divided.

Hager and other affected landowners asked Rep. John Huffman, R-The Dalles, for help after being unable at several hearings since 2007 to convince the city council to reduce the amount of the assessment.

Instead, the elected body decided in February on a “compromise” plan that, while maintaining the amount of the fee, allows it to be paid when the property is developed instead of when it is sold or after 10 years have passed. That plan was scheduled to be presented to the public for comment in June, but the hearing has been delayed pending the outcome of legislative action.

Sen. Ted Ferrioli, R-John Day, expects HB 3479-4 to be approved because Huffman, who sponsored the measure, is respected for working well across the aisle. He said once Huffman has educated officials about the issue, they seem to be very concerned about a city charging ahead for development that might never occur.

“Who gets to throw that dart?” he asked. “It is sort of a thing to be marveled at that a community would charge this kind of money — a simple lot division does not constitute $60,000 of infrastructure work.”

Huffman’s proposal to limit the city’s charge to a maximum of $5,000 was approved May 2 by a 46-10 margin in the House after being moved forward by the Land Use Committee. Hunnicutt and Huffman had sought input from the League of Oregon Cities and municipalities around the state when crafting the measure.

“Committee members without exception have really been appalled at what they’ve heard and I have every expectation this will also pass in the Senate,” said Huffman.

He and Ferrioli join Hunnicutt in agreement that cities have the right to expect people who develop property to pay for infrastructure improvements.

However, they believe, at the heart of the problem is The Dalles’ “misguided” attempt to charge landowners who want to create one new lot the same as if they were developers who were subdividing land into 20 parcels.

“This is the kind of stuff that should never rise to the level of the Legislature and it is not something we want to take on,” said Ferrioli. “But it’s sort of an appeals process to have landowners come to the state when they have been unable to deal with their local government.”

Parker said the city is against any measure that directly targets The Dalles and believes passage will “tie the hands” of officials from finding their own way to deal with the problem.

“People don’t have to pay until there is development under the plan that we have worked out,” he said. “If this bill passes and landowners don’t have to pay, or sign a non-remonstrance agreement (a document that prevents them from opposing formation of a Local Improvement District), it’s certainly going to make it difficult for us to proceed.”

He said one of the solutions being discussed by city officials is formation of Reimbursement Districts for engineering work. He said landowners could then get plans drawn up for improvements that they could undertake themselves at less cost because they would not have to pay prevailing wage as the city does. He said property owners would be able to recoup engineering expenses once a Local Improvement District was formed to pay for street improvements.

“If this bill passes that is something we can’t do,” said Parker.

Hunnicutt said Parker was the only legal representative of a municipality in The Dalles to argue that HB 3479-4 was flawed due to “ambiguities” in the language. He said legislative counsel and attorneys from the cities of Beaverton, Portland, Salem and Eugene, among others, reviewed the text of the measure and had no issues with the final version.

“I think the (Senate) committee would have liked to have an explanation from Mr. Parker or one of the elected officials from The Dalles but none of them came to testify,” he said.

Parker said he and Nolan Young, city manager, were having their annual performance evaluations at a special council meeting May 21 so were unable to be present for the Senate hearing.

Garrett Chrostek, the city’s administrative fellow, was sent to testify and deliver letters of objection to Roblan and committee members, as well as Ferrioli.

Chrostek testified that not only obscure language but “internal inconsistencies” in the bill could create problems for communities around the state in addressing how property owners should satisfy their obligations for street improvements.

“We believe it will likely take litigation to sort out these ambiguities and inconsistences,” he stated in written comments.

He said opponents of the city’s plan to lift mandatory payment of the assessment with a sale or after a set period of time had failed to show how that solution would not meet their needs.

“In summary, this legislation should not move forward because it tries to address in a few paragraphs what we have dedicated entire chapters to in our LUDO (Land Use and Development Ordinance),” wrote Chrostek. “Accordingly, the unintended consequence of this legislation is that it raises more questions than it does answers and provides both property owners and the city with less certainty.”

Hunnicutt said officials from The Dalles do not seem to understand that imposing an assessment on property that is more than the market value of the land itself constitutes a regulatory “taking,” which can be legally challenged.

“The Dalles is the only city in the entire state that is doing things this way and it just defies logic,” he said. “This bill isn’t going to affect other cities, as Mr. Chrostek warned, because no other city is going in a direction that actually stalls growth.”

Parker said the city does not control the market value of properties within its jurisdiction and is simply trying to recoup costs for street improvements and not “drive people off their property.”

“It’s pretty obvious they (landowners) didn’t like our solution so, if we get the chance, we need to go back and create a solution they can live with,” he said.

The Dalles Mayor Steve Lawrence said he was not in office when the controversy over lot partitions on the eastern edge of town began more than five years ago. He said it has become obvious since the issue reached the legislative level that the council needs to review the city’s capital improvement plan that prioritizes projects. He said a discussion also needs to take place with county leaders about the methodology of transferring ownership of rural roads during annexations, which could pare down the cost of upgrades for landowners.

“I think this is a wake-up call and I wouldn’t call it anything more than that,” said Lawrence. “We need to set up a process where the comments of community members are actually heard and that’s where I think we need to improve.”

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