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Barkers Five, LLC v. Land Conservation & Dev. Comm'n

Court of Appeals of Oregon

February 20, 2014

BARKERS FIVE, LLC; SANDY BAKER; CITY OF TUALATIN; CITY OF WEST LINN; CAROL CHESAREK; CHERRY AMABISCA; SAVE HELVETIA; ROBERT BAILEY; 1000 FRIENDS OF OREGON; DAVE VANASCHE; BOB VANDERZANDEN; LARRY DUYCK; SPRINGVILLE INVESTORS, LLC; KATHERINE BLUMENKRON; DAVID BLUMENKRON; METROPOLITAN LAND GROUP; CHRIS MALETIS; TOM MALETIS; EXIT 282A DEVELOPMENT COMPANY, LLC; LFGC, LLC; ELIZABETH GRASER-LINDSEY; and SUSAN MCKENNA, Petitioners,
v.
LAND CONSERVATION AND DEVELOPMENT COMMISSION, METRO, WASHINGTON COUNTY, CLACKAMAS COUNTY, MULTNOMAH COUNTY, STATE OF OREGON, and CITY OF HILLSBORO, Respondents

Argued and Submitted January 16, 2013.

Page 369

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Land Conservation and Development Commission. 12ACK001819.

Reversed and remanded for further action consistent with the principles expressed in this opinion.

Wendie L. Kellington argued the cause for petitioners Barkers Five, LLC, and Sandy Baker. With her on the brief were Wendie L. Kellington, P.C., and Kristian Roggendorf, Matthew D. Lowe, and O'Donnell Clark Crew LLP.

Jeffrey G. Condit argued the cause for petitioners City of Tualatin and City of West Linn. With him on the brief was Miller Nash LLP.

Michael F. Sheehan argued the cause and filed the brief for petitioners Carol Chesarek and Cherry Amabisca.

Carrie A. Richter argued the cause for petitioners Save Helvetia and Robert Bailey. With her on the brief were Edward J. Sullivan and Garvey Schubert Barer.

Mary Kyle McCurdy argued the cause and filed the brief for petitioners 1000 Friends of Oregon, Dave Vanasche, Bob VanderZanden, and Larry Duyck.

Christopher James argued the cause for petitioners Springville Investors, LLC, Katherine Blumenkron, and David Blumenkron. With him on the brief were Cameron Soran and The James Law Group, LLC.

Steven L. Pfeiffer argued the cause for petitioner Metropolitan Land Group and petitioners Chris Maletis, Tom Maletis, Exit 282A Development Company, LLC, and LFGC, LLC. With him on the briefs were Seth J. King and Perkins Coie LLP.

Elizabeth Graser-Lindsey and Susan McKenna filed the brief Pro se.

Patrick M. Ebbett, Assistant Attorney General, argued the cause for respondents Land Conservation and Development Commission and State of Oregon. With him on the brief were Ellen F. Rosenblum, Attorney General, and Anna M. Joyce, Solicitor General.

Roger A. Alfred argued the cause for respondent Metro. With him on the brief were Alison Kean Campbell and Office of Metro Attorney.

Alan A. Rappleyea, County Counsel, argued the cause for respondent Washington County. With him on the brief were Jacquilyn Saito-Moore, Assistant County Counsel, and Office of Washington County Counsel.

Rhett C. Tatum, Assistant County Counsel, argued the cause for respondent Clackamas County. With him on the brief was Stephen L. Madkour, County Counsel.

Jed Tomkins argued the cause for respondent Multnomah County. With him on the brief was Jenny M. Morf, County Attorney.

Christopher D. Crean argued the cause for respondent City of Hillsboro. With him on the brief were Pamela J. Beery, Chad Jacobs, and Beery, Elsner & Hammond, LLP.

Before Haselton, Chief Judge, and Sercombe, Judge, and Deits, Senior Judge.

OPINION

Page 373

HASELTON, C. J.

TABLE OF CONTENTS

I. Introduction

§

II. Statutory and Regulatory Framework

§

A. Senate Bill 1011 (2007)

§

B. The Statutory Framework (ORS 195.137 - 195.145)

§

1. Process for Designation of Urban Reserves

§

2. Process for Designation of Rural Reserves

§

3. Intergovernmental Coordination and Cooperation

§

4. LCDC Rulemaking Authority

§

C. The Regulatory Framework (OAR chapter 660, division 27)

§

III. Procedural History

§

IV. Preliminary Contentions: " Clearing the Decks"

§

V. Unlawful in Substance Contentions: Compliance with " Amount of Land

Standard" and Statewide Planning Goals

§

A. " Amount of Land Standard" in OAR 660-027-0040(2)

§

B. Statewide Planning Goals

§

1. Application of Economic Development Goal

(Goal 9)

§

2. Use of Urban Growth Report to Project Land Needs

(Goals 2 and 14)

§

3. Assessment of Carrying Capacity

(Goals 2, 3, 4, 5, 6, 8, 9, 10, 12, and 14)

§

VI. Unlawful in Substance Contentions: " Consideration" and " Application"

of the Reserve Factors and the Meaning and Application of the

" Best Achieves Standard"

§

A. Validity of LCDC's Legal Premises: " Consideration" and

" Application" of the Reserve Factors

§

1. " Consideration" of " Factors" in the Manner of Goal 14

§

2. Application of the Factors to " Areas"

§

3. Application of the Factors to Alternative Areas within a County

§

4. Application of Rural Reserve Factors, Urban Reserve Factors,

or Both to Each Area

§

5. Determination Whether to Designate an Area As Urban or Rural

Reserves or to Leave It Undesignated

§

B. Validity of LCDC's Legal Premises: The " Best Achieves Standard"

§

1. Standard Is Qualitative Not Quantitative

§

2. Standard Applies to Designation " In Its Entirety" Not to

Designation of Individual Properties or Areas

§

3. " Best Achieves Standard" Allows for a Range of Permissible

Regional Designations

§

4. Satisfaction of Standard Is Demonstrated through Findings

Concerning Application of the Reserve Factors

§

VII. Petitioners' Particularized Challenges

§

A. LCDC Properly Understood That Designation Was Not a " Political"

Decision

§

B. Washington County

§

1. Misapplication of Rural Reserve Factors

§

2. Effect of Washington County's Misapplication of the Rural

Reserve Factors

§

C. Clackamas County

§

1. Application of OAR 660-027-0060(4), aka the " Safe Harbor

Provision," to Area 4J and Clackamas County's Revised Rural

Reserve Findings on Remand

§

2. Clackamas County's Application of the Rural Reserve Factors

§

D. Multnomah County

§

1. " Balancing" of the Factors

§

2. Adequacy of Multnomah County's Consideration of

Rural Reserve Factors Pertaining to Area 9D

§

VIII. Unlawful in Substance Contentions: LCDC's Substantial Evidence

Review

§

A. Standard of Review for Substantial Evidence

§

B. LCDC's Understanding of Substantial Evidence Review

§

C. Petitioners' Particularized Challenges

§

1. Washington County

§

2. Clackamas County

§

a. Designation of Area 4J As Rural Reserve

§

b. Designation of Areas 4A to 4D As Urban Reserve

§

c. Remaining Contentions

§

3. Multnomah County

§

IX. Conclusion

§

Page 374

[261 Or.App. 264] I. INTRODUCTION

This case concerns the designation of urban and rural reserves in the Portland metropolitan area that will guide its growth until 2060.[1] Metro, in conjunction with Clackamas, Multnomah, and Washington counties, designated such reserves under a new process that had been established by the legislature in 2007, and, in June 2010, they submitted their designation to the Land Conservation and Development Commission (LCDC) for review. See generally ORS 197.626(1)(c), (f) (providing for LCDC review of urban and rural reserves). Ultimately, in August 2012--approximately one year after LCDC voted to acknowledge a revised submittal--

Page 375

LCDC issued its 156-page, single-spaced acknowledgment order.

Twenty-two petitioners--including property owners, nonprofit and citizen groups, and municipalities--seek judicial review of that order. In hundreds of pages of briefing, they raise 25 assignments of error that are predicated on a record that consists of approximately 36,000 pages.[2] Collectively, petitioners' assignments of error range from fundamental methodological issues pertaining to LCDC's understanding and application of the legal principles that govern the designation of reserves to the correctness of LCDC's substantial evidence review of Metro and the counties' designation of particular land as either urban or rural reserves. Simply stated, petitioners contend that LCDC's order is unlawful in substance because, in reviewing Metro and the counties' designation, LCDC misapplied the legal principles governing the designation of urban and rural reserves and circumscribing its review.

[261 Or.App. 265] As explained in greater detail below, we reject petitioners' contentions pertaining to, among other things, (1) the validity of the rules governing the designation of urban and rural reserves in this case (OAR chapter 660, division 27); (2) Metro's authority to designate reserves outside of its service district boundary; (3) whether too much land was designated as urban reserve under OAR 660-027-0040(2); and (4) whether the designation complies with particular Statewide Planning Goals. We also uphold nine fundamental legal premises underlying LCDC's review of the designation--that is, legal premises concerning Metro and the counties' " consideration" and " application" of the reserve factors and the meaning and application of OAR 660-027-0005(2) (otherwise known as the " best achieves standard" ). Further, we reject most of petitioners' contentions concerning whether LCDC properly applied the substantial evidence standard of review.

Nevertheless, we conclude that LCDC erred in four respects. In particular, LCDC erred in (1) approving Washington County's misapplication of the rural reserve factors pertaining to agricultural land; (2) concluding that Multnomah County had adequately " considered" the rural reserve factors pertaining to Area 9D; (3) concluding that it has authority to affirm a local government's decision where its findings are inadequate if the evidence " clearly supports" the decision; and (4) failing to meaningfully explain why--even in light of weighty countervailing evidence--Metro and the counties' designation of Areas 4A to 4D (commonly referred to as Stafford) as urban reserves is supported by substantial evidence.

Accordingly, because LCDC's order is unlawful in substance in various respects, we reverse and remand LCDC's order for further action consistent with the principles expressed in this opinion. ORS 197.651(10)(a) (providing that " [t]he Court of Appeals shall reverse or remand the order only if the court finds the order is[,]" among other things, " [u]nlawful in substance" ).

II. STATUTORY AND REGULATORY FRAMEWORK

To provide necessary context, before turning to the procedural history of this case and the parties' specific [261 Or.App. 266] contentions on judicial review, we describe the general statutory and regulatory framework that governed the designation of urban and rural reserves in this case. That framework finds its origin in Senate Bill (SB) 1011 (2007).[3] We begin with the circumstances that precipitated the enactment of that framework.

A. Senate Bill 1011 (2007)

Metro is a metropolitan service district established pursuant to ORS chapter 268,

Page 376

ORS 197.015(14), that includes land in Clackamas, Multnomah, and Washington counties. Metro is responsible for coordinating land use planning in that tri-county region. ORS 195.025; ORS 268.385. Among Metro's responsibilities is the adoption of a regional UGB. See generally ORS 268.380 - 268.390 (describing Metro's planning and land use authority).

Before the 2007 legislative session during which SB 1011 was enacted, Metro--as well as others--identified deficiencies in the process by which Metro managed and expanded the regional UGB. Specifically, Randy Tucker, Legislative Affairs Manager for Metro, explained:

" * * * The [current] system [for managing the Portland region's UGB] is dominated by two arbitrary numbers (20-year land supply requirement, [ see generally ORS 197.296, and a] Metro-only five-year UGB evaluation cycle[, see generally ORS 197.299]) rather than by rules that are more responsive to the aspirations of the region. Today's system requires perpetual UGB expansions, but the 'low-hanging fruit' of obvious and easy expansion areas is gone. The current system offers no way to protect critical farmland or natural resources over the long term, yet it also fails to consider factors related to efficient and effective urbanization when deciding where to expand the UGB. The existing 'land hierarchy,' [ see generally ORS 197.298,] which directs UGB expansions based on the quality of [261 Or.App. 267] agricultural land may be too narrow; more criteria than soil type may be needed to decide what farmland is truly worth protecting and what areas are more logical to urbanize.
" As a result, current rules lead to UGB expansions where they are not wanted (especially for industrial use) and prevent expansions where they might be appropriate and desirable. For this reason and others, the current system, which requires Metro to start from scratch every five years, leads to conflict, uncertainty, and frustration for local governments, farmers, businesses, and individual citizens."

Testimony, House Committee on Energy and the Environment, SB 1011, May 21, 2007, Ex C (statement of Randy Tucker).

To determine how to address those deficiencies in the current system, Metro--at some point before the 2007 legislative session--obtained partial funding from the Department of Land Conservation and Development (DLCD) and, in conjunction with DLCD, the Oregon Department of Agriculture (ODA), and Clackamas, Multnomah, and Washington counties, conducted what has become known as the " Ag-Urban Study." Id. That study examined land outside Metro's UGB and focused on three overarching questions:

" o What lands are functionally critical to the agricultural economy (irrespective of soil type)?
" o What lands are critical in terms of ecological function (protecting water quality, plant and wildlife habitat, and key landscape features like steep slopes)?
" o What lands can most efficiently and effectively be integrated into the urban fabric of the region to create sustainable and complete communities?"

Id. (boldface in original). The answers to each of those questions were ultimately embodied in three documents--summaries of which Tucker provided to the House and Senate committees that considered SB 1011: (1) a January 2007 ODA report to Metro entitled " Identification and Assessment of the Long-Term Commercial Viability of Metro Region Agricultural Lands" (the ODA Report); (2) Metro's February 2007 " Natural Landscape Features Inventory" (the Natural Landscape Features Inventory); and (3) the " Great Communities Final Report" (the Great Communities [261 Or.App. 268] Report). Because those three documents pertain to, and provide context for, certain of the parties' contentions on review, we summarize their essential content at this point.[4]

Page 377

The ODA Report described an analysis of agricultural lands based primarily on " an examination of both the capability (ability of the land to produce an agricultural product) and the suitability (ability to conduct viable farm use) of any given tract of land to be utilized for farm use." That examination focused, in turn, on particular subfactors related to capability ( e.g., the quantity and quality of soils and water) and suitability ( e.g., land use patterns; agricultural land use patterns; parcelization, tenure, and ownership patterns; agricultural infrastructure; zoning; location in relationship to adjacent lands zoned for nonresource development).

As a result of that analysis, ODA identified and mapped 20 agricultural subregions separated into three types of agricultural land categories-- viz., " Foundation," " Important," and " Conflicted" --which the report defined as follows:

" Foundation Agricultural Lands are agricultural lands that provide the core support to the region's agricultural base. These lands anchor the region's larger agricultural base. They incubate and support the larger agricultural industry and are vital to its long-term viability. They have the attributes necessary to sustain current agricultural operations and to adapt to changing technologies and consumer demands.
" Important Agricultural Lands are agricultural lands that are suited to agricultural production and contribute to or have the capacity to contribute to the commercial agricultural economy. These lands maintain the ability to remain viable over the long-term. They have the potential to be Foundation Agricultural Lands, but tend to be not utilized to their full potential. Trends in regional agricultur[e] could lead to a greater development of the agricultural capacity of these areas.
[261 Or.App. 269] " Conflicted Agricultural Lands are agricultural lands whose agricultural capacity (soils/water) is more times than not considered excellent but whose suitability is questionable primarily due to questions of integrity and ability to operate. These questions lead to issues of long-term viability. These lands are influenced by factors that diminish long-term certainty, which in turn tends to limit investment in agricultural operations by area farmers. These lands could become Important Agricultural Lands with changes in circumstances and trends in the industry. There may be individual or multiple operations within these areas that are conducting efficient, effective and viable operations."

(Boldface in original.)

Metro's Natural Landscape Features Inventory examined an area that " extended from north of Salem to the North Fork of the Lewis River on a north-south axis and from the Cascade foothills to the Coast Range on the east-west axis." The inventory identified 26 " features of the landscape that influence the sense of place for the greater region and ultimately will help define the future urban form of the greater region." Examples of natural landscape features identified in the inventory include (1) the " Cascade Foothills," which, among other things, provide " a scenic panorama for Portland and the eastside of the region" and " drinking water for the majority of the population of the region" and (2) " Forest Park Connections" --that is, the area that " provides protection to key watersheds like Balch, Miller, Ennis and Agency Creeks and secures the integrity of the 'big game' corridor that links the park with habitat in the northern Coast Range."

Finally, the Great Communities Report identified and described " eight essential characteristics" that " are the most important in making urbanization decisions" -- viz., (1) community design, (2) complete communities, (3) ecological systems, (4) optimization of public investments, (5) governance, (6) finance, (7) economy, and (8) education and workforce development. As an example, the report explained that " community design" recognizes that

" [d]ensity, connectivity and legibility are considered essential characteristics in attaining cohesive community interaction, active populations and thriving business districts. [261 Or.App. 270] To support the characteristic of walkability, the area should have high

Page 378

enough densities and a diverse enough mix of uses within a quarter mile radius of centers to support walkability. A minimum of 12 to 16 dwelling units per acre in these areas is recommended. Additionally, the area should have the capacity to provide connectivity to and within the area for all automobiles, business-related trips, bicycles, pedestrians and transit. Legibility refers to areas that have rich, distinctive and site-specific attributes and forms that fit the natural environment and capitalize on unique and significant natural features. It also focuses on how people inside the area perceive the region as they move through it, in other words, how they define its sense of place. Features may include views of natural ordering elements such as Mount Hood, the presence of and visual access to significant local landmarks, the ability to create edges to the community and pathway systems throughout an area, to create districts, nodes or centers and to develop gateways into/out of the area."

SB 1011 emerged from the Ag-Urban Study process and, consequently, incorporated some of the principles expressed in the ODA Report, the Natural Landscape Features Inventory, and the Great Communities Report. Audio Recording, House Committee on Energy and the Environment, SB 1011, May 21, 2007, at 24:28 - 25:31 (statement of Randy Tucker), https://olis.leg.state.or.us (accessed Feb 6, 2014). Of particular significance, the urban reserve factors specified in SB 1011 derived from the Great Communities Report and the rural reserve factors derived from the ODA Report.[5] In sum, " SB 1011 [was] an attempt to align the law with the region's goals both for urbanization and for protection of areas that should not be urbanized." [261 Or.App. 271] Testimony, House Committee on Energy and the Environment, SB 1011, May 21, 2007, Ex C (statement of Randy Tucker).

During the course of the legislative hearings, a coalition that represented diverse interests continued to meet to refine SB 1011 and propose amendments to its provisions.[6] As ultimately enacted, SB 1011--which is codified at ORS 195.137 to 195.145 [7]--authorized the designation of urban and rural reserves to provide " greater certainty" to commerce, industry, private land owners, and providers of public services by " facilitat[ing] long-range planning" for both urban and rural uses. ORS 195.139.

B. The Statutory Framework (ORS 195.137 - 195.145)

Four salient aspects of the existing (post-SB 1011) statutory framework are most pertinent to the designation of urban and rural reserves in this case.

1. Process for Designation of Urban Reserves

ORS 195.145(1)(b) authorizes a new, alternative process for the designation of urban

Page 379

reserves. Before the enactment of SB 1011, a process existed for the designation of such reserves. In determining which land to include as urban reserve, that existing process required that relative priorities be given to various types of lands. See generally OAR 660-021-0000 - 660-021-0080 (the division 21 rules). Of particular significance, OAR 660-021-0030(2) provides, inter alia, that the " [i]nclusion of land within an urban reserve shall be based upon the locational factors of [Statewide Planning] Goal 14 [(Goal 14)] and a demonstration that [261 Or.App. 272] there are no reasonable alternatives that will require less, or have less effect upon, resource land." Further, OAR 660-021-0030(2) provides that, once determined to be suitable, land may be designated as urban reserve only according to a set of priorities in OAR 660-021-0030(3) related to the agricultural quality of the land.

Although SB 1011 continued to provide for designation of urban reserves under that existing process, ORS 195.145(1)(a), it also established a new, alternative process, ORS 195.145(1)(b), under which the reserves in this case were designated. As Representative Jackie Dingfelder explained, this " new process for designating urban reserves," which " are the first in line when land needs to be brought into the UGB," is

" based on a set of factors that consider how well land can be woven into the urban fabric of the region rather than the current approach of selecting urban reserves based on factors that are related to their quality as farm land. In effect, this will make it easier to urbanize land that may have good soil but is not necessarily critical to the agricultural economy."

Audio Recording, House Floor Debate, SB 1011, June 11, 2007, at 1:48:58 - 1:49:40 (statement of bill's carrier Rep Dingfelder), https://olis.leg.state.or.us (accessed Feb 6, 2014).[8]

Central to that alternative designation process is a nonexclusive set of six urban reserve factors--derived from the Great Communities Report--that Metro and a county must " consider" in designating urban reserves under ORS 195.145(1)(b). Specifically, ORS 195.145(5) provides:

" [Metro] and a county shall base the designation of urban reserves under subsection (1)(b) of this section upon consideration of factors including, but not limited to, whether land proposed for designation as urban reserves, alone or in conjunction with land inside the [UGB]:
[261 Or.App. 273] " (a) Can be developed at urban densities in a way that makes efficient use of existing and future public infrastructure investments;
" (b) Includes sufficient development capacity to support a healthy urban economy;
" (c) Can be served by public schools and other urban-level public facilities and services efficiently and cost-effectively by appropriate and financially capable service providers;
" (d) Can be designed to be walkable and served by a well-connected system of streets by appropriate service providers;
" (e) Can be designed to preserve and enhance natural ecological systems; and
" (f) Includes sufficient land suitable for a range of housing types."

(Emphasis added.)

In addition, the amount of land that Metro and a county can designate as urban reserves under ORS 195.145(1)(b) is limited. ORS 195.145(4) provides:

" Urban reserves designated by [Metro] and a county pursuant to subsection (1)(b) of this section must be planned to accommodate population and employment growth for at least 20 years, and not more than 30 years, after the 20-year period for which [Metro] has demonstrated a buildable land supply in the most recent inventory, determination and analysis performed under ORS 197.296."

Page 380

Stated simply, ORS 195.145(4) establishes an " urban reserves planning period" --that is, a period between 20 and 30 years beyond the 20-year UGB planning period. Urban reserves designated under ORS 195.145(1)(b) " must be planned to accommodate population and employment growth" during the urban reserves planning period. ORS 195.145(4).

2. Process for Designation of Rural Reserves

ORS 195.141 authorizes the designation of a new type of reserves-- viz., rural reserves. " These are the lands that are critical to the functioning and long-term viability of the agricultural industry irrespective of soil quality, and [261 Or.App. 274] rural reserves can also be established to protect important natural areas." Audio Recording, House Floor Debate, SB 1011, June 11, 2007, at 1:49:47 - 1:50:05 (statement of Rep Dingfelder), https://olis.leg.state.or.us (accessed Feb 6, 2014). Before the enactment of SB 1011, there had been " no legal authorization to protect th[o]se lands over the long term." Testimony, House Committee on Energy and the Environment, SB 1011, May 21, 2007, Ex C (statement of Randy Tucker).

Unlike with urban reserves, the legislature did not impose a limitation on the amount of land that may be designated as rural reserves. Instead, the legislature imposed a temporal restriction on the development of such reserves. Specifically, land that is designated as rural reserve (1) must be outside of a UGB, (2) " [m]ay not be designated as an urban reserve during the urban reserve planning period," and (3) may not be included in a UGB during the urban reserve planning period. ORS 195.141(2). In practical terms, this means that land designated as rural reserve is essentially not subject to urban development for up to a total period of 40 to 50 years--that is, the 20-year UGB planning period plus the 20- to 30-year urban reserves planning period.

As with the designation of urban reserves, the process for designating rural reserves requires the " consideration" of a nonexclusive list of factors, which were derived from the ODA Report. Specifically, ORS 195.141(3) provides:

" When designating a rural reserve under this section to provide long-term protection to the agricultural industry, a county and [Metro] shall base the designation on consideration of factors including, but not limited to, whether land proposed for designation as a rural reserve:
" (a) Is situated in an area that is otherwise potentially subject to urbanization during the [urban reserves planning period], as indicated by proximity to the [UGB] and to properties with fair market values that significantly exceed agricultural values;
" (b) Is capable of sustaining long-term agricultural operations;
" (c) Has suitable soils and available water where needed to sustain long-term agricultural operations; and
[261 Or.App. 275] " (d) Is suitable to sustain long-term agricultural operations, taking into account:
" (A) The existence of a large block of agricultural or other resource land with a concentration or cluster of farms;
" (B) The adjacent land use pattern, including its location in relation to adjacent nonfarm uses and the existence of buffers between agricultural operations and nonfarm uses;
" (C) The agricultural land use pattern, including parcelization, tenure and ownership patterns; and
" (D) The sufficiency of agricultural infrastructure in the area."

(Emphasis added.)

3. Intergovernmental Coordination and Cooperation

The designation of urban and rural reserves requires coordination and agreement between Metro and the counties. To that end, ORS 195.143(1) provides that Metro and a county " must consider simultaneously the designation and establishment" of rural reserves pursuant to ORS 195.141 and urban reserves pursuant to ORS 195.145(1)(b). As Tucker explained, the direction " to consider the establishment of rural and urban reserves simultaneously" ensures " coordination of the planning of both types of reserves and

Page 381

consideration of the relationships between them." Testimony, House Committee on Energy and the Environment, SB 1011, May 30, 2007, Ex D (statement of Randy Tucker).

Ultimately, the designation of reserves occurs through agreements between Metro and a county.[9] As Representative Dingfelder explained on the floor of the House, under the new process established in SB 1011, " neither urban reserves [261 Or.App. 276] nor rural reserves can be created * * * unless Metro and a county agree about both urban and rural reserves. This provides a greater degree of protection and accountability." Audio Recording, House Floor Debate, SB 1011, June 11, 2007, at 1:50:10 - 1:50:25 (statement of Rep Dingfelder), https://olis.leg.state.or.us (accessed Feb 6, 2014).

Of particular significance, the coalition in support of SB 1011 agreed that urban reserves may not be designated in a county unless rural reserves are designated in that county as well.[10] To that end, ORS 195.143(3) provides:

" A county and [Metro] may not enter into an intergovernmental agreement to designate urban reserves in the county pursuant to ORS 195.145(1)(b) unless the county and [Metro] also agree to designate rural reserves in the county."

4. LCDC Rulemaking Authority

The legislature authorized LCDC to engage in rulemaking concerning the designation of urban and rural reserves. ORS 195.145(6) (" [LCDC] shall adopt by goal or by rule a process and criteria for designating urban reserves pursuant to subsection (1)(b) of this section." ); ORS 195.141(4) (" [LCDC] shall, after consultation with [ODA], adopt by goal or by rule a process and criteria for designating rural reserves pursuant to this section." ).

C. The Regulatory Framework (OAR chapter 660, division 27)

In response to that rulemaking authorization, LCDC promulgated the rules in OAR chapter 660, division 27 (the division 27 rules), which governed the designation [261 Or.App. 277] of urban and rural reserves in this case.[11] OAR 660-027-0005(2) establishes the objective of the division 27 rules--which has become known as the " best achieves standard." That rule provides, in pertinent part:

" The objective of [division 27] is a balance in the designation of urban and rural reserves that, in its entirety, best achieves livable communities,[12] the viability and vitality of the agricultural and forest industries and protection of the important natural landscape features that define the region for its residents."

(Emphasis and boldface added.)

To achieve the " best achieves" objective, " [w]hen evaluating and designating land for

Page 382

urban reserves," OAR 660-027-0040(8) provides that Metro and a county " shall apply the factors of OAR 660-027-0050." In turn, in promulgating OAR 660-027-0050, LCDC incorporated the urban reserve factors from ORS 195.145(5), see ___ Or.App. at ___ (slip op at 14-15), and also established two additional factors-- i.e., OAR 660-027-0050(7) and (8).[13] Specifically, OAR 660-027-0050 provides:

" When identifying and selecting lands for designation as urban reserves under this division, Metro shall base its decision on consideration of whether land proposed for designation as urban reserves, alone or in conjunction with land inside the UGB:
" (1) Can be developed at urban densities in a way that makes efficient use of existing and future public and private infrastructure investments;
[261 Or.App. 278] " (2) Includes sufficient development capacity to support a healthy economy;
" (3) Can be efficiently and cost-effectively served with public schools and other urban-level public facilities and services by appropriate and financially capable service providers;
" (4) Can be designed to be walkable and served with a well-connected system of streets, bikeways, recreation trails and public transit by appropriate service providers;
" (5) Can be designed to preserve and enhance natural ecological systems;
" (6) Includes sufficient land suitable for a range of needed housing types;
" (7) Can be developed in a way that preserves important natural landscape features included in urban reserves; and
" (8) Can be designed to avoid or minimize adverse effects on farm and forest practices, and adverse effects on important natural landscape features, on nearby land including land designated as rural reserves."

Consistently with the quantitative " cap" on urban reserve designations prescribed by ORS 195.145(4), LCDC also promulgated OAR 660-027-0040(2)--which is known as the " amount of land standard." Specifically, that rule provides:

" Urban reserves designated under this division shall be planned to accommodate estimated urban population and employment growth in the Metro area for at least 20 years, and not more than 30 years, beyond the 20-year period for which Metro has demonstrated a buildable land supply inside the UGB in the most recent inventory, determination and analysis performed under ORS 197.296. Metro shall specify the particular number of years for which the urban reserves are intended to provide a supply of land, based on the estimated land supply necessary for urban population and employment growth in the Metro area for that number of years. The 20 to 30-year supply of land specified in this rule shall consist of the combined total supply provided by all lands designated for urban reserves in all counties that have executed an intergovernmental agreement with Metro in accordance with OAR 660-027-0030."

[261 Or.App. 279] With respect to the designation of land for rural reserves, OAR 660-027-0040(9) provides that, " [w]hen evaluating and designating land" for such reserves, Metro and a county " shall apply the factors of OAR 660-027-0060." In promulgating OAR 660-027-0060, LCDC incorporated the rural reserve factors from ORS 195.141(3), see __ Or.App. at __ (slip op at 17), that pertained to protection of the agricultural industry but also extended their application to the forest industry. Specifically, OAR 660-027-0060(2) provides:

" When identifying and selecting lands for designation as rural reserves intended to provide long-term protection to the agricultural industry or forest industry, or both, a county shall base its decision on

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consideration of whether the lands proposed for designation[:]
" (a) Are situated in an area that is otherwise potentially subject to urbanization during the [urban reserves planning period] as indicated by proximity to a UGB or proximity to properties with fair market values that significantly exceed agricultural values for farmland, or forestry values for forest land;
" (b) Are capable of sustaining long-term agricultural operations for agricultural land, or are capable of sustaining long-term forestry operations for forest land;
" (c) Have suitable soils where needed to sustain long-term agricultural or forestry operations and, for agricultural land, have available water where needed to sustain long-term agricultural operations; and
" (d) Are suitable to sustain long-term agricultural or forestry operations, taking into account:
" (A) [F]or farm land, the existence of a large block of agricultural or other resource land with a concentration or cluster of farm operations, or, for forest land, the existence of a large block of forested land with a concentration or cluster of managed woodlots;
" (B) The adjacent land use pattern, including its location in relation to adjacent non-farm uses or non-forest uses, and the existence of buffers between agricultural or forest operations and non-farm or non-forest uses;
" (C) The agricultural or forest land use pattern, including parcelization, tenure and ownership patterns; and
[261 Or.App. 280] " (D) The sufficiency of agricultural or forestry infrastructure in the area, whichever is applicable."

Further, during rulemaking, LCDC established factors for the designation of rural reserves to protect important natural landscape features. Specifically, OAR 660-027-0060(3) provides:

" When identifying and selecting lands for designation as rural reserves intended to protect important natural landscape features, a county must consider those areas identified in Metro's February 2007 'Natural Landscape Features Inventory' and other pertinent information, and shall base its decision on consideration of whether the lands proposed for designation:
" (a) Are situated in an area that is otherwise potentially subject to urbanization during the [urban reserves planning period];
" (b) Are subject to natural disasters or hazards, such as floodplains, steep slopes and areas subject to landslides;
" (c) Are important fish, plant or wildlife habitat;
" (d) Are necessary to protect water quality or water quantity, such as streams, wetlands and riparian areas;
" (e) Provide a sense of place for the region, such as buttes, bluffs, islands and extensive wetlands;
" (f) Can serve as a boundary or buffer, such as rivers, cliffs and floodplains, to reduce conflicts between urban uses and rural uses, or conflicts between urban uses and natural resource uses[; ]
" (g) Provide for separation between cities; and
" (h) Provide easy access to recreational opportunities in rural areas, such as rural trails and parks."

In addition to amplifying the substantive standards for designating urban and rural reserves, the division 27 rules--consistently with the statutory directive, see ORS 195.143--also require intergovernmental coordination and cooperation. For example, OAR 660-027-0040(10) provides that " Metro and any county that enters into an agreement with Metro under this division shall apply the factors in OAR 660-027-0050 [(concerning urban reserves)] and OAR 660-027-0060 [(concerning rural reserves)] concurrently and in [261 Or.App. 281] coordination with one another." In addition, Metro and the counties with which Metro has entered into an agreement

" shall adopt a single, joint set of findings of fact, statements of reasons and conclusions explaining why areas were chosen as urban or rural reserves, how these designations achieve the objective stated in OAR 660-027-0005(2) [(the 'best achieves

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standard')], and the factual and policy basis for the estimated land supply determined under [OAR 660-027-0040(2) (the 'amount of land standard')]."

OAR 660-027-0040(10).

Finally, there are two substantial exceptions to the overarching mandates of OAR 660-027-0040(10). The application (if any) of each is vehemently disputed by the present parties.

The first exception is OAR 660-027-0060(4)--the so-called " safe harbor provision." The " safe harbor provision" dispenses with the requirements that a county apply the factors in OAR 660-027-0060(2) in designating certain land as rural reserves and the requirement that Metro and the county explain why that land was selected as rural reserves. Specifically, OAR 660-027-0060(4) provides:

" Notwithstanding requirements for applying factors in OAR 660-027-0040(9) and [OAR 660-027-0060(2)], a county may deem that Foundation Agricultural Lands or Important Agricultural Lands [14] within three miles of a UGB qualify for designation as rural reserves under [OAR 660-027-0060(2)] without further explanation under OAR 660-027-0040(10)."

The second exception is OAR 660-027-0040(11). That provision imposes additional requirements on Metro to the extent that it seeks to designate Foundation Agricultural Land as urban reserve. Specifically, OAR 660-027-0040(11) provides:

" Because the [ODA report] indicates that Foundation Agricultural Land is the most important land for the viability and vitality of the agricultural industry, if Metro designates such land as urban reserves, the findings and [261 Or.App. 282] statement of reasons shall explain, by reference to the factors in OAR 660-027-0050 and 660-027-0060(2), why Metro chose the Foundation Agricultural Land for designation as urban reserves rather than other land considered under this division."

III. PROCEDURAL HISTORY

In 2010, Metro and Clackamas, Multnomah, and Washington counties made the initial designation of urban and rural reserves that are at issue in this case. We take the undisputed procedural facts concerning the designation from LCDC's order.

" Metro's initial decision to designate urban reserves in the three-county region was made on June 3, 2010. Multnomah, Clackamas and Washington counties made their initial final decisions to designate rural reserves in their counties, respectively, on May 13, 27 and June 15, 2010. The four governments submitted their joint and concurrent decision to [DLCD] on June 23, 2010. The initial submittal established a system of urban and rural reserves in the three-county region to guide long-term planning to the year 2060. The initial submittal designated 28,615 acres of urban reserves to accommodate urban growth to 2060, and 266,954 acres of rural reserves to protect agricultural land, forest land and important natural landscape features from urbanization for 50 years. The initial submittal included changes to the counties' comprehensive plans and Metro's [Regional Framework Plan (RFP)] and [Urban Growth Management Functional Plan (UGMFP)], including plan maps that depict the urban and rural reserves."

The director of DLCD referred Metro and the counties' initial submittal--that is, Metro Ordinance No. 10-1238A--to LCDC for review in the manner provided for periodic review. See generally ORS 197.626(1)(c), (f) (providing for LCDC review of urban and rural reserves " in the manner provided for review of a work task under ORS 197.633" ); ORS 197.628 - 197.650 (governing periodic review process); OAR chapter 660, division 25 (the division 25 rules) (rules implementing periodic review process).[15]

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[261 Or.App. 283] Pursuant to OAR 660-027-0080(4), LCDC was required to review the submittal for

" (a) Compliance with the applicable statewide planning goals. Under ORS 197.747 'compliance with the goals' means the submittal on the whole conforms with the purposes of the goals and any failure to meet individual goal requirements is technical or minor in nature. To determine compliance with the Goal 2 requirement for an adequate factual base, [LCDC] shall consider whether the submittal is supported by substantial evidence. Under ORS 183.482(8)(c), substantial evidence exists to support a finding of fact when the record, viewed as a whole, would permit a reasonable person to make that finding;
" (b) Compliance with applicable administrative rules, including but not limited to the objective provided in OAR 660-027-0005(2) [('the best achieves standard')] and the urban and rural reserve designation standards provided in OAR 660-027-0040; and
" (c) Consideration of the factors in OAR 660-027-0050 or 660-027-0060, whichever are applicable."

In October 2010, LCDC held a hearing concerning the initial submittal. At that hearing, LCDC (1) " approve[d] the urban and rural reserve designations as submitted in Clackamas and Multnomah counties" and " approve[d] the urban reserves in Washington County, with the exception of two areas" ; (2) reversed the urban reserve designation of one of those excepted areas and remanded the designation of the other for further findings; and (3) " remand[ed] the rural reserve designations in Washington County for further consideration in light of changes made on remand" to those two areas.

In response to LCDC's ruling at the conclusion of the hearing, Metro and Washington County adopted amendments to their planning documents to revise the reserve designations. " The Metro and Washington County re-designations," which were submitted on May 13, 2011, " adjusted the urban and rural reserve designations in [261 Or.App. 284] Washington County" in several ways.[16] The net effect of those adjustments " was to decrease the amount of urban reserves designated by 299 acres, to decrease the amount of rural reserves designated by 120 acres, and to increase the amount of undesignated lands in Washington County by 419 acres." In addition, " [t]he re-designations also added findings addressing more specifically both the urban and rural reserve factors in cases where Metro designated Foundation Agricultural Land in Washington County for urban reserves." In sum,

" [f]ollowing the re-designations and with the adoption of Metro Ordinance No. 11-1255,

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Metro has designated 28,256 gross acres as urban reserves throughout the three-county region. Clackamas County Ordinance No. ZDO-233 designates 68,713 acres as rural reserves. Multnomah County Ordinance No. 20-10-1161 designates 46,706 acres as rural reserves. Washington County Ordinance No. 740 designates 151,209 acres of rural reserves. The total of rural reserves throughout the three counties is 266,628 [acres]."

[261 Or.App. 285] Ultimately, LCDC issued an acknowledgment order " approving the 2010 initial submittal [(Metro Ordinance No. 10-1238A)], as revised through the 2011 re-designation submittal [(Metro Ordinance No. 11-1255)], which together constitute the Metro Urban and Rural Reserves Submittal." This judicial review followed. ORS 197.626(2) (providing that a final order of LCDC concerning the designation of urban and rural reserves under ORS 195.137 to 195.145 " may be appealed to the Court of Appeals in the manner described in ORS 197.650 and 197.651" ); ORS 197.650(2) (" Jurisdiction for judicial review of a final order of [LCDC] issued pursuant to * * * ORS 197.626 * * * is conferred upon the Court of Appeals." ).

On review, 22 petitioners challenge LCDC's order.[17] Petitioners' myriad contentions range from the sublime to the arcane to the mundane--that is, from fundamental methodological issues pertaining, inter alia, to LCDC's understanding and application of the legal principles that govern the designation of urban and rural reserves and the review of such designations to fact-specific challenges relating to the evidentiary sufficiency of Metro and the counties' submittal.

As framed by the parties' contentions, we review LCDC's order to determine whether it is " [u]nlawful in substance." ORS 197.651(10)(a).[18] In conducting that review, we [261 Or.App. 286] are confined to the record (albeit gargantuan) of LCDC's action. ORS 197.651(9)(a).

Further, in analyzing petitioners' contentions, we note that, consistently with our typical practice, we will generally identify the proponent of a particular contention. However, given the large number of parties, the fundamental nature of many of the contentions on review, and the fact that many parties adopted arguments articulated by others, we will, in some ...


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