BOARD OF COMMISSIONERS'
August 29, 2007
Commissioners' Conference Room
Commissioner Faye Stewart presided with Commissioners Bill Dwyer, Bill Fleenor, Bobby Green, Sr., and Peter Sorenson present. County Administrator Bill Van Vactor, Assistant County Counsel Stephen Vorhes and Recording Secretary Melissa Zimmer were also present.
16. PUBLIC HEARINGS
a. PUBLIC HEARING AND ORDER 07-8-29-19/In the Matter of Adopting Supplemental Findings to Ordinance No. PA 1231, Amending the Rural Comprehensive Plan to Redesignate Land From “Agricultural” to “Marginal Land” and Rezoning of That Land From “E-40/Exclusive Farm Use” to “ML/SR” (“Marginal Land With Site Review”) and Adopting Savings and Severability Clauses (file PA04-6092; Dahlen).
Jerry Kendall, Land Management, asked Fleenor if he read the entire record and was able to participate.
Fleenor indicated that he did read the file.
Stewart reported the nature and purpose of the hearing is limited to the item remanded by LUBA concerning the farm income test of ORS 197.247 in the 1991 version. He asked if any of the Board members had ex parte contacts.
There were none.
Kendall explained that this item was heard and approved by the Board in July, 2006 through Ordinance 1231. He noted it was appealed to LUBA by the appellants and on February 15, LUBA remanded the decision based on only one of five assignments of errors they did not agree with the County. He indicated that was the income test portion of the marginal lands test from ORS 197.247, the 1991 version of the farm income test. He noted in marginal lands applications they accept an affidavit concerning the farm income generated during the five years since January 1978. He added in that regard, LUBA found that the statute contains no expressed limits on the geographic scope of a farm operation. He recalled the affidavit stated the C & M Livestock Company didn’t have any operation adjacent, contiguous or in the vicinity of the subject property. He said that LUBA wanted the company or the applicant to be able to declare that the C & M Livestock Company had no other holdings generating income during that time period. He said the applicant has come back with an affidavit to that affect. He said it states the company had less than 100 head of cattle during the five year period and they sold a maximum of 40 calves a year per the statistics listed in the order. He noted it generated less than $20,000 annually. He stated staff recommended the Board adopt the attached order that supplements the original findings. He noted the order has the LUBA case attached, the affidavit and the revised findings.
Fleenor said there would be value in the grazing of 100 head of cattle on the property for the exclusive purpose of producing calves. He indicated the cattle are there for a short period of time and then they are sent to slaughter. He thought there was a financial component that was not being added with the benefits derived from the 100 head on the grazing and the impact it will have on their ultimate sale to the slaughterhouses. He wanted to see that addressed.
Kendall recalled from the record that the cattle were grazed to provide a presence on the property to eliminate trespass. He indicated the agreement was they paid the owner $1,000 annually to lease the property to graze the cattle.
Vorhes said the test under the statute is that the proposed marginal land was not managed during three of the five calendar years preceding January 1, 1983, as part of a farm operation that produced $20,000 or more in annual gross income. He noted it is the income they are reviewing.
Commissioner Stewart asked Green if he had any ex parte contacts.
Green had none.
Commissioner Stewart opened the Public Hearing.
Steve Cornacchia, Eugene, stated he represented Mrs. Dahlen in this matter. He said it was a complex application with a significant amount of criteria they had to fulfill. He said the criteria was generated by state statute and the Board found they had met all the criteria. He said they met the tests for the passage of the marginal lands application and the application was approved on that basis. He indicated that they had shown through their technical and expert testimony that they met the income and productivity requirements. He noted this was one of only five marginal lands applications that had come before the County within the past six years. He said the critera is specific and there is no margin of error. He indicated what they were faced with when it was appealed was an appeal that included five assignments of error. He said the opponents are agreeing they have met their burden on other things. He noted one of the issues was the use of 1983 log prices for one of the productivity tests. He noted that LUBA said Lane County was right on everything except where Lane County found the income test was met, because there was $1,000 or less generated on the property itself by 25 cows. He said they had 25 head on the prior owner’s property. He said the property has open space with poor productive soils. He said they didn’t consider it as farm use, they wanted to keep people off the property. He said it was then determined that an affidavit on the earlier rezone with 25 cows located there was a farm use. He indicated the Board’s 1997 directive, issued a working paper that outlined the criteria for marginal lands. He noted on the issue where property is leased, the direction was they were to take the value of the operation on the applicant’s property and any nearby values. He added if there wasn’t anything nearby, then they would have counted just what occurred on their property alone. He said they did that. He noted that LUBA said no, when that statute was passed, the legislature intended for the Board to say as part of a farm operation, in the requirement, they demonstrate it was not managed for three of the five years as part of a farm operation that produced $20,000 in income. He stated they have to show what the entire farm operation produced. He said they didn’t do that and that is the sole issue that needed to be taken care of. He said they sent it back to the Board for another step. He said they are providing evidence from one of the owners of C & M Livestock Company. He said Mr. Minte was the son of the primary owner, but they were both partners. He said in his affidavit, they state they were at 100 cows total and the only income they produced from the cows was the income off the calves they sold. He noted the other cows are seed cows and continue on each year. He stated the statute was clear: it is the income produced.
He noted another part of the statute stated they have to show the property was not capable of producing 85 cubic feet of merchantable timber per year. He indicated that was part of the forest test. He noted the legislature created two types of tests: an income test versus capability or productivity. He noted on the income, there is the opportunity to deal with capability when they can’t get an affidavit. He said they are using the Oregon State University Cattle prices. He said they didn’t get more than $300 per calf when they sold it at auction. He said a productivity assessment was done. He used the figures on sales per cow. He noted the 1979 figure is $551.17. He tried to maximize the prices so there could be no question of any kind of manipulation. He noted on the diagram, five are regular cattle and five are beef cattle. He said for all cows sold in Oregon there was $5,347,000 produced in 1978 and they divided the $5 million by the 14,500 in the beef cow category, to come up with $368.76 per cow. He said if they were to divide the $5 million by just the number of beef cows, the numbers go down to $148 in 1978. He said no matter which way the numbers are used from Oregon State they would still not make the $20,000 income tax. He said less than $20,000 was produced in income from the sale of those calves. He said the statute asks how much income was made in a year and there was no way they could come up with a definition of income that includes an add on. He said with the affidavit of the actual operator himself and the Oregon State figures, they show there was less than $20,000 produced from the cattle operation for C & M.
Sorenson asked what the Board is supposed to do.
Cornacchia stated whether or not they have demonstrated that the property was not managed in three of the five years between 1978 and 1982 as part of a farm operation that produced $20,000 in income per year. He said their demonstration is to show that the farm operation did not produce more than $20,000.
Sorenson asked if there was any contradictory testimony.
Vorhes indicated the test is whether the farm operation included this property as grossing $20,000 or more in income in three of the five calendar years before January 1, 1983.
Dwyer was skeptical and he didn’t agree.
Vorhes recalled in the LUBA decision it was part of the debate the legislature had around making people produce, or if they should they be given something else to use as objective criteria. He said part of the statute states that a county may use statistical information compiled by the OSU Extension Service or other objective criteria to calculate income.
Dwyer thought it was hard to believe that they didn’t gross $20,000 for the cattle to stay in business.
There being no one else signed up to speak, Commissioner Stewart closed the Public Hearing.
MOTION: to approve 07-8-29-19.
Green MOVED, Stewart SECONDED.
Green said the Board’s role was they were asked by LUBA to determine whether or not there is sufficient evidence regarding the income tax. He said he has to make a decision on what is based on the record. His support for this was because there was no contrary evidence.
Stewart commented this was a matter of fairness. He noted staff supported this and believes the information is accurate. He said they had no information from the opposition. He thought it was supportable, as he was in the cattle business.
VOTE: 3-2 (Dwyer, Sorenson)
17. OTHER BUSINESS
There being no further business, Commissioner Stewart adjourned at 4:25 p.m.