City councilor Julie Hoy and incumbent Mayor Chris Hoy aren't related. They also aren't in the same ballpark when it comes to the current state of their campaign finances, according to the ORESTAR system that tracks this in Oregon.
It's a familiar story when it comes to local races in Salem. Almost always, the conservative candidate (in this case Julie Hoy) raises more money than the progressive candidate (in this case Chris Hoy).
Here's how their campaigns stack up at the moment, with several months remaining until the May election. There's plenty of time for Chris Hoy to ramp up his campaign, but so far the money momentum decidedly favors Julie Hoy.
2024 contributions Julie Hoy: $57,788 Chris Hoy: $5,216
2024 expenditures Julie Hoy: $28,428 Chris Hoy: $594
Cash balance Julie Hoy: $41,419 Chris Hoy: $16,656
Number of contributors in 2024 Julie Hoy: 50 Chris Hoy: 16
Largest contributor Julie Hoy: $20,000 from Lawrence Tokarski Chris Hoy: $2,500 from Trevor Phillips
Back in March I wrote about how the Chamber of Commerce appeared to be trying to hide a $25,000 contribution from Mountain West Investment Corporation, whose president is Larry Tokarski.
Now Mountain West Investment Corporation is making campaign contributions in an indirect way by funneling five times as much money through a different political action committee.
On August 26th, Mountain West Investment Corporation gave $125,000 to the Jobs PAC.
Just two days prior, the Jobs PAC gave $2,500 to Republican Danielle Bethell’s campaign for Marion County Commissioner. On the same day, the Jobs PAC gave $10,000 to Republican Raquel Moore-Green’s campaign for the Legislature and on September 4 they gave $15,000 to Republican Denyc Boles' campaign for the Legislature.
Here's a screenshot of part of the most recent Secretary of State's transaction report for the Jobs PAC. I indicated the Mountain West Investment Corporation contribution in red.
As I noted in a May post, Hit piece on Trevor Phillips gets facts horribly wrong, the Jobs PAC is run by the Public Affairs Counsel firm in Salem. The treasurer of the Jobs PAC is James L. Wilson, who heads up that lobbying firm.
Public Affairs Counsel lobbies for Salem Health which is where Denyc Boles works as a lobbyist. Yes, the same Denyc Boles who received a $15,000 campaign contribution from the Jobs PAC.
Hopefully soon campaign finance reform laws will be in place that prevent these sorts of large corporate contributions from being laundered through political action committees like the Jobs PAC.
I was pleased to be one of the first to fork out $100 for a year's subscription to the Salem Reporter, a new online news source headed up by Les Zaitz that will start publication in September.
Right after I subscribed, I emailed Zaitz and the three reporters he's hired, telling them how disappointed I've been that the Statesman Journal (Salem's daily newspaper, owned by Gannett) hasn't run stories that challenge the Powers That Be in this town.
I’ll end by observing that in recent years I’ve been frustrated by the failure of the Statesman Journal to do genuine investigative reporting in this town. Quite a few times I’ve contacted a Statesman Journal reporter about an investigative story idea, sometimes after I’ve already done a good share of the investigating on my own.
I’d be told by the reporter, “This sounds interesting. I’ll talk to my editor.” And that would be the end of it.
If a story cast a business leader, or City officials, in a bad light, it wouldn’t be written. Salem Weekly would do its best to get the word out, but a bi-weekly publication with minimal online presence is hampered in doing good investigative reporting, especially given the lack of reporting resources Salem Weekly has.
So I’m looking forward to Salem Reporter doing a better job of keeping citizens informed of what the Powers That Be in this town are up to.
I’m glad that, according to the Poynter story, you aren’t expecting much from advertising revenue. I’ve heard Statesman Journal management talk about how news, opinion, and advertising are all separate, and I wish this was true, but my experience is that it isn’t for this Gannett paper.
Well, this morning I got an email from Salem Reporter that talked about their first meeting with people in this town. Below is the accompanying photo and a description of that meeting. My commentary follows.
Larry Tokarski, founder of Salem Reporter, invited veterans to the front of Thursday's session to lead the crowd in the Pledge of Allegiance.
Good morning..........
Response to the news of the launch of Salem Reporter has been so heartening to our team. We have had encouragement from all quarters. We have had people sign up for our free newsletter. We have had people subscribe. The first subscription - from Pat McCormick - came in just 18 minutes after our site went live.
On Thursday, we hosted a morning function for local business leaders to explain what is the Salem Reporter and how they could help give Salem news it's been missing. In the crowd was "Mr. Oregon," Gerry Frank. We had Salem stalwarts such as Dick Withnell, Richard Kreitzberg and Bob Cannon. We had a great contingent from the Salem Chamber of Commerce, led by Nick Williams. We also had long-time friends such as Ron Anderson and Ray and Keeta Lauderdale.
At the very least, this is bad optics.
Many of my fellow liberals are worried that since funding for Salem Reporter has come from Larry Tokarski, a businessman who is a big supporter of conservative causes in Salem, this online newspaper won't be free to report on issues that put Tokarski or the Chamber of Commerce in a bad light.
So it was a curious, but perhaps telling, decision to have the very first Salem Reporter meeting feature (1) Tokarski, and (2) local business and Chamber of Commerce leaders.
If the Salem Reporter had wanted to set off alarm bells in the minds of progressives, it's difficult to think of a better way to do this.
Now, I readily admit that this initial meeting doesn't mean the Salem Reporter is going to go soft on the business community in Salem or the Chamber of Commerce. However, I found it somewhat worrisome that the business people were asked "to help give Salem news it's been missing."
Personally, what I feel Salem has been missing the most is aggressive investigative journalism. The Salem Business Journal and Statesman Journal have plenty of business-friendly stories. Salem Weekly does some good reporting, but lacks the resources to dig deep into issues.
Thus I've been hoping, and continue to hope, that the Salem Reporter will fearlessly go where the Statesman Journal fears to tread. For example, there's good reason to consider that urban renewal funds have been used by the City of Salem to further "crony capitalism," something I've written extensively about in regard to the Park Front Building.
To it's credit, the Salem Business Journal published an opinion piece that I wrote on this subject. But the Statesman Journal, nada.
Anyway, I'm still optimistic about the Salem Reporter.
I just wish Zaitz and company had chosen to start off with an open house of some sort aimed at the general population of concerned citizens, rather than begin with a get-together of business leaders. There are two additional Salem Reporter meetings planned, but both also are invitation-only.
For those in government......
We have two more functions scheduled to help introduce people to the Salem Reporter. Next week, we host public officials, elected officials, those who work in government, and volunteers who serve on so many boards and commissions. The hour-long event will be at 7:30 a.m. Thursday, Aug. 16, in the Board Room at the Salem Convention Center. If you serve in such a capacity and haven't received your invitation yet, no matter! Join us. Just shoot a note to [email protected] to let us know you're coming so we can put on enough coffee.
For those in the nonprofit world.........
The week after that, we're planning a function with the executive leadership and volunteer board members for Salem-area nonprofits. The hour-long event will be at 7:30 a.m. Thursday, Aug. 23, at the Salem Convention Center. If you serve in such a capacity and want to attend to learn how to work with Salem Reporter to cover the important work of these organizations, drop an email to [email protected].
A few days ago I blogged about newly-elected city councilor Jackie Leung's effort to fulfill a campaign promise by attempting to get the Salem City Council to reconsider its decision to form a Lone Oak Road Reimbursement District.
The Reimbursement District would raise money to pay for road improvements by collecting between about $4,000 and $10,000 from lot owners in the south Salem area when a home is built on their property.
It's unclear whether the City Council will undertake a reconsideration of the Reimbursement District, which has to be done at next Tuesday's council meeting, because an agenda item implements the decision that passed on a 5-4 vote on May 14.
One of the five council members who voted for the Reimbursement District would have to make a motion to reconsider the vote: Mayor Chuck Bennett, or councilors Brad Nanke, Sally Cook, Steve McCoid, and Chris Hoy.
After residents in the Creekside neighborhood began emailing City officials, urging that the Reimbursement District be reconsidered and overturned, they got this response from Tami Carpenter, the City Manager's Executive Assistant.
Thank you for your email to the City Council. We understand your concern regarding the possible closure and development of Creekside Golf Course. This however, is a private property matter that, as you know, has been playing out in the courts.
The City Council does not have authority to stop the golf course owners from closing the facility. If the golf course is redeveloped, it will then have to meet current development standards and be subject to administrative and possible City Council reviews, as warranted.
The issue of funding construction of Lone Oak Road extension with a reimbursement district has been comingled with the possible closure of the golf course. The City Council’s decision has no bearing on the future of the golf course. The decision simply states that if—and only if—the golf course is redeveloped then a fee will be assessed on the new lots to pay for a portion of the street construction. The fee will also be assessed on new subdivision developments south of Jory Creek.
Additional funding from other development fees has also been allocated to the project. The existing Creekside owners are not subject to the fee, nor are any existing Salem residents subject to the fee or assessment for this project. Thank you again for your email,
Tami Carpenter Executive Assistant to the City Manager Mayor/City Manager’s Office
Since I've followed this issue closely, a Creekside resident contacted me and asked if I'd prepare a reply that could be posted on the Creekside NextDoor site. Here's what I wrote and sent to the resident yesterday.
The City Manager’s Executive Assistant has claimed that approval of the Lone Oak Road Reimbursement District “has no bearing on the future of the golf course.”
Well, this requires a belief that City officials don’t care one way or the other whether the golf course property becomes a housing development. But in fact, almost a third of the money expected to be raised by the Reimbursement District (29%) comes from an assumption that 210 lots on what is now the Creekside golf course will be developed as home sites, thereby paying $1,935,000 into the Reimbursement District.
City officials shouldn’t have a vested interest in whether the golf course becomes a subdivision. However, they do — even though a final decision on this issue awaits a legal ruling.
The City of Salem is assuming that 210 lots will be developed on the golf course property prior to the legal ruling, prior to plans being submitted for a subdivision, prior to public hearings on what sort of development, if any, is suitable for an area prone to flooding,
Yet the City Manager’s office would have us believe that City officials are completely neutral on the question of what happens to the golf course property, notwithstanding the fact that the Lone Oak Road Reimbursement District is dependent on 210 lots being developed on the property in order to raise sufficient funds to construct road improvements.
Further, after initially saying that money for those improvements could be raised through a future citywide Streets and Bridges bond should sufficient money be lacking in the Reimbursement District fund, City officials now state that this option is off the table.
This makes development of the golf course into a 210 lot subdivision essential if a bridge over Jory Creek and the northern extension of Lone Oak Road are to be built, since City officials have shown no interest in making the Creekside developer foot the bill.
So it sure seems like the City of Salem has already come to a premature conclusion that development of the golf course into a subdivision needs to happen, thereby putting a thumb on the scale of impartiality that citizens should expect of public officials.
Today I realized that I wanted to share some arguments with City officials about why the Lone Oak Road Reimbursement District is a bad idea. This is the message that went to members of the City Council and key City of Salem staff.
Mayor Bennett and city councilors, I realize that you probably think that everything that could be said about the Lone Oak Road Reimbursement District already has been said.
Actually, I agree with you.
Before the Memorial Day weekend arrives, I simply want to share a couple of things that have been said about the Reimbursement District that bear on the question of whether the City Council should reconsider, once again, it’s approval of the District
These two items are a strong argument in favor of reconsidering and revoking the Reimbursement District, so I wanted to bring them to your attention.
(1) At the May 14 City Council meeting, Councilor Sally Cook asked what the process would be for funding Lone Oak Road if the Reimbursement District didn’t exist. Public Works Director Peter Fernandez gave this response:
“We probably would see the southern leg built, because there are a couple of subdivisions coming in that, you know, need to put pieces of it in, and we could probably make that happen.
We would struggle financially with getting the bridge [over Jory Creek] built. SDC’s [System Development Charges] would be applied, but there wouldn’t be any leverage, so you see the math that Mr. Davis showed you. We’d be waiting a long time for the bridge, but you’d probably get the southern leg built.”
Here’s a screenshot of a slide that shows the southern leg, which passes right by one of the subdivisions, and apparently through the west side of the other subdivision. So it certainly does seem that those subdivisions would build the southern extension of Lone Oak Road even if the Reimbursement District didn’t exist.
(2) Regarding the bridge and northern extension of Lone Oak Road, here’s the flawed logic of the Reimbursement District. A large share of the funds expected to be raised by the Reimbursement District, 29%, are to come from the development of 210 lots on what is now the Creekside golf course.
Yet if the golf course is developed, the South Gateway Neighborhood Association pointed out in a letter to the City Council that it would make much more sense if Lone Oak Road were to run through the flat land of the golf course property, which wouldn’t require building a bridge, and the northern extension could be made the responsibility of the Creekside developer.
Here’s a screenshot of a portion of the SGNA letter. It was written when City staff were saying that the northern extension likely would be part of a future Streets and Bridges bond, which now is off the table according to staff:
Here’s an image of how Lone Oak Road could be realigned to run through what is now the golf course property.
So if the golf course is converted to a subdivision, there wouldn’t be a need for a Reimbursement District to fund a bridge and northern extension of Lone Oak Road, because a much less expensive extension could be built on the west side of the golf course property, with the cost paid by the Creekside developer and SDCs.
And if the property remains a golf course, almost certainly there won’t be enough money in the Reimbursement District to fund the $5.6 million cost of a bridge over Jory Creek and the northern extension of Lone Oak Road, since $1,935,000 would never accrue to the District from 210 lots in a subdivision constructed on the golf course property.
In summary, then:
City staff have said that the southern extension of Lone Oak Road likely would be built if there wasn’t a Reimbursement District. And the northern extension likely only could be built if the golf course becomes a subdivision, in which case it would make much more sense to run Lone Oak Road through the flat golf course property, as SGNA advises, thereby eliminating the need for a Reimbursement District for the bridge and northern leg.
Hence, there's no need for the Lone Oak Road Reimbursement District.
Fresh off her upset victory in the Ward 4 City Council race, Jackie Leung is making good on her campaign promise to work hard on preserving open space in the Creekside neighborhood.
She recognizes that unfettered development can't be allowed to diminish the quality of life for Salem residents. So Leung is asking the City Council to reconsider and overturn its recent narrow 5-4 approval of a Lone Oak Road Reimbursement District.
The Reimbursement District collects between $4,000 and $10,000 from lot owners in the south Salem area when a home is built on their property, then gives that money to developers to reimburse them for constructing improvements to Lone Oak Road.
There's some big problems with this plan.
Here's why people in Salem should support fairness by emailing the City Council at [email protected] to urge them to reconsider and overturn the Lone Oak Road Reimbursement District at next Monday's May 29 council meeting.
(1) City officials assume the Creekside golf course will become a subdivision. Even though the Creekside Homeowners Association is appealing a legal decision that allowed developers Larry Tokarski and Terry Kelly to build a subdivision on the golf course property, the Reimbursement District assumes that 210 homes will be built on that property.
It isn't fair for the City of Salem to tilt the scale in favor of developers when people in the Creekside neighborhood are doing their best to preserve the open space that they consider was promised to remain in perpetuity when they bought homes there.
(2) Greenspace is valuable to everybody in Salem. There needs to be a vigorous community discussion about the best use of the Creekside golf course property, should it ever be converted from a golf course. Developers shouldn’t be able to get their way just because they seek to make money from a subdivision development.
Quality of life for Salem residents has to be considered in every development decision. As noted above, the Reimbursement District simply takes for granted that the golf course property will become a subdivision. This ignores flooding risks for downstream homes and businesses by developing that property.
(3) Developers shouldn't get preferential treatment from City officials. As I noted in a recent post about the Reimbursement District, Public Works Director Peter Fernandez said at a City Council meeting that likely the southern extension of Lone Oak Road would be built by developers of two subdivisions in that area even if a Reimbursement District wasn't formed to pay them back.
Government shouldn't do what the private sector already plans to do. Lot owners in south Salem shouldn't have to pay an extra $4,000 to $10,000 when they build a home on their property so real estate developers get a free ride on building road improvements that they would have to construct anyway.
Here's a message Jackie Leung is releasing today which echoes the points made above:
Subject: Email City Council to Save Creekside Golf Course
Dear Creekside Neighbors,
Please join me in writing an email to the Salem City Council ([email protected]) before they meet again on May 29, 2018. Under City Council rules, any councilor who voted for the May 14, 2018 motion can ask that it be reconsidered at the next meeting. The email below is an initial step in our effort to get the City Council on the side of the Creekside community.
If the cloud of the Lone Oak Road Reimbursement District is removed from our golf course on May 29, it will be easier to use the Salem Comprehensive Plan to protect our outdoor recreation and open space. In addition, we can review options for a ballot measure or conservation easement to protect the golf course as permanent green space for south Salem.
Please consider writing an email or letter to the City Council before May 29. This message was sent only to a small list of Creekside residents, so please reach out to others and encourage them to email the City Council.
I am thankful for Creekside's support for my campaign for City Council. I look forward to working together over the next four years to protect the Creekside golf course.
Thank you, Jackie Leung
---------------------- Email message to Salem City Council: [email protected]
Subject: Save Creekside Golf Course
Mayor Bennett and City Council members,
Please reconsider and overturn the May 14, 2018 motion establishing the Lone Oak Road Reimbursement District.
The District is based on building 210 homes on the golf course with each home paying about $10,000 for the costs to build Lone Oak Road.
The District should not be approved because:
(1) The court appeal has not been decided. (2) City rezoning and development approvals have not been granted. (3) Developers already have the contractual obligation to build Lone Oak Road.
As a Salem resident, I am strongly opposed to the City Council taking any action that assumes the Creekside golf course will be subdivided into a housing development.
It's a real battle going on between the Creekside Homeowners Association and the owners of the Creekside Golf Club, Larry Tokarski and Terry Kelly.
Recently I came across a May 9, 2018 letter that the Creekside HOA sent to its members, describing what was going on with the Association's fight to prevent the golf course from being turned into a subdivision, as Tokarski and Kelly are trying to do.
All I know about this legal battle is what I've read in several Statesman Journal stories, the titles of which provide a succinct overview of what's going on.
The HOA letter I've shared addresses an issue that I'd wondered about. Since the Creekside Homeowners Association is appealing a legal ruling that gave the golf club owners the right to convert the golf course into a subdivision, why should the $422,789 in legal fees owed to Tokarski and Kelly be paid now?
If the HOA ends up winning its appeal, seemingly they would be the ones owed reimbursement for legal fees, not the Creekside Golf Club owners. (I'm not an attorney, so I might be wrong about this.)
So the letter says:
On March 26, 2018, the Association filed a formal appeal of the supplemental judgment. In order to prevent the golf course owners from collecting the awarded attorney fees and costs while the appeals are ongoing, the Association sought financing to bond the judgment. (If the judgment was not bonded, then the golf course owners could have taken collection actions against the Association to collect on the judgment.) Therefore, in order to bond the judgment, the Board took out a loan of $500,000.00 from NW Bank.
The loan is for a term of 20 years. The collateral pledged to NW Bank is the Association's right to assess the owners if the Association is in default on the loan. If the Association is not in default, then NW Bank cannot take action against or assess the owners. Monthly loan payments are approximately $3,500.00/month.
This makes sense to me. Might as well wait until the appeals are settled before paying the legal fees.
But I'm sure this is a controversial issue among members of the Creekside Homeowners Association. Most, I'm pretty sure, don't want the golf course turned into a subdivision, since they bought homes at Creekside believing the golf course would be there in perpetuity. And their homes would be worth less if the golf course amenity went away.
Here's some thoughts on this fine mess from my position as an interested outside observer.
(1) Tokarski and Kelly are playing hard ball. The Creekside developers must have made a lot of money since the early 1990s, when the Creekside neighborhood began to be built. Yet they're willing to toss away the goodwill of those who bought homes there in order to make even more money by converting the golf course into a subdivision.
Sure, I understand that this is what developers like to do: make money. It just seems to me that given how successful Creekside has been for its developers, they could cut the neighborhood some slack on the golf course conversion.
After all, this is a wetlands area prone to flooding. Likely the City of Salem won't allow them to build as many homes as their initial plans called for (354, according to a Statesman Journal story).
Maybe I'm being unrealistic in suggesting that Tokarski and Kelly could produce a positive legacy by leaving most, or all, of the golf course as open space and/or a park if the golf club truly isn't profitable, instead of engaging in a knock-down, drag-out fight with the Creekside Homeowners Association.
But sometimes realism is a drag.
(2) Suing the HOA over spending money to preserve the golf course property was extreme. What Tokarski and Kelly did when they sued the Creekside Homeowners Association over its spending HOA money to fight Tokarski and Kelly was positively Trumpian.
I say this, because it reminded me of Trump trying to tell Justice Department officials that they shouldn't be conducting an investigation into the Trump campaign's possible collusion with Russia, along with Trump's possible efforts to obstruct that investigation.
Sure, the parallels aren't exact, but a Statesman Journal story said that Tokarski and Kelly had standing to sue the HOA because they are members of it.
Creekside Golf Club’s owners have asked a judge to remove the board of an adjacent homeowners association and put the HOA into receivership.
It’s the latest volley in a two-year legal battle that will decide whether the club’s owners, developers Larry Tokarski and Terry Kelly, can close the South Salem championship course and turn it into a residential subdivision.
...The lawsuit claims Tokarski and Kelly have the right to sue because they own property in the development, making them members of the homeowners association.
Hmmmm. So Tokarski and Kelly are battling the Creekside Homeowners Association in their effort to convert the golf course into a subdivision. Then Tokarski and Kelly put on their hats as Creekside HOA members to sue the association for spending money on fighting them.
Weird, though legal. It just shows the lengths Tokarski and Kelly are willing to go to get their subdivision built.
(3) There's a certain karmic justice in Jackie Leung's City Council victory. Lastly, I can't help but mention that the recent victory of Jackie Leung over incumbent Steve McCoid in the Ward 4 City Council race has a sort of karmic ring to it. Here's what I mean.
Larry Tokarski has been a substantial contributor to conservative political campaigns in Salem. McCoid, though he billed himself as a moderate, is considerably more conservative than Leung, whose campaign featured a pledge that she'd be tougher on making developers live up to their obligations, and would do her best to prevent the Creekside golf course from becoming a subdivision.
It seems clear to me that Leung got the vote of many, if not most, Creekside residents, or she wouldn't have beaten McCoid. Those voters were turned off by McCoid's support of a Lone Oak Road Reimbursement District that assumed the golf course would become lots which would pay into the District when they were developed.
So this strikes me as a "what goes around, comes around" sort of thing. I'm confident that Tokarski and Kelly would have preferred to see McCoid win, yet their efforts to convert the golf course into a subdivision helped lead to Leung's victory.
Watching last night's City Council final deliberation on a Lone Oak Road Reimbursement District reminded me of a demolition derby.
The plan that was approved on a 5-4 vote was the last one standing, like a bashed-in car with smoke streaming from its hood, oil leaking all over, fenders missing, dents everywhere.
Not a pleasant sight, but in the eyes of a majority of City Council members, better than nothing.
The Council considered four alternatives to the original Lone Oak Reimbursement District plan that landed with a resounding "no thanks!" thud at a public hearing a while back, which led to the Council reconsidering that plan.
Here's a screenshot from the CCTV video of the meeting that shows the alternatives considered last night.
The left column says "Adopted," since this was the original plan that was adopted by the Council before the reconsideration of it. The policy question was who is going to pay for a bridge over Jory Creek, a northern extension of Lone Oak Road extending south of the bridge, and a southern extension of Lone Oak Road.
It struck me as decidedly strange that after all the criticisms of the original "Adopted" plan, and the Council's vote to reconsider it, City of Salem staff recommended sticking with the plan that hardly anybody liked except City staff. This shows a disturbing lack of both understanding political reality, and flexibility, on the part of City staff.
This screenshot shows the unbuilt sections of Lone Oak Road.
Here's some key takeaways from last night's vote:
(1) No inclusion in a Streets and Bridges bond. City staff made clear that including money for the Lone Oak Road improvements in a future Streets and Bridges bond was off the table, contrary to statements made by Public Works Director Peter Fernandez at previous meetings that this was the only way the Jory Creek bridge could be financed. So this is a win for Salem taxpayers, who shouldn't have to foot the bill that developers should be paying.
However, since City staff didn't alter their recommended budget for the Reimbursement District ("Adopted" column above), the reason Fernandez said a Streets and Bridges bond would be needed to pay for the bridge hadn't changed. Namely, that there won't be enough money in the Reimbursement District to pay for a crossing over Jory Creek. More about this below.
(2) More emphasis on SDCs. City staff presented three alternatives to the original plan that relied more on Systems Development Charges to pay for the Lone Oak Road improvements. To my understanding based on what I heard last night, these are accumulated from citywide development to the tune of an average of $1,200,000 annually.
So even though some City Councilors said they were pleased that developers, not taxpayers, would be paying for the improvements, this is questionably accurate for several reasons. First, it is development all over Salem that produces the SDC pot of money, not development solely in the Lone Oak Road area. Second, the Reimbursement District will collect money ($4,900 to $9,200) whenever a lot is platted for a house in the district boundary.
Often this will be a lot owned by an individual or family, not a real estate developer. So while it is true that development is paying into the Reimbursement District, this isn't always a major subdivision developer, but someone developing a single lot.
(3) Steve McCoid wanted Creekside excluded entirely. Councilor McCoid represents the Creekside area. He's in a race against Jackie Leung that will be decided tonight. McCoid said that in the course of his campaigning, he's heard from many people that they don't want to include Creekside lots in the Reimbursement District for several reasons, including a feeling that the Creekside developer should have paid for the road improvements, and not wanting the Creekside golf course turned into a subdivision.
McCoid made a motion to eliminate all Creekside lots from the Reimbursement District, a proposal that took a while to even get a second and pretty clearly wasn't favored by anyone but him. Other councilors said that it made no sense to let the Creekside developer off the hook for helping to pay for the Lone Oak Road improvements, since a 210 lot subdivision on the golf course property is expected to bring in the $1,935,000 shown in Alternatives 2 and 3.
(4) Alternative 3 ended up being chosen. Councilor Tom Andersen made a substitute motion to McCoid's motion that called for selecting Alternative 1 instead, which was the staff recommendation with the exclusion from the Reimbursement District of lots in the eastern part of south Salem, since few people who live in that area would use Lone Oak Road, and they were irked at being part of the District.
Not much love was shown for this motion either, so Councilor Chris Hoy made a substitute to the substitute motion by calling for Alternative 3 to be approved. This was the same as Alternative 1, except for the exclusion of 50 lots in the Creekside area that already had been platted and weren't likely to be further divided.
As mentioned above, the vote was 5-4 in favor of Alternative 3, judging by a show of hands from those opposed to the motion: Councilors Andersen, Ausec, Kaser, and Lewis.
(5) Peter Fernandez' surprising statement. During the deliberations prior to voting, Councilor Sally Cook asked what would happen if the Reimbursement District wasn't approved. After Glenn Davis attempted an answer, Public Works Director Fernandez jumped in with a statement that I feel deserved a lot more attention than it got. Here's a video I made of the interchange.
Fernandez said that the southern extension of Lone Oak Road likely would be built by developers of two subdivisions in that area, because the road is needed for the subdivisions. As I've noted in previous posts, this raises an obvious question: if those developers were going to build the southern extension anyway, why is a Reimbursement District being formed to pay them back for what they would do regardless?
Note in the video how Glenn Davis struggles to find words to describe how the developers would react if there wasn't a Reimbursement District that the Oak Ridge Estates developer requested after learning that they'd be expected to pay for improvements to Lone Oak Road.
After listening to Davis, my reaction was that a perfectly acceptable response would have been: "Well, if there wasn't a Reimbursement District, the developers would just have to pay for the southern road improvements on their own, since this would be a condition of their subdivision approvals."
Those two subdivisions total about 120 lots.
Development of those lots would add about $1,100,000 to the Reimbursement District fund ($9,212 per lot times 120). So as Peter Fernandez said, it makes sense that the developers would go ahead with building the southern extension of Lone Oak Road without a Reimbursement District, since the total cost is only $15,000 per lot ($1,800,000 divided by 120).
But nobody on the City Council asked the obvious question after listening to Fernandez: "If the two subdivision developers would make the southern improvements to Lone Oak Road on their own, why are we including these improvements in the Reimbursement District?"
Bottom line: I realize this is geeky stuff. But I feel the need to go into this much detail so there's a record of what transpired at least night's City Council meeting, especially since the Statesman Journal has devoted exactly zero reporting resources to this subject. (The newspaper wouldn't even publish a guest opinion that I wrote for them.)
Because of me, Salem Weekly, the South Gateway Neighborhood Association, and numerous individuals who complained about the Lone Oak Road Reimbursement District, the original plan was improved. It's good that the eastern part of the District was dropped out, and that the idea of paying for the bridge over Jory Creek by including money for it in a Streets and Bridges bond has been given up.
But the Reimbursement District plan approved by the City Council still is tilted too much in favor of developers. Almost certainly the Creekside developer isn't going to build the bridge and northern extension of Lone Oak Road unless they get approval to convert the Creekside golf course into a 210 lot subdivision.
A City of Salem staff report gives this a 50-50 chance of happening. Which is a good chance. I'd put the odds at even higher than that. It sure seems like it would be justified to require construction of the bridge and northern extension of Lone Oak Road as a condition of approval for a subdivision on what is now the golf course.
But as it stands, the Creekside developer would be able to make those improvements, then get paid back for what they cost through the Reimbursement District. Pretty sweet deal.
I realize that developers are in the business of making money. I'm just saying that it would have made more sense to hold off on forming a Reimbursement District for the bridge and northern extension of Lone Oak Road until it was known whether the golf course would become a subdivision.
If this happens, the Creekside developer could have paid for those improvements as a normal cost of doing business.
However, with the approval of the Lone Oak Road Reimbursement District, there's a very good chance that (1) a legal ruling will allow the Creekside golf course to be transformed into a housing development, after which (2) the Creekside developer will build the bridge over Jory Creek and the northern extension of Lone Oak Road, then (3) be paid back by the Reimbursement District, likely not all at once, but over the span of, say, ten or more years as the District accumulates funds when lots are developed in the south Salem area.
If people in the not-too-distant future ask, "How the heck did the Salem City Council allow this to happen?", I feel good that this blog post, and other posts I've written on this subject, will provide a detailed answer.
Below is an opinion piece about the Lone Oak Road Reimbursement District that I submitted to the Statesman Journal a month ago. I never heard back from the editorial board one way or the other, which in itself is a sad commentary on how far Salem's so-called "paper of record" has fallen.
The Statesman Journal has published exactly nothing about this subject, even though it is a highly controversial issue that's consumed a lot of City Council time, and is of considerable concern to residents of the Creekside area, along with hundreds of lot owners in south Salem who would be required to fork out thousands of dollars when they develop their property to pay for Lone Oak Road improvements -- even if they rarely, if ever, would use the road.
One would think that since the Statesman Journal hasn't seen fit to devote any reporting resources to this issue, they'd be pleased to publish a written-for-free opinion piece. But these days one would think isn't a good guide to figuring out what the newspaper would do, given that one would think a local paper would care about reporting important local news.
Think again. Here's my opinion piece.
Lone Oak Road Reimbursement District is a bad idea
Lone Oak Road has gotten a lot of attention from the City Council lately.
First the Council voted to form a Lone Oak Road Reimbursement District. This would assess property owners in south Salem between $2,464 and $9,212 when a lot was developed. That money would pay for northern and southern extensions of the road, the size of the assessment being based on how close the lot is to Lone Oak Road.
The South Gateway Neighborhood Association (SGNA) then asked the City Council to reconsider that vote.
Their letter pointed out that (1) SGNA wasn’t given advance notice about the Reimbursement District proposal; (2) the District funding plan assumes the Creekside Golf Course will be converted to a subdivision even though this is an undecided legal issue; (3) City staff didn’t adequately inform councilors about the Creekside developer’s obligation to build the northern extension of Lone Oak Road.
The Council then voted to reconsider its approval of the District. On March 26, a reconsideration hearing at which most of those who testified were opposed to the District resulted in a decision being delayed until the May 14 Council meeting.
Property owners who live quite a ways from Lone Oak Road complained that they’d be required to pay into the District even though they’d rarely, if ever, use the road.
In short, it’s a fine mess the City of Salem has gotten itself into.
At the reconsideration hearing, Public Works Director Peter Fernandez revealed his role in saddling the public with the cost of completing Lone Oak Road. Fernandez admitted that before entering into a 2015 Memorandum of Understanding (MOU) with the Creekside developer in which the City of Salem assumed responsibility for building the Jory Creek bridge, he failed to get a estimate from his own engineers about how much the bridge would cost.
So the MOU contains the developer’s figure of $750,000 for the bridge, while the Reimbursement District proposal budgets $5.6 million. This roughly $5 million mistake means that money for the bridge would have to come from a future Streets and Bridges bond, because the District wouldn’t be able to raise $5.6 million.
Thus the plan is for property tax payers throughout Salem to pay for the Jory Creek bridge, then the City would be partially reimbursed by the District. This makes little sense, since property owners in south Salem would be reimbursing property owners in all of Salem. A better way is to simply include the northern extension of Lone Oak Road as part of a Streets and Bridges bond.
Building the southern road extension also doesn’t require a Reimbursement District.
Two subdivisions planned for that area total 120 lots, and their developers should foot the bill directly for the Lone Oak Road improvements. Why should the City collect about $1.1 million from District assessments on those lots, then reimburse the developers for the money they’d just paid into the District?
Bottom line: the Reimbursement District isn’t needed, and the City Council should kill this bad idea.
I've been blogging about the Lone Oak Road Reimbursement District since it first became a hot issue. Here's my previous posts on this subject:
Well, there's either an innocent reason next Monday's City Council agenda contains a staff recommendation to postpone another vote on the Lone Oak Road Reimbursement District from April 23 to June 11, or there's a hidden reason.
UPDATE: The City Council decided to continue deliberations on the Reimbursement District at its May 14 meeting.
The second option -- hidden -- seems more likely to me, so I'm going to run with that in this post. Plus, it's way more fun to engage in political conspiracy theories than take utterances from City Hall on controversial issues like this one at face value.
That said, here's the staid, boring, straightforward explanation offered up by City Manager Steve Powers for postponing further deliberations on the reconsideration of the formation of the Reimbursement District.
At the April 23, 2018, City Council meeting Council will be conducting a public hearing on the proposed move of the Union Gospel Mission and West Salem Zone Code Clean Up. Moving the deliberations of reconsideration of the formation of the Lone Oak Reimbursement District to June 11, 2018, will allow adequate time on the agendas for all three topics.
This postponement will also allow staff more time to prepare information for the deliberations.
OK, but City staff knew that the Union Gospel Mission hearing was going to be on April 23 at the time of the March 26 City Council meeting, which was when Mayor Bennett made a motion to postpone a reconsideration vote on the Reimbursement District after a public hearing resulted in virtually unanimous opposition to the District.
(The Union Gospel Mission hearing was listed on the March 26 agenda as an upcoming public hearing.)
So the Machiavellian aspect of my political mind is thinking along the lines I'll describe below. As background to my musings, here's the timeline of the Lone Oak Road Reimbursement District proposal. Click here for my previous posts on this subject.
January 22: City Council votes 7-2 to form the District. Sally Cook and Cara Kaser are the no votes. Notably, Steve McCoid, the Ward 4 councilor who represents the Creekside area where the District is located, votes in favor of it.
February 12: After the South Gateway Neighborhood Association requests a reconsideration of the Reimbursement District approval, citing several reasons for this, the City Council votes unanimously to hold another hearing on March 26.
March 26: Opposition to the District clearly outweighs supporters of it. Following Mayor Bennett's motion, the City Council votes unanimously to continue deliberations on the reconsideration of the Lone Oak Road Reimbursement District at the April 23 meeting.
April 3: The City Manager recommends postponing those deliberations for seven weeks until the June 11 Council meeting.
Thus if the postponement is approved at next Monday's meeting, the Salem City Council will spend almost six months on the Lone Oak Road Reimbursement District. Which makes me think...
(1) Any time a controversial vote is put off until summer, there's reason to wonder whether this is being done to diffuse opposition to the issue. Sure, no more public testimony will be heard on the Reimbursement District, but the City Attorney said that citizens can convey their views to members of the City Council, and those members can discuss the District with interested citizens.
So one theory is that delaying the reconsideration deliberations for seven weeks is an attempt to pass it in the "dead of summer" when people affected by the District will be less likely to be lobbying against it.
(2) Steve McCoid is in a tough political spot. He voted for the Lone Oak Road Reimbursement District, but the District isn't popular among his constituents. His opponent in the May election, when two-person City Council races are decided, is Jackie Leung. She is against forming the Reimbursement District.
It's possible that McCoid, and/or his allies on the City Council, pressed for the seven week postponement to get the next vote on the District to be after the May 15 primary election. However, McCoid is already on record as supporting assessing lot owners in the south Salem area between $2,464 and $9,212 when a lot was developed in order to fund construction of the missing sections of Lone Oak Road.
Why, then, would McCoid want to keep this issue on the Ward 4 political table through the primary election? It might be because another vote in favor of the Reimbursement District around the time ballots are being received and filled out would be a more visible campaign issue than McCoid's first vote to establish the District back in January.
(3) Complicating the political calculations for McCoid is the fact that his largest outside campaign contribution is $2,500 from the Oregon Realtors Political Action committee. The Lone Oak Road Reimbursement District basically is a giveaway to developers in the Creekside area who otherwise would have to pay for improvements to the road themselves. McCoid thus either would tick off his constituents if he votes "Yes" on the reconsideration of the District, or irritate Oregon Realtors if he votes "No."
(4) Lastly, Steve McCoid seems to realize that he's in a tough battle against Jackie Leung in his quest to be re-elected Ward 4 councilor. His largest campaign contribution came from himself yesterday, $5,000 (see below). As noted before, it's possible to argue both ways as to whether postponing a vote on the Reimbursement District helps or hurts McCoid.
But if we're concerned about transparency in City government and holding elected officials responsible for their votes, clearly it would be better if the City Council stuck to its original plan to have deliberations on the reconsideration of the Reimbursement District occur as scheduled on April 23 so that voters know where council candidates stand on this issue prior to the May election.
City Manager Powers said that postponing the deliberations until June 11 would give staff "more time to prepare information for the deliberations." Well, they've had several months to do this already, so it's difficult to see why giving City staff another seven weeks would make much of a difference.
On the whole I see the attempt to move the deliberations to June 11 as a delaying tactic. It'll be interesting to see which members of the City Council agree to this next Monday, and which say "let's get this over with on April 23 as previously planned."
Last night the City Council decided to take another month to consider its reconsideration of a Lone Oak Road Reimbursement District that appears to have support mainly from the developers who would pocket money supplied by lot owners in south Salem.
A hearing was supposed to clear up questions about the Reimbursement District, but it seemed that as many questions were raised as answered. So after lengthy discussion, Mayor Chuck Bennett moved to hold open the hearing until the April 23 City Council meeting. That motion was passed unanimously by nine rather confused councilors.
In case you've missed the twists and turns of this issue -- and if you only read the Statesman Journal, you've missed out completely, because our local newspaper no longer covers most local news, including news about the Lone Oak Road Reimbursement District -- here's my blog posts about this subject, listed from oldest to newest..
The hearing last night featured quite a few complaints from people who would have to pay thousands of dollars to the Reimbursement District when a house was built on their lot, even if they'd rarely, if ever, use an extension of Lone Oak Road.
They questioned why owners of lots quite far from Lone Oak Road would have to pay up, while current residents of the Creekside neighborhood wouldn't have to pay anything.
In my three-minute testimony, I argued that there didn't appear to be a need for a Reimbursement District. You can either listen to what I said via the You Tube video below, or read my remarks in a continuation to this post.
Several city councilors said they'd be submitting questions to City staff that they'd like answers to when the Reimbursement District is discussed again at the April 23 City Council meeting.
Here's a key question that I hope gets asked and answered: Is the Creekside developer required to build a bridge over Jory Creek and an extension of Lone Oak Road, or is constructing these improvements the responsibility of the City of Salem?
I recall that City staff said last night that if the Creekside developer plats Phase 14, the bridge and road would have to be built as a condition of moving ahead with the development of that phase. However, the staff report for the Reimbursement District reconsideration hearing only speaks of the Creekside developer being required to construct Lone Oak Road.
The Creekside developer is required to construct Lone Oak Road between Muirfield Avenue and Augusta Drive as a condition of the next sub-phase of Creekside’s Phase 14 development. However, the timing of construction is at the developer’s discretion, not the City’s. Therefore, this condition to construct Lone Oak Road is also being imposed on other developments in the area since the street is needed to serve these other properties.
There also was considerable talk about a 2015 Memorandum of Understanding that called for the City of Salem to build the bridge and possibly also the road (the MOU language isn't crystal clear on this point), with the Creekside developer seemingly only being responsible for dedicating the right of way for the northern extension of Lone Oak Road. Download Attachment 7 - Creekside MOU 052715
The MOU calls for the City of Salem to include $750,000 in the Capital Improvement Plan for FY 2016 through 2020 to build the bridge. But the plan for the Reimbursement District assumes that the bridge will cost $5,6 million. So there's close to a $5 million discrepancy between what City officials thought the Jory Creek crossing would cost in 2015, and what it now is estimated to cost,
This is a major screw-up which was cause for concern at previous City Council hearings. Last night it was learned who was responsible for the $5 million mistake: Peter Fernandez, the Public Works Director. He said that he failed to get a cost estimate from the City engineering staff, choosing instead to rely on a cost estimate by the Creekside developer.
Here's a video I made of Fernandez' admission that he was the one who screwed-up.
This $5 million mistake by Fernandez is important for reasons beyond the high dollar figure. Here's why:
(1) Peter Fernandez had numerous opportunities to come clean about why the cost of the Jory Creek crossing mushroomed from less than a million dollars to almost six million dollars. But he only revealed his failure to get a cost estimate from his engineers under close questioning from Councilor Tom Andersen last night. This calls into question Fernandez' credibility on other issues, and is a valid reason to wonder why he should continue to serve as Public Works Director.
(2) It was acknowledged yesterday that given the $5.6 million cost of a bridge over Jory Creek, there is little likelihood that the Creekside developer will ever choose to build the bridge. So this eliminates a major rationale for the Reimbursement District, which already obviously is on shaky ground given the fact that after approving it, the City Council voted to reconsider that decision, and now has decided to spend a month considering the reconsideration before the April 23 Council meeting.
(3) To elaborate on the above, it makes little sense for the City of Salem to include money to build the bridge in a future Streets & Bridges bond measure, then pay back some of that money via funds raised through the Reimbursement District. If this happened, money provided by all property tax payers in Salem would be reimbursed by assessments placed on several hundred lots in the south Salem area that are part of the Lone Oak Road Reimbursement District. Those lot owners would be justifiably irked by this.
(4) Their irritation would be justified for several reasons, one of them being that City staff said that the Lone Oak Road Reimbursement District is by far the largest district of that kind in Salem. In other words, and as already noted, lot owners who are far away from Lone Oak Road are being asked to pay for bridge/road improvements. The fact that the City of Salem would be the entity being reimbursed by those lot owners for bridge construction makes the Reimbursement District even more unfair.
Another nail in the coffin of the Reimbursement District is the fact noted by City staff last night that two subdivisions planned for the area south of Sahalee Drive include about 120 lots (outlined in purple and orange above). The developers of these subdivisions (one 10 acres, the other 20 acres) are responsible for building the southern extension of Lone Oak Road to Rees Hill Road.
Bizarrely, last night City staff said that since the Reimbursement District assessment per lot would be about $10,000, the $1.2 million raised (120 times $10,000) just about equals the cost of building the southern extension of Lone Oak Road. So the City of Salem would collect $1.2 million from the developers, then reimburse the developers for the $1.2 million they'd just paid to the Reimbursement District.
Um, here's another idea: ditch the idea of the Reimbursement District and simply have the two developers build the southern extension of Lone Oak Road for $1.2 million, sharing the cost between them.
Bottom line: the Lone Oak Road reimbursement district is a solution in search of a problem. Read my testimony below for why this is the case.
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