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Fairview should reconsider economic incentives

No. 1: Deliberating on public matters via email, outside of the watchful eyes and ears of the public, violates Oregon's public meetings law.

No. 2: Any poll — or vote — of city councilors taken on public matters via email isn't worth the digital ink it's printed with. Those results can't be entered into the public record, because they were illegal to begin with.

No. 3: Entering the vote results — excuse me, poll results — in the record without public discussion, only exacerbates the appearance of a behind-closed-doors, good ol' boys and girls style of government.

No. 4: This is precisely the reason why Oregon has an open meetings law; to protect its citizens against elected officials who will conduct business behind the scenes.

What's this all about?

The city of Fairview's recent decision to waive system development charges (SDCs) on new developments has in many ways divided this community: some saying the waiver will help spur economic development, others saying it unfairly burdens taxpayers and utility customers with the cost.

Given the division that was created by the economic incentives, proposed changes emerged that would have soften the incentives. Mayor Ted Tosterud forwarded the proposed changes to city councilors via email on March 28, telling them that a lack of response would count as a “no.”

The votes — excuse me, poll results — came in via email. Two councilors said “no,” one said “yes,” and three others didn't reply. There you have it, the vote totals — oops, poll numbers — are in: five “no,” one “yes.” And that was all Mayor Tosterud needed to squelch the revised incentives. There was no public presentation. No public testimony. No public deliberation. Just a private “poll” that set public policy.

It does not matter that the council may have arrived at the same decision had this matter been conducted in full view of the public. What matters is that Fairview's elected leaders conducted business in violation of the state's public meetings law.

What should happen next?

The Fairview City Council needs to go back to the drawing board on the incentives program. The Outlook fully endorses incentives for economic development, but within reason. This editorial in no way is intended to say Fairview should abandon incentives. But, we are concerned about the consequences of waiving all SDCs for all developments.

In the first place, Oregon law says SDCs can't be waved off as if they don't exist. A city is still on the hook for paying SDCs, even if they don't pass those fees on to developers. The money will come out of utility revenue (which is a negative hit on utility customers), or from the city's general fund, which is traditionally used for critical services like police, fire and parks.

The city, however, claims the citizens would be off the hook for these infrastructure costs because all vacant land in Fairview already has infrastructure in place. But if that's true, then why pass a waiver to begin with?

This is an odd course of action for a community looking to contract out what is left of its public safety services, and a town that has an annual debate about whether or not it has enough general fund revenue to spend a couple thousand dollars for a chili cook-off in the parks.

Even worse, the SDC giveaway will lift a huge financial burden off the shoulders of the developers of multifamily housing (apartment buildings). But the city will never recoup the loss of SDCs through property-tax collections on apartment buildings.

In Gresham, for example, roughly half of the police and fire calls for service are generated by multi-family properties, but multi-family properties only pay about 13 percent of the city’s residential property taxes, with single family homes paying around 87 percent.

So why in the world would any city extend these incentives to multi-family developments?

Incentives, even when they do make sense for a community, are only effective when they help attract a desired product when that product wouldn’t have otherwise happened.  In Fairview’s case, it is neither. East Multnomah County is already overly built-out on apartments. And the market to build apartments — even without government subsidies — is already marching forward. The Portland metro area apartment vacancy rate is below 5 percent, indicating a huge market for new apartments, as is further evidenced by double-digit, single-year rental increases.

We aren't asking that the Fairview City Council pull the plug on the incentive program, but it's not too late to revise this program in a way that makes sense for the greatest number of taxpayers and ratepayers in this community.

And, please, will ya do it publicly this time.