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Adopting or amending an urban growth boundary has never been easy, but a recent decision by the Oregon Court of Appeals illustrates just how difficult the process can be.

As we reported in our November 2010 column, the Court of Appeals in 1000 Friends of Oregon v. Land Conservation and Development Commission (鈥淲oodburn鈥�) struck down a UGB expansion decision that lacked findings justifying the designation of additional industrial acreage. The city was attempting to provide developers a 鈥渕arket choice鈥� in their selection when reading requirements of Goals 9 and 14 together.

Last month, the court again struck down the LCDC’s acknowledgment of a decision by the city of McMinnville to expand its UGB through periodic review in 1000 Friends of Oregon v. Land Conservation and Development Commission (鈥淢cMinnville鈥�). The court engaged in a lengthy effort to reconcile ORS 197.298, a statute that prioritizes the types of land that can be added to a UGB, and the Goal 14 UGB factors as they existed in 2005, given previous precedent for application of those standards.

The petitioners’ appeal alleged that: 1, the city did not apply the Goal 14 standards completely or consistently; and 2, the city ruled out some land for consideration by defining its land needs in such a way that less exception land was available and more agricultural land was included.

The court found that the first step in applying the priorities of ORS 197.298 is to determine how much land is needed. That determination is made by the application of the two Goal 14 鈥渘eed鈥� factors 鈥� 1, demonstrated need to accommodate long-range urban population growth requirements consistent with LCDC goals; and 2, subcategorizing that needed land into housing, employment opportunities and livability needs.

In this case, the city’s use of the ascribed qualities of a particular use as a basis to rule out higher-priority land, failed to address separate types of land needs of its component uses, such as various housing types. The proper first step is to determine the land needs of each land use, and then examine the available land to determine if it is 鈥渋nadequate to accommodate (each) amount of land needed.鈥�

The second step is to locate and justify the inclusion of land to fill the quantified need. Because ORS 197.298(1) states that the priority system is 鈥渋n addition to any requirements established by rule addressing urbanization鈥� (i.e., Goal 14 and its implementing rules), the court determined that the priority lands analysis must be done before either the application and balancing of the Goal 14 locational factors or the exceptions to the priority system under ORS 197.298(3).

Thus, the priority system that placed prime resource lands as the lowest priority may not be balanced with each of the Goal 14 locational factors at this step, although two of the factors 鈥� No. 5 (environmental, energy, economic and social consequences) and No. 7 (compatibility of the proposed urban uses with nearby agricultural activities) 鈥� that mirror provisions in ORS 197.298 can be applied. Only after these factors are applied is ORS 197.298(3) applied to allow 鈥渓ower priority鈥� farm and forest land to be used.

The application of ORS 197.298(3)(b) sets forth the specific manner in which lands can be removed from consideration because, 鈥渇uture urban services could not reasonably be provided to the higher priority lands due to topographical or other physical constraints鈥︹�� Therefore in step two, Goal 14, factor 3 the orderly and economic provision of public facilities and services is not a consideration, and the city’s decision to resort to lower-priority land because of the relatively higher costs of providing a particular public facility or service to the higher-priority area was in error.

The third step involves a determination of which candidate lands to include under Goal 14, where the remaining locational factors of Goal 14 are independently applied after land has been prioritized under ORS 197.298 as adequate to accommodate the identified need. It is at this point in the analysis that cost efficiencies in the provision of public facilities and services become relevant (Goal 14, locational factor 3 鈥� orderly and efficient provision of public facilities and services; and factor 4 鈥� maximum efficiency of land uses) along with the other Goal 14 locational factors. The LCDC’s findings were deficient in a number of respects in that they were not sufficiently descriptive of the surrounding uses to allow meaningful comparisons among the candidate sites.

These cases are instructive for a number of reasons. First, the court is working hard to read related statutes, the goals and regulations together so that the entire UGB expansion process, when it occurs, has meaning. Second, adequate findings require a considered explanation of the choices that are made.

Most importantly, UGB cases are both factually and legally complicated. Given the number of challengers joining these fights, coupled with the fact that this will be a case of first impression for the court, finding a chink in the armor is likely.

Edward Sullivan has specialized in land-use law for more than 40 years and is an owner in the Portland office of Garvey Schubert Barer. Contact him at 503-228-3939 or at [email protected].

Carrie Richter specializes in land-use and municipal law and is an owner in the Portland office of Garvey Schubert Barer. Contact her at 503-228-3939 or at [email protected].