APRIL 10, 2006


The Regular Meeting of the Beaverton City Council was called to order by Mayor Rob Drake in the Forrest C. Soth Council Chamber, 4755 SW Griffith Drive, Beaverton, Oregon, on Monday, April 10, 2006 at 6:40 p.m.


Present were Mayor Drake, Couns. Catherine Arnold, Betty Bode, Bruce S. Dalrymple, Dennis Doyle and Cathy Stanton. Also present were City Attorney Alan Rappleyea, Chief of Staff Linda Adlard, Finance Director Patrick O'Claire, Community Development Director Joe Grillo, Engineering Director Tom Ramisch, Operations/Maintenance Director Gary Brentano, Library Director Ed House, Human Resources Director Nancy Bates, Police Chief David Bishop and City Recorder Sue Nelson.


Mayor Drake acknowledged that last week, April 2 - 8, 2006 was National Library Week.

Mayor Drake proclaimed April 2006 as Records and Information Management Month.


Mayor Drake welcomed the Boy Scouts from Troop 124, and said they were working on various merit badges.

Henry Kane, Beaverton, said on February 1, 2006, he submitted a letter (The 2005 Legislature ended forced annexation of unincorporated territory and requires only voters in territory proposed for annexation to approve the proposed annexation); it included a copy of the 2005 Oregon Law that codified the existing law. He said the Oregon Constitution guaranteed the right to vote and several Oregon Supreme Court cases have declared statutes that take away the right to vote unconstitutional. He said Agenda Bills 06058 and 06059 on the agenda for this meeting will authorize the City to force annexation to the Tualatin Hills Park and Recreation District under certain circumstances. He said this could not be done. He said these agenda bills were cleared by the City Attorney and he suggested the Council ask the City Attorney if he was aware of the constitutional provisions and the 2005 statute he (Kane) cited. He said both agenda bills were unconstitutional.

City Attorney Alan Rappleyea said twice recently the Oregon Court of Appeals reiterated that there was no constitutional right to vote on annexation issues and that was reflected in the Oregon Supreme Court's opinions. He said staff was very confident there was no constitutional right to vote on annexations. He said this issue involved annexation to the Tualatin Hills Park and Recreation District (THPRD). He said when people develop their land, they have to demonstrate that they have park and recreation facilities. He said one option is to annex to the THPRD or they could demonstrate they have other park and recreation facilities of the quality provided by the District so there is no need to annex to the THPRD. He said this was not forced annexation and Washington County has the same provision. He said the 2005 legislation does not affect this statute.


Coun. Doyle distributed copies of the Mayor's Youth Advisory Board's newsletter The Whirlpool to the Council.

Coun. Stanton referred to the proclamation for Records and Information Management Month. She said City Recorder Sue Nelson was recognized nationally as a records and information management expert. She said Nelson ensures that the City has all the records required by law without filling up countless numbers of boxes with paper that has to be stored, which is costly. She thanked Nelson and her staff for keeping track of the City's records and said she appreciated their work.


There were none.


06051 Washington County Cooperative Library Services Provision of Internet Filtering

Library Director Ed House said the proposed WILInet Intergovernmental Agreement (IGA) allows each library to decide what filtering it wants in the system and holds the County harmless for any decision a local library makes (companion Agenda Bill 06056). He said the Library Advisory Board discussed this issue and the filtering package at length. He said the Library Advisory Board's role is to advise the City on library policies. He said in 2001, the Council asked that the children's computers be filtered to protect them from any harmful material that might unexpectedly appear on the Internet computers. He said the company that the City contracted with to provide this service went out of business. He said in the meantime the filtering service has been provided to all the libraries by Washington County Cooperative Library Services (WCCLS) through another company that currently provides other software services to the libraries.

House said the City would continue to filter the children's and youth homework center areas. He said one change being proposed would allow young adult users to choose the level of filter, from child filtered or adult filtered levels. He said this would be done through a drop-down menu where the user could select the filtering level. He said the general public area (adult) would have a third option of unfiltered.

House said one purpose of the adult filter was to prevent unwanted sites from appearing on the screen. He said they wanted to be sure to offer the unfiltered package as this maintains the First Amendment right of free access to information.

Mayor Drake asked the City Attorney to speak about the most current court decisions and what base has been built to allow or disallow filtering for adults.

City Attorney Alan Rappleyea said the 2003 US Supreme Court case American Federated Library Association vs. United States arose from the restriction that federal grant monies would not be given to libraries that did not have filters to protect children from pornography. He said the Federated Library Association took this case to the Supreme Court saying this was an infringement on First Amendment rights. He said the US Supreme Court upheld the federal legislation and said it would support that restriction for there wasa high level of interest in protecting children from pornography. He said this decision allows librarians to decide what will be included in the library's circulation materials. He said the decision was limited in that it stated adult patrons had the immediate right to remove all filters. He said the Court said this was not an infringement on First Amendment rights because adult patrons could remove the filters. He said the WCCLS policy was based on this decision.

Mayor Drake said this would allow the City to continue with its current policy of filtering the children's area; young adults and adults could choose whether or not to have the filters and anyone doing research could also choose whether or not to select a filter.

Coun. Bode asked if there was consent among the Library Advisory Board members concerning the filtering.

House said the Board did consent to the filtering. He said the Board's position was that the children's area would remain filtered as it currently is; the young adult would choose between children's filtered or adult filtered; and the adults would choose between children's, adult or unfiltered. He said the one change the Board wanted to see on Exhibit A of the IGA, was that the default for the adult area be unfiltered.

Coun. Stanton confirmed that the City's current policy was that pornography was not to be viewed on the Library's computers. She asked if that would change with the unfiltered selection.

House replied it would not; the City's policy would remain the same. He clarified that would be different from people doing research on that subject.

Coun. Stanton asked if it would be possible for the Council to decide that the adult filter would be the default on the Library computers.

House said that was possible but the Library Advisory Board’s position was strong that the adult default should be unfiltered.

Coun. Stanton asked if children were allowed to use the adult computers.

House said children were allowed to use adult computers but it seldom has happened. He said it would be hoped parents will discuss the options with their children about using the computers in the adult section.

Coun. Doyle said he was glad they were strengthening the filtering levels in the youth sections. He said he thought the staff report said the Library would default to adult filtered.

House said the staff recommendation was that the adult default be filtered and the Library Advisory Board felt strongly the adult default should be unfiltered. He said the Council would need to make the decision.

Mayor Drake asked what other libraries were doing regarding the default setting.

House said two libraries do not have any filtering for children or adults, some default to adult filtered and others default to the unfiltered setting.

Mayor Drake said if the default was set at adult filter, before the cycle started a notice would appear on the screen stating that the cycle was set for adult filtering and would ask if the user wished to go to unfiltered.

House said that was correct; there would be a drop down menu that would allow the user to select the filter level.

Mayor Drake said though the Council respects the Library Advisory Board's opinion, the Council has expressed some concern and does have the option to select filtering as the default. He confirmed with House that if a user started with the filter turned on, they would need to log off and restart to select the unfiltered setting. He said it could be done easily and was not time consuming. He asked how long people could use the computers.

House said a person is allowed one hour per day to provide everyone the opportunity to use the computers. He said logging on only takes 15-20 seconds.

Coun. Stanton explained for the public what was filtered by the adult filter (in the record).

Coun. Doyle asked how the City enforced the pornography ban on the computers.

House said the staff monitored what patrons view on the computer stations.

Coun. Doyle asked why the Library Board felt strongly about the no-filter default.

Coun. Bode said she was at the Library Board meeting and the Board strongly supported people’s rights. She said the Board felt the Internet system should open to full information and if the user wanted filtering they could make that selection. She said there was a long discussion regarding freedom of information. She asked House how many times in a month the staff had to enforce the no pornography issue.

House said it was a very rare occurrence now because staff actively monitors computer use.

Mayor Drake confirmed that Coun. Bode was the Council Liaison to the Library Advisory Board.

Coun. Doyle said considering there was rarely a problem why default to no filter; why not default to adult filter. He asked if users are asked to leave if they break the rule.

House said in the past offenders were asked to leave the Internet site and if it happened again, they were asked to leave the Library. He said in the past a couple of people were excluded from the Library for a period of time because of this problem. He said the Board felt it was more appropriate that people have full access to information and if they wished to limit their access, they could do so by choosing the adult filter.

Coun. Stanton said she had been volunteering at the Library for many years and a couple of times she had to alert staff to improper use of the computers. She said as a parent and a mother, she would prefer the adult filter.

House replied that was why there are two designated areas in the Library; one for children and one for young adults.

Coun. Dalrymple said if the default was set at adult filter, users were still able to make their own choice to go to unfiltered. He said people's rights were not being taken away, they were being given the choice. He said providing the choice for some level of restriction protects some users from getting to the unfiltered area. He said he did not see anything wrong with that process.

Coun. Bode asked if the software program requires a default.

House replied the software program does require a default and users would have to be trained on selecting the filter level.

Coun. Stanton confirmed with House that this was a drop down screen and not an automatic pop-up. She asked if the program had the capability to do a pop-up box.

House said he did not know if that was possible. He said he had not seen the software package in operation; he had only read the literature.

Coun. Arnold said she had not used the Internet at the Library. She asked if people had to sign-on to use the Internet.

House replied a user had to sign-on as a patron or in the case of a visitor they would be given a pass to use the computers.

Coun. Arnold said it did not sound as if the program recognized that a user was a child. She asked if a child could access an unfiltered station if they signed on in the adult section.

House said that was correct.

Coun. Arnold said pornography was now called the new addiction. She said she was uncomfortable with the idea that youths could go upstairs and access inappropriate information. She said for this reason she preferred having the filter in the young adult area. She said she was concerned youth could access this information in the adult section.

Coun. Doyle said he was comfortable with Exhibit A. He suggested asking the software vendor for a pop-up screen at the start of the cycle instead of the drop down menu. He said that way a user would have to decide what filter level they wished to use; each person would make their own choice. He said he thought that was the sensible solution. He said until the pop-up screen is available, he was comfortable with starting at the adult filter level shown on Exhibit A.

Coun. Bode said when users start the computers, they need to know the filtering level on the computer. She asked the City Attorney if the Library was obligated to post a card on the computers stating the filter level.

Mayor Drake said in considering all of the Council's points, what he heard was that the Council wants to give people the option to choose the filter level, but when they first start using the computer it should not automatically cycle to the most accessible level.

Rappleyea said the law requires that users have easy access to all the sites. He said as long as there is information available so users can access any site relatively easily, that is sufficient. He said otherwise there might be problems of censorship. He stressed the Supreme Court said cities have the right to protect the children using the Internet.

Coun. Stanton said she supported the filtering and she thought the pop-up would be much easier than the pull down menu.

House said if the screen was not obvious then it would be his job to have proper signage available to show users how to access the desired level of information.

Coun. Bode asked House to clarify the discussion.

House summarized the Council's position was that the children's area would remain filtered at the children's filter level; the young adult area would have a choice between the children's filter and the adult filter; and the general public area would have a choice of either the children's or adult filter or no filter, and the default would be adult filter.

Mayor Drake said staff would explore if the software could provide a pop-up notice rather than a pull-down menu.

Coun. Arnold asked if they could have a trial period on this policy.

Mayor Drake said the Council could always modify the policy.

House said the ability to revise the policy was included in the IGA. He said he would follow-up with WCCLS and the vendor regarding the pop-up capability.

Mayor Drake confirmed there was Council consensus to proceed as discussed.

Mayor Drake thanked House for the information.

06052 Current Investment Practices and Proposal to Use Non-Discretionary Investment Advisory Services

Finance Director Patrick O'Claire and Assistant Finance Director Shirley Baron Kelly presented a PowerPoint presentation on the City's current investment practices and proposed investment advisory services (in the record). He said the companion Agenda Bill 06047, Contract Award - Non-Discretionary Investment Advisory Services, was on the agenda for this meeting. He said as of March 31, 2006, the City has an investment portfolio of $53.2 million; $26.1 million is invested in securities and 27.1 million is in the State's Local Government Investment Pool (LGIP). He reviewed how the City handles its investment portfolio (in the record).

O'Claire reviewed the benefits of using an investment advisor (in the record). The benefits included: 1) Access to capital markets and a large volume of trades from primary dealers; 2) Functions as an extension of staff with a large number of resources available to the City; 3) Availability of tools and models dedicated to assessing the value of fixed-income securities; 4) Performs an extensive credit review process of all investment issuers; and 5) Provides comprehensive reporting in compliance with the City's Investment Policy, the Oregon Revised Statutes and the Government & Accounting Standards Board.

Mayor Drake referred to Orange County, California that went bankrupt several years ago because it invested in high-yield junk bonds. He said the City of Beaverton has always invested conservatively. He said in using an investment advisor, investments would still be conservative and the investment pool would be broader.

O'Claire said that was correct. He said Orange County lost its principal in its investment. He said one of the principles of the City's investment portfolio was that the City would never lose principal. He said it is the City's s tandard that investments are held to maturity.

O'Claire explained the difference between an investment advisor and a broker acting as an investment advisor (in the record). He said using an investment advisor would give the City access to a larger trading operation to obtain the best prices on all trades. He said an investment advisor accesses top market resources such as Bloomberg, Telerate and TradeWeb and the City would be able to monitor these resources daily on the Web. He reviewed the models an advisor would use to guide the City's investments. He reviewed the services an advisor would provide that would add value to the City's investment program. He reviewed the process for making investment decisions and the investment strategies for liquid and short-term funds.

Coun. Stanton confirmed with O'Claire that the short-term funds were 18-months and shorter periods. She asked if this recommendation was approved, at a later date would Council get a proposal to change the investment policy to go beyond 18 months.

O'Claire said that was correct. He reviewed a chart that compared the One-Year Federal Agency vs. Oregon LGIP, from July 2000 to February 2006 (in the record). He said in a declining interest environment the LGPI was the better investment, because the duration of the LGPI was five months. He said in an increasing interest environment, the Federal Agency does better than the LGPI. He said an investment advisor would point this out to the City. He reviewed various Benchmarks the City could use and the returns the City would receive on each (in the record).

Coun. Doyle asked what the dollar value difference was between the bidders for the investment advisor services.

O’Claire said a sample of the annual costs was on Exhibit 2 of Agenda Bill 06047, at the bottom of the page.

Coun. Doyle asked about the rationale for scoring the written proposals and the oral presentations.

O’Claire said the staff asked that the top three bidders present their proposal as if the City had never seen the technical proposal, to demonstrate the services they would bring to the City and the depth of their organization. He said based on the criteria, PFM was the best prepared of the three; they did research on the City's budget, they knew the issues with the Library operations, they knew the number of funds the City had and the annual appropriations. He said PFM did its homework on the City of Beaverton. He said their presentation made City staff feel very comfortable with PFM's skills and staff. He said PFM provided the best support for the City in establishing a custodial service agreement account; MBIA staff said they could do this if the City wanted. He said PFM offered to come up several times during the first year to help in establishing this service; MBIA offered to come up twice if needed. He said PFM's presentation was superior to MBIA.

Coun. Bode asked if he was confident they had sufficiently detailed the services in the contract.

O’Claire said as part of the work they would develop the contract and the specifics that were discussed in the presentation would be incorporated into the contract, including the number of site visits for the first year. He said as the City matures in this relationship, the need for on-site visits would decrease to twice per year.

Coun. Stanton asked O'Claire if he contacted PFM and MBIA clients for references.

O’Claire replied he contacted City County Insurance Services (CCIS), a new client with PFM. He said CCIS gave PFM discretionary analysis to conduct trades on behalf of CCIS, not approved-by which is what the City would do. He said CCIS had high compliments for PFM.

Coun. Stanton asked if CCIS experienced if growth in their investments under PFM.

O'Claire said he could ask CCIS's Finance Director that question. He said he was certain the director would say CCIS saw value for the services PFM provided.

Coun. Stanton said she wanted to see enough growth in secure markets to cover the cost for the service.

Coun. Arnold said Coun. Dalrymple had requested financial analysis information for review prior to the meeting. She noted O'Claire had provided a spreadsheet that compared the earnings rate from PFM based on a similar client to the City of Beaverton. The earnings rate over a 15-month period was .43%. With the City's investment portfolio of $26 million, that produced $111,800 in interest. She said PFM's annual charge was around $27,000, which meant the City would have earned over $83,000. She said she thought $27,000 was a small fee for all the work involved. She asked if there would be any extra charges for the setup.

O'Claire explained PFM manages public sector only and has $15 billion in public funds and $9 billion in bond proceeds under its management. He said PFM has 156 public sector clients and a staff of 145 members. He said PFM was well structured and well funded. He said all charges would be covered in the contract.

Coun. Dalrymple said when he first looked at the staff report he needed financial analysis information. He said the information O'Claire provided was very helpful in coming to a clear understanding on this issue. He said in going to PFM, he felt the risk still remained low because the City was still following its guidelines. He said he thought it would be well managed from the City's side also. He said the performance information was beneficial.

Coun. Bode said the initial term of service was one year with a renewal for four years, with an option. She said there were sufficient checkpoints and the only way the City would know if this works was to proceed. She thanked O'Claire for the information and graphs.

O'Claire said there were termination clauses in all City contracts.

Mayor Drake thanked O'Claire for the information.


Mayor Drake called for a brief recess at 8:25 p.m.


Mayor Drake reconvened the meeting at 8:40 p.m.


Coun. Stanton MOVED, SECONDED by Coun. Bode, that the Consent Agenda be approved as follows:

Minutes of the Regular Meeting of March 20, 2006

06053 Liquor Licenses: New Outlet - El Ranchito Alegre III; Sushitime.

Change of Ownership - El Perilo Y Taqueria. Additional Privilege - Mingo. Change of Ownership & Greater Privilege: Hakatamon Japanese Restaurant; Yuzu Japanese Restaurant

06054 Boards and Commissions Appointment - Carmen Gobel to Citizens with Disabilities Advisory Committee

06055 Boards and Commissions Appointment - Ruben Medina, Jr., to Human Rights Advisory Commission

06056 Authorize Intergovernmental Agreement with Washington County Cooperative Library Services to Provide Internet Filtering

06057 Classification Changes

06062 Approval of City Assistance for the Merlo Station Affordable Housing Project - (Pulled for separate consideration)

Contract Review Board:

06047 Contract Award - Non-Discretionary Investment Advisory Services (Rescheduled from March 20, 2006 Meeting)

Question called on the motion. Couns. Arnold, Bode, Dalrymple, Doyle and Stanton voting AYE, the MOTION CARRIED unanimously. (5:0)

Coun. Stanton referred to the minutes of March 20, 2006, and said page three, second paragraph, should read Rebecca Lane not Rebecca Street. She thanked staff for answering her questions.

06062 Approval of City Assistance for the Merlo Station Affordable Housing Project

Community Development Director Joe Grillo said in Agenda Bill 06062, staff noted an error on Exhibit A; in the System Development Charge (SDC) Subsidy table, under Storm, the Revised Project Cost was not carried over to the Proposed Expenditure column. He said the Proposed Expenditure under Storm should be $1,905. He said that was consistent with the staff recommendation that the City pay a ratio of the SDC cost proportionate to the number of units to residents earning below 30% median family income. He said that changes the staff recommendation from $18,492 to $20,397, for the SDC Subsidy; and changes the total on the Proposed Waived Fees and Expenditures from $195,046 to $196,951. He said the additional $1,905 would come from the State Revenue Sharing funds proposed for the 2006-07 Budget.

Coun. Stanton MOVED, SECONDED by Coun. Doyle, that Council approve Agenda Bill 06062, Approval of City Assistance for the Merlo Station Affordable Housing Project.

Coun. Stanton said she asked that this be pulled for discussion because she wanted the citizens to understand why the City was waiving these fees. She said in the past the City approved a similar waiver with The Bridge Project. She explained when anyone builds on their property, the City collects a variety of fees to cover City costs for services, such as plan reviews and inspections. She said this fee waiver represents $196,951 that the City will not receive. She said the City was doing this because this was a very worthwhile project. She said developers do not build affordable housing because it is not profitable. She said when these opportunities arise, the City agrees to waive the fees so that affordable housing can be built, and that is good for the community.

Coun. Dalrymple noted the agreement with Tualatin Valley Housing Partners (TVHP) was for 30 years. He asked what would happen after the 30 years.

Grillo said the project could revert to market rate though he doubted that was the intent of TVHP as a non-profit agency. He said it could be refinanced after 30 years.

Coun. Dalrymple confirmed with Grillo that the City would only be involved for thirty years.

Coun. Stanton said because the City was able to do this, the market price for these homes would be lower than the regular market rate. She said that was a great use of the City's Revenue Sharing funds.

Mayor Drake said he served as the City's representative on the original founding Board of the TVHP twelve years ago. He said the intent of TVHP when it was founded was to have a permanent long-term history in this area; the goal was to focus on providing housing for those who were at 30% of the median family income, which often means the elderly, disabled and destitute. He said it is extremely difficult to find anyone interested in investing in long-term housing for the neediest in our society. He said this was housing for the working poor, disabled or destitute. He said the City provides office space for the TVHP and he has not seen anything other than sheer dedication to the original mission of the TVHP from its director. He said subsidies were needed to build affordable housing.

Coun. Bode said TVHP's most recent housing project was The Bridge at Allen Boulevard and 141st Avenue. She said this housing was for the developmentally disabled, and it was well maintained, safe and an improvement to the neighborhood. She said based on the quality of The Bridge, she was able to support this TVHP project and hoped more projects would be developed in the future.

Question called on the motion. Couns. Arnold, Bode, Dalrymple, Doyle and Stanton voting AYE, the MOTION CARRIED unanimously. (5:0)


Coun. Stanton said she had a question on Agenda Bill 06060, TA 2006-0001 Scoreboard Sign (first reading ordinance). She said she did not have a copy of the amended Code language from the Planning Commission hearing that was referred to in the Final Order. She said she would like to get a copy of the amended language before the second reading of this ordinance. She said Exhibit A of the ordinance does not address logos and she wanted to know why that was not included.

Grillo said staff could go back to the Planning Commission materials. He said he was not at the Commission meeting, but upon advice from the Assistant City Attorney, the Planning Commission recommended that the verbiage logo be changed to something more simplistic and neutral. He said that was what was reflected in the ordinance. He said a logo had a different implication than a sign. He said the city attorney advised that the verbiage be content neutral within the sign. He said this ordinance allows a public agency to have a sign on a scoreboard and establishes the parameters for that sign. He said they may have a logo but they may also have their name.

Coun. Stanton said she would still like to see the language.

Rappleyea said that was the difficult standard of content neutrality that the Oregon Supreme Court established for the First Amendment and that was why the Assistant City Attorney raised the issue.

Coun. Doyle MOVED, SECONDED by Coun. Stanton, that the rules be suspended, and that the ordinances embodied in Agenda Bills 06058, 06059, 06060 and 06061, be read for the first time by title only at this meeting, and for the second time by title only at the next regular meeting of the Council. Couns. Arnold, Bode, Dalrymple, Doyle and Stanton voting AYE, the MOTION CARRIED unanimously. (5:0)

First Reading:

Rappleyea read the following ordinances for the first time by title only:

06058 An Ordinance Amending Ordinance 4187, The Comprehensive Plan, to Clarify that the Tualatin Hills Park and Recreation District (THPRD) is the Primary Parks and Recreation Provider for the Citizens of the City of Beaverton, CPA 2005-0008 (Ordinance No. 4387)

06059 An Ordinance Amending Ordinance 2050, The Development Code, to Require Properties Applying for Certain Land Use Approvals to Annex to Tualatin Hills Park and Recreation District (THPRD) and Providing a Waiver Provision, TA 2005-0009 (Ordinance No. 4388)

06060 TA 2006-0001 Scoreboard Sign (Ordinance No. 4389)

06061 An Ordinance Supplementing Ordinance No. 4270 (Amended and Restated Master Water Revenue Bond Ordinance) and Authorizing the Issuance, Sale, Execution and Delivery of Water Revenue Bonds, in One or More Series, in an Aggregate Principal Amount Not to Exceed $15,000,000; Related Matters; and Declaring an Emergency (Ordinance No. 4390)

Second Reading:

Rappleyea read the following ordinance for the second time by title only:

06050 An Ordinance Amending Chapter 5.05 of the Beaverton Code Regarding Vacant Buildings (Ordinance No. 4386)

Coun. Stanton MOVED, SECONDED by Coun. Doyle, that the ordinance embodied in Agenda Bill 06050 now pass. Roll call vote. Couns. Arnold, Bode, Dalrymple, Doyle and Stanton voting AYE, the MOTION CARRIED unanimously. (5:0)


There being no further business to come before the Council at this time, the meeting was adjourned at 8:55 p.m.

Sue Nelson, City Recorder




Approved this 17th day of April, 2006.

Rob Drake, Mayor